The Oracle study, Connecting Dollars to Outcomes, which provides insights from more than 350 senior nonprofit executives in the U.S., found that while executives believe that outcomes measurement supports their top three priorities for 2019 – financial stability, staff turnover and donor retention—only 29 percent of nonprofits are able to effectively measure the outcomes of dollars invested.
“Nonprofits have always tried to measure their impact,” said Lauren Woodman, CEO of NetHope. “These organizations constantly work to expand their mission by acquiring more donors and increasing gift size. There’s consequently never been a more important time to provide visibility into the results. While the majority of nonprofits noted they struggle measuring impact, this study shows the focus organizations are putting on investing in the resources that will allow them to change their approach to measurement.”
Nonprofit measurement misery
Nonprofit leaders know that measuring impact and increasing donor engagement is critical, but struggle to demonstrate the outcome of investments and are unable to share results with donors or funders in real-time.
- 76 percent of nonprofit executives identified increasing the effectiveness of outcomes measurement as the top priority for 2019.
- Only 29 percent of nonprofits are able to effectively measure the outcomes of dollars invested.
- Only 18 percent of nonprofits offer their donors and funders access to real-time reports. The most popular methods for communicating value to funders and donors are annual reports (65 percent), emails (54 percent) and one-on-one meetings (39 percent).
The challenges of connecting dollars to outcomes
Operational issues and executive skepticism are the top obstacles to nonprofits embracing outcomes measurement.
- The largest operational challenges are lack of people to manage measurement (37 percent); no system in place to measure outcomes (30 percent); and data silos (27 percent).
- Executive skepticism focuses on the applicability of outcomes measurement, with 69 percent of respondents believing that it primarily rewards well resourced, larger nonprofits. Executives also believe that it over simplifies social issues (60 percent) and is too short-term (45 percent).
A better outcome for everyone
Despite executive skepticism, executives acknowledge that being able to effectively measure outcomes will support their top three organizational priorities for 2019. Those are financial stability, staff turnover and donor retention.
- 84 percent of nonprofit executives believe outcomes measurement will increase fundraising success. 49 percent believe it will increase recurring donations, while 35 percent believe it will increase gift size.
- More than half of executives believe it will help them tap into new donor demographics. Furthermore, 42 percent believe it will help meet funder requests.
“Nonprofits are constantly trying to do more with less. They also have to prove to watchdog agencies and funders that they’re using donations effectively,” said Cheryl Gipson, Oracle NetSuite. “We live in a time where consumer trust in institutions of all types is dwindling. Being able to effectively measure the outcome of all investments in real-time is therefore increasingly important for the nonprofit industry. We are committed to helping create a more impactful nonprofit industry and will continue our work with nonprofits to provide technology that allows them to trace dollars from donation to results.”