5 Hallmarks of an Effective Nonprofit

Effective Nonprofit Hallmarks

  • Effective, Clear Mission
  • Community or Public Benefit and Impact
  • Strong Planning Activities
  • Effective Outcomes Measurement
  • Strong Leadership and Stakeholder Representation

Judging effectiveness in a for-profit business is straightforward: is the business earning a profit and is it meeting expectations of customers and business partners? Factors that can be assessed regarding a nonprofit organization are less-clear. The Guidestar organization asked questions of thousands of nonprofit organization members and received clear answers about organizational missions, community impact, and planning and assessment. These concepts are also echoed by the Urban Institute, the United Way, and other organizations charged with working to improve nonprofit operations and impact. Here are five hallmarks of an effective nonprofit organization.

Effective, Clear Mission

An organization’s mission statement should direct every aspect of the nonprofit’s activities, from program development and service delivery to budgeting and decision-making. The mission of the American Red Cross says that the organization will “will provide relief to victims of disasters and help people prevent, prepare for and respond to emergencies.” If the Red Cross were to suddenly sponsor youth sports leagues, it would be understandable if the public questioned whether or not the leagues fit the organization’s mission.

Community or Public Benefit and Impact

Many nonprofit organizations have worked for years to determine the extend of their impact in the community. Unlike hospitals or clinics, where the number of lives saved can be counted, if a scouting organization were to stop providing programs, what would the impact be? Scouting organizations are able to point to the benefits their programs provide to youth participants, families, and the community at large. This type of youth organization can measure their impact by comparing measures of educational, social and emotional well-being among participants.

Strong Planning Activities

The best nonprofits conduct active short, medium, and long-range planning. They include all stakeholders in planning processes, from the people who receive and need their services to board members, staff and community representatives. They work with local government and other leaders to determine community needs, and assess what future needs are likely to be. Planning occurs along several different timelines, and consider financial resources, personnel resources, and community support when determining priorities for programs, hiring, investment and service provision. They also regularly revisit program effectiveness, and assess whether or not programs are adequate to meet community needs.

Effective Outcomes Measurement

Nonprofits which work best with government and private industry partners know that they have to determine program outcomes in advance, be realistic in expectations, and then deliver successful outcomes at the end of program periods or service provision. An arts program will want to set outcomes for participants that include increased art ability and proficiency, and also harder-to-assess but important outcomes such as greater feelings of confidence or participants’ ability to express themselves in art form. A health program sets realistic, achievable health outcomes using measures of health, such as reduced average BMI.

Strong Leadership and Stakeholder Representation

The stakeholders for any organization include representatives of the entire community, not just the organization’s staff and board. A program that serves the community has outcomes which benefit everyone, not just the specific people who may use an organization’s services. Programs that keep close contact with stakeholders will be far more effective than ones which are isolated, have limited contact with diverse community leaders, and don’t bring different stakeholder groups together to learn differing perspectives and views on the organization’s programs and services.

The hallmarks of an effective nonprofit have remained clear over time, and always involve a clear, necessary mission, strong impact, and good planning and leadership. Keeping track of program outcomes and staying in touch with the community will increase any nonprofit’s effectiveness.

See also: Top 10 Cheap Online Master’s in Nonprofit Management and Leadership Degree Programs