Evaluating the Nonprofit Portfolio

Published on Wednesday, April 08, 2009
ARTICLES

The seeds of Acton Institute's current evaluation program were sown in a proposal for a major foundation six years ago. To present a clear and compelling case for supporting Acton's research department, all relevant facts were organized in a table. That simple table is now called a scorecard and is the starting point of our evaluation work.

Scorecards

Today each Acton department, including human resources and fundraising, has its own scorecard. It begins with the department's mission statement, followed by a list of every project along with its description, objectives, strategies and target audience. The heart of the scorecard is the metrics and variance columns, which allow managers to track results. Other columns like "weight" and "grade" provide additional perspective for the reader.

Dashboards

Because the scorecard is dense with information, the most important measures are chosen and graphed on a single PowerPoint slide for easier viewing. Acton's most frequently used dashboard contains 12 key organizational metrics. Board members expect to see this Management Dashboard each month, ensuring that this process remains a priority during busy times.

State of the Institute

These two tools provide the framework by which to evaluate the "Acton investment portfolio," whose guiding objective is Acton's mission statement. This mission or objective is met by strategically investing in a mix of instruments, namely Acton's current departments and programs. To monitor those individual investments, Acton produces the State of the Institute which collects comprehensive performance results in five scorecards and graphs them in seven dashboards. Management and board members, in their role as Acton's financial advisors, can then review this report twice a year to determine which departments, projects or activities should be funded, finished or changed.

Learning and Improving

In the spirit of solidarity, we'll share a few lessons learned from our six years of measuring.

Simpler is better. This includes software, systems, metrics, and expectations. When we implemented our first scorecard, we had to scrap almost every one of our original metrics. Though our intention was to measure things that really mattered, like reputation and impact, our metrics were too difficult in practice. In the early stages of our program we also spent thousands of dollars on a comprehensive software solution that never materialized. PowerPoint and Excel now meet most of our needs.

Embed learning opportunities into the process. Our dashboards require program directors to provide written analysis of their graphs. We didn't fully appreciate until later that this regular examination of trends, historical data and organizational factors would produce the dashboards' biggest benefit: Owners of the data are now sensitive to what drives the numbers and can quickly identify victories or problems.

For example, we discovered the "Subscribe Here" button was accidentally dropped from the front page of Acton's brand new website because we saw a precipitous, unprecedented drop in opt-in newsletter subscriptions. On a more serious note, Acton started limiting expenditures in the summer of 2008, even before the market's plunge, because we noticed a significant drop in revenues and "days cash on hand" compared to our five-year average. We ended our year in the black, due partly to this early adjustment.

Be discerning about costs and benefits. For instance, because evaluation takes time, adding it to someone's current job description isn't realistic. Proactively encourage buy-in by addressing complaints, calming fear of failing numbers, praising successes, and using the tools to raise resources.

Finally, donors will appreciate transparency and reward evaluation efforts.

Rachel Wondergem is the director of strategy and planning at the Acton Institute. Write her at rwondergem@acton.org. Find more measurement information, visit http://www.measuringfreedom.com/.