Performance Indicators:
Should They Be Standardized?
There has been a lot of discussion lately around program performance indicators and whether the industry should try to standardize them, and how to measure nonprofit programs. This can prove to be a controversial topic.
Nonprofits have mixed feelings. On the one hand, many would like one set of standardized indicators for easier, more streamlined reporting back to the donor community. However, that requires all grantors to agree upon what those indicators actually are - not an easy feat.
On the other hand, many nonprofits feel standard indicators don't do their projects justice. Strictly defined criteria for success can make it difficult to communicate any unique aspects or secondary results of a project. This can result in giving grantors tunnel vision.
Grantors also have mixed feelings. Many feel that standardizing indicators would make it easier to compare similar projects - resulting in an "apples to apples" comparison and leveling the grantee playing-ground, if you will. It would also enable grantors to track and compare numerous projects at once.
On the flipside, many grantors also believe that standardizing indicators is too heavy-handed an approach. Similarly, nonprofits feel that it strips out any uniqueness a project might have. Grantors also may have a difficult time agreeing on what indicators should be standard and may not want to be confined to the majority-determined indicators.
One thing to keep in mind is that in most industries, while there are standard performance indicators, there are always other evaluation methodologies and channels for measuring and communicating success. The same holds true for philanthropy.
Many large granting entities (e.g. The Bill and Melinda Gates Foundation, USAID, etc.) are already creating some standard indicators of their own. Because they grant to so many organizations, it only makes sense for them to standardize as much as they can. However, it is still up to smaller grantors to decide if they want to follow suit. It's also up to nonprofits to decide if they want to measure just those indicators, or also measure others.
The best approach here is one that falls somewhere in the middle - one that will require ongoing communication and collaboration between nonprofits and grantors. Nonprofits need to be able to show grantors all aspects of their programs, whether it's through standard indicators or their own indicators combined with qualitative data. Most grantors will find that while standard performance indicators provide a nice common baseline, it's the details beyond that that tell the whole and heart of the story.
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