Accountability is important in any organisation and especially so in a Not-for-Profit. Understanding the inputs, outputs, outcomes and impact of an activity, helps communicate this to the various stakeholders. Funders, whether they are governments or institutions providing grants or donors giving a few coins, want to know that their funds are looked after and used well. In the past, the focus was very much on what you spent the funds on. Now, it’s more about how you’ve made a difference.
What are Inputs?
In service-based organisations, one of the key inputs is people.
Inputs are the resources you use to do what it is you do.
Others are the resources and finances used in your organisation.
- If you’re providing care to people, the inputs would include not just the time of your team but also any equipment they need, any medical supplies, the rent on the facilities you use.
- For a community sports club inputs would be balls and equipment, a vehicle for transport and the hours of volunteer work that makes the club work.
Inputs are often the easiest of our 4 to identify. Generally, you have control over them and make decisions about how many to use on each project. You will roster the right people, give them access to the tools and consumables they need. For this reason, they have always been a key measure of accountability. An important part of any grant application is outlining what you will spend the funds on. Then later you account for how you have actually spent them.
What do we mean by Outputs?
Measuring outputs is more about what you do.
Outputs is about the tasks and services you perform.
Outputs tend to be reasonably easy to measure, and measure quickly, because you (or your team) are there and present, able to see what is happening.
- In delivering Meals on Wheels, you know how many dinners you have prepared and delivered.
- If you’re in the business of running a theatre, you know how many plays you put on, how many people attended.
If you don’t have the right tools or systems to measure outputs, you have the means to implement them. Sometimes, you need to consider which are the important outputs to measure. Is it that you’ve put on 5 plays or that you’ve entertained 1,000 theatre-goers. That’s where you need to consider them in the context of your strategic goals, or those of your funders. What do they want to know?
Examples of Outcomes
Out of our 4 measures, outcomes can sometimes be the hardest to define. They differ from the inputs and outputs we have discussed so far, in that they are outward-facing.
Outcomes are customer-centric.
To know what your outcomes are, ask questions like these:
- How do your customers/clients benefit?
- What changed for them?
We are looking for the short-medium term changes for your customers. Sometimes, you can’t measure the outcomes yourself because they happen after your job is done. That can complicate measurement and may require the use of other parties to do the counting. At times the outcomes can be more subjective or may be measured with qualitative surveys. Ideally, you would choose objective, quantitative outcomes if you can.
How can we Measure Impact?
Out of inputs, outputs, outcomes and impact, it’s the latter, impact, that is usually the hardest to measure. It’s also the one with the broadest outlook.
You could consider the impact of a project on your organisation, on your clients or on the community you operate in (and define that narrowly or broadly). A program can have many impacts and they tend to ripple over time.
Impact does need to be measured over a long period of time.
It’s rare to be able to assess the impact of any program the day after it has finished. Sometimes it may take years to realise the extent of the impact.
A common substitute for reporting the actual impact of a project is to focus on the expected impact. This may be just wishful thinking in some cases. However, it may also be reasonable if there is documented evidence of the success of similar programs.
A Practical Example: Measuring Inputs, Outputs, Outcomes and Impact
The theory is great but sometimes working through a practical example helps to bring this all home. One of our local charities started off gathering donations of food and providing breakfast to schoolchildren. They’ve since expanded and do various fund-raising activities, bring in sponsorship and provide the same service to an ever-widening group of children.
What are their inputs?
Inputs are what they consume:
- Donations of food
- Volunteer labour
- A paid employee
What are their outputs?
The outputs are what they produce:
- The number of breakfasts provided
- Amount of schools they serviced
- How many children they have fed
What are the outcomes?
In this example, the outcomes are the immediate benefits:
- Well-fed children
- More children attending school
What is the impact?
This program hasn’t been running long enough to be able to measure the long-term impact. However, there have been academic studies of similar programs that have confirmed positive impacts in the areas of:
- Improved academic performance
- Higher rates of completing schooling
Communicating the impact of a program is an important part of attracting ongoing funding. Funders need long-term goals to be willing to commit to long-term funding. Being able to document and explain the inputs, outputs, outcomes and impact of your program is vital to its success.
Even businesses like ours find ways to measure our impact from time to time. We did this a few years ago with the help of some ACNC numbers. At that time, we calculated that we save our NFP customers over $12m every year.
Use Calxa to help you track any of these values as part of your monthly reporting. This Financial KPIs for Business Guide will direct you to Calxa’s KPI Builder where you can set up your measuring indicators and include them on visual graphs.