Performance Benchmarks for Nonprofits

Valorie Delp
A good benchmark can easily be evaluated.
A good benchmark can easily be evaluated.

Every 501(c)3 organization has to have performance benchmarks. For nonprofits, this is the best and most effective way to measure where you're at as an organization and where you want to go as an organization. Benchmarking, is in essence, the path to improvement and efficiency. In addition, you will have to have solid benchmarks in place in order to secure any type of grant funding. After all, who would want to give their money to an organization that spends it frivolously and ineffectively?

What is a Benchmark?

A benchmark is a major milestone towards achieving the overall mission of your organization. There is definitely a right and wrong way to write a benchmark and so it's worth your while to either hire a writer to write them for you, or take a class somewhere like the Foundation Center to learn how to write them for your organization.

Benchmark Writing Do's and Don'ts

Good benchmarks are the marker of solid and sustainable funding. In other words, grant makers want to give to organizations that know where they're going and how they are going to get there. More often than not, if your organization is turned down by a grant maker, part of the problem lies with your bench marks.

Take for example an organization whose mission is to "improve the lives of inner city children by promoting literacy." The benchmarks need to state:

  • Specifically what the organization is going to do to promote literacy.
  • How the organization plans to evaluate whether or not it is succeeding.
  • Specific and tangible (measurable) objectives that not only include a timeline for when the benchmark will be achieved, but also a method for evaluation.
  • How the objective fits with the mission statement of the organization.

Good Benchmarks vs Poor Benchmarks

Using the aforementioned inner city organization that wants to improve literacy, consider the following examples for benchmark statements:

Example

Original Statement: The Inner City Literacy Project (ICLP) will improve literacy by working with local schools.

Problem: The above statement is too vague. It doesn't provide answer the questions, when and how.

Better Benchmark: ICLP will work to improve literacy by doing the following:

  • Within 2 years, ICLP will make sure that every classroom in this district has a classroom library of at least 100 books. We will do this by holding book drives, fundraising, and promoting book fairs.
  • Provide three to four teacher workshops in each school in our district.
  • Evaluate reading test scores from year to year.
  • Provide reading coaches and mentors to all new elementary school teachers within our district.

Notes: You'll note how the second examples are very specific in terms of what will be done and when it will be done. In addition, they are easy to assess.

Benchmark Evaluation

One important part of an organization's health is its ability to evaluate and redirect as necessary. Without evaluation an organization cannot truly grow to reach its potential. Therefore, it's important to note not only what you want to accomplish but how you're going to know whether or not you've accomplished your goal! While it sounds simple, a lot of organizations fail to adequately provide this information on a grant application and consequently don't receive the money they are seeking.

Outside Evaluation of Benchmarks

There are a variety of ways in which you can evaluate and organization's benchmarks. How and what you do will depend on your organization's mission statement. Most organizations will evaluate both internally (among their own staff), and externally.

There are numerous benefits to getting an outside opinion on your performance benchmarks:

  • A fresh perspective looking at a problem in a new way may inspire the organization and set a new precedent for creativity in problem solving.
  • An objective voice declaring that your organization is doing a great job meeting benchmarks is much more powerful than an insider saying that your organization is great.
  • Outside evaluation can often get to the bottom line about how effectively your organization is using funds and with a fresh perspective help you spend more efficiently to reach your overall goal.

Inside Evaluation of Benchmarks

Most organizations will submit to both outside, objective reviews and also spend time evaluating within an organization. The benefit of doing a regular evaluation within the organization is that members are in a unique position to evaluate why something is or is not working. An outside evaluator is likely to tell you what isn't working but may not exactly be able to pinpoint why.

Performance Benchmarks for Nonprofits