Four tips to better measure and communicate impact for key stakeholders

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Whether your nonprofit organization raises money through government subsidies or via fundraising initiatives, being able to communicate the goals and outcomes of the organization to key stakeholders is an essential part of the organization's success. It is important to note that a communication strategy should be implemented with both external and internal stakeholders in mind, as all parties need to be aligned under a common goal. Below are four tips that will help you to better communicate your organization's objectives to internal and external stakeholders.

Tell a story

Telling the story of an organization in a measurable way ensures clear communication to donors as well as internal staff. This story should not only include the backstory of the issue that is being solved (ie. supported housing), but also how the organization is using the funds to solve the issue.

For example:

We raised $1,000,000 to provide 10 fully supported housing spaces for one year. We spent $800,000 directly on securing physical locations and $100,000 on improvements and upgrades to ensure the spaces met the needs of the residents now and going forward. The remaining funds provided program support to individuals for one year. We noted successful tenancy for each of the individuals, creating stability and sense of community.

Maintain up-to-date bookkeeping

Government agencies such as the Canada Revenue Agency (CRA) have increased the requirements for registered charities in recent years to provide documentation supporting the end use of all funds raised and spent by an organization. Similarly, many funders require significant information and reporting with regard to how specific funds are used. In many cases, funds can only be raised if the end use of the funds can be clearly supported as being in line with the funder's requirements.

It is important to note the applications of NPO accounting standards here, as the deferral method and restricted fund method of accounting require all revenues and expenses to be treated in accordance with the funder's wishes and requirements. Clearly displaying this information to the funder can help ensure continued relationships are maintained as the funder knows their wishes are being respected. It also decreases risk in terms of inappropriate use of funds.

Be transparent

As mentioned above, creating an effective record keeping process ensures that all government and funder requirements are maintained with minimal time and energy. As a bonus, it also enables for timely financial statements to be available on a monthly basis, which can be used to showcase the organization's successes in a transparent manner to stakeholders.

Strong bookkeeping and financial reports also help to reduce the organization's risk, as constant access to financial reports reduces the likelihood of inappropriate spending. Based on these reports, key stakeholders are able to pose questions and challenge the organization early on regarding decisions of how resources are being stewarded, and come to a conclusion of where the best interests lay for the organization and their stakeholders.

Analysis and review

In order to engage the organization's stakeholders in the budget and financial planning process, the management team needs to have an understanding of what the numbers mean from an operational and organizational perspective. This also enables the team to ascribe costs to resources required for planned programs and new activities.

Having leadership involved in the key metrics and outcomes of the organization on a consistent basis allows strategic decisions to be made with the most applicable and relevant information of an organization's performance in meeting its objectives. If this is not communicated clearly and consistently within the organization, it can become challenging for managers to understand their department's role in developing the services of the organization and how they integrate with the total operations.

Dene Paquin is the Marketing Manager at Enkel Backoffice Solutions, a Vancouver based accounting firm that provides day-to-day bookkeeping services for small and medium sized businesses. Enkel strives to provide fellow entrepreneurs with a better system for managing their bookkeeping, cash flow and financial data, so they can focus on growing their business.

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