FYI Blog

Telling the Whole Story with Nonprofit KPIs

Key performance indicators, or KPIs, aren’t one-size-fits-all. These data nuggets are a valuable way to see if your nonprofit is striking the right balance between thinking big and driving impact.

KPIs are designed to tell the story of your work—and the data you uncover should inspire further digging. Why is that particular number down this month? Why are we having this experience or outcome? What will it take to reach our impact goals?

Impact measurements for nonprofits should be a tool for effective evaluation. If you’re focusing on the wrong numbers or information, you can end up obscuring the real story. And placing too much focus on just one data point can lead to inefficient resource planning and an incomplete, ineffective solution to the problem your organization is trying to solve.

So how exactly can you—as a leader, funder, board member or fundraiser—use KPIs to set your nonprofit up for success?

Think through your theory of change

Before getting too deep into the weeds, it’s important to understand the impact you’re trying to make and define what success looks like. It’s helpful to apply the theory of change and answer these questions as a starting point:

  1. What impact do you hope to achieve?
  2. What is the mechanism you’re going to use to achieve that impact?
  3. How will you know when you’ve achieved it?

Track everything!

After you’ve gotten clear on the theory of change for your organization, it’s time to determine what metrics are helpful in evaluating impact. Make sure you are tracking across a range of both qualitative and quantitative KPIs to figure out what’s right for your nonprofit.

Quantitative KPIs illustrate reach—the number of donors you have, the number of subscribers to your email list, the number of folks engaging with your content on social media. You can also gather quantitative KPIs from program outcome indicators and stats. Depending on the work your organization is doing, this could be anything from disease prevention rates to academic performance improvement. Basically, any meaningful, trackable data can come in handy when measuring impact.

You should also rely on qualitative KPIs. This isn’t so much concrete numbers but anecdotal data—like beneficiary and donor feedback, success stories, and case studies. Stories are critical in connecting the work, the impact, and the need for resources to make that impact happen—and are essential to drawing more people into your mission.

Some other metrics to consider tracking could be cost per outcome (making sure you take into account the short vs. long-term implications of costs) and stakeholder loyalty (through something like a Net Promoter Score that asks: “How likely are you to recommend our organization to a friend or colleague?”).

You can also track cash reserves (what does your safety net look like?), and financial sustainability (where is the bulk of your funding coming from and how is that evolving?).

Be wary of “short-termism”

Nonprofits notoriously suffer from short-termism—being so focused on the year ahead (whether that’s raising money, helping constituents, or reporting on grant funding) that they lose sight of long-term initiatives that could lead to systemic change.

It’s understandable to operate this way when you’re vying for resources and trying to maintain your network of support, but don’t forgo big picture thinking because it feels out of reach. Imagining your dream scenario will help you more clearly outline possible steps you can take to get there.

Ask for the “why”

KPIs should ultimately serve as a starting point. They should spark curiosity and a lot of questions, like “Why did we get this outcome?” “What meaning do these metrics take on when looked at together?” “What can we do to change things next time?”

The numbers always have a story behind them. Finding out the “why” will help you figure out what’s working and not working with your fundraising.