Impact Matters : Why Nonprofits Must Demonstrate Their Effectiveness
“We are not grant makers; we are change makers.”
This statement by a Kellogg Foundation official encapsulates a growing shift in how donors view their role in creating impact. Since donors see themselves as an integral part of the impact delivery pipeline, nonprofit organizations (NPOs) must focus on showing tangible results through measurable outcomes rather than just reporting on their activities.
In several of my recent conversations with NPOs, a muddled distinction between impact and activity metrics emerged. Activities capture the effort towards delivering impact. Here is a quick example illustrating this difference:
Mission: To empower underprivileged youth through education, mentorship, and skill-building programs, fostering personal growth and creating pathways to a brighter future.
Activity Metric: The number of mentorship sessions conducted monthly for underprivileged youth.
Impact Metric: The percentage increase in high school graduation rates among participants, measured annually.
When evaluating programs, it is important to focus on demonstrable impact they have had, not just activities they have completed. A good question to ask is : What evidence shows that this program created meaningful, long-term change in the communities it served? Requiring proof that the program’s positive effects are lasting would help capture its impact story more effectively.
Distinguishing activity inputs from mission outcomes focuses NPOs on change-making, not output-tracking. Impact transparency enhances accountability to donors, policymakers, Trustees, staff, volunteers, media, regulators, beneficiaries, and other stakeholders who invest attention, trust, and resources based on perceived returns and impact.
While counting people served or projects completed has value (esp. for operations management, Government/Funder requirements, internal forecasting etc.) , true transformation lies in the end outcomes.
To fulfill their missions and create meaningful change, NPOs must prioritize outcomes orientation and make it a core aspect of their culture.
