Assessing success

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It is a fundamental responsibility of the board to be clear about the purpose and strategy of the organisation for example by agreeing on vision and mission; values and strategy.

But how do trustees and the board judge the success of the organisation? How can you know the organisation is making progress on its strategy? Are the lives of beneficiaries being improved? Have you advanced your cause? Are financial targets being met? Does the organisation work efficiently? If you want to know if the organisation is being successful, the board needs to know what success looks like.

Success measures

Central to answering these questions is the development of a set of  success measures,  indicators that tell you how well you are doing relative to targets you want the organisation to reach. (Your success measures should of course be drawn from your strategy.)

An effective set of success measures seeks to balance different aspects of performance and recognise that they are interlinked. For example an organisation can only deliver good results for beneficiaries if it has sufficient resources, and if people are supported and motivated to do their work to an appropriate standard. 

A balanced set of success measures is likely to include measures that:

• assess the achievement of your core purpose (for most charities this will be achieving positive change for their beneficiaries or their cause)
• assess financial health
• reflect the effectiveness of internal processes and ways of working that are key to the organisation
• other success measures that are important to your organisation for example your environmental objectives or how you are meeting the expectations of key stakeholders.

If you are just starting to measure success start with a small number of carefully chosen measures.

As you create your list of success measures bear in mind:

• It's often a good idea to start with the outcomes or results you want to achieve and work backwards. For example, what will be different for your cause or beneficiaries if your strategy is a success? How could you measure that? If the changes you seek are very long term are there intermediate milestones of success you need to set out?
• Take care to distinguish what your organisation does and produces (such as training courses and events) from the difference they have made. A busy organisation is not necessarily an effective one.
• Remember to compare your results with the resources you are putting in. Is the organisation getting good value for money invested. Is it learning how to do things more efficiently?
• Balance short and long-term success. Will meeting the needs of today’s beneficiaries be at the expense of future beneficiaries. Do you need to spend more money today to deliver better more cost-effective services in the future?
• Try and include indicators that predict whether you will be successful in the future so that you can anticipate if you are going off course. For example if your charity relies on legacy income you may want to track how many new donors have pledged to leave you money.
• Keep the number of indicators small. Design them so that the staff or volunteers in the organisation can regularly report on progress to the board.

Involving others in assessing performance

In deciding how the organisation assesses its performance, it helps if you plan a way to involve the whole organisation. If you have staff, they may develop proposed indicators and targets. However it is the board that remains accountable for performance and it should play an active role in deciding how success is assessed. 

Using a balanced scorecard to measure performance

Some non profit organisations and charities use the concept of a balanced scorecard, that is, a small set of linked measures designed to track different aspects of performance. Although developed for the private sector the concept has been adapted for use in the non profit sector. See for example Social Enterprise London’s (SEL) version of the balanced scorecard. Cooperatives UK has developed the Co operative, Environmental and Social Performance Indicator (CESPI) to help cooperatives demonstrate what they achieve.

See the Improving performance section for more information on monitoring and evaluating the performance of non profit organisations. 

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