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Historically, nonprofits have manually measured their performance; however, organizations now are looking for ways to use technology to support the analysis of their efforts, improve their operational processes and further develop their business strategies. By putting a focus on performance management - while leveraging their IT infrastructure - organizations can discover mission-critical information, such as how much time it takes to complete certain tasks, what untapped resources are available to them and what improvements employees would like to see take place, as well as determine actionable metrics to better their performance - and deepen their connections with donors and members - in the future.
What to measure?
To improve future performance, it's important for organizations to determine exactly what they would like to measure. Nonprofits typically use financials to measure their performance, but does this really help improve upon current business and determine strategies for future growth? Many organizations that measure performance focus on satisfaction and retention of donors. Organizations need to measure what's easy to measure and should look at more than just the hard numbers - they should consider using performance management frameworks, such as the Balanced Scorecard, to help clarify their goals, identify how to track them and put in place the necessary mechanisms to achieve them. These out of the box management systems will need to be modified in order to effectively work for each nonprofit, but using one will help nonprofits stay focused on their goals and make improvements that will enhance the organization.
How to improve performance?
There are a number of ways nonprofits can fully leverage their IT infrastructure to help drive performance improvements, which will help the organization run more smoothly and better enable them to meet their objectives. In addition, by following these best practices, nonprofits will not only gain greater insight into their organizations but also ensure that the needs of staff and members and donors are being met.
Implement self-service functionalities, and empower donors and members to do things on their own, such as pay their dues, give donations and make other financial transactions online. Managing these operations independently will make them feel more connected to the organization and will allow members and donors to access these items around the clock. Applying technology in this way also can help staff process payments, transfer financial transactions and handle accounts receivable items, such as cash receipts and tracking invoices online, more quickly and accurately, allowing them to spend more time communicating with donors and members and focusing on the core goals of the organization. These tools can help nonprofits ensure that financial transactions are easy and smooth for all donors, members and employees leading to improved accuracy and more valuable data which can be used for future planning.
Look at business process automation to streamline operational processes and increase efficiency. Tasks, such as updating donor or member contact information, should not be time-consuming; business process automation allows staff to better manage data and process it more quickly, creating more time for them to focus on communicating with their constituents. Nonprofits can easily access and piece together demographic, transactional activity and channel preference and motivational data, which will also help them find new ways of strengthening their donor and member relationships. Having the database connected to the organization's website can also save staff a significant amount of time. With business process automation, nonprofits can ensure that online transactions, such as membership renewals, event registrations, product sales and profile updates, are recorded directly in their databases. The use of business process automation can help organizations improve upon their operations, while eliminating any unnecessary resources.
Use business intelligence tools to analyze data and get a more complete picture of the constituent base. Organizations can better manage their donor and member communities - and strengthen their relationships with constituents - through the deployment of personalized, real-time dashboard tools and a single, comprehensive database system. The technology allows organizations to measure performance and monitor staff, while optimizing time and resources. To get a clear understanding of the metrics that best demonstrate progress toward goals, organizations will need to define Key Performance Indicators. For example, do your donors prefer to attend events and contribute in-person, or do they prefer to make online donations? Dashboards provide visibility into the full scope of a nonprofit's fundraising initiatives; organizations can accurately measure performance by comparing donor habits, gift sizes, volunteer times and other metrics. Visualization tools, such as dashboards, also enable executives to see this information about a campaign anytime they choose without having to wait for manual reports to be run, compared and refined. Nonprofits can then analyze and report this data in real time and then map it into their business goals.
One thing is for certain - a nonprofit should ensure that its IT infrastructure enables donor and member relationships. Ask for direct feedback from the community, and apply their suggestions to let them know that they are being heard. This will not only strengthen the nonprofit-constituent relationship, but it will allow the organization to improve its processes based on the community's needs. Having this information will assist a nonprofit in finding new ways to effectively reach out to members and donors. Once an organization knows its concerns, the group can work to address the issues and show its community it is being taken into consideration.
Organizations continuously evolve and look to find ways to improve. Performance management can show what processes work best for employees, which will allow nonprofits to eliminate unnecessary resources and streamline their operations, making them more productive and helping them achieve their business goals. Using tools such as the Balanced Scorecard as a starting point will help organizations get a clear picture of their objectives and point them in the right direction for achieving those objectives. Once a performance management plan is in place and nonprofits decide what they want to measure (and what's easy for them to measure), technology can be used to improve processes and provide staff members with more time to focus on what's most important to their organization.
Alves is CEO of Advanced Solutions International, Alexandria VA. Details: www.advsol.com.