To start, most of the social sector gauges success by how they manage social problems instead of solving them. For instance, it’s common for groups to list the number of coats they hand out, the number of meals they provide, the amount of money they give away and so on. These things are important, no question. But when it comes to tackling a challenge like poverty, real progress means helping people escape poverty, not helping them endure it.

To be clear, cost-effectiveness matters. So does reaching a large number of people. Yet if those are the only things we measure, a problem like poverty won’t really budge. Sure enough, the poverty rate has hardly moved since 1970, hovering around 13% then and now. The social sector is serving more people, but it doesn’t seem to be empowering more people to leave poverty behind.

Over the past year, we've surveyed roughly 50,000 people across 25 metropolitan areas. We ask if they've sought services from a local nonprofit—and if so, which ones. If they have, we ask each person to rank the nonprofit's impact on their lives on a scale from 1 to 10 based on three questions:

  • Has the nonprofit transformed your life for the better?
  • Do you feel empowered to overcome barriers in your life?
  • How likely are you to recommend the nonprofit to someone in a similar situation?

These are simple questions, yet most nonprofits don’t pose them to their beneficiaries. That’s a shame because the answers clearly indicate a group’s effectiveness. When a beneficiary says a nonprofit has transformed their life, empowered them to overcome challenges and earned their recommendation, they’re essentially saying: This group is better than the competition.

This is the kind of information businesses use to measure their products and then improve them. Nonprofits can, and should, do the same thing. It starts with such simple steps as engaging your team to identify your offerings, surveying the people you help about their effectiveness and then adapting your work based on the results. Such a measurement system could be used within an existing customer journey framework. And partnering with other nonprofits could help you get an even better sense of your impact.

Read the full article about measuring nonprofit effectiveness by Evan Feinberg at Forbes.