Afterwards, we noticed the people we were talking to had begun to ask deeper questions like, “How do you know if a nonprofit board is doing a good job?” It seems that article helped nonprofit leaders, board members, and major donors to start thinking more critically about what they should look for in determining if the board they are connected to is being run effectively and accomplishing the organization’s mission. They wanted more information about what they should be on the lookout for – what kinds of red flags might signal an underlying culture problem or what kinds of signs indicate that the board is going off track.
A traditional analysis looks at inputs like fundraising expenses and operational costs and outputs like the number of people served and geographic area covered. The goal is basically to understand how the organization is using its funds to do something beneficial. This approach works if the output is something with a clear monetary value like scholarships granted or number of meals served. However, that approach seems to fall short when attempting to measure the “unquantifiable” impact a nonprofit has on its community – things like reducing isolation, giving community members a voice, offering mentorship, preventing violence, providing acceptance for marginalized groups, or reducing homelessness. Therefore, a true analysis of a nonprofit’s impact needs to include an evaluation of their Social Return on Investment (SROI) also.
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