More than Spreadsheets and Software

Heartwarming client success stories 
will always have a place in communicating how nonprofit human service organizations forever touch the lives of individuals and families. 
But, these stories alone rapidly are becoming inadequate in garnering public and private funds.

In his book, Leap of Reason, Mario Morino, co-founder and chair of Venture Philanthropy Partners, details what he believes it will take for nonprofit human services organizations to compete for increasingly scarce financial resources in the coming years.

He argues that competing for dollars will require collecting, evaluating, and using data to inform programmatic and operational decisions, which means organizations will need to adopt an organization-wide performance culture—one tuned to continuous, information-fueled improvement. In short, what it will take is what he refers to as “managing to outcomes,” gaining the benefit of good information to set a course, correct-course, and strive for impact.

Leap of Reason details why managing to outcomes is necessary, the internal and external obstacles nonprofits face when making this leap, and how those obstacles can be overcome. The book concludes with a collection of essays about lessons learned by practitioners during their transition into managing to outcomes.

The Time is Now

In the current era of budget deficits, greater spending scrutiny, and increased demand for transparency, nonprofits must be able to prove they are using resources efficiently while achieving desired results.

“Now is the time to get the house in order and figure out how to ensure you are performing well,” Morino says. “This is the time to get ahead of the storm so you will be able to navigate through it.”

Ensuring “the house is in order” today also is critical in preparing organizations for an impact-oriented future.

“There’s a small base of individuals who are finding that, without getting into outcome measures and measurement itself, it’s difficult to push forward on the kinds of improvements they need to make to achieve true impact for the people they’re serving,” Morino says. “It’s a good stepping point to encourage others and show what can be done.”

In fact, in a new report from the Alliance for Children and Families, the uncompromising demand for impact is identified as one of six disruptive forces expected to fundamentally change the nonprofit human services sector during the next 3-5 years. The report, Disruptive Forces: Driving a Human Services Revolution, speculates that, in the future, organizations may be required to demonstrate that particular interventions have efficacy in order to secure funding. Key sector stakeholders likely will first define a desired impact, and then consider what organization or groups of organizations can deliver at the lowest cost.

The related message Leap of Reason offers for organizations and their boards is that managing to outcomes can be a roadmap for this desired future, not a roadblock. The book provides guidance on carefully selecting the outcomes to measure, so that the information collected is relevant to the organization, and can be used—and is used—to improve programs and service delivery.

“There is a tremendous amount of third-party evaluation done on nonprofits by foundations, with good purpose,” Morino says. “But the ‘leap of reason’ isn’t about outside evaluations or what type of data organizations must provide to their funders.”

Instead, Morino’s point of view is focused on using data to attain long-term sustainability and improvement goals, not satisfy immediate funder interests. He says that continuously evaluating performance is the only way organizations can know they are improving and having meaningful, measurable impact for the communities they serve. Thus, measurement is a powerful tool for achieving an organization’s mission, not an extraneous task for appeasing funders.

Mindset Is Key

While Leap of Reason is designed primarily to be a call to action for those who seek additional and better information about results, it also is a wakeup call for those who have been resistant to measurement.

Morino says the biggest impediment to adopting a performance-improvement culture isn’t the size of an organization, level of resources, or availability of evaluation expertise; it’s a resistant attitude from a nonprofit executive. Nonprofit leaders, he says, need to move out of their comfort zones.

“If you accept managing to outcomes as a premise of general management, then anyone can do it,” Morino says. “So, I could be a tiny organization, but it doesn’t stop me from tracking my activity and my clients’ progress, even on an anecdotal level.”

Additionally, he says the process for obtaining and recording information can be as simple as putting pen to paper or maintaining a modest spreadsheet.

“People are focused on big systems and buying software to conduct evaluations,” Morino says. “But, in the beginning, the best system is probably no system at all—just a commonsense look at what you’re doing and how it’s working.”

Achieving Impact

In this era of data and measurement, it is easy to become bogged down with numbers and incremental change, rather than working toward achieving large-scale impact for communities. Yet, managing to outcomes and implementing a performance culture is one of the surest ways to ensure mission fulfillment and positive, measurable change, Morino says.

“If you’ve oriented your culture toward performance, you can use the information to go into an improvement mode, to course correct, and to ensure that you are achieving impact for kids and families,” he says.

He encourages leaders to continuously ask themselves, “To what end?” Because circumstances constantly shift, but there always will be opportunities to redefine impact goals and ultimately raise the bar to a higher level.

More than Spreadsheets and Software