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Why Measure? Part 2

Posted March 13, 2008 6:15 AM by Dylan Miyake

This discussion of measurement in the non-profit world has been going on for some time now. In an article in the Summer 2004 issue of the Stanford Social Innovation Review, Katie Cunningham & Marc Ricks argue that major donors aren't really that interested in performance measurement. In fact, the note in the article that "only four of the 22 interviewees were strongly interested in getting better data on the performance of nonprofit organizations. Much to our surprise, the rest expressed skepticism – or even outright disapproval of the concept."

What's behind this counter-intuitive finding by SSIR? Well, they posit five reasons that major donors aren't clamoring for increased performance management:

  1. Donors Do Not See a Need for Performance Measurement
  2. Donors Do Not Have Time for Performance Measurement
  3. Donors Do Not Have Confidence in Performance Measurement
  4. Donors Do Not Want to See Nonprofit Resources Dedicated to Performance Measurement
  5. Donors Look to Institutional Funders to Engage in Performance Measurement on Their Behalf

A very interesting fact was that despite the fact that all the interviewees were successfull businessmen and women in their own right, when it came to charitable contributions, they almost all relied on "gut" and personal connections to make their decisions. The rigor and analysis they brough to their professional decisionmaking was left at the door when dealing with their personal charities.

But a bigger issue, in my mind, is a fundamental lack of understanding of the integrated nature of performance measurement and performance management. Our position has always been that "you can't manage something that you can't measure," so without measurement, there can certainly be no efficient management.

I think would go without saying that the funders of non-profits would like to see their favorite organizations managed better and to be more effective. Better measurement is not simply about creating a "report card" for the NFP, it's about helping them manage better.

Getting this message out to NFPs and mission driven organizations -- that the Balanced Scorecard is a management framework that can accelerate time to results -- is one of the mission objectives of Ascendant.

Related Blog Entries

I'm glad that I subscribe to this blog, but I recently read some different information about donors and measurement. I read in the Wall Street Journal that donors would give more if nonprofits could show that they were really making an impact.

This article was from back in December 2007:
# Posted By Emily Martin | 3/13/08 12:34 PM
I agree wiht Emily. All recent studies reveal that donors are increasingly younger business people who expect performance data to demonstrate impact as a "return on investment" from their donation. Our ongoing challenge is to understand the expectations and behaviors of the donors of future.
# Posted By Laura Downing | 3/15/08 7:37 PM
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