Making data-driven decisions can make or break any organization, especially a nonprofit. Put another way, leveraging the right information has a direct impact on whether or not a nonprofit achieves its mission. The first step here is to actually understand the specific data a report needs to generate.
Though traditional reports for both for-profit organizations and nonprofits alike are helpful—balance sheets, income statements, and so on—nonprofits, if they want to be successful, need to generate forward-looking reports that track and offer predictive power for key performance indicators.
Generating reports that will directly impact the organization’s mission and function can be thought of as “altruistic reporting.” In other words, such reports can be thought of as answering questions like, “Who is being helped as a result of this decision?”
More than for-profit businesses, a charity, foundation, or other nonprofit organization needs to have a crystal clear idea of their mission, what they hope to accomplish, and what things will look like if these goals are met. It’s more than likely that any nonprofit that has been operating successfully for even a short time has an idea of their mission but, if not, first things first.
To function well, nonprofits need more than just financial data. Of course, reports that provide clarity on the success of different fundraising campaigns are also critical, but data on human outcomes or project success are equally important.
It’s important to ask the right questions to determine which data should be collected and reported on.
The concept of altruistic reporting relies on the idea that specific data can be leveraged to improve actual outcomes. An example in contrast—let’s imagine a report is crafted that clarifies which marketing strategies work to increase attendance at fundraising events. Strategies could include social media ads, television spots, or a direct mail campaign. This information is essential as funding determines whether or not an organization can stay viable.
However, this type of data does little or nothing to determine if a specific program or process is doing the most good for the most people. If a nonprofit’s goal is to distribute meals to low-income families, for example, an altruistic report would showcase where time and money are best being allocated to achieve that goal.
Employee time is a finite resource. Where is your team spending most of that time? Are they working toward fundraising efforts? Building efficient processes? What is it that drives each decision? If an organization doesn’t have a firm grasp of key performance indicators, it’s impossible to make effective decisions.
Reporting that informs on process outcomes helps the leadership team and the board make better decisions so employees are able to use their time in a way that best advances your mission.
From compliance to altruistic reporting, it can be difficult to know where to start without qualified experts who know the field. The accounting professionals at Rubino provide consultative expertise that helps organizations best achieve their goals. How are you currently leveraging reports to further your goals? Reach out to us to continue this discussion today.