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What is a KPI?

KPI stands for “key performance indicator.” A key performance indicator is a measurable value that tells us how an important process is functioning in our organization.

There are three general kinds of KPIs that nonprofits (and really, all organizations) should track: inputs, outputs, and outcomes. All three are important to understanding the health, direction, and success of the nonprofit. For each, you’ll want to look at totals, trends over time, and potentially some breakouts of those measures within relevant subgroups. I’ll show you plenty of examples in each section below.

Keep in mind that while there are a few metrics that apply to pretty much all nonprofits, each nonprofit is unique and therefore the metrics that matter to each will be different. The examples here will get you started thinking about exactly what your organization should monitor.

Inputs

Inputs represent the money, materials, people, and other things that your organization needs to function. Think of input KPIs as the gas gauge on a car – it lets you know if you’ve still got plenty of fuel to operate, and how much more you might need to secure based on how far you want to go. It’s also helpful to keep track of your “miles per gallon” so to speak, or how much it’s costing you to carry out the key operations and activities of your organization.

The one input that all nonprofits must track is funding. For most, this will come from donations and generated income; for others it might involve grants, trusts, investments, or other sources. At the most basic level, you should be tracking the total amount of funding and how that’s changing over time. Even better would be to track how much funding comes from each source, so you can understand, say, if you’re gaining ground in grants but losing ground in general donations. Many development teams take these analytics one step further and segment, or categorize, where donations come from to help them understand the most effective place to focus. For example, how much money comes from first-time donors vs repeat donors? Or locals vs visitors?

Since nonprofits are often fueled at least in some part by unpaid labor, you should also track your people power from volunteers. Measures like active volunteers you have on hand or how many total hours volunteers are contributing will let you know what you have to work with beyond just dollars.

The expense side of input metrics looks at your investment into the actual day-to-day running of your organization. How much do you spend on employee wages and benefits? How much do your fundraising efforts cost? How much do you pay to rent or maintain your offices or event spaces? While many donors care about these overhead expenses, there isn’t necessarily a magic “right” number for them. The reason it’s important to track them is to see if they are unnecessarily increasing as well as making sure you’re getting as much as possible back for your investment in them. What you get back is part of the next type of KPIs!

To recap, here are examples of input KPIs for nonprofits:

• Total donations
• Total grant funding
• Total trust funds
• Number of volunteers
• Number of volunteering hours
• Salaries and benefits
• Fundraising costs
• Building rent/maintenance
• Other operating expenses

Outputs

The next group of KPIs captures what your organization produces from those inputs. Nearly all nonprofits already track these in some form, because this is the easiest way we have to show what we’re doing with the money people entrust to us. The exact measure here will be dependent on what your nonprofit does. For example, if you are a food bank it could be how many pounds of food or packaged lunches have been shared. A pet rescue could track how many animals it rehomes. A job training nonprofit could record how many classes it teaches and how many students attend.

Outputs could also be intangible things, like social media shares or news mentions, if that’s important to your organization’s success. Outputs like these are in some ways a secondary input, because typically they aren’t the final goal of your organization but rather a way of generating awareness to further the primary goals of your nonprofit. But because it takes time and money (inputs) to create these, I like to think of them as products as well.

To recap potential nonprofit output KPIs, capturing what you actually DO:

• Meals fed
• People trained
• Supplies dispensed
• Wells dug
• Expenses
• Social media likes or views
• Social media reshares or mentions

Outcomes

The final set of KPIs for nonprofits are the most important – and sometimes the hardest to get. While we can easily (in most cases) count the outputs, how do we know that those outputs are directly generating the actual change we want to see in our communities and the world? Consider that if you are a non-profit promoting and supporting job readiness, you don’t actually care how many classes you host. That’s a proxy, or stand-in measure, for the number of people who are actually then able to get a meaningful job who couldn’t before. If we could do that by waving a wand, we would! So in this example, the outcome we care about is “number of newly employed people.” You can see how this is subtly but crucially different than the number of students in our classes.

Outcome KPIs should directly relate to the organization’s mission and purpose for existing. Traditionally, it’s been enough for nonprofits to track productivity (outputs) but today donors and especially big funders are demanding more and better evidence that those outputs directly and impactfully translate into meaningful outcomes.

With jobs, the outcome is pretty clear and hopefully strongly influenced by the programs and actions the nonprofit did. But it might not always be immediately obvious, or at least not clear how we can capture it reliably. For example, if you run a church, how do you measure your outcomes? What about organizations that promote social cohesion and positively, like Pass It On?

When outcomes aren’t easy to capture, one option is to invest in one or two studies that show the outputs do directly increase the desired outcome. Then you can say going forward that X number of outputs, which is easy to count, implies Y amount of outcome, which is hard to count. For example, let’s say your nonprofit provides nonmedical interventions to improve survival in serious cancer patients, like pet therapy, prayer and meditation, and art therapy. It would be hard to measure for each individual person whether your interventions helped that person live longer – after all, you don’t know how long the recipient would have lived without your work. But you can look at a big group your beneficiaries over time, and compare them to similar patients who didn’t participate with your organization. If you see that your participants on average live six months or a year longer, then you can say that overall your interventions result in increased years of life. So when you report your outputs (numbers of visits, art classes, and prayer sessions) you can connect that to the average outcome from your study.

At their core, outcome KPIs can be very similar to program evaluation. The primary difference is trying to find a way to capture these meaningful measures of positive change reliably over time, rather than just once. As we saw in our two examples, sometimes this is possible – and sometimes it’s not.

To recap possible outcome KPIs, to capture the ultimate IMPACT of your nonprofit:

• Program evaluation
• Reduction in hungry children
• Transient people hired
• Increased life expectancy
• Reduction in water-borne disease, which results in reduced child mortality

Every Nonprofit is Unique – and so are their KPIs

You can see the wide range of possible KPIs for your organization. Not only will these metrics change based on the issues your nonprofit is tackling, but also on what data you can generate and where in the organization the metrics are being used. To learn more about the difference between tactical and strategic KPIs, check out this article.