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Want to Become a Data-Driven Organization? First, Develop an Impact Strategy

By Kristin Dorage June 26, 2018

Better impact measurement is easier with an impact strategy, so you can achieve your nonprofit's goalsSee if this sounds familiar:

1. You come up with a great idea that you think will further your mission.
2. You pitch your idea to donors and receive funding to bring it to fruition.
3. But unfortunately, things don’t go as planned – there are unanticipated challenges with your programming and external factors that complicate your work. You struggle to measure the impact of your work, making it unclear whether your idea led to real impact.

This scenario is quite common in the nonprofit space because solving social problems is challenging work. Creating social change requires time, money, and constant improvements to programming and operations. This is why so many nonprofits are shifting towards becoming “learning organizations” (also known as becoming “data-driven”) and why “impact measurement” has become such a buzzword in donor circles.

A CRM system such as Salesforce can go a long way towards helping nonprofits engage in evidence-based practices; after all, a CRM keeps your data in one place, and data is crucial for helping organizations make smart decisions. But in order for data to provide insight, nonprofits must first be clear about what they’re doing and why.

Start by creating a plan for your impact strategy

How to Improve your Impact Strategy

An impact strategy is one way to develop clarity about your intentions, and it is important for any nonprofit seeking to become a learning organization. An impact strategy should clearly define what your goals are, how you plan on achieving your goals, and how you’ll measure success.

Here are three questions that can help your organization develop an impact strategy.

Where are you going?

Most nonprofits already have mission and vision statements, but they are worth revisiting when you develop an impact strategy. Your vision statement should depict your ultimate vision for the world. Dream big! This is a time to inspire your staff and your donors. If everyone at your organization does their jobs correctly, what will the world look like in 50 years? 100 years? Part of this process may be drawing inspiration from the UN Sustainable Development Goals, and of course you’ll want to consider how technology could enable your success.

Then, write a mission statement that is outcome-oriented, clear, concise, and useful. Writing a mission statement forces you to figure out what it is you’re doing and why. For instance, whom will you serve? Where will you do this work? What specifically are the things you do and what are the things you don’t do? Having a clear, narrow focus helps avoid mission creep and makes it much easier to measure your impact later on.

Then, develop specific objectives that will help you achieve your mission. Objectives should explain how much you plan on accomplishing a certain thing by a specific date. For example, “By 2020, we plan to increase the literacy rates of children accessing our programs by 20%.”

Move towards outcomes and impact - don't just stop at activities and outputs for your program measurement

How will you get there?

Once you know where you want to go, work backwards from your vision and map out what needs to be in place in order for you to get there. This map will serve as your organization’s theory of change – a depiction of how and why change is expected to happen in a particular context. Your map should include the activities your organization will run, the resources it needs to run them, and expected short-term and long-term outcomes. It’s common to put this map into a results framework, which should include the following:

  • Activities – the specific interventions you will run. Ex: In a safe water drinking program, this could be providing education about water sanitation and chlorinated drinking water.
  • Outputs – the direct results of your activities; that which is within your direct control. Ex: The number of water education home visits; the number of households participating in a chlorinated drinking water workshop.
  • Outcomes – short-term changes as a result of effective implementation of activities. These are things you hope you’re influencing, even though they are right outside of your direct control. Ex: The percentage of households that are using chlorinated drinking water.
  • Impact – long-term, meaningful, measurable, sustainable change in individuals and organizations as a result of consistently effective implementation of activities. Ex: Reduced child mortality rates.

Activities, outputs, outcomes and impact are they key parts of your nonprofit impact strategy

Note that the impact you are trying to achieve can be influenced by several different outcomes some of which are outside of your control. Measurement at the impact level can be tricky, so focusing on the things you can measure, such as your outputs and outcomes, will at least help you infer whether your programs are contributing to your desired impact.

Also, with so many objectives and indicators to track, you might realize it’s impossible to tackle everything at once. That’s okay! Just identify which business areas are the most important for achieving your overall strategy, and prioritize those first.

Impact measurement is a cycle of continuous improvement

How will you know when you’ve achieved success?

Impact measurement is an iterative process — rarely will organizations say they’ve achieved success and their work is done! But as you evaluate your programs, you will use your findings to make improvements. To do this, you’ll want to develop indicators for each output and outcome in your results framework. Indicators help measure your progress towards your goals. For example, if your organization runs a job skills training program, you’ll want to track outputs like the number of people who attend a certain class. You’ll also want to track whether participants pass the exam at the end of the class to see how much they’ve learned (an outcome). Indicators should be measurable and should help you know whether or not you are on track towards achieving your goals.

Once you have an impact strategy your organization can design its systems and processes to be in alignment with these goals. And when the time comes for you to measure your impact and demonstrate this impact to donors, you will be well on your way!

In our next blog post about impact measurement, we’ll talk about translating your results framework into your Salesforce data model. We’ll also discuss how to gather the right data to demonstrate impact, and how to analyze and present data in a meaningful way.

Also, check out one or all of our 3-part Impact Measurement webinar series: