We’ve added guardrails to avoid overcounting, keeping estimates conservative and accounting for variance in the status of implementation. This model of measurement is far from perfect, and would be very expensive to validate externally, but it has allowed us to find a way to evaluate our contributions to systems change and to compare the potential impact of various activities. In our experience, the ability to experiment with new forms of impact measurement has been extremely valuable, leading us to new ways to talk about our work and new strategic insights.

WHAT IF MEASURING IMPACT IS JUST TOO HARD?

It can be challenging for nonprofit leaders juggling limited resources, multiple demands, and an ambitious mission to find the resources necessary to measure impact robustly. You might feel frustrated when told what you should be measuring (by this book, or by multiple journal articles), with the implication you are failing if your impact measurement isn’t best-in-class.

The key takeaway should not be that you are failing unless you are conducting randomized control studies, baseline and endpoint prevalence surveys, or using sophisticated proxies. The most important thing to remember is that knowing what impact your efforts are having (or not) will help you ensure that your organization’s actions align with its purpose. Investing time and thought into how your organization can improve is invariably a worthwhile investment, and one that will look different for everyone.

Regardless of where you are on this journey, take a hard look at how your organization understands its own impact. Then ask yourself if that process could be improved. It usually makes sense to measure your activities as part of your efforts to track impact. You can start by embedding basic systems of measurement within how you design, carry out, and evaluate a program. That way, you aren’t left scrambling to track your impact retroactively. It particularly helps to measure your trajectory over time, as that can be a proxy for performance. Also, look at whether you can improve data collection. Can you better define the things you are measuring? Are there other particulars you can measure that will give a rounder picture of your work? Ask others for their input, particularly those you serve, and don’t just ask your fans for input, but also those who are more skeptical of your work. How do peer organizations approach this?

All nonprofit leaders should strive to ensure their organizations have the greatest impact, whatever that may look like, using the resources available. A mindset focused on impact and better (if not perfect) ways of measuring it is the first step to achieving maximum impact. This mindset is also key to developing a powerful strategy, which is what we will look at in the next chapter.

IMPACT ACTION POINTS

Identify and Measure Change

Work out the key inputs and activities of your nonprofit. • Then identify the change (outcomes) your organization is seeking to bring about or contribute to.

Assess how your organization is measuring its contribution to that change.

Determine whether the measures being used can be sharpened, clarified, or expanded.

If you can’t rigorously measure your organization’s impact, then explore whether you can improve the way you measure your activities and consider whether there are suitable proxies for impact that you can measure.

Ensure you are making the best use of all the information your organization is generating.

Regularly review and refine these efforts.

^* In the Freedom Fund’s case, in four years we saw a reduction of over 80 percent in the overall levels of slavery in the communities in which we were working in northern India. See “Unlocking What Works: How Community-Based Interventions Are Ending Bonded Labour in India,” September 2019, Freedom Fund website at freedomfund.org/wp-content/uploads/Freedom-Fund-Evidence-in-Practice-Paper-Unlocking-what-works.pdf. The Freedom Fund stopped working in India in January 2023 due to the Indian government placing restrictions on the ability of international organizations to fund community-based organizations in the country.

^14a While the terms “activities” and “outputs” can be used interchangeably, I’ll use “activities” throughout to avoid confusion.

^* For more background on March of Dimes, see Georgette Baghdady and Joanne M. Maddock, “Marching to a Different Mission,” Stanford Social Innovation Review, Spring 2008.

^* A randomized control trial (RCT) is a study that randomly assigns participants to either receive a service or program or to be in a control group, in order to compare the two groups’ outcomes. It’s regarded as a particularly rigorous way of measuring impact.

^* Notably, when Russia’s invasion of Ukraine resulted in millions of Ukrainians fleeing for their lives, the US and UK established community-based schemes that mobilized hundreds of thousands of ordinary citizens as hosts and sponsors. Subsequent research on the experiences of hosts and sponsors also helped influence decisions in both countries to extend these schemes, such as through the Welcome Corps initiative that US Secretary of State Anthony Blinken announced in January 2023. More in Common’s strategy of providing robust quantitative and qualitative evidence of public attitudes shows that even on highly contested issues, there are pathways to influencing policymakers when you speak to their priorities (in this case, managing public opinion on a very sensitive issue). Matthew La Corte, L. J. Wolfgang Keppley, “New Poll Reveals Refugee Sponsorship Increases Support, Reduces Opposition to Resettlement,” Niskanen Center website, March 1, 2021, https://www.niskanencenter.org/new-poll-reveals-refugee-sponsorship-increases-support-reduces-opposition-to-resettlement/; “Welcoming Ukrainians: The Hosts’ Perspective,” More in Common website, March 13, 2023, https://www.moreincommon.org.uk/our-work/research/welcoming-ukrainians/.

^* Of course, there will also be organizations that are profligate with their spending and should be judged accordingly—but simply looking at a single overhead number won’t tell you if that’s the case. Rather, this requires a more detailed examination of the reasonableness of expenditure, particularly on fundraising. See Phil Buchanan, “Getting the Facts Straight About the Nonprofit Sector,” HuffPost, September 23, 2013, www.huffpost.com/entry/getting-the-facts-straight_b_3976022/amp.

^† For a vehement argument on the dangers of an undue focus on overhead, see Dan Pallotta, Uncharitable: How Restraints on Nonprofits Undermine Their Potential (Boston: Tufts University Press, 2010).

^* A big challenge with control groups is that this kind of research can be very expensive. As an alternative, the Freedom Fund has in the past used participatory evaluations to try and “ground-truth” the results of our research—asking individual community members what they’ve seen and experienced to better understand the factors that led to a change in conditions. When we do this, we are always careful with our analysis, making sure not to overstate the role of our organization beyond what the data tells us.

CHAPTER 3

Strategy

Make Choices to Maximize Impact

[Strategy] is the alignment of potentially unlimited aspirations with necessarily limited capabilities.

—John Lewis Gaddis¹

Wendy Kopp was a final-year undergraduate student at Princeton University, with a deep interest in education reform, when she came up with the bold idea that was to shape the rest of her professional career and shake up the education sector in the US and beyond. The problem she wanted to address was the desperate shortage of qualified teachers for the lowest-income communities throughout the country.^* She outlined her proposed strategy in her senior thesis:

Why not get the country’s best minds to commit two years to teach in urban and rural public schools? It would change the lives of some of the nation’s most underserved students, and it would change the consciousness and direction of our nation’s future leaders.²

Of course, getting the “best minds” (i.e., graduates from some of the top universities) to commit to two years of teaching was easier said than done, given all the other options open to them. But this is where Wendy leaned into the purpose of her initiative. What she could offer to graduates that corporate recruiters couldn’t was a compelling cause. As she put it: “I had this sense that there were thousands of people out there—talented, driven people—who were not inspired by the opportunities they saw in front of them, who were searching for something they weren’t finding in terms of the opportunity to assume a significant responsibility that would make a real difference.”³

Wendy didn’t just rely on the power of her cause. She made the recruitment process for her new teacher corps—by now called Teach For America—highly selective, in order to make it more attractive to overachieving graduates. She went around to leading universities, such as Harvard, Yale, and Princeton, with the message, “If you’re really good, you might be able to join our cause. But first you have to submit to a rigorous screening and evaluation process. You should prepare yourself for rejection because it takes a special capability to succeed in these class-rooms.”⁴ And if they succeeded in getting selected, their reward was to work with students who have been badly served by the education sector in the past, in low-income communities, at the same entry-level pay as other new teachers in the state.

Of course, recruiting talented graduates was just one part of the challenge. The other was raising funding for an innovative and wholly untested educational start-up. Wendy and her small team worked around the clock, relentlessly pitching corporations and foundations for funding, selling them on the idea of transforming education for the most underserved in the country while giving a sense of purpose to high-performing graduates. It worked. By the end of its first year, Teach For America had recruited five hundred graduates for its inaugural cohort of teachers.

Over the next five years, Teach For America grew rapidly. It expanded its remit beyond its own teacher recruitment and placement efforts to reforming school programs and providing recruiting services on a contract basis to school districts. In fact, it grew so quickly that by its fifth year it found its ambitions were exceeding the funding it could mobilize. As a result, it had to make some painful course corrections. This included reducing its annual expenditure from $8 million to $5 million, achieved in part by letting go sixty experienced teachers who provided professional development to the newer teachers. It also closed down its contract recruiting services initiative and some other, non-core, projects. These were deeply painful cuts for a young and ambitious organization, but they ensured that Teach For America could remain focused on its core mission of getting young graduates to work with low-income students.⁵ This discipline set it up for long-term success.

Some thirty years later, Teach For America has approximately 64,000 alumni. Of those, 1,300 are currently principals, assistant principals, and deans, and more than 14,800 are teachers. Its alumni have taught millions of students in the US. Its recruitment focus and corps makeup have evolved to become more representative of the students its serves—now half of its corps members identify as people of color, half come from a low-income background, and one-third are first-generation college graduates.⁶ Statewide studies of the relative effectiveness of teacher education programs consistently place Teach For America at or near the top in terms of participants’ effects on student academic outcomes.⁷

Its impact is not limited to the US. Teach For America–affiliated organizations have now been set up in sixty-one countries, ranging from Peru to Pakistan, dramatically increasing the reach of the organization’s purpose and mission. But at its heart remains Wendy’s original idea—to persuade top graduates to devote two years of their life to serving students in the lowest-income communities.^*

I started this chapter with Teach For America’s origin story because I’ve always found it to be an inspiring example of strategy in action. Strategy for a nonprofit is the set of decisions and trade-offs it needs to make to achieve the greatest impact.^† In this case, Wendy identified a clearly defined problem and found an innovative way to mobilize the necessary resources by leaning into the intrinsic motivation of a powerful cause. Her great insight was to turn the challenge of recruiting top talent on its head—by challenging bright graduates to prove they had what it takes to make a difference to the lives of those who could most benefit from top-quality education. Relentless execution and a willingness to make tough choices when the organization began drifting off mission have all contributed to the outsized impact Teach For America has had on the education sector.

WHAT IS STRATEGY?

Every nonprofit has a strategy. It may be written or unwritten. A strategy provides a conceptual framework for the most effective allocation of your organization’s resources (people, money, and time). A good strategy enables you to make the best decisions for your organization in the circumstances you face, to achieve the greatest impact. A bad strategy may be the decision to continue spending money to implement existing programs, despite evidence showing they are having little impact.

So, what does strategy look like when done well? There is no universal template, but I’ll set out a few key concepts and approaches that I think are of value, based on my firsthand experience with a number of strategic planning processes. My hope is that these will help guide you as you decide on the approach that best works for your organization.

The objective should always be to end up with a clear plan or framework that guides your organization’s work and that you can revise as circumstances require. So how to do that?

The starting place is to embark on a thoughtful strategic planning process. Good planning is key, and an essential first step in designing a strategy. In fact, to my mind, the planning process is often more valuable than any written strategic plan that results.

The next step is to ensure you have a powerful mission in place, or develop one as part of the planning process. As discussed in chapter one, that means being clear about your organization’s purpose and how you intend to achieve it.

You should have an idea of the impact you hope to achieve in the next few years—your impact goals—as this provides a way of assessing your progress and gives your organization something to aim for. In a start-up, these goals may be based more on guesswork than evidence, but you should still have some idea of what you hope to achieve. Once your organization is more established, you should aim to have more specific targets for your impact within a clear time frame—usually three to five years, though sometimes longer. In setting these targets, you will remain guided by your mission, as they will help you gauge whether you are on track to deliver on that mission.

You need a clear understanding of the path to achieve your mission and impact goals. This means analyzing how your organization’s activities (and its programs in particular) will translate into impact, directly or indirectly, and defining the key assumptions you are making in the process. This analysis is usually called your “theory of change.”^*

As you are deciding what you will set out to do, you also have to decide what you won’t do. That means making choices! This can be challenging, particularly if it means closing underperforming programs or reallocating resources.

Once all of this is clear, you can set out your strategy as a written plan or framework, bearing in mind that even the most thoughtful plan will likely need to change and adapt over time.

We’ll look at each of these steps in turn, but first I’ll share some of the initial strategic decisions I had to make when the Freedom Fund launched.

CASE STUDY

Making Early Strategic Choices at the Freedom Fund