Why Measure? Nonprofits use metrics to show that they are efficient. But what if donors don’t care?

by Katie Cunningham and Marc Ricks, Stanford Social

Innovation Review; Summer 2004. Do donors really care about performance measurement?
According to this Stanford Social Innovation Review piece: not really. Through interviews with individual donors, the authors reveal that the real motivations behind giving are a personal connection to the cause, leadership, or trustees. There is also a widespread belief in the donor community that there’s not much difference between organisations engaged in similar work. Individual (distinct from institutional) donors reported that they do not have the time or energy to minutely inspect grantee activity. This report underscores suspicions that big evaluation efforts often end up gathering dust rather than directing dollars. This skepticism about measurement is not just held by third sector leaders but by funders themselves. Donors do not have confidence in performance measures. Purely quantitative performance metrics are a magnet for particular unease. Donors report that easily measurable items like fundraising efficiency and overhead ratios are incomplete. This is because these measures are simple to gather so their performance can be overestimated. Real performance measurement costs money. Some donors believe it robs organisations of those same resources from their core work. According to these authors, individual donors look to institutional funders to lead and fund performance measurement.
In the face of this, the authors maintain that organisations which measure will still be better off in the long term. In any case, the attitudes and practices of both the donors and nonprofits will need to shape measurement if they are to overcome this inherent reluctance.
See: www.ssireview.org/articles/entry/why_measure/

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