25 thoughts on “Accountability and Measuring Performance in Nonprofits”
Wow! This guy made some remarks that inspired me. When dealing with the worst of the challenges at the Museum in Taos, NM, I often thought: there has to be a better way, a better system. There has to be a way to make a board accountable, as well as an organization, but who do you go to? In my case, an employment attorney (a really awesome, skilled, winning employment attorney!) was a good start. But if I had known about these concepts, what a powerful means to reveal the possible inactivity, the possible wrong activity of a board, and, the meaningful activity of an organization.
The idea of accountability itself can be daunting and intimidating. To me, the word suggests wrongdoing, and, actions will be taken to measure such and then hold “accountable” the culprits who are causing the problem(s). And understandably, such a concept, or “litmus test”, makes board members and staff nervous. But, it isn’t always easy or clear as to how to identify problems or the stinkers who are causing the trouble.
Financial issues are one thing, and I think that financial transparency is a given— there is a great deal of information and many resources that can help an organization achieve such. But the performance measures that are discussed in this talk suggest, in my opinion, how to address, identify, and document deliverables that are perhaps more intangible—like spotlighting ethical or unethical governance. These concepts suggest to me a way to “level the playing field” when it comes to making everyone in an organization (board members, staff, and CEO) be responsible, or accountable, for the success of the organization. A commitment to transparency in reporting seems like a great way to eliminate just sweeping problems under the rug and out of view, and perhaps sweeping out the ED along with the problems. These concepts somehow, to me, make it seem that everyone has to share the load of success or failure.
Jill,
I was very surprised to learn of all the different resources available to nonprofits to assist them with measuring their performance outcomes. What was most surprising was that Burger stated that his agency does not charge the nonprofits for services that his company provides to the nonprofit organizations. I was hoping that he would take time to explain how his agency is funded as it’s unheard of in this day and age for an agency to do anything for free.
The word “accountability” does seem to take on a dirty meaning, and while I can understand hesitation in adopting the term as a part of the agency culture, I do agree with you that it is a necessary step. Anyone who has worked for any business knows that there is always the proverbial ‘skeleton in the closet’; issues that agencies would much rather forget for whatever reason – the boss with the questionable ethics, missing money that disappears around child-support payment time and reappears later, the mysterious closed doored meetings where three people walk in but only one leaves, crying frantically. I believe this stems from a deeper fear of individuals (and their companies) to admit that we makes mistakes. Hubris can be more powerful than logic, as illogical as that sounds.
I agree that accountability carries a negative connotation. I like the idea of meaningful data. Often I will read stats and they don’t really tell the entire story. Stats can easily be manipulated to depict almost any story you would want them to.
I also appreciate his organization and their mission to measure governance. A charity can put out statistics and never provide transparency to how their organization is governed. I’m not really sure how this can level the playing field within an organization. But, I can see how it could even things out between competing organizations. Possibly choosing the organization with less resources because of preference of governance.
The presenter was indeed interesting and incredibly insightful. Much of his presentation challenges us to re-evaluate existing institutional paradigms measuring organization success. We should all agree that merely distributing ouputs (or resources) is sometimes not enough, especially when these services are not managed correctly. It needs to be based on objective analysis, grounded from existing literature, leveraging proven – and quantifiable – techniques that produce the kind of product the public and institution (hopefully) expects from itself. Determining what and which outcomes, however, aren’t always clear, and sometimes rather arbitrary. Its also possible the organization doesn’t have the capable training or resources to meet this particular criteria. These can be tricky and challenging problems, but issues that I expect will make these groups better and stronger, which is good for the public its serves.
I agree with you. A commitment to transparency in reporting is a good to not only the organizations themselves but also for the general public and donors. Transparent reporting helps staff and board members to know the problems exist within the organization, then they can work to solve them. Transparent reporting let donors know whether the organization follow the rules or make the good use of the money and manage its’ financial status well for others to examine.
According to Jossey-Bass, “Accountability relationships are complicated by the fact that nonprofits are expected to be accountable to multiple actors: upward to their funders or patrons, downward to clients, and internally to themselves and their mission”. Therefore, they are expected to be accountable for different things by different people and the expectations are broken down into four broad categories: accountability to finances, governance, performance and mission. Ken Burger, the speaker in the video presentation, also states that accountable, transparent and high performance nonprofit agencies must measure finance, organizational accountability or governance and have a performance management and measurement system in place to measure meaningful results.
Burger quotes a colleague of his as stating that “there is virtually no credible evidence that most nonprofits produce social value or meaningful change in communities or people’s lives”. He contributes this as being a result of nonprofit agencies not having performance management and measurement in place to produce outcome indicators and therefore agencies don’t know to what extent or degree they may be providing social value. Funders also aren’t able to determine if agencies are providing social value since no data is available for them to research outcomes provided by the nonprofit agencies. I agree with Burger in that measuring finances, governance and having a performance management and measurement system are all very important for an organization to ensure accountability.
A financial audit should be completed in order to show stakeholders and potential funders that the agency is fiscally sound and is able to use funds appropriately and wisely as without the funds, the agency would not be able to provide the services that would produce social value to the community and persons served. Organizational accountability as it relates to governance is necessary as an agency that provides poor oversight of the board can result in potentially unethical issues and could cause an agency to perform badly and to have to close. Having a performance management and measurement system in place is also extremely important in order to ensure the agency has meaningful results and is meeting their mission. Therefore it is necessary that an agency has the right CEO who is willing to develop a performance measurement system and to set meaningful outcome indicators and a logic model.
You are very much on point. Performance improvement is grounded in the items that you listed, items which (I feel) many nonprofits in this area could use some help with.
Out of curiosity, what you do think would be good factors for a performance manager? I ask because (applying the theoretical to the practical), my organization has had and may have in the future, a position whose scope is to both measure and report business and performance improvement. Does your company have a similar position?
I think a Performance Manager would be a great addition to any organization. Having one person who is dedicated to reviewing the agency as a whole and capturing data or performance indicators for all departments in the agency would definitely be an asset as it would allow the managers to concentrate on performing the activities their department is responsible for and would give them additional support with meeting their established outcomes as they would hopefully receive feedback regularly from the Performance Manager on where they may be falling short and technical support to determine ways to improve. StarCare does not have one set person dedicated to performing these duties, however due to data reported to and captured by the major state agencies that provide the majority of our funding, we have different individuals who monitor reports distributed by the state agencies indicating where we are with meeting targets and expected outcomes. Our system is more a reactive system and not a proactive system as we usually wait for reports from the state prior to knowing we have issues we need to address.
I would assume that it is most organizations desire to improve social value. That is why most non-profits are established. Usually non-profits address some sort of injustice or lack of a particular service that would not create profit. Why the hell would this not be measured? Pretty crazy that this feels like some novel idea. Listening to him speak, it just all seemed matter-of-fact. Gratefully, he has found a way to help charities distribute meaningful stats. For free at that! I also would be interested in how they are funded but that might be his real secret.
I am with you Duncan! I don’t understand how he can say that there is no way to measure if we are effecting the people around us. All we can do is give pre and post test to the clients that we serve and see if their responses have changed positively or negatively. Granted some people are not honest, but all we have is the paper that is in front of us. We have to be able to start somewhere and using some type of performance measuring tool is a crucial start!
Youre completely on point – nonprofit groups need to clearly demonstrate to their funders, clients, and stakeholders its internal activities. As the speaker indicated, the traditional feedback loop found in the for-profit sector is non-existent; in many cases, the organizations clients cant always hold the organization accountable for their services since their product, in most cases, is free. Consequently, there needs to be another avenue where the players involved (funders, regulators, clients, etc.) can objectively evaluate the effectiveness of the organization. As I mentioned in my earlier post, identifying the appropriate performance measurement indicators is a difficult exercise where consensus may be difficult to come by. Nevertheless, the approach – holding organizations more accountable, developing more strategic and sophisticated outcome measures, etc. – is an encouraging direction the sector, by all indications, seems to be advancing toward.
I agree with you that having a performance management and measurement system in place is very important. The thing that I like from the video is that the speaker emphasized the importance of meaningful data or meaningful result. In order to produce meaningful data for staff and board members or for the public to examine, a measurement system should be set up and actions should be implemented. And of course, financial report is one of the important meaningful data that staff should collect and supervised by the boards.
Listening to the presentation offered by NYU Wagner, I fell that there were several key points raised that truly sheds light on key issues in performance management for nonprofit organizations. From my personal experience, accountability is, in a sense, a combination of multiple factors that, as the speaker elaborated on, are unique and integrative.
As the speaker noted, tying outcomes to impact for nonprofit organizations is incredibly difficult because the expense of calculating quality data that will support the impact factor is not feasible. Many nonprofits do not have the resources to hire a program evaluator or regularly contract to quality improvement agencies. That being said, there are several inputs that we can benchmark to establish and compare to see if a nonprofit is being held accountable. The availability of financials is one of those factors that seem to reflect well. On top of that, just because data cannot be taken to the next level in terms of analysis does not meet, in my opinion, that it should not be gathered. Quasianalysis can be a more reliable indicator that gut feelings. For example, in the organization I work for now, there are a series of goals that are measured through electronic health record data that tell us very useful information; are our nurses competent in the system, have we reached the required level of compliance with the state, are there negative health trends to be aware of? These factors seem to have a prima facie impact on our mission, even if they cannot be inextricably tied through vigorous analysis.
On another note, the presence of stakeholder/beneficiary feedback is also a key indicator. Again, cutting-edge data collection may not be possible because of budgetary constraints; nonprofits usually cannot hire multi-million dollar branding and marketing firms to gauge stakeholder feedback. Instead, homespun methods can be a good indicator. For example, having a beneficiary complete a satisfaction survey when they have used your product can provide valuable feedback.
In sum, accountability in nonprofit organizations must be a data-driven process that incorporates stakeholder/beneficiary feedback, one that is both practical and challenging.
Steve,
I like what you had to say about the financial aspect of accountability. Since majority of the nonprofits are not able to hire their own financial person of choice, having some finance person in either the board or any other positions does help. Once going through the books the person or volunteer should be responsible for relaying the information to the board so they could provide a place of transparency for their benefactors and donors.
Great point Steve! Even if a non-profit is unable to analyze the data it should at least be collected. When I worked at my old job, I had the students in the after-school program take weekly questionnaires and semester pre and post test. Most of the time this data was not analyzed deeply, however I was able to look at their feedback and implement some of their feedback. Also, on the questions that could be easily quantified because of a yes or no answer those were the ones that I used for marketing if there was a growth in that measure. What I am saying is that, even if it can’t be analyzed there is nothing wrong with having that data laying around just in case!
It is a very inspiring and informative video of performance measurement. The gentlemen gave us some really important food for thoughts about the accountability and the performance measurement of the nonprofit sector. Recently, in my country, there is a religious nonprofit foundation being criticized about not transparent enough to the public about its finance. The incident actually arouse people’s attention that donors and general public do not used to examine the effectiveness and the accountability of nonprofit organizations. The nonprofit sector in my country is just like a model that we learned and borrow from United States. It is good that we have this sector that serves for the good of the communities and society. But the problem of borrowing the model is that the general public does not really understand how nonprofit organizations should be managed and governed. We have no idea how to examine them and measure them. I think last week’s class and this video gave me a broad idea of how things should be done regarding the nonprofit organizations’ performance measurement.
Honestly, it is so great to have organization like Charity Navigator that assists and encourages nonprofit organizations to improve or enhance their publicly accessible results reports. Since the whole nonprofit sectors have grown bigger and become a sector that contains a huge amount of organizations that are operating with the money donated by corporations, individuals, and government agencies, organizations themselves and the general public all need to learn how to make the system work better and last longer. For this purpose, on the side of the nonprofit organizations, they need to have a good governing board that could take the responsibility to supervise the finance and the accountability of the organizations. They are also responsible to make the result reporting and performance or effective measurement report more accessible to the public. It is important that they show the transparency of the organizations. On the side of the general public and donors, it is important for them to check the accountability and transparency of the organizations before they make donations. We also had the responsibility to supervise these organizations to make sure they make great and effective use of the money they collected.
Stephanie,
It is sad to read about nonprofits, especially the religious ones, being called out on not being financially transparent with their donors. I honestly do hope that for their sake that they would come out and show financial reports for the years in question. But it does raise a point that everyone, including the religious factors, should be responsible for allowing some sort of transparency. Donors want to know where their money is going to and how it is being used.
The biggest component that stuck out to me during the NYU Wagner talk was the fact about outcomes. I know I have seen a few charities and other organizations that are mainly focused on having outcomes to where they lose focus on the accountability sector. When Ken Berger made his statement about how only drawing attention to the outcomes will benefit in the short run but would possibly not last, I was enlightened. It is true that a lot of donors want to know where their money is going, and that managing finances will help lead to those wanted outcomes, however that should not be the only thing that drives accountability. I for one have always thought that financial accountability is all that mattered for a growing organization, but when he mentions organization accountability and how his website shows bits and pieces of that, I had to check it out. Looking at the Charity Navigator’s website, I love how they put out their goals and ways that they are trying to be more effective in the business. I sort of wonder how long it took for them to come up with what they should be transparent with and who all should be accountable for the different components of their company.
At the end of the day, honesty and integrity for the company should be the leader of accountability. Nonprofits should carry these two qualities in every outlook of their outreach and donation programs if they want to see their wanted results or outcomes. Whether if it is data driven or donor driven, every company should find what works best for them effectiveness wise to continue without encountering their own negative outcomes down the road. If they start the accountability model from the beginning, there should be no reason of failing.
Accountability and transparency are important issues in the nonprofit sector, and with good reason. After all, these organizations are enjoying tremendous tax benefits and opportunities from funders to perform a specific function or service within the parameters of the tax code. In reality, not all nonprofit groups live up to this edict. Certainly, this isn’t to say such behavior is the norm; there are literally millions of identified nonprofit groups that exist today. It is a statistical certainty that a very few do not perform in a way that is expected of them. Alas, these “bad apples,” so to speak, are too often pulverized in media circles. Of course, organizations committing acts inconsistent to their outlined mission are wrong, and should appropriately be reprimanded for it. But doing so in the media landscape, however, may – and I emphasize “may” – also give viewers/readers the rather hollow impression that such conduct is the norm. This can have adverse consequences impacting honest organizations doing all they can to advance their cause and satisfy their mission.
With that said, providing a comprehensive system that quickly and accurately reveals the organizations financial records, program activities, and compensation packages is an important resource that should be available to the public. This is especially true to donors specifically, as some of this information (thanks to resources like guidestar – a database we’ve all become familiar with over the semester) can offer a better overall description of the organization in question services and programs. Savvy nonprofits doing quality work are likely to see these transparency resources as an excellent marketing opportunity over its competitors.
Ultimately, and this is nothing earth-shattering when I say this, is that accountability and transparency are incredibly important. Legitimizing those characteristics generate tremendous trust, which, of course, is critical to cultivating and maintaining social capital with the public, donors, constituents, stakeholders, and, well, the IRS. All nonprofit groups should absolutely embrace these instruments.
I thought this was interesting. Seemed like a simple solution to helping non-profits improve. Mostly because they don’t really know what impact they produce. You have to know your current performance to interpret whether or not an organization is improving. I’ve started to realize the most difficult part of public administration is measuring the three E’s: equity, efficiency and effectiveness. Unlike for-profit corporations, public sector administrators don’t really know who their customers are. When consumers for private sector corporations are unhappy they can seek the service elsewhere. Allowing them to measure revenues, profits and adjust. How are your customers in the non-profit sector going to seek the same service elsewhere? You’re probably the only organization in the area providing the service. Or, they are beneficiaries of someone else’s money; which you usually can’t take to another organization.
Not only are administrators having a difficult time measuring meaningful outcomes. Most foundations are asking charities for meaningless data and giving funds based on said data. As Burger pointed out, most donors obviously don’t care much. Of the 15% of donor’s that said credible evidence of social value was crucial, only 2% look for credible data.
My grandma would always say, “If you don’t want anyone to find out. Don’t do it.” I liked the “sunshine is the best disinfectant” saying he used. I think transparency prevents people from doing the wrong thing. Creating the fear of getting caught is important. Probably a bigger deterrent than punishment. Like Jill, I am not really sure about using the word accountability. I do not think you need that until something bad happens. I would be interested to see what organizations do to address wrongdoings. How are people punished? Everyone knows right from wrong. I think how we punish people shows how we feel about the infraction.
I like how you point out that transparency prevents people from doing the wrong thing in order not to get caught. It is kind of sad that people need a watchdog to stay on the right track but it is just the way it is. When people don’t have structure in their work or a system that makes them accountable for their performance their can fall into a state of complacency or feel free to manipulate data or else into their advantage because they feel no one is watching. Of course ethics plays a big role in this but having a well set of rules and regulations seems to be the best way to keep everyone on the same page.
It was very interesting to watch this video. Mr. Burger was adamant about donors using their head and not their heart to giving money. Many organizations just trust that their anecdotal stories will be enough to pull money into the organization. Especially, faith-based nonprofits, they try to find that perfect story of success within their organization and it becomes the marketing story that will hopefully pull in money. In all reality, this is an extremely biased story. This is very skewed. It does not mean that every family that you work with will have these outcomes as well. Therefore, it is smarter on the donors behalf to begin to ask more questions about the legitimacy of their response. Like Mr. Burger said though, only 2% really look for this hardcore data. To really make a paradigm shift, it will take donors to be more inquisitive before handing the money over. If they don’t ask questions, then why do the nonprofits have to go through more work, when the questions are not being asked!?
Mr. Burger mentioned the evidence-based measures and outcomes. I believe that many organizations measure outcomes. He explains outcomes as something that happens today, but may not carry over tomorrow. This makes sense. It is really good that we are beginning to look for legit data. It is time to look into ways to measure performance and be transparent about it.
Although if you are a small nonprofit, it may be difficult for you to provide this data and be transparent about it. Most likely, the financial transparency is not an issue. However, having to turn your programs into data may be extremely hard to do. Simply because of time and expertise. Performance Measurement is fairly new to the nonprofit world, therefore, it may not be an expertise that somebody has that they can contribute to the organizations in a meaningful impacting way. Mr. Burger did provide the audience with free information on how you can do better at measuring your results and begin transparent. I believe that organizations should take heed to this lesson and do their best at making a long lasting change, by proving their work with evidence based data.
It was indeed surprising to hear that only 2% of donors look for hard data in order to make their charitable decisions. Never the less I wonder if this attitude will change with Millenials and Generation Z as they are more technologically driven which might influence their inquiry traits… But that is just my mind wandering, maybe it has nothing to do with it. But putting that on a side note like you say even though measurement systems are new to the nonprofit world it is important for this management tool to be taken seriously. Not only to provide information to external stakeholders but internal as well. Organizations will be able to carry a much clear self-evaluation and reassess their goals and objectives in pro of providing quantifiable social value.
-Alicia
Regarding the how, Burger in the video places a lot of emphasis on the CEO of the organization. He explains the huge importance of having a leader that is knowledgeable about Performance Management Systems and believes in their value for the success of the organization.
I think it is important to be informed of organizations like Charity Navigator and other websites that Burger lists like Perform Well and Keystone.org. They can provide resources and tools for the nonprofits that want to implement or refine their performance measurement system as well as have an unbiased feedback.
I was pleased that Burger talked about the importance every member of the organization plays in the performance of the organization. Especially the part where he briefly discusses the effective oversight the board of directors should provide and the well thought selection process the organization should have in place for their selection instead of just being a group best buddies. In the case studies we have read so far we have been able to see how damaging this can be. And of course all this I think leads to transparency and ethics. Nonprofits need to be aware of how this can affect their image directly and survival.
All this reminds me of an organization in my country which seems to be in the verge of closing their doors. In Ecuador a lot of nonprofits (NGOs), including the arts are funded by the government. I don’t want to post the name, but this particular music organization was not able (or was afraid…) to open their books when asked by the directing government office that was responsible for their funding. This organization had being getting their funding from another office and it seems that that previous office had not being meticulous about following through with their annual reviews. Now the future of teachers and students that depend on this organization’s services is uncertain.
Nonprofits Matter 
Wow! This guy made some remarks that inspired me. When dealing with the worst of the challenges at the Museum in Taos, NM, I often thought: there has to be a better way, a better system. There has to be a way to make a board accountable, as well as an organization, but who do you go to? In my case, an employment attorney (a really awesome, skilled, winning employment attorney!) was a good start. But if I had known about these concepts, what a powerful means to reveal the possible inactivity, the possible wrong activity of a board, and, the meaningful activity of an organization.
The idea of accountability itself can be daunting and intimidating. To me, the word suggests wrongdoing, and, actions will be taken to measure such and then hold “accountable” the culprits who are causing the problem(s). And understandably, such a concept, or “litmus test”, makes board members and staff nervous. But, it isn’t always easy or clear as to how to identify problems or the stinkers who are causing the trouble.
Financial issues are one thing, and I think that financial transparency is a given— there is a great deal of information and many resources that can help an organization achieve such. But the performance measures that are discussed in this talk suggest, in my opinion, how to address, identify, and document deliverables that are perhaps more intangible—like spotlighting ethical or unethical governance. These concepts suggest to me a way to “level the playing field” when it comes to making everyone in an organization (board members, staff, and CEO) be responsible, or accountable, for the success of the organization. A commitment to transparency in reporting seems like a great way to eliminate just sweeping problems under the rug and out of view, and perhaps sweeping out the ED along with the problems. These concepts somehow, to me, make it seem that everyone has to share the load of success or failure.
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Jill,
I was very surprised to learn of all the different resources available to nonprofits to assist them with measuring their performance outcomes. What was most surprising was that Burger stated that his agency does not charge the nonprofits for services that his company provides to the nonprofit organizations. I was hoping that he would take time to explain how his agency is funded as it’s unheard of in this day and age for an agency to do anything for free.
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The word “accountability” does seem to take on a dirty meaning, and while I can understand hesitation in adopting the term as a part of the agency culture, I do agree with you that it is a necessary step. Anyone who has worked for any business knows that there is always the proverbial ‘skeleton in the closet’; issues that agencies would much rather forget for whatever reason – the boss with the questionable ethics, missing money that disappears around child-support payment time and reappears later, the mysterious closed doored meetings where three people walk in but only one leaves, crying frantically. I believe this stems from a deeper fear of individuals (and their companies) to admit that we makes mistakes. Hubris can be more powerful than logic, as illogical as that sounds.
-Steve
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I agree that accountability carries a negative connotation. I like the idea of meaningful data. Often I will read stats and they don’t really tell the entire story. Stats can easily be manipulated to depict almost any story you would want them to.
I also appreciate his organization and their mission to measure governance. A charity can put out statistics and never provide transparency to how their organization is governed. I’m not really sure how this can level the playing field within an organization. But, I can see how it could even things out between competing organizations. Possibly choosing the organization with less resources because of preference of governance.
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The presenter was indeed interesting and incredibly insightful. Much of his presentation challenges us to re-evaluate existing institutional paradigms measuring organization success. We should all agree that merely distributing ouputs (or resources) is sometimes not enough, especially when these services are not managed correctly. It needs to be based on objective analysis, grounded from existing literature, leveraging proven – and quantifiable – techniques that produce the kind of product the public and institution (hopefully) expects from itself. Determining what and which outcomes, however, aren’t always clear, and sometimes rather arbitrary. Its also possible the organization doesn’t have the capable training or resources to meet this particular criteria. These can be tricky and challenging problems, but issues that I expect will make these groups better and stronger, which is good for the public its serves.
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I agree with you. A commitment to transparency in reporting is a good to not only the organizations themselves but also for the general public and donors. Transparent reporting helps staff and board members to know the problems exist within the organization, then they can work to solve them. Transparent reporting let donors know whether the organization follow the rules or make the good use of the money and manage its’ financial status well for others to examine.
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According to Jossey-Bass, “Accountability relationships are complicated by the fact that nonprofits are expected to be accountable to multiple actors: upward to their funders or patrons, downward to clients, and internally to themselves and their mission”. Therefore, they are expected to be accountable for different things by different people and the expectations are broken down into four broad categories: accountability to finances, governance, performance and mission. Ken Burger, the speaker in the video presentation, also states that accountable, transparent and high performance nonprofit agencies must measure finance, organizational accountability or governance and have a performance management and measurement system in place to measure meaningful results.
Burger quotes a colleague of his as stating that “there is virtually no credible evidence that most nonprofits produce social value or meaningful change in communities or people’s lives”. He contributes this as being a result of nonprofit agencies not having performance management and measurement in place to produce outcome indicators and therefore agencies don’t know to what extent or degree they may be providing social value. Funders also aren’t able to determine if agencies are providing social value since no data is available for them to research outcomes provided by the nonprofit agencies. I agree with Burger in that measuring finances, governance and having a performance management and measurement system are all very important for an organization to ensure accountability.
A financial audit should be completed in order to show stakeholders and potential funders that the agency is fiscally sound and is able to use funds appropriately and wisely as without the funds, the agency would not be able to provide the services that would produce social value to the community and persons served. Organizational accountability as it relates to governance is necessary as an agency that provides poor oversight of the board can result in potentially unethical issues and could cause an agency to perform badly and to have to close. Having a performance management and measurement system in place is also extremely important in order to ensure the agency has meaningful results and is meeting their mission. Therefore it is necessary that an agency has the right CEO who is willing to develop a performance measurement system and to set meaningful outcome indicators and a logic model.
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You are very much on point. Performance improvement is grounded in the items that you listed, items which (I feel) many nonprofits in this area could use some help with.
Out of curiosity, what you do think would be good factors for a performance manager? I ask because (applying the theoretical to the practical), my organization has had and may have in the future, a position whose scope is to both measure and report business and performance improvement. Does your company have a similar position?
-Steve
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Steve,
I think a Performance Manager would be a great addition to any organization. Having one person who is dedicated to reviewing the agency as a whole and capturing data or performance indicators for all departments in the agency would definitely be an asset as it would allow the managers to concentrate on performing the activities their department is responsible for and would give them additional support with meeting their established outcomes as they would hopefully receive feedback regularly from the Performance Manager on where they may be falling short and technical support to determine ways to improve. StarCare does not have one set person dedicated to performing these duties, however due to data reported to and captured by the major state agencies that provide the majority of our funding, we have different individuals who monitor reports distributed by the state agencies indicating where we are with meeting targets and expected outcomes. Our system is more a reactive system and not a proactive system as we usually wait for reports from the state prior to knowing we have issues we need to address.
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I would assume that it is most organizations desire to improve social value. That is why most non-profits are established. Usually non-profits address some sort of injustice or lack of a particular service that would not create profit. Why the hell would this not be measured? Pretty crazy that this feels like some novel idea. Listening to him speak, it just all seemed matter-of-fact. Gratefully, he has found a way to help charities distribute meaningful stats. For free at that! I also would be interested in how they are funded but that might be his real secret.
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I am with you Duncan! I don’t understand how he can say that there is no way to measure if we are effecting the people around us. All we can do is give pre and post test to the clients that we serve and see if their responses have changed positively or negatively. Granted some people are not honest, but all we have is the paper that is in front of us. We have to be able to start somewhere and using some type of performance measuring tool is a crucial start!
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Youre completely on point – nonprofit groups need to clearly demonstrate to their funders, clients, and stakeholders its internal activities. As the speaker indicated, the traditional feedback loop found in the for-profit sector is non-existent; in many cases, the organizations clients cant always hold the organization accountable for their services since their product, in most cases, is free. Consequently, there needs to be another avenue where the players involved (funders, regulators, clients, etc.) can objectively evaluate the effectiveness of the organization. As I mentioned in my earlier post, identifying the appropriate performance measurement indicators is a difficult exercise where consensus may be difficult to come by. Nevertheless, the approach – holding organizations more accountable, developing more strategic and sophisticated outcome measures, etc. – is an encouraging direction the sector, by all indications, seems to be advancing toward.
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I agree with you that having a performance management and measurement system in place is very important. The thing that I like from the video is that the speaker emphasized the importance of meaningful data or meaningful result. In order to produce meaningful data for staff and board members or for the public to examine, a measurement system should be set up and actions should be implemented. And of course, financial report is one of the important meaningful data that staff should collect and supervised by the boards.
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Listening to the presentation offered by NYU Wagner, I fell that there were several key points raised that truly sheds light on key issues in performance management for nonprofit organizations. From my personal experience, accountability is, in a sense, a combination of multiple factors that, as the speaker elaborated on, are unique and integrative.
As the speaker noted, tying outcomes to impact for nonprofit organizations is incredibly difficult because the expense of calculating quality data that will support the impact factor is not feasible. Many nonprofits do not have the resources to hire a program evaluator or regularly contract to quality improvement agencies. That being said, there are several inputs that we can benchmark to establish and compare to see if a nonprofit is being held accountable. The availability of financials is one of those factors that seem to reflect well. On top of that, just because data cannot be taken to the next level in terms of analysis does not meet, in my opinion, that it should not be gathered. Quasianalysis can be a more reliable indicator that gut feelings. For example, in the organization I work for now, there are a series of goals that are measured through electronic health record data that tell us very useful information; are our nurses competent in the system, have we reached the required level of compliance with the state, are there negative health trends to be aware of? These factors seem to have a prima facie impact on our mission, even if they cannot be inextricably tied through vigorous analysis.
On another note, the presence of stakeholder/beneficiary feedback is also a key indicator. Again, cutting-edge data collection may not be possible because of budgetary constraints; nonprofits usually cannot hire multi-million dollar branding and marketing firms to gauge stakeholder feedback. Instead, homespun methods can be a good indicator. For example, having a beneficiary complete a satisfaction survey when they have used your product can provide valuable feedback.
In sum, accountability in nonprofit organizations must be a data-driven process that incorporates stakeholder/beneficiary feedback, one that is both practical and challenging.
-Steve
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Steve,
I like what you had to say about the financial aspect of accountability. Since majority of the nonprofits are not able to hire their own financial person of choice, having some finance person in either the board or any other positions does help. Once going through the books the person or volunteer should be responsible for relaying the information to the board so they could provide a place of transparency for their benefactors and donors.
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Great point Steve! Even if a non-profit is unable to analyze the data it should at least be collected. When I worked at my old job, I had the students in the after-school program take weekly questionnaires and semester pre and post test. Most of the time this data was not analyzed deeply, however I was able to look at their feedback and implement some of their feedback. Also, on the questions that could be easily quantified because of a yes or no answer those were the ones that I used for marketing if there was a growth in that measure. What I am saying is that, even if it can’t be analyzed there is nothing wrong with having that data laying around just in case!
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It is a very inspiring and informative video of performance measurement. The gentlemen gave us some really important food for thoughts about the accountability and the performance measurement of the nonprofit sector. Recently, in my country, there is a religious nonprofit foundation being criticized about not transparent enough to the public about its finance. The incident actually arouse people’s attention that donors and general public do not used to examine the effectiveness and the accountability of nonprofit organizations. The nonprofit sector in my country is just like a model that we learned and borrow from United States. It is good that we have this sector that serves for the good of the communities and society. But the problem of borrowing the model is that the general public does not really understand how nonprofit organizations should be managed and governed. We have no idea how to examine them and measure them. I think last week’s class and this video gave me a broad idea of how things should be done regarding the nonprofit organizations’ performance measurement.
Honestly, it is so great to have organization like Charity Navigator that assists and encourages nonprofit organizations to improve or enhance their publicly accessible results reports. Since the whole nonprofit sectors have grown bigger and become a sector that contains a huge amount of organizations that are operating with the money donated by corporations, individuals, and government agencies, organizations themselves and the general public all need to learn how to make the system work better and last longer. For this purpose, on the side of the nonprofit organizations, they need to have a good governing board that could take the responsibility to supervise the finance and the accountability of the organizations. They are also responsible to make the result reporting and performance or effective measurement report more accessible to the public. It is important that they show the transparency of the organizations. On the side of the general public and donors, it is important for them to check the accountability and transparency of the organizations before they make donations. We also had the responsibility to supervise these organizations to make sure they make great and effective use of the money they collected.
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Stephanie,
It is sad to read about nonprofits, especially the religious ones, being called out on not being financially transparent with their donors. I honestly do hope that for their sake that they would come out and show financial reports for the years in question. But it does raise a point that everyone, including the religious factors, should be responsible for allowing some sort of transparency. Donors want to know where their money is going to and how it is being used.
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The biggest component that stuck out to me during the NYU Wagner talk was the fact about outcomes. I know I have seen a few charities and other organizations that are mainly focused on having outcomes to where they lose focus on the accountability sector. When Ken Berger made his statement about how only drawing attention to the outcomes will benefit in the short run but would possibly not last, I was enlightened. It is true that a lot of donors want to know where their money is going, and that managing finances will help lead to those wanted outcomes, however that should not be the only thing that drives accountability. I for one have always thought that financial accountability is all that mattered for a growing organization, but when he mentions organization accountability and how his website shows bits and pieces of that, I had to check it out. Looking at the Charity Navigator’s website, I love how they put out their goals and ways that they are trying to be more effective in the business. I sort of wonder how long it took for them to come up with what they should be transparent with and who all should be accountable for the different components of their company.
At the end of the day, honesty and integrity for the company should be the leader of accountability. Nonprofits should carry these two qualities in every outlook of their outreach and donation programs if they want to see their wanted results or outcomes. Whether if it is data driven or donor driven, every company should find what works best for them effectiveness wise to continue without encountering their own negative outcomes down the road. If they start the accountability model from the beginning, there should be no reason of failing.
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Accountability and transparency are important issues in the nonprofit sector, and with good reason. After all, these organizations are enjoying tremendous tax benefits and opportunities from funders to perform a specific function or service within the parameters of the tax code. In reality, not all nonprofit groups live up to this edict. Certainly, this isn’t to say such behavior is the norm; there are literally millions of identified nonprofit groups that exist today. It is a statistical certainty that a very few do not perform in a way that is expected of them. Alas, these “bad apples,” so to speak, are too often pulverized in media circles. Of course, organizations committing acts inconsistent to their outlined mission are wrong, and should appropriately be reprimanded for it. But doing so in the media landscape, however, may – and I emphasize “may” – also give viewers/readers the rather hollow impression that such conduct is the norm. This can have adverse consequences impacting honest organizations doing all they can to advance their cause and satisfy their mission.
With that said, providing a comprehensive system that quickly and accurately reveals the organizations financial records, program activities, and compensation packages is an important resource that should be available to the public. This is especially true to donors specifically, as some of this information (thanks to resources like guidestar – a database we’ve all become familiar with over the semester) can offer a better overall description of the organization in question services and programs. Savvy nonprofits doing quality work are likely to see these transparency resources as an excellent marketing opportunity over its competitors.
Ultimately, and this is nothing earth-shattering when I say this, is that accountability and transparency are incredibly important. Legitimizing those characteristics generate tremendous trust, which, of course, is critical to cultivating and maintaining social capital with the public, donors, constituents, stakeholders, and, well, the IRS. All nonprofit groups should absolutely embrace these instruments.
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I thought this was interesting. Seemed like a simple solution to helping non-profits improve. Mostly because they don’t really know what impact they produce. You have to know your current performance to interpret whether or not an organization is improving. I’ve started to realize the most difficult part of public administration is measuring the three E’s: equity, efficiency and effectiveness. Unlike for-profit corporations, public sector administrators don’t really know who their customers are. When consumers for private sector corporations are unhappy they can seek the service elsewhere. Allowing them to measure revenues, profits and adjust. How are your customers in the non-profit sector going to seek the same service elsewhere? You’re probably the only organization in the area providing the service. Or, they are beneficiaries of someone else’s money; which you usually can’t take to another organization.
Not only are administrators having a difficult time measuring meaningful outcomes. Most foundations are asking charities for meaningless data and giving funds based on said data. As Burger pointed out, most donors obviously don’t care much. Of the 15% of donor’s that said credible evidence of social value was crucial, only 2% look for credible data.
My grandma would always say, “If you don’t want anyone to find out. Don’t do it.” I liked the “sunshine is the best disinfectant” saying he used. I think transparency prevents people from doing the wrong thing. Creating the fear of getting caught is important. Probably a bigger deterrent than punishment. Like Jill, I am not really sure about using the word accountability. I do not think you need that until something bad happens. I would be interested to see what organizations do to address wrongdoings. How are people punished? Everyone knows right from wrong. I think how we punish people shows how we feel about the infraction.
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I like how you point out that transparency prevents people from doing the wrong thing in order not to get caught. It is kind of sad that people need a watchdog to stay on the right track but it is just the way it is. When people don’t have structure in their work or a system that makes them accountable for their performance their can fall into a state of complacency or feel free to manipulate data or else into their advantage because they feel no one is watching. Of course ethics plays a big role in this but having a well set of rules and regulations seems to be the best way to keep everyone on the same page.
-Alicia
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It was very interesting to watch this video. Mr. Burger was adamant about donors using their head and not their heart to giving money. Many organizations just trust that their anecdotal stories will be enough to pull money into the organization. Especially, faith-based nonprofits, they try to find that perfect story of success within their organization and it becomes the marketing story that will hopefully pull in money. In all reality, this is an extremely biased story. This is very skewed. It does not mean that every family that you work with will have these outcomes as well. Therefore, it is smarter on the donors behalf to begin to ask more questions about the legitimacy of their response. Like Mr. Burger said though, only 2% really look for this hardcore data. To really make a paradigm shift, it will take donors to be more inquisitive before handing the money over. If they don’t ask questions, then why do the nonprofits have to go through more work, when the questions are not being asked!?
Mr. Burger mentioned the evidence-based measures and outcomes. I believe that many organizations measure outcomes. He explains outcomes as something that happens today, but may not carry over tomorrow. This makes sense. It is really good that we are beginning to look for legit data. It is time to look into ways to measure performance and be transparent about it.
Although if you are a small nonprofit, it may be difficult for you to provide this data and be transparent about it. Most likely, the financial transparency is not an issue. However, having to turn your programs into data may be extremely hard to do. Simply because of time and expertise. Performance Measurement is fairly new to the nonprofit world, therefore, it may not be an expertise that somebody has that they can contribute to the organizations in a meaningful impacting way. Mr. Burger did provide the audience with free information on how you can do better at measuring your results and begin transparent. I believe that organizations should take heed to this lesson and do their best at making a long lasting change, by proving their work with evidence based data.
– Ashlei
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Ashlei,
It was indeed surprising to hear that only 2% of donors look for hard data in order to make their charitable decisions. Never the less I wonder if this attitude will change with Millenials and Generation Z as they are more technologically driven which might influence their inquiry traits… But that is just my mind wandering, maybe it has nothing to do with it. But putting that on a side note like you say even though measurement systems are new to the nonprofit world it is important for this management tool to be taken seriously. Not only to provide information to external stakeholders but internal as well. Organizations will be able to carry a much clear self-evaluation and reassess their goals and objectives in pro of providing quantifiable social value.
-Alicia
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Regarding the how, Burger in the video places a lot of emphasis on the CEO of the organization. He explains the huge importance of having a leader that is knowledgeable about Performance Management Systems and believes in their value for the success of the organization.
I think it is important to be informed of organizations like Charity Navigator and other websites that Burger lists like Perform Well and Keystone.org. They can provide resources and tools for the nonprofits that want to implement or refine their performance measurement system as well as have an unbiased feedback.
I was pleased that Burger talked about the importance every member of the organization plays in the performance of the organization. Especially the part where he briefly discusses the effective oversight the board of directors should provide and the well thought selection process the organization should have in place for their selection instead of just being a group best buddies. In the case studies we have read so far we have been able to see how damaging this can be. And of course all this I think leads to transparency and ethics. Nonprofits need to be aware of how this can affect their image directly and survival.
All this reminds me of an organization in my country which seems to be in the verge of closing their doors. In Ecuador a lot of nonprofits (NGOs), including the arts are funded by the government. I don’t want to post the name, but this particular music organization was not able (or was afraid…) to open their books when asked by the directing government office that was responsible for their funding. This organization had being getting their funding from another office and it seems that that previous office had not being meticulous about following through with their annual reviews. Now the future of teachers and students that depend on this organization’s services is uncertain.
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