Updated date:

Benchmarking and Performance Standards

Enthusiastic strategic manager skilled in budgeting, fundraising, grant writing and policy development. Master of Public Administration.

Performance Standards

Setting performance standards and establishing benchmarking goals is essential. Public agencies are encouraged to adopt and implement benchmarking techniques from private entities in order to improve their efficiency and effectiveness. I examine the techniques and benefits of benchmarking for non-profit organizations.


Business Goals

Business Goals

Business Goals

Generate Your Mission Statement

A nonprofit organization should have a clear mission statement. This will enable the organization to compare itself with others that have a similar mission. Organizations can compare their results with the industry benchmark.

Organizations should use electronic means of fundraising and communication including newsletters and online appeals as well as social networking. They should compare their organization with other similar organizations to find out how well they are implementing best practices and technology.

Church Mission Statement

St. Joseph Catholic Church Des Moines

St. Joseph Catholic Church Des Moines

Benchmarking and Outcome Measures

Establishing outcome measures is necessary for benchmarking. Hendricks, Plantz & Pritchard define outcomes as, “benefits or changes for program participants.”

According to Lee, Johnson and Joyce, benchmarking is, “best practices in government or the private sector that are identified and used as a guide for revising how government operates." Non-profit organizations should meet regularly to share best practices. Moreover, Letts, Ryan and Grossman, state that, “Benchmarking is more than discovering best practices. It includes comparative measurement, active goal setting and implementation."

Kelly & Rivenbark state that, “Benchmarking is a comparison between two data points, with one of the data points designated as the benchmark." With benchmarking, data points typically involve comparisons between years. For example, the number of clients served in year can be the benchmark. The organization would then seek to meet or exceed the number of clients served in year two.

While a benchmark is a defined “mark” or data point, outcomes are all measurable benefits and changes. A benchmark is a designated data point.



Quantify Outcome Measures

Outcome measures are useful for organizations where service is the "product" of the organization. Outcome measures, “capture the extent to which the service is meeting its objectives and service delivery goals” (Kelly & Rivenbark). Benchmarks and outcome measures indicate the level of performance of a given organization.

According to Gelmon, Foucek & Waterbury, “Performance monitoring can be very useful to reveal trends over time, to assess actual performance vs. targets, and to compare across units, different groups of clients or activities. Performance monitoring is also extremely valuable as the basis for external benchmarking of organizational performance."


Benchmarking and Fundraising

Convio is a marketing company that provides evaluation and program measures for nonprofit organizations. They created an online marketing index study. Their benchmarking technique compares a given nonprofit organization with similar peer groups. They asked, “What online market metrics should I focus on? How is my organization doing? What targets should I set for my organization?”

According to the study, the fastest fundraising channels for nonprofits are (1) online presence and (2) web traffic. Additionally:

  • The median growth rate in online giving was 20 percent.
  • Online giving is growing fastest for small organizations. An increase in gift count drove the fundraising gains.
  • Median donation size increased from $83.44 in 2009 to $91.94 in 2010.
  • Fundraising appeal effectiveness increased in 2010.

How should a nonprofit organization measure itself against these findings?

Web Analystics and Online Presence

Photo by fauxels from Pexels

Photo by fauxels from Pexels

Comparing Xerox, CARE and Boston Ballet

Letts, Ryan & Grossman studied and compared Xerox, Cooperative for Assistance and Relief Everywhere (CARE) and the Boston Ballet with other similar nonprofit organizations. Xerox focused their benchmarking on delivery and quality of products and services. CARE, a humanitarian organization providing disaster relief, focused on health objectives. The Boston Ballet focused on fundraising and their public image.

Each organization wanted to know how it compared on a global level. CARE implemented a water quality benchmark. They used the incidence of diarrhea in year one as the benchmark and they compared it to the incidence of diarrhea in future years.

Xerox established the number of orders in a given year as their benchmark. They compared subsequent years to that data point.

The Boston Ballet had difficulty measuring outcomes and establishing benchmarks for “artistic performance.” Instead, they benchmarked their ability to raise funds and improve public image. They established a committee, compiled a questionnaire and turned to the San Francisco Ballet for additional insights. They were invited to “pay homage to the past and appeal to new audiences." They improved their public image and helped trustees understand other issues.

Evaluating Employee Satisfaction

Lopus conducted a performance evaluation and benchmarking of employee satisfaction and retention of nonprofit organizations with a Christian ministry focus. Employees were asked, "How well is your organization managed?” This was a cross-comparison benchmark. A total of 85 organizations were ranked.

They found that employee satisfaction was linked to effective management. Effectiveness is based on (1) trust, (2) enthusiasm, (3) ability to retain high quality employees, (4) a focus on accountability rather than a permissive environment, (5) ability for supervisor to solve work-related problems, listening to employee suggestions and then acting on them, (6) ability to communicate reasons behind decisions, (7) fairness, and finally (8) teamwork. These findings parallel those of the private and governmental sectors.

Observations and Generalizations

  • Organizations should consider these benchmarks: (1) The use of technology, (2) Effectiveness of online giving and (3) Quantifying effective management. Finding ways to measure outcomes that are difficult to quantify might require the organization to examine other areas such as fundraising and public image. Set the benchmark for year one and determine the growth by measuring and recording the distinct data point in year two.
  • Nonprofit organizations can benefit from contacting other organizations with a similar mission. Gathering data and best practices from their peers should prove to be beneficial. An organization might consider sharing best practices with more than three and at least five to ten organizations so that a fair “sample population” can be gathered in order to look for consistencies and trends and draw reasonable conclusions.
  • Nonprofit organizations should consider their operations to be similar to the private and governmental sector when identifying and measuring outcomes for performance evaluation and benchmarking. They should adopt the techniques developed and implemented in private and public sectors.
  • In order to remain financially solvent, best fundraising practices should be shared, measured and benchmarked. Being effective and efficient with the dollars granted to the organization is just as important in nonprofit organizations as it is in the private and public sector.
  • Management skills are necessary to administer funds properly, build trust, foster enthusiasm and promote fairness throughout the organization. Setting up designated data points for several measures and comparing them year to year and across organizations with a similar mission will allow the nonprofit manager to benchmark with success.

See also: Strategic Planning & Analysis

References

Bhagat, V. McCarthy, D. & Snyder, B. (2011). The convio online marketing nonprofit benchmark index™ study. Retrieved from:http://www.convio.com/files/2011- Benchmark-Report.pdf

Gelmon, S.B., Foucek, A. & Waterbury, A. (2005). Program Evaluation: Principles and Practices. 2nd ed. Portland: Northwest Health Foundation. Retrieved from: http://www.wcasa.org/file_open.php?id=923

Hendricks, M., Plantz, M. & Pritchard, K. (2008). Measuring Outcomes of United Way Funded Programs: Expectations and Reality. Wiley Periodicals, Inc. 119: 13-35. DOI: 10.1002/ev.266

Lee, R. D., Johnson, R.W., & Joyce, P. G., (2008) Public Budgeting Systems, 8th ed. Jones & Bartlett Publishers INC. Sudbury, Massachusetts.

Letts, Ryan & Grossman (1999). Benchmarking: How nonprofits are adapting a business planning tool for enhanced performance. John Wiley & Sons. Retrieved from: http://www.tgci.com/sites/default/files/pdf/Benchmarking_0.pdf

Lopus, A. (2003). Benchmarking Management Performance! Eight Ways to Accelerate Your Organization’s Effectiveness. Christian Management Report. 28-30. Retrieved from: http://www.bcwinstitute.com/Learningcenter/press/CMR%20Accelerate%20Org %20Effec.pdf