For most businesses success is measured by financial profit, return on investment and customer satisfaction. For a nonprofit however, success is measured a little differently as they work towards positively impacting society through their mission and goals, not by the bottom line.
Before a nonprofit can begin measuring the success of their goals, they must first define key indicators in which to measure. These indicators will then be compared with reports to give the nonprofit a better understanding of how their success, or lack thereof.
Measuring Nonprofit Success
Use Nonprofit Accounting Software
Using nonprofit specific accounting software is a must for any nonprofit organization. Not only will this help them stay organized, but it will enable to better analyze their financials and outcomes.
Learn more about the benefits of nonprofit accounting software by reading Why Your Nonprofit Needs Abila MIP Accounting Software.
Use Reporting Functions in Nonprofit Accounting Software
While this may seem a little obvious, nonprofits should make use of the reporting features their accounting software offers. While the numbers only give the financial aspect of the nonprofit, it’s important to see how well the programs, departments, projects, etc. are using the budget they are allotted. Are they able to meet their goals and deadlines and limit expenses all while in the budget they are given?
These numbers then need to be compared with the overall goals of the nonprofit.
Compare Reports with Outcomes
Once nonprofits have compiled their reports, they should compare them against their ultimate goals and key performance indicators. If an organization’s goal is to feed more of the homeless, they should see how many more people they have been able to feed than the previous year. They should also look at how much more money (or less money) it took to accomplish that goal. If the organization was unable to feed more of the homeless, was it due to lack of funding? Were there not enough people working on the project? Figuring out why something is or isn’t working will help a nonprofit structure and organize their efforts for maximize success.
Combining both reports from nonprofit accounting software and outcomes will give an organization a better understanding of their mission is being accomplished and how they can continue to grow and positively impact society.
Capital Business Solutions provides nonprofit accounting software and consulting services for nonprofit organizations throughout the United States. To learn more about our products, services or trainings, please call Bob Schilling at 877-889-0629 or send us a message!