Giving Compass' Take:

• BoardSource examines the metrics that nonprofits should pay the most attention to when it comes to tracking viability and sustainability.

• How many of the listed items are on your organization's priority list for collecting data? This piece makes sure that the different categories can be applied across many different sectors.

• Here's why donors need more access to data on charities in general.

Balanced scorecards, dashboards, strategic plan reports, even routine financial and activity reports: They range from basic to varying degrees of sophistication relative to accountability, management, and governance. “Metrics” is the prevailing mantra, but do the metrics that are routinely tracked by nonprofit executives and boards allow them to see the forest for the trees?

It is possible that an organization can have a darned good balanced scorecard, dashboard, and/or strategic plan report, and good near-term financial reports, and yet be losing ground — gradually or otherwise.

The viability and sustainability (V&S) of a nonprofit organization is as serious a matter as fidelity to mission — viability in the sense of appealing to users and supporters and delivering on a value proposition in ways that are relevant for the times and the foreseeable future, and sustainability in terms of access to and use of funds that provide assurance of continuity for multiple years.

Following are some of the more critical aspects of V&S, which are valuable only as examined over a period of at least three years, five or more if possible.

In financial stability, adequacy, and sustainability, some key metrics are:

  • Trend in financial bottom-line by program and total organization (deficits, surpluses); intent is to find if each program/function holds its own (and, if not, if there is need for examination of its viability and/or a need for subsidy)
  • Trend in funding by source/category (e.g., membership, philanthropy, government, fees and third-party payers); and from this, identifying strengths, vulnerabilities, and the effectiveness of the mix of funding sources
  • Trend in pursuit of funding (e.g., grant requests, RFP responses, etc.) and results; more than the trend but continuous and honest (v. hopeful) examination of the status of each request and its likelihood of success

Read the full article about metrics by Irv Katz at Boardsource