Why Is Every Vendor Talking about Impact Measurement?
If you have been paying attention to nonprofit vendor marketing in the past year you’ve surely noticed an ongoing theme – an emphasis on impact measurement.
Salesforce: “Impact – social impact, impact on a community, impact on a neighborhood – is achieved by changemakers in the nonprofit sector who design and deliver great programs and great program outcomes to their participants. Extending the power of the Salesforce platform to this indispensable part of an organization’s social mission will also enable increasingly sophisticated and real-time connections and analyses between ‘what works’ and ‘what it costs’.”
Microsoft: “Too many nonprofits are struggling to efficiently deliver their mission and to measure and communicate their impact. This is a critical challenge in an era of unprecedented humanitarian need…the organizations Microsoft partners with are asking for better systems to help them deliver their mission and scale their impact.”
These are just a few examples of the shift in marketing focus. If you have recognized this, you most likely have asked yourself: Is this a good thing? What does it mean for nonprofit product offerings? Should my organization be doing more to measure impact and outcomes? We have been asking ourselves the same questions and, in this post, we will address these along with providing our insight into how this may play out over time.
A short history
There are several shifts that have happened over the past decade that have driven impact measurement. Two of the most influential trends are:
- The change in people’s relationships with, and expectations of, organizations they support
- The democratization of technology
It wasn’t long ago that average donors sat down at the end of the year, possibly consulted with their families about which organizations they would give to and made their yearly donations. These donations were often made to a local chapter of a large national organization whose mission addressed the issues they cared about in a very general way, and there was an assumption that those organizations would be good stewards of funds. There were few, if any, expectations about how their money would be used. The emphasis was not on outcome requirements. The number of nonprofits was nowhere what it is today, and people generally had faith of the good intentions of those running charities.
Fast forward to the present. Today people have choices. The growth in the sector has been significant, with the National Center for Charitable Statistics reporting a 28.4% increase in 501(c)(3) organizations between 2005 and 2015. Today’s donors and funders do their homework and want to give for a specific cause, potentially serving either a small geographic, social economic or cultural group achieving precise outcomes. Donors can give to smaller nonprofits that target a very specific need instead of giving to a national nonprofit. Adding to this shift, donors now have very different expectations about how their money is being spent, often designating or putting restrictions on how funds will be used and expecting that organizations are achieving donor objectives. These demands add a layer of complexity for nonprofits.
Democratization of technology
Today’s technology allows us to easily collect, analyze, and gain valuable insight from data. Thanks to deep discounts on customer relationships management (CRM) solutions and the targeted focus on supporting nonprofits by large tech companies like Microsoft and Salesforce, these tools are now available to nonprofits of virtually any size and shape. As the discounts have increased and become more widely available, small nonprofits are able to have access to the same solutions that were previously only accessible to large, enterprise organizations with big budgets and staffing.
Tools are now easier to use and more accessible, and cloud-based solutions are the new normal. Highly specialized IT professionals are no longer required for an organization that wants to leverage these tools. In small- to mid-size nonprofits, we are seeing new, previously unexpected types of employees stepping into roles of managing technology. We’ve seen former admin assistants, development officers, and marketing specialists all changing the way they work and taking on new technological responsibilities. Current employees taking on these roles also contributes to the increased affordability of nonprofit technology tools.
As large vendors have made CRM technology more accessible to all sizes of nonprofits, an ecosystem of vendors, partners and digital solutions has followed suit. Today’s nonprofit has a selection of options ranging from Cadillac solution to free online fundraising and email marketing tools, all of which empower them to work toward impact measurement.
Smaller nonprofits can take advantage of licensing discounts to get staff, and sometimes even volunteers, access to these powerful tools. With more data added to systems, more data is available to make informed decisions. The democratization of technology and the age of big data has also led to the democratization of data. Marketing, financial, and community-specific data is so much more available to everyone, including nonprofit organizations. Nonprofit leaders can leverage this data not only to gain marketing insights about their donors and supporters in order to better engage with their constituencies, but also to better understand the needs of those individuals. That same data helps ensure that the nonprofit is able to track its true impact on its targeted populations over time.
How do these shifts translate to impact measurement?
All of these changes in the technology section have allowed smaller and mid-size organizations to spring up, and act like much larger enterprise organizations, but with a level of agility that is hard to replicate in a long-standing nonprofit. These smaller organizations are able to quickly define their mission and map out the activities and strategies they plan to execute in order achieve the outcomes donors are expecting and have the overall impact they envision through their missions. Utilizing today’s technology, tools and data they are building ecosystems that let them manage and measure activities, their outcomes, and ultimately, impact.
Concrete examples of their impact is music to funders’ ears. In contrast, we’ve seen many of today’s mid-sized and large nonprofits operating out of multiple databases and spreadsheets. The data that could help them measure impact is often scattered and they have to spend a significant amount of staff time manually collating and analyzing information in order to be able to provide the level of detail constituents are demanding.
Why are vendors touting this now?
Vendors have picked up on the changing environment and to drive nonprofits to use their products, they realize that impact measurement is a better sales pitch than talking about back-office operations or efficiencies.
They have also realized that their current clients and prospects need to track mission-specific information and data in order to keep up in today’s competitive environment. The increase in 501(c)3 organizations and opportunities for people to participate in corporate social responsibility programs instead of donating to a nonprofit organization has crowded the lineup of charitable options. Realizing that their tools can be easily adapted to address new challenges, they’re encouraging your organization to use new technology and compete on the same level as new organizations and corporate social responsibility programs. The idea of taking on the implementation of these tools might seem daunting today, but they are critical to ensuring that your organization will be able to survive and thrive in the long run.
This is part one of our series. Read part two here.