Not-for-profit organizations are increasingly investing time and resources in planning: strategic planning, risk management planning, crisis management planning and more. Equally important is the task of evaluating the work and progress of the organization, especially as it relates to delivering such plans. Organizations that do not invest in formal planning should still evaluate the results of what they do and this article offers suggestions on who should evaluate what and how to evaluate.
What to evaluate and who should do it?
The following are typical not-for-profit tools and products that should be evaluated:
1. The Strategic Plan
I strongly believe that every not-for-profit organization, no matter the size or budget, should have a strategic plan (which is why I wrote an article on the subject). The board of directors or governing council who owns the strategic plan should evaluate it annually. Strategic plans are often supported by other plans (e.g. risk management plan, communication plan, crisis management plan) and these should also be evaluated annually.
2. The Budget
The approved budget should be evaluated every six months to determine if it is a credible representation of the financial health of the organization. Again, the governing, elected body is responsible for the budget and for its evaluation. Staff might be asked to prepare an evaluation report to assist the elected leaders in their duties.
3. The Bylaws
Bylaws should be evaluated at least every two years to confirm that they are relevant to the circumstances under which the organization is and is planning to operate. They are the responsibility of the board/council on behalf of the members and therefore it is their responsibility to see to the evaluation. Typically, a bylaw committee is appointed by the board to do the work and make recommendations.
4. Events and Programs
Each event and program run by a not-for-profit organization deserves an evaluation component. This includes member or stakeholder conferences, educational or fundraising events and programs, board/council and committee meetings, and even staff meetings. If it is worth organizing it is worth asking participants to evaluate the effectiveness of the activity.
Not-for-profit organizations typically communicate to a broad range of stakeholders, such as members and/or donors, prospective members/donors, media, government, students, the public and more. Communication schedules and vehicles should be evaluated to judge how timely and effective such communications are. A good evaluation tool is a communication audit.
Websites should be evaluated for effectiveness and ease of access on an annual basis at a minimum. This should be done by an expert, preferably an independent third party.
7. Financial Reports
The content and reliability of financial reports should be evaluated annually; comparing financial results to budget should be part of such a review. While your auditors should comment on the adequacy of your financial reports, a finance committee with members having the necessary expertise could review your financial reports and report to the board/council.
8. Internal Controls
Internal controls include how money is managed, how assets are utilized and protected, how information is used, how authority is delegated, how decisions are arrived at and more. An annual evaluation of internal controls is very important and allows the organization to demonstrate how it averts negative risks. It is wise to allow an independent, third party expert conduct this evaluation.
9. Advocacy Efforts
If a not-for-profit organization has advocacy as a strategic priority, its effectiveness in advocating warrants evaluating. The could include lobbying government, profiling a profession, industry or charity, or defending an interest group.
10. Exit Interviews
A valuable set of information can be gleaned by performing exit interviews. Interviewing people who are leaving or severing their relationship with your organization can turn up problems that need to be addressed. It is important that the interviewee feel comfortable and safe with the person conducting the interview and that confidentiality be assured.
How to evaluate
Key tools used to evaluate include:
People can be interviewed in person or by telephone. It is recommended that the interview questions be provided in advance so that the interviewee can organize and prepare his or her thoughts. That said, some circumstances warrant spontaneous reactions.
2. Focus Groups
Focus groups are a powerful means to evaluate services or test new ideas. Basically, focus groups are interviews, but of 6-10 people at the same time in the same group.
Surveys are usually written questions that people respond to in writing. Increasingly, organizations are using online surveys that are very “time effective” for respondents. My experience suggests that surveys that take no more than five minutes to complete are very well received, with higher than average response rates. In our work, we aim to achieve a minimum 25% response rate, which is above generally accepted valid rates (the numbers for which depend on a number of research factors).
Audits involving measuring against criteria. The criteria could measure a number of factors, including:
- Addressing strategic priorities
- Goals and objectives
- Value (perceived and real)
- Stakeholder understanding
- Utilization of resources (human, physical and financial)
- Effectiveness of process
- Evaluation validity and reliability
Benchmarking is the process of comparing your organization to others considered to be the very best. This requires deciding who sets the standard and what that standard is. The criteria outlined in “Audits” above could apply. You would need to rate both your organization and the one(s) you are benchmarking against. Another approach to benchmarking is finding “best practices” and then rating your performance against them.
Some tips about evaluation
1. When asking respondents to assign a score, always use an even number range (e.g. 1 – 4 or 1 – 6); this denies the respondent the opportunity to “sit on the fence” by selecting the middle score.
2. While there is a cost to consider, tracking website visits provides very important statistics that will enable you to maximize your return on investment.
3. Self-evaluation exercises can provide interesting results, especially if you can compare these results to third-party evaluations allowing you to identify the “gap”.
4. When evaluating, consider contrasting the evaluation of members/donors versus non. This may provide insight as to why the “nons” are nons.
Evaluation for performance and accountability is an important element for not-for-profit organizations that strive to be transparent to and trusted by their key constituents.
Questions or comments are invited.
Paulette in President of Solution Studio Inc., a consulting practice that serves the not-for-profit association community. She can be reached at 1-877-787-7714 or Paulette@solutionstudioinc.com.