Assessing Performance in Nonprofit and Charitable Organizations: Pressures, Practices and Prospects

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Assessing Performance in Nonprofit and Charitable
Organizations Pressures, Practices and Prospects
Symposium on Measuring the Impact of Doing
GoodJoseph L. Rotman School of
ManagementUniversity of Toronto January 21,
2009

• Michael Hall
• Vice-President, Research
• Imagine Canada

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Outline of Presentation

• Why Evaluate?
• The Nonprofit Environment
• Misconceptions
• Practices
• Challenges
• Moving Forward

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The Value of Performance Assessment

• Improving impact
• Increasing awareness and support from donors and
  funders (encourage investment)
• Enabling effective funding/donation decisions
  (enabling investment)

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Use of Evaluation Information Voluntary
Organizations To what extent will your
organization use the evaluation information to
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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The Nonprofit Environment Increasing Visibility
and Transparency
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Everyone Can be an Evaluator
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Stakeholders Have their Say
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Canada Lags -- But Not for Long
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Common Misconceptions

• Nonprofits seldom evaluate performance
• Funders need to ensure that organizations
  evaluate their programs
• Nonprofits lack the know how
• Nonprofit organizations are too complex to
  evaluate their impact

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How Often do Nonprofits Assess their Performance
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Evaluations Conducted Over Previous Year

• 77 report conducting evaluations / assessing
  performance

Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Most Evaluations are Internally Driven
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Barriers in Evaluation Voluntary Organizations
In terms of conducting evaluations, how much of
a problem is
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Evaluation Information CollectedWhat types of
evaluation information were collected in the last
evaluation conducted by your organization?
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Evaluation Practices Ease of Identifying and
Collecting Outcome Information
Source Hall et al., Assessing Performance
Evaluation Perspectives and Performance in
Canada's Voluntary Sector, 2003.

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Challenges

• Evaluation can divert resources from programs and
  funders are not always willing to pay for
  evaluation
• No simple measures of performance - multiple
  objectives and multiple stakeholders (c.f.,
  for-profit organizations and metrics around
  share-holder value)
• Evaluation-itis

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Considerations for Moving Ahead

• Greater clarity of purpose and intended audience
  for evaluation information
• Tailored assessments
• Do small volunteer-run organizations need
  sophisticated performance assessment?
• Range of options includes testimonials, measures
  of costs and outputs, measures of outcome/impact
• Consider intended use and the consequences of
  making bad decisions

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Concluding Observations

• Evaluation needs to be de-mystified
• Performance assessment is part of organizational
  life among charities and nonprofits
• But current practices do not suit all purposes
• Organizational capacities are limited and
  evaluation efforts should be based on
  cost-benefit considerations
• Demands for performance information appear to be
  increasing at least among funders

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Thank You

• For more information about Imagine Canada and its
  research visitwww.imaginecanada.ca
• www.nonprofitscan.ca