To ensure we’re all on the same page when reading this article, let’s establish the definition of metrics: metrics are measurements. Another published definition is: “Metrics are a system of parameters or ways of quantitative and period assessment of a process that is to be measured, along with the procedures to carry out such measurement and the procedures for the interpretation of the assessment in the light of previous or comparable assessments. Metrics are usually specialized by the subject area, in which case they are valid only within a certain domain and cannot be directly benchmarked or interpreted outside it.” (Wikipedia)
In an excellent article you can find on CharityVillage, entitled Voluntary Sector Board Governance – Survey Says! (a joint survey conducted by the Centre for Voluntary Sector Research and Development and the Strategic Leverage Partners), the authors warn that boards “should exercise caution when applying the for-profit board governance practices such as performance measurements to the nonprofit sector. Nonprofits are…more complex because they have a larger variety of stakeholders and their missions…involve outcomes that are different to measure.”
That said, many board members want to see not-for-profit organization metrics in the strategic plan and committee work plans, so this article suggests ways to draft them.
A common metric for not-for-profit organizations is membership/donor/sponsor growth. In this case, a metric could read “Obtain five new corporate and 25 individual members” or “Attract three new sponsors; one PLATINUM, one GOLD and one SILVER” or “Increase the number of donors by 10% and donations by 15%”.
Another metric could deal with retention: “Retain 95% of current members, donors, sponsors in 2008”.
Events provide another metric opportunity: “Offer six professional development workshops”; “Host two sponsor recognition events in 2008”; “Hold a national and two regional conferences”.
Governance activities are another activity that can be measured. “Hold at least four board meetings and four executive meetings in 2008”. “Have a national representative attend at least one meeting of every chapter”. “Conduct a Strategic Plan review workshop”.
Financial results are a very common subject of metrics:
- “Increase dues revenue by 10% and non-dues revenue by 20%”
- “Increase receipted donations by 10% and non-receipted donations by 25%”
- “Increase sponsorship revenue by 10%”
- “Decrease total expenditures by 5% over 2007”
- “Increase marketing expenses by 10% to support branding initiative”
Planning deserves metrics too. “Monitor, measure, analyze and update business plans, focusing on accomplishments and disappointments.”
Surveys also count. “Conduct surveys and ensure the participant feedback mechanisms are consistently used, monitored and reflected in future activities.”
ISM3 is a framework for Information Security Management Systems. ISM3 looks at defining levels of security that are appropriate to the business mission and render a high return on investment. The following ISM3 table suggests the elements that must be known for a metric to be fully defined.
| Element | Description |
| Metric | Name of the metric |
| Metric description | Description of what is measured |
| Measurement procedure | How is the metric measured? |
| Measurement frequency | How often is the Measurement taken? |
| Thresholds estimation | How are the thresholds calculated? |
| Current thresholds | Current range of values considered normal for the metric |
| Target value | Best possible value of the metric |
| Units | Units of Measurement |
The balanced scorecard is a common metric model and much can be found on this topic by conducting an Internet search. Typically, the metrics tracked are key performance indicators (KPIs). The intention is to identity future-state objectives and relate them to special goals that can be achieved through critical success factors or performance drivers, which are then monitored and measured by key performance indicators.
Human resource management is well served with metrics.
Metrics can also be applied to social investments. To learn about the Social Return on Investment (SROI) Excel model, read this CharityVillage article Measuring the return on social investments.
What gets measured gets managed is a popular business maxim that suggests that using metrics can enhance a not-for-profit organization’s chance at success in forward planning.
So in summary, plan to plan.
Paulette in President of Solution Studio Inc., a consulting practice that serves the not-for-profit association community. Paulette co-authored two manuscripts on risk management & not-for-profit organizations and regularly conducts risk management, strategic planning and board development workshops. She can be reached at 1-877-787-7714 or Paulette@solutionstudioinc.com.
