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Jan 1, 2019 | Insights

Why Evaluation is Important for Your Nonprofit

There is a big emphasis on return on investment (ROI) by foundations right now. It has many nonprofits scrambling to develop methodology and tools for collecting data.

Scientific, academic-style evaluation has its place and can be quite useful in some situations, but the cost, level of scientific rigor, and academic terminology has made evaluation frightening, off-putting, or simply boring to the majority of action-oriented, program-focused, nonprofit managers and staff.

It has caused us to lose sight of the fact that any ordinary person, including program participants, can engage in figuring out whether or not a program is effective, a system is working, or an organization is having an impact.

Done well, a simple, yet relevant, evaluation practice can significantly improve a program’s effectiveness.

Why Evaluate?

Accountability is the key reason for evaluation. Most small and mid-sized nonprofits conduct formal evaluations because it is required by their funders. Government agencies, foundations, the United Way, and even individual donors are scrutinizing nonprofits more closely than ever for accountability and effectiveness. Program participants, boards, staff, and the public are also demanding greater accountability from nonprofit organizations.

Nonprofit organizations are finding that it makes sense to place new emphasis on evaluation in order to:

  • Prove they are worthy of the public trust and the dollars given because of the trust in the mission and operations of the charitable institutions
  • Show various contributors that their social investment is working — in today’s parlance, what’s the ROI?
  • Ensure that the people for whom the organization exists are receiving tangible, real benefits
  • Better understand staffing patterns and the delivery of programs from a management perspective
  • Plan
  • Do a better job

Who Should Evaluate?

Almost anyone can evaluate.

Participatory evaluation enables users of services to take part in designing and implementing the evaluation of those services. The style and values of the organization and the programs being evaluated will determine who participates in the process.

A flatter, more inclusive organization is likely to include more people in the evaluation process. Different types of programs or activities will call for different types of evaluations and different levels of involvement from different people.

Get leadership on board.

Generally, the board of directors is most accountable for ensuring that evaluation is taking place, while the executive director is most responsible for managing the evaluation process.

Executive directors have the role of cultivating:

  • An atmosphere of openness
  • Continuous learning
  • Skill at hearing constructive criticism at all levels of the organization

These skills and competencies have to be present within the executive director in order to successfully lead an organization that continually learns, innovates and improves on behalf of its clients and mission.

Leadership must exude a spirit of belief in the importance of evaluation. If evaluation is dismissed by the ED as an annoyance forced upon the organization from the outside, staff will feel the same way. The executive director must also understand the level of evaluation that is appropriate. It does not make sense to burden program staff with evaluation plans that are so time-consuming that they don’t have time to run the program.

Be aware of how ready your organization is to implement, create and implement new systems and structures.

Organizational Transparency

Organizational transparency is the state an organization or collaboration reaches when it can communicate clearly and openly about itself at all levels to all stakeholders, including the staff, board, clients, funders and community constituents.

Evaluation will help to create the clarity needed and lay a fact-based foundation for telling your organization’s story. Anecdotal stories serve a purpose, but they do not “prove” the organization’s relevance to the community with the same credibility that evaluation does.

Nonprofits are ultimately accountable to the public. Information age demands for more data and open communication — organizational transparency — will continue to increase.

Key stakeholders need to know that the organization is holding true to its mission through meaningful programs supported by sound management practices. Evaluation is the tool for demonstrating accountability.

Interested in more?

Download the free chapter on Evaluation from our Executive Directors Guide