KPIs Can Make or Break the Success of a Nonprofit Strategic Plan. Here’s How to Choose the Right Ones.
The strategic planning process is invigorating. There’s nothing quite like sitting amongst passionate colleagues and collectively envisioning a brighter future for your organization. The excitement and ambition are electric.
But eventually the planning process ends. And that’s when reality strikes. You realize you have to actually implement the plan.
Did you just feel the balloon pop, too?
Implementing a strategic plan takes time and commitment, and can feel like a long-term slog when you’re in the thick of it - especially when you’re not sure if the path you’re headed down is the right one.
Having the right Key Performance Indicators (KPIs) in place is the antidote to implementation burnout. And working towards the wrong KPIs - aka unrealistic KPIs - can turn your plan implementation into a sinking ship.
Realistic and Manageable KPIs are Crucial Components When Implementing a Strategic Plan
Too many organizations unintentionally sabotage their strategic plan before it even gets off the ground. This happens when ambition overrides reality and you’re left with unrealistic KPIs with which to measure success.
KPIs need to accurately depict how your programs and services are performing. But the measurements you put in place can’t be so time-consuming, cumbersome, or expensive that they become burdensome to implement. KPIs that cause friction simply won’t get implemented.
4 Tips for Determining the Right KPIs to Track
What’s considered a meaningful KPI will differ by organization, but the methods for determining which KPIs to track are fairly universal. Here are four tips to get you started.
Think Through the “What?” and the “So What?” of Your Activities
KPIs should track what your organization does and for what purpose. Actions and results. For example, if you’re an organization focused on providing college prep courses to teens, you might want to track not only the number of teens in your programs but also the rate at which those teens successfully enter a four-year college.
Talk to Other Organizations in Your Sector
What information are your friends at other nonprofits tracking? And how do they gather information? There’s no need to reinvent the wheel. Ask for guidance from those you trust about how to create realistic metrics.
Investigate Whether Any Agencies Collect Information Related to Your Mission in Your Area
It’s possible to leverage agencies and other nonprofits to gather comprehensive research on your sector. For example, Feeding America has conducted extensive research on food insecurity and hunger in America. Several Beam Consulting clients have utilized this research to establish benchmarks against which they measured their progress.
Ask Your Funders
Funders and donors are often useful partners for more than financial support, and they usually have a clear sense of what they’d like to see reported on to demonstrate organizational impact. Rather than guessing - ask them. Over the years, we have had lots of examples of funders not only providing reporting clarity but also working hand-in-hand with staff and leadership to establish those metrics.
After taking each of these steps, you’ll have a stronger idea of the type of data you need to collect to evaluate success.
How to Identify Useful Nonprofit KPIs for Your Organization
There are three steps I recommend to Beam Consulting clients as they work to identify their list of KPIs.
Define Your Goals & Objectives
What do you want to achieve through your strategic plan? What does success look like for your organzation or specific areas within it? Your strategic plan’s vision and goals should help you define your intended achievements.
Identify Critical Success Factors
What are the key elements that directly contribute to achieving your objectives? For example, say that you’re a conservation organization working to restore a local river. Critical success factors could include reducing the amount of stormwater runoff into local rivers or stopping chemical dumping from local corporations. Ideally, you would measure your success in addressing those factors.
Define Your Data & Data Collection Methods
This step comes down to determining what’s realistic for your organization to measure and the context in which you’ll use that data to show a meaningful result.
A measurement that works for another organization may not be appropriate for you. For example, a large conservation organization may have a division focused solely on working with corporations to address environmental practices. Therefore, it makes sense for them to track the results of negotiations with those companies. For a smaller nonprofit with fewer resources, collecting that data may not be as realistic. Instead, the smaller organization may decide to count the number of trees planted and river clean-up days.
Make Your KPIs Both Realistic and Meaningful, and You’ll Set Your Plan’s Implementation Up for Success
The right KPIs should be easy to track and monitor frequently while also allowing you to report accurate and meaningful intel on the success of your programs and services.
Finding this balance is core to the success of your strategic plan.
As you prepare for your next strategic plan and setting meaningful KPIs, I’m always here to help. If you’re looking for guidance, don’t hesitate to get in touch.
Happy planning!
Dani
About The Author
For the past 25 years, Dani has helped nonprofits at local, regional, and global levels find sustainable solutions to tricky growth and funding issues. She works with leaders and teams to optimize their approach to fundraising, strategic planning, marketing, and more! Dani is passionate about helping motivated people build vibrant and effective nonprofit organizations—so they can make a meaningful impact in the world!