Sage Intacct Non-ProfitThe call for greater transparency and accountability is growing stronger in the nonprofit world. Just as financial analysts and credit rating agencies scrutinize a corporation’s financial performance to make recommendations, charity evaluators are diving deeper into nonprofit results—and they’re expanding their evaluations and criteria to include the tracking and reporting of non-financial performance and outcome metrics.

Case in point: Charity Navigator, the well-known, charity-rating website, has changed the way it rates nonprofit groups, saying the new method gives donors a better picture of how a charity performs over time. Charity Navigator is America’s largest and most influential charity evaluator, with more than nine million visits annually and impacting at least $10 billion of charitable donations each year.  This makes Charity Navigator far and away the largest and most utilized charity rating service that exists anywhere. Clearly one of the more influential charity assessment organizations, Charity Navigator is using the new rating system that changes the way the group assesses a charity’s financial health, but it leaves intact the way it rates a group’s accountability and transparency, a major performance category. In 2016, Charity Navigator began tracking outcome metrics – and the reporting of those measures.

Outcome MetricsWhy are outcome measures so important?

Nonprofit organizations are experiencing more competition for funding than ever before. Donors and grantors have higher expectations. Often, gifts and grants come with stipulations for performance because the givers want to ensure that their dollars are getting the greatest possible return on investment. Government funding, as well, has strengthened compliance reporting and performance expectations.  Implementing strategic outcome measures not only helps a nonprofit to meet compliance requirements, but also strengthens its reputation while assuring current and prospective donors that the organization is efficient, proactive and a good steward.

What’s more, charity evaluators, such as Charity Navigator, have embraced outcome reporting and will be rating nonprofits based not only on financial reporting and analysis, but also on their tracking and reporting of outcomes – dramatically raising the standard for all nonprofit organizations. Face it, outcome metrics are an enormous part of improving overall visibility and performance for today’s nonprofits. Keep in mind, when it comes to outcome metrics, you want to define the key metrics that best measure what is most important to your mission. Don’t get lost in the weeds with tactical issues such as ‘Who will measure what—and when?’ The details and processes follow naturally – especially when you use a modern financial system to make it easy. Take advantage of external resources to get up to speed quickly. You may have too few or too many metrics, but consistent progress brings success.

Outcome metrics will reflect the complete picture of your organization’s health and impact and, in doing so, enable long-term advantages. Intacct gives you greater efficiency and managerial visibility so you can drive down costs while fully pursuing your organization’s mission. Contact the Sage Intacct experts at CompuData today to get started!