Beyond Numbers: Unveiling Non-Financial Performance Measures for NGOs/NPOs

Non-financial performance measures are indicators that measure the non-monetary aspects of an organization’s work, such as its mission, vision, values, strategy, goals, processes, outputs, outcomes, and impact.
Non-financial performance measures are important for NGOs and NPOs because they help them to align their work with their mission and vision, improve their work quality and effectiveness, and show their work value and impact.
To implement non-financial performance measures effectively, NGOs/NPOs need to define the purpose/scope of measurement; select relevant/meaningful/possible measures/indicators; collect/analyze reliable/valid/timely data; and report/use clear/accurate/useful results.
There are some examples of NGOs and NPOs that have used non-financial performance measures effectively to improve their performance and impact, such as World Vision and GlobalGiving.

Non-governmental organizations (NGOs) and non-profit organizations (NPOs) are entities that work for social causes and public good. They aim to make a positive difference in the world by addressing various issues that affect people and the planet. Some of these issues are poverty, health, education, environment, human rights, and more. NGOs and NPOs do not work for governments or businesses. They get money from people who support them. They often collaborate with other organizations, communities, or individuals to achieve their goals. But how do they know if they are achieving their goals and making an impact? How do they measure their effectiveness and performance?

NGOs and NPOs have relied on financial metrics to check their success. They check how much money they have, spend, need, get, and save to see if they can keep doing their work. However, these metrics do not capture the full picture of their work and value. They do not show how good, useful, and helpful their programs and activities are. They do not show how they are contributing to social change and improving people’s lives.

NGOs and NPOs need to use more than numbers to see how good they are. They need to use things that show how they help people and the world, not just money. They need to see if they are doing what they want to do and how they want to do it. They also need to tell others what they have done and what they need to do better.

In this blog post, we will talk about some things that are important for NGOs and NPOs. These can help them do their work better and influence the world. We will also see examples of NGOs and NPOs that have used them well.

An image of a balance sheet or a financial report to illustrate the traditional way of measuring performance.

Understanding Non-Financial Performance Measures

Non-financial performance measures show how an organization does good things, not just money. They have four types: inputs, processes, outputs, and outcomes. Here is what they mean:

Inputs are the resources that an organization uses to do its work. They include staff, volunteers, equipment, materials, facilities, funds, etc.
Processes are the activities that an organization does to deliver its work. They include planning, designing, implementing, monitoring, evaluating, reporting, etc.
Outputs are the things that an organization makes or gives because of its work. They include things like training sessions, workshops, publications, campaigns, events, etc.
Outcomes are the changes or effects that an organization creates with its outputs. For example, literacy, skills, health, happiness, etc.

Non-financial performance measures show how an organization does good things. They can be numbers or words, true or not. Numbers show how much or how many times something happens. For example, they can show how many people learned or got better. Words show how good or how different something happens. For example, they can show what people say about the help or the stories of how things changed. True things show something that other people can see. For example, they can show how many books or papers were made or how well people did on tests. Not true things show something that can change depending on who sees it. For example, they can show if the people who got help were happy or thankful or if the programs were useful or wanted. All these kinds of ways are important for showing how good and helpful an organization’s work is. They can work together and give a full and fair picture.

An image of a customer satisfaction survey or a feedback form to illustrate one example of a non-financial performance measure.

Importance of Non-Financial Metrics

Non-financial performance measures are ways of showing how an organization does its work. They help NGOs and NPOs to:

Align their work with their mission and vision. Non-financial performance measures help NGOs and NPOs to say what they want to do and how they want to do it. They help them to make clear goals and plans that show their purpose and values. They also help them to check and see how they are doing and how well they are meeting their goals and plans.
Improve their work quality and effectiveness. Non-financial performance measures are ways of showing how an organization helps people and the world. They help NGOs and NPOs to see what they do well and what they can improve. They help them to learn from what works and what doesn’t and make smart choices based on proof. They also help them to change their work to fit diverse needs and situations.
Demonstrate their work value and impact. Non-financial performance measures show how an organization benefits people and the world. They help NGOs and NPOs to communicate their achievements and challenges. They help them to be transparent and accountable to their stakeholders. They also help them to gain and keep support from donors, partners, staff, volunteers, beneficiaries, and the public.

Implementing Non-Financial Performance Measures

Implementing non-financial performance measures can be challenging for NGOs and NPOs. They may face difficulties such as:

Choosing the right measures that are relevant, meaningful, and feasible for their work.
Collecting and analyzing data that are reliable, valid, and timely for their measures.
Sharing clear, correct, and useful results.

Some solutions can help NGOs and NPOs measure their non-financial performance well. These steps are:

Define the purpose and scope of the measurement. Choose the time, people, and place for the measurement.
Select the measures and indicators. Check that the data for them is good and easy to get.
Collect and analyze the data. Get the data for your measures and indicators with good methods and tools. For example, you can use surveys, interviews, groups, watching, papers, etc. You can also use effective ways and programs to study the data. Some examples are descriptive statistics, inferential statistics, content analysis, etc.
Report and use the results. Show your measurement results clearly, correctly, and honestly. They should use formats and channels that suit their audience and purpose. Show your results in diverse ways. For example, reports, pictures, talks, etc. Use your results to improve your work. They should show how they are making a difference in the world through their work. They should share their achievements and challenges with their stakeholders.

Case Studies of Effective Non-Financial Measurement

Some examples of groups that have used things to show how they help people and the world are:

World Vision uses a method called LEAP to see how good they are. They use things that show how they help people and the world, such as:

The alignment of its programs with its strategy, standards, and values.
The participation and empowerment of its beneficiaries and partners in its programs.
The quality and effectiveness of its programs in achieving intended outcomes and impact.
The learning and innovation of its staff and partners in improving its programs.

GlobalGiving is a group in the US that helps people give money to small projects around the world. It uses a system called GG Rewards to see how well its partner groups are doing based on things like:

The quality of their project reports.
The frequency of their project updates.
The responsiveness to donor feedback.
The engagement with GlobalGiving’s tools and resources.

GlobalGiving collects this data using its platform and algorithms. It analyzes these data using a scoring system that assigns points to each metric. It shows its partner organizations how they do and how they compare to others with a dashboard. It rewards them for good work with benefits. For example, putting them on its website, getting them money, learning new things, etc.

Non-financial performance measures show what an organization does that is not money. They help NGOs and NPOs work for their goals and dreams, make their work better and more useful, and show their work value and effect. To use these measures effectively, NGOs/NPOs need to:

Define the purpose/scope of measurement.
Select relevant/meaningful/feasible measures/indicators.
Collect/analyze reliable/valid/timely data.
Report/use clear/accurate/useful results.

We hope this blog post helped you learn what non-financial performance measures are, why they matter for NGOs/NPOs, and how to use them.

Thank you for reading!

SUMMARY:

This blog post is about how NGOs and NPOs can measure their effectiveness beyond financial metrics. It explains what non-financial performance measures are, why they are important, and how they can be implemented. It also provides some case studies of NGOs and NPOs that have used non-financial performance measures effectively.