How do you measure your impact?

What do the BP oil spill and the nonprofit sector have in common? They both lack real-time data that would provide a true understanding of their impact. We are all thinking about the devastating effects of the oil spill in the Gulf of Mexico and the impact on the environment and economies of communities along the Delta. From the outset in April, journalists were asking for a clear and consistent answer on how much oil was spewing from the broken well pipe a mile below the Deepwater Horizon Oil Platform. No good answers were given because there was no monitoring apparatus that could measure the flow accurately. Now efforts have been taken to better monitor the well flow and understand the long- and short-term impact of this historic tragedy.

Like the BP incident, the nonprofit sector cannot fully articulate its impact, albeit in more positive terms. Other industries and sectors are able to measure, track and communicate their impact in terms that people can understand and hear about on a monthly or quarterly basis. We track employment, crop yields, manufacturing output, construction, even sports in such detail that our newspapers have dedicated whole sections to reporting on their activities daily. Society has placed a significant emphasis on understanding many parts of our world, but far less on the real impact of the work of the nonprofit sector even though we touch everyone’s life in some way every day.

Flickr user: Pink Sherbet Photography

What do we know about the sector? In Michigan, we know that one in ten who are fortunate to be employed work for a nonprofit. The demand for nonprofit sector services is escalating. We know that while there are significant declines in charitable giving, delays in government payments for services rendered, and overall higher costs to doing business; the overall sector grew 2.7% during this most recent recession, was slow to shed jobs, and provided growing wages to its workforce. All this we know about our sector. However this data is from 12-18 months ago and only touches the surface for what we really need to understand our sector. We cannot tell you today what those numbers might be in real time, nor the full impact of our work—all necessary to make real decisions on how to best deploy our resources for the maximum benefit.

Flickr user: Benketaro

There are important questions we should ask. What is the local impact of nonprofits as a sector? What are the monthly unemployment rates for nonprofit employers? What is costs/benefit ratio of tax exemption to community benefit among nonprofits? As the National Council of Nonprofits CEO, Tim Delaney recently put it, “We have a government that can tell us with precision how many iceberg lettuce heads were pulled out of the ground last year, yet it cannot tell us how many heads of individuals were employed by nonprofits. Why are iceberg lettuce heads more valuable than the people who take care of America’s communities?”

Last week, some stepped up to try to address these questions and give nonprofits a voice in the decisions of government. Rep. Betty McCollum (D-MN) announced Wednesday that she will introduce new legislation that will help mold a stronger partnership between the federal government and nonprofit organizations, especially those who have direct influences in the health care and education sectors (http://www.councilofnonprofits.org/nscsact). The Nonprofit Sector and Community Solutions Act (H.R. 5533) would strengthen America’s communities by making the federal government a more productive partner with nonprofit organizations by establishing
1) better communication with the federal government,
2) better coordination within government, and
3) enhanced data collection.

Just as we witnessed in the health care reform legislation, nonprofits were left out of the bill until the last minute despite being a major employer—rivaling other small for-profit businesses. That is because policy makers did not understand nonprofits as major employers and economic engines in communities. This legislation will begin to establish federal mechanisms for nonprofits to be at the policy table and give real data to decision making.

We will provide updates through our blog on this important legislation as it develops. In the meantime, please use the free tools MNA has provided to tell our sector’s stories. We have updated data on the economic impact of the sector through the recession, survey data on the economic pressures nonprofits face as well as the important role volunteers play in our work, and state data on the important role of philanthropy through our Giving and Volunteering report that shows Michigan residents continue to give despite our financial challenges. Please use all of these as you talk to decision makers about our work. I truly believe that once we better understand our sector and can effectively communicate our impact, our sector will be well positioned to help lead Michigan’s economic turnaround.

Submitted by Kyle Caldwell, president and CEO of Michigan Nonprofit Association.

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2 Responses

  1. […] through the recession, survey data on the economic pressures nonprofits face as well as …»Read More This entry was posted in News and tagged mex, minnesota nurses association, nba rumors, omb. […]

  2. […] are attributable to its activities. Out of these three words, impact is the hardest to measure. The challenge is gathering real-time data that will provide non-profits with a true understanding of […]

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