Impact measurement, or impact measurement and management (IMM), is a new focus area in the nonprofit community. However, the principles behind it have been around forever. 

Every organization wants to understand just how effective it is at delivering its promised mission to the community it serves. Doing so is key to improving your programs and services, strengthening your relationships with supporters, and growing your organization’s operations over time. 

If you’re new to measuring, analyzing, and reporting your nonprofit’s impact in a formal way, you’re not alone. This short introduction will teach you the basics so that you can get started with your own IMM process. Let’s begin! 

This image and the text below define the term impact measurement.

Impact measurement is defined as “a process that involves evaluating the effectiveness of your programs, initiatives, and interventions to determine if you’re delivering your intended results or benefits to your target beneficiaries.” 

This means thinking beyond your nonprofit’s day-to-day work and instead focusing on the lasting effects your programs, services, and interventions have on those you serve. For example, instead of evaluating the immediate fundraising success of your charity auction, you would consider how that event allowed you to do more for your beneficiaries over the following weeks and months and build relationships with supporters for the long term. 

By having this impact-focused mindset, you set your nonprofit up to consistently improve how it’s working toward its vision for a better tomorrow in a variety of areas, from program delivery to fundraising. 

The Benefits of Impact Measurement & Management 

IMM benefits both your organization and the stakeholders who support your work. Let’s look at the specifics: 

Benefits for Your Nonprofit 

  • Increased accountability to and transparency with stakeholders like donors, grant funders, and corporate partners 
  • Consistent opportunities to improve and grow as you analyze impact data and make informed decisions 
  • More efficient and effective resource allocation as you determine what areas of your operations need the most focus
  • Enhanced marketing as you demonstrate why your cause matters and why your organization deserves support 

Benefits for Stakeholders

  • Better organizational governance as leaders like your board of directors gain a full understanding of your nonprofit’s current state and make careful decisions to grow your impact over time 
  • Evidence of your organization’s effectiveness as your nonprofit provides an objective view of its operations and their long-term effects 
  • Strengthened relationships as stakeholders better understand why they should continue to support your organization 
  • More meaningful recognition as your stakeholders see what their contributions help your organization achieve 

Getting Started 

To experience the benefits above, you’ll need to design your own IMM strategy. Here are a few steps for starting on the right foot: 

1. Create an impact framework. 

Your impact framework will include specific objectives that you want to measure your progress toward. These objectives should be smaller goals that will get you closer to your biggest goal of all—accomplishing your mission. Here are a few examples of potential objectives: 

  • Raise the completion rate for our adult ESL program. 
  • Increase member engagement in our online community.  
  • Deliver more meal kits to single mothers and their families. 

After you have a list of objectives, determine the key metrics (typically called key impactor indicators (KIIs) in IMM) you will track to gauge your progress toward those objectives. Here are some examples of KIIs that correspond with the objectives above: 

  • Pre- and post-test scores for program participants 
  • Total number of members participating in your online forum 
  • Percentage of successful meal kit deliveries 

Once you’ve outlined a few objectives and accompanying KIIs, you have the structure you need to measure and understand your impact. Now all you need is data. 

2. Collect data. 

Determine what existing sources you can turn to for data relevant to each of your objectives. These might include your constituent relationship management platform (CRM), marketing platforms, and other tools. Also consider any publicly-available data that might be useful, like academic studies or government reports. 

You may find that you need to capture more data. If this is the case, make a plan for how you will do that, whether by investing in a new data collection tool, sending out a survey, or conducting a focus group. 

3. Analyze your data for patterns and trends. 

Next, it’s time to look critically at your data and see what story it is telling about your nonprofit. How you do this will depend on what type of data you’re working with. 

For quantitative data, you’ll conduct statistical analysis. For qualitative data, you’ll need to codify your data and extra themes to gain insights. This is where IMM can get a bit tricky, so you may find your organization would benefit from working with a data scientist or investing in a dedicated IMM platform. 

4. Put your insights into action.

The data analysis step will provide you with useful information. For instance, you might notice that the attendance rate for your adult ESL classes goes down after the three-month mark or that your percentage of successful meal kit deliveries for the single mothers you serve goes up on weeknights. 

With these insights, you can make data-driven decisions that improve how your nonprofit operates. For example, you might create video lessons that supplement in-person classes to improve ESL program attendance after three months. 

You can also use your impact insights to report back to your community about your progress toward your goals. Create a dedicated impact report or share this information in a resource like your annual report. Don’t be afraid to shine a light on both your achievements and your challenges—honesty will help build trust with your stakeholders and demonstrate why they should continue their support. 

Impact measurement and management empowers your nonprofit to understand its progress toward accomplishing its mission and make careful improvements along the way. Use this crash course to start building out your own IMM strategy!

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