Whether your organization is a nonprofit focused on animal welfare, a family foundation that awards grants to organizations serving at-risk youth, an impact investing firm championing renewable energy, or a corporation with several corporate social responsibility (CSR) initiatives, you know that the work you do makes a real difference. 

But, as an impact creator, how do you prove the effectiveness of your work to stakeholders? Or, as someone who funds mission-driven work, how do you know your dollars are being put to good use? 

The answer lies in a process called impact measurement. In this guide, we'll explore everything you need to know about impact measurement and how you can get started: 

• Impact Measurement: FAQ
• What Impact Measurement Looks Like for Different Types of Organizations (With Examples)
• How to Get Started With Impact Measurement and Management
• Top Impact Measurement Tool Providers to Consider

Once you master impact measurement, you'll have concrete data on your side, empowering you to make data-driven decisions that shape your organization’s future and the good it does for others. Let's begin! 

Impact Measurement: Frequently Asked Questions

Impact measurement and management (IMM) is a focus area in the mission-driven space that has been around for decades but is now growing in importance as more and more people recognize its value. So, if you're unfamiliar with it, you're not alone! In this section, we'll bring you up to speed on all the basics you need to know by answering some common questions. 

What is impact? 

Impact refers to the tangible changes or results an organization generates for its community as outlined by its mission, vision, and goals. 

Depending on the nature of an organization's work, it may have an impact on one or more of the following:  

• Individual lives
• Societal systems and structures
• The environment
• Economic development
• Pubic health and well-being
• Education
• Cultural and artistic expression
• Human rights and social justice
• Technology and innovation 

To understand and communicate your own organization's impact, you need to evaluate and report on it effectively. That's where impact measurement comes in. 

What is impact measurement? 

Impact measurement, also referred to as impact measurement and management (IMM), is a process that involves evaluating the effectiveness of an organization's programs, initiatives, and interventions to determine if the organization is delivering its intended results or benefits to its target beneficiaries. 

This means going beyond tracking what an organization does daily, like making investments, checking in with grantees, putting volunteers to work, or delivering services, and examining the short- and long-term positive outcomes of the work it's doing. 

Why is impact measurement important? 

Let's examine the importance of impact measurement from the perspective of mission-driven organizations and their stakeholders. 

Measuring organizational impact is important for: 

• Accountability and transparency: Mission-driven work depends on stakeholder support. By demonstrating how resources are used and the effectiveness of services rendered, organizations can stay accountable to stakeholders and maintain trust as they strive to be transparent about their operations. 
  
  
• Learning and making improvements: Understanding the impact of programs, initiatives, and interventions allows organizations to learn what strategies work best and make data-driven decisions to improve their approach.
  
  
• Resource allocation: In the mission-driven space, sticking to a budget and prioritizing the most important needs is the name of the game. Impact measurement allows organizations to see which areas of operations need the most time, attention, and funding.
  
  
• Enhanced employee morale: Impact measurement has the power to open team members' eyes to the importance of the work they do every day, which can motivate them and increase productivity.  
  
  
• Better marketing: Measuring impact can help an organization share its story in more emotionally evocative ways, which can be helpful for raising awareness of its cause and calling for support. 
  
  
• Scaling up operations: Whether an organization is creating a strategic plan for the next five years or simply planning an upcoming fundraising campaign, it's always looking to grow its impact. To achieve more down the line, organizations first have to understand how well they are currently performing. 

For the stakeholders who support mission-driven work, impact measurement is important for: 

• Organizational governance: The leaders of mission-driven organizations, like the board of directors, need a full understanding of how effectively the organization is delivering its mission. This way, they can make informed strategic governance decisions and guide the organization toward a healthy future. 
  
  
• Compliance and regulatory purposes: Policymakers, investors, or grantmaking organizations may require organizations they support to report on progress toward their mission. When an organization has an impact measurement strategy, this process is much smoother. 
  
  
• Strengthened relationships: Mission-driven organizations often collaborate with community partners or businesses to move their work forward. Demonstrating impact is a good way to strengthen and maintain relationships and show partners why they should continue to lend support. 
  
  
• Having evidence of an organization's effectiveness: Stakeholders like donors or investors want to know that their contributions are making a difference. When they can see an organization's impact for themselves, they feel more motivated to give again. 
  
  
• Recognition of contributions: Sharing an organization's impact is also a great way to recognize those who contribute to its mission, whether through donating, volunteering, or some other form of support. Being able to point to what their contributions helped produce can be rewarding for supporters. 

What Impact Measurement Looks Like for Different Types of Organizations (With Examples) 

Different types of mission-driven organizations will have different IMM needs. Let's take a look at three core types of organizations to better understand their motivations for measuring impact and how they typically approach the process. 

Impact Investors 

Impact investors manage portfolio companies or funds, typically investing in for-profit organizations with a certain thematic focus, such as the environment, education, or social good. 

These organizations benefit from impact measurement in two ways: 

1. They measure and report on their own organization's impact to stay accountable to stakeholders such as their board of investors. 
2. They also encourage portfolio companies or funds to report impact information to them.

By reporting on their own impact, impact investors can continue contributing to organizations building a better tomorrow. Additionally, by understanding portfolio companies' and funds' impact, investors can provide effective strategic support, helping the organizations they support improve their operations and scale up. 

Example of Impact Measurement for Impact Investors: Sonen Capital

Sonen Capital focuses on driving both social and environmental impact, as well as high financial returns, for its clients. 

The investment firm recognized the need to not only sell impact-focused investments but also report on the non-financial results of those investments. They partnered with UpMetrics to use data frameworks and intuitive dashboards to highlight their impact insights and provide clients with a way to see the lasting impact their investments create. 

Interested in learning more about Sonen Capital's impact measurement journey? 

Grantmakers

Private foundations, public foundations, corporations, and government agencies may all provide grants to nonprofits.

Similar to impact investors, these organizations engage in impact measurement and management themselves to stay accountable to boards, donors, and communities while also encouraging their grantees to demonstrate the impact they're generating using grant funds. 

Enhanced transparency among grantmakers, their supporters, and their grantees allows for better collaboration and learning among all three parties. 
 

Example of Impact Measurement for Grantmakers: Ewing Marion Kauffman Foundation

The Ewing Marion Kauffman Foundation works in Kansas City and the surrounding area to help people achieve financial stability, upward mobility, and economic prosperity. One way it does this is by providing grants to local organizations aligned with its mission. 

During the COVID-19 pandemic, the Kauffman Foundation saw a need to improve its data strategy. The organization began using UpMetrics' IMM platform to set grantees up with a way to define their own success metrics and monitor their impact. 

Now, the foundation and its grantees can learn from their impact data to drive even more positive change for the Kansas City community. 

Dive deeper into the Kauffman Foundation's IMM story! 

Nonprofits

Nonprofits rely on the generosity of others to keep their missions moving forward. One way they can prove themselves worthy of continued support is to demonstrate the impact of their programs and services. 

By measuring their progress toward the smaller objectives that will get them closer to accomplishing their larger missions, nonprofits can evaluate the outcomes of their initiatives and projects and use that information to make careful decisions about improving their operations. 

Example of Impact Measurement for Nonprofits: America SCORES Chicago 

Since 2000, America SCORES Chicago has provided free after-school and summer programming to youth that combines soccer, poetry, and service learning. 

The nonprofit works with UpMetrics to enhance its reporting efforts and more effectively track student engagement and program effectiveness data.

Now, they have easy access to insights on their work that allow them to stay accountable to government funders and school principals. They've also found it easier and faster for their internal team to collect and manage organizational data. 

Get more details by reading the America SCORES Chicago case study! 

How to Get Started With Impact Measurement and Management

Now that you understand what impact measurement is, the value it can bring, and what it looks like at different organizations, you're likely ready to dive into evaluating your own organization's impact. 

Follow these steps to get started: 

1. Create an Impact Framework. 

An Impact Framework is essentially a visual and mental map that helps your team think about impact as something you can measure and leverage. There are three key pieces to a complete Impact Framework: 

Dimensions of Impact 

At UpMetrics, we recommend you begin building your Framework by considering your larger mission and vision in the context of key dimensions of impact:

• Who you are serving 
• What you are delivering to those you serve
• The quality of your delivery
• How those you serve are better off because of what you deliver
• Community contributions, or the larger, possibly more indirect impact your work has on your community  

From there, you'll determine objectives and key impactor indicators that fall under those specific impact dimensions. 

Objectives 

In order for your impact measurement efforts to lead to positive outcomes for your organization, stakeholders, and those you serve, you need to know what you want to achieve through the process. 

Of course, you want to make headway on your organization's overarching mission, but it will make the process more manageable to break this larger objective into more granular goals. 

Here are a few examples of manageable objectives to inspire you: 

• Raise academic performance across each high school in the district. 
• Improve our portfolio company's solar panel install program.
• Increase enrollment in our volunteer program.
• Strengthen our relationships with community partners.
• Help grantees distribute more hygiene kits to the unhoused in our county. 

Key Impact Indicators (KIIs) 

Similar to key performance indicators (KPIs), KIIs are measurable values that help you see the progress you've made toward your objectives. The KIIs you choose will inform the data collection and analysis steps coming up. 

Here are some examples of KIIs: 

• High school attendance rates 
• Number of beneficiaries served
• Percent of donors who gave again
• Number of grants awarded
• Satisfaction from program participants
• Pre- and post-test scores
• Staff retention rate
• Total number of corporate partners

As you come up with KIIs that align with your own objectives, try to go a little deeper than surface-level indicators. For instance, it may be helpful to track the number of people who enroll in a program, but it may be more informative in the end to track the number of people who complete the program or are retained in the program year after year. 

Putting All of the Pieces Together For a Complete Impact Framework 

Our impact measurement and management platform allows your organization to put together all the pieces of its Impact Framework. Here's a snapshot of what your Impact Framework could end up looking like: 

As you can see, on the UpMetrics platform, you're guided through the process of adding objectives and KIIs and attaching them to specific dimensions of impact.

Want to try it for yourself? 

2. Consider the data needed to monitor progress toward your objectives. 

Data refers to the raw facts and figures you need to collect and analyze to evaluate your organization's impact, or, on a more manageable level, its progress toward specific objectives. 

You can (and should) use both quantitative and qualitative data to measure your progress:

• Quantitative data refers to data that can be given a numeric value. Here are a few examples: 
   
  • Number of beneficiaries served through a particular program
  • Percentage of increase in organizational revenue over a certain period of time
  • Average amount of time to deliver a specific service  
  • Number of partnerships formed with local businesses 

• Qualitative data complements quantitative data, focusing on what cannot be represented with a number. It captures qualities, characteristics, experiences, and behaviors in a more descriptive or narrative form. Here are some examples:
  
  
  • Testimonials from beneficiaries sharing their experiences receiving your services
  • Survey answers from donors about a fundraising event
  • Photographs or videos capturing a volunteer activity
  • Interviews with staff members to better understand your organization's funding needs 

From the get-go, commit to working with both quantitative and qualitative data. This will give you a fuller picture of your organization's impact once you begin analyzing your data for insights.  

3. Collect data. 

Begin by digging into the data you already have, both quantitative and qualitative. The data that will get most of your focus will largely depend on the KIIs you've picked. 

This will require you to identify where your current data lives. If your organization is a small shop, you may only have a few spreadsheets to reference. However, larger organizations may have heaps of data sitting in several different solutions, from donor databases to marketing tools. You'll eventually need to consolidate your data in one place to analyze it. Jump ahead to learn about recommended tools for doing this!

You'll likely want to collect additional data to reference as well. Depending on your KIIs and data needs, you may need to conduct surveys, interviews, or focus groups. You'll also want to look for trends in your internal database and other tools.  

Also, consider any publicly available data that can enrich your organization's own data collection. For instance, perhaps your organization is focused on lowering the unemployment rate in your local area. Publicly available data about unemployment on the state, county, or city level can enrich your understanding of the data your organization has. 

4. Analyze the data.

• Quantitative data calls for statistical analysis. The specific method you'll need to use will depend on your KIIs.  
  
  
• Qualitative data requires thematic analysis. To do this, you'll codify your data and then extract themes that you can turn into understandable insights.

If you're intimidated by the prospect of data analysis or know that this skillset is out of your team's wheelhouse, you're not alone. Consider partnering with a data scientist or investing in an impact analysis platform to explore what your data has to say about your work. 

5. Act on your insights. 

Effective data analysis will answer the question, "How close are we to achieving our objectives?" And once you have those answers, it's time to act. 

This may involve: 

• Making data-driven decisions and improvements to your organization's programs, initiatives, and interventions
• Generating comprehensive and engaging reports to share with stakeholders
• Sharing the story of your organization's progress toward its larger goals with your community through marketing materials 

Even if your data is telling you that you haven't made much progress on your goals or that new problems have emerged that need addressing, remember not to be discouraged by your findings. Let your insights spur positive change and optimism for better results in the future.  

Top Impact Measurement Tool Providers to Consider

Having the right tools at your disposal will make your impact measurement efforts easier and more successful. As you consider the top providers below, take into account your organization's needs, budget, goals, and plans for scaling up in the future so that you pick the right fit. 

1. UpMetrics

UpMetrics is the leading provider of impact measurement and management software for nonprofits, foundations, impact investors, and CSR-focused corporations. 

With our user-friendly tools, your organization can tap into our DeCAL methodology for impact measurement. DeCAL stands for:

• Define: Create an Impact Framework that includes the key objectives and KIIs you want to track to further progress toward accomplishing your larger mission and vision.
  
  
• Collect: Gather your existing data, use our data capture tools to collect more information, and then format and prepare your data for thorough analysis.
  
  
• Analyze: Visualize your data with our custom dashboards and compare your outcomes against your organization's or industry's baselines to evaluate progress toward your goals.
  
  
• Leverage: Take your insights from our platform and use them to make positive changes, stay accountable to stakeholders, and share your organization's story.

What Sets UpMetrics Apart

UpMetrics stands out because of our team of social sector experts. Through our managed services offering, you can tap into their expertise on: 

• Impact measurement strategy, Impact Framework, and KII development
• Data science
• Data collection and maintenance 

Better yet, we'll help you become an expert in impact measurement, too, transitioning you to becoming self-powered on our platform over time. 

We also offer access to the foundational features of our platform via our free Starter Plan. This grants your organization access to our impact framework builder, themed framework templates, and the ability to publish a public profile page. 

Additionally, by working with UpMetrics, you can tap into the power of community by joining our Impact Learning Collectives (free for UpMetrics customers!). Or, if you're a grantmaking organization, you can sponsor the cost of the platform for a group of your grantees through our Cohort program.

2. Sopact

Sopact is a software provider committed to helping organizations make sense of their data through careful listening and artificial intelligence (AI)-powered data collection and analysis.

They offer two solutions: 

• Sopact Sense: A platform that allows users to easily collect data and then thoroughly analyze it with the power of automation
• Sopact Suite: A more robust tool that allows organizations to combine organizational data and AI for rapid data analysis, integrate with other solutions, and tap into expert support.

3. ImpactMapper

ImpactMapper is a provider that puts a special emphasis on helping organizations get the most out of their qualitative data. 

Their software empowers organizations to: 

• Turn text into quantitative trends
• Create custom surveys
• Create and customize data visualizations
• Review all data with high-level analytics
• Manage grants, grantees, and fund disbursements

4. Civis Analytics

Civis Analytics helps its users overcome data silos and unify information to better understand what motivates their audiences to take action. It's an especially useful tool for mission-driven marketers. 

Some of its capabilities include: 

• Easy importing and exporting
• AI-supported workflows
• Data standardization
• Data augmentation
• Data processing in coding language of user's choice
• Simple report creation 

Wrapping Up

Measuring impact allows an organization to quantify and communicate the difference it's making in the world. As you work to measure and manage your own organization's impact, draw on the process outlined above to guide your work.

And remember, the impact measurement journey often requires support. Consider partnering with a provider like UpMetrics to gain access to the tools and expertise you need to truly understand how much progress you or the organizations you support are making on your mission! 

Want to keep learning about the world of impact measurement? Here are a few recommended resources from our blog: 

• Impact Reporting: 6 Steps to Creating an Exemplary Report
• Hitting the Bullseye: What to Consider When Building an Impact Framework Tailored To Your Nonprofit
• Using Data as a Differentiator to Drive Dollars to Your Organization
• How to Get Your Nonprofit Board On-Board with New Tech