In Caplan Norton's non profit model they dropped out financial indicators and
they added omission indicators.
But they didn't say much about how we would measure omission and
they didn't really explain why financial metrics should be dropped.
Finally donors and clients are not the only stake holders, even though Kaplan and
Norton only includes them, I think we can enlarge that.
For a number of reasons I think there are ways we can improve on this idea of
a balanced score card, or dashboard of indicators, and
make it more useful to you in your work.
So let's start thinking about what we could do.
I would say we start with going back to the logic models that we
detailed earlier in this course, and
we pull out of the logic models, critical output, And outcome measures.
And we say that's gonna be our starting point for measuring mission.
We're going to identify the most important outputs and outcomes short term,
and we're going to integrate those into our score card.
We're going to chose a small number of financial indicators that are really
important and telling.
We're gonna take a small number of critical indicators related to
what the people inside the organization, and around it, think about the firm.
And we're gonna ask, what is governance, what does staff development look like,
what is volunteer engagement, how are these practices being done?
And finally in the fourth basket, we're gonna ask for
a small group of quality indicators.
If you do all four of those things,
we can start to construct, I think, a very simple and usable scorecard.
So four baskets.
Social impact measures, financial indicators,
stakeholder satisfaction indicators, and some quality indicators.
Those are the four I'd like to start with and detail what each one might look like.
Let's start with those social impact measures.
They don't have to be incredibly complicated and obscure.
We can take some critical measures of the units of activity that you engage in,
the number of people you serve, the number of hours of performances delivered,
the number of services that you have.
We can quantify some simple metrics of outputs and we can use those.
We can also take some simple outcome measures and
say what happened to the people in our programs.
How did they change, what did they learn, how did they grow?
We can use those two types of metrics to get a purchase on
this question of social impact.
It doesn't have to be wildly complicated it can be fairly straight forward.
When it comes to financial metrics, I propose six.
You could have more, you could have less, but
I think you wanna have something around profitability,
something about did the fund balance in the organization go up or down?
Did the firm's financial position get better or worse?
Second, I think you'd want to have something about growth, overall agency or
organizational growth.
Did the budget increase from one year to another?
Or did it shrink.
Third, I think you'd want to have some kind of measures of liquidity,
cash on hand.
There's a big difference between having three months, six months, nine months, or
a year of cash on hand.
So I'd like some measure of liquidity.
Also I think there should be some useful measure of vulnerability of
the organization.
Is it prone to big swings?
Ups and downs from year to year or
from quarter to quarter in terms of revenues and its financial position.
How much movement is there over time in
the financial position of the organization.
I think fifth we could have some efficiency measures.
Simple measures of overhead and of administrative expensed,
total program expense.
Nothing complicated, but some kind of measure that gives us a sense of
how efficient are we in terms of mixing program and administration.
And finally, I'd like to have some metric, I think, of research diversification.
Everything we know about what makes a nonprofit successful
