In 1999, Houston had a problem: NASA’s $125M Mars Climate Orbiter was lost forever. One team of project engineers worked in metric, another team in imperial. The result? An expensive fireworks show for an audience of none. The best and brightest get it wrong sometimes.
After the grief, NASA didn’t give up. Its teams learned, they got better, and they developed a far more successful mission on their next go. Progress learns far more from failure than from success.
In the world of impact and philanthropy, measurement and sharing of data are siloed. It would be like the NASA team speaking thousands of different languages, with some teams opting for only numbers, some for text, and some for interpretive dance. Without the ability to measure and communicate, funders are forced to default to support:
- People they trust
- Things they understand and value, and
- Things that make them and their organizations look good to the people they care about.
According to a study by Innovation Network, 92% of nonprofits measure their impact, but only 58% have a framework for their measurements. Meanwhile, 76% of impact investors use the IRIS+ thematic taxonomy, and 69% align their investments with the UN Sustainable Development Goals. Just over 1 in 10 of us aren’t measuring at all, about half know what to measure, and those who are measuring are measuring different things. If social impact were a movie, it might be called “Everything Everywhere All at Once”.
Measurement is the Peloton of impact: it keeps you on track and accountable. But, as with any workout routine, it’s got its pros and cons. When you nail it, you’re the Connor McDavid of philanthropy, with funding rolling in and stakeholders in awe. But when you fumble, you’re chasing vanity metrics, wasting time and resources, and looking like the WeWork of the nonprofit world.
Trust-based philanthropy is the secret sauce that connects funders and nonprofits. Impact measurement is the linchpin that makes it all click, ensuring that funding goes where it’s needed most and generates real results. Together, they’re the dynamic duo that can bring both sides together in trust to accelerate impact.
Here’s a game plan to create impact measures that drive success:
- Goals: Start with clarity, like Marie Kondo with a cause. Align your mission and the causes you support.
- Metrics: Choose your metrics wisely. The IRIS+ thematic taxonomy and UN Sustainable Development Goals are good places to start, though be sure to tie in your organizational strategy and mission – this approach will help you meet your organizational goals while achieving greater impact in your area of expertise.
- Share the love: Data and insights are best served transparent and collaborative – like a potluck for philanthropy. Even the best insights are limited by factors like geography, type of organization, and size. The more we share, the better off we’ll all be.
By embracing impact measurement, funders and nonprofits put trust first, showcasing their commitment to transparency and accountability: the foundation of trust-based philanthropy. If you don’t know where to start there are amazing leaders that can help and support you, send us a note if you’re feeling stuck and we’ll send free resources to get you started.
Trust is the currency of the nonprofit world; let’s invest wisely.