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With budgets tightening, there are still ways NC nonprofits can find success

When residents of central North Carolina are trying to rebuild their lives, The Barnabas Network helps them create a home. The Greensboro-based nonprofit provides used and refurbished furniture to individuals and families recovering from addiction, homelessness, abuse, fires, and other challenges.

Arriving at the nonprofit last May as its executive director, Derrick Sides was charged with significantly expanding Barnabas’ reach and impact. It was a big task. But Sides also had a major advantage over many nonprofit leaders in similar situations – a substantial evaluation report that Barnabas had commissioned in 2014.

Developed by UNC-Greensboro’s Nonprofit Evaluation Support Program, the evaluation explored how Barnabas’ services impact its clients and how it can improve its performance and sustainability.

As he transitioned into his new role, Sides says, the 30-page report, completed a year before his arrival for less than $1,000, offered a “perfect window into where the organization was and what our current challenges and opportunities are. It helped form the basis for our strategic planning.”

The report had recommended that Barnabas develop a strategic plan, as well as enhance its marketing through more consistent messaging and stronger funding. Data analysis in the report also helped Sides and his colleagues spot important patterns – such as the fact that Barnabas tends to get its largest number of referrals for people in need from June through December, meaning it needs to build up inventory in the spring.

With funding tight, demand for services up, and the new federal tax law expected to have an adverse effect on charitable giving, nonprofits everywhere are increasingly under pressure to show results.

“Learning how to use scarce resources to do effective evaluation is really going to be important, as well as communicating with funders to gain their support for evaluation as a critical business function,” says Jeanne Tedrow, president and CEO of the N.C. Center for Nonprofits.

But the barriers to evaluation can be formidable.

Innovation Network’s 2016 State of Evaluation report found that 85 percent of nonprofits said they need evaluation to know if they are being effective. But just 28 percent had what the study termed “promising capacity,” a blend of the internal knowledge, tools, and time to undertake substantial evaluations. The vast majority of nonprofits do not have the funds to hire external evaluators. And even those that do sometimes hamper themselves by evaluating the wrong things.

A vicious cycle ensues. Too often, nonprofits find themselves without the resources or skills to invest in evaluation of their operational performance and impact. But without solid evaluation data, it becomes harder to attract the investments needed to expand and evaluate their work.

How to break this spiral?

First, “nonprofits need to ask themselves, ‘What is the difference we are trying to make?’ ” says Meredith Emmett of Third Space Studio, a Durham nonprofit strategy consultant whose clients include Blue Cross and Blue Shield of North Carolina Foundation’s Nonprofit Leadership Academy. Because they are eager to drive change, nonprofits frequently try to do too many things, making meaningful evaluation difficult.

Once there is specificity about what success looks like, it’s then critical to identify measures for gauging progress. Those measures can’t simply be the province of a few leaders – they need enthusiastic buy-in from the board and staff and need to be communicated frequently.

Tracking progress against those measures requires a third step: collecting the right data. If a nonprofit isn’t asking the right questions of itself, its clients and the communities it serves, it will not get the data it needs to keep improving. “That’s what evaluation is for, getting organizations to be more effective and efficient,” says Morgan Fleming of The Good Evaluator, a Durham consulting firm that has assisted Don’t Waste Durham, Triangle Area Parenting Support, and other nonprofits.

In addition to independent consultants, whose fees can range from a few hundred dollars to $15,000 or more depending the scope and complexity of the work, nonprofits can also benefit from regional support programs. HandsOn Northwest North Carolina, with funding from the Kate B. Reynolds Charitable Trust, offers a measurement consulting program for as little as $200. WNC Nonprofit Pathways provides free organizational assessment tools that can help nonprofits explore critical questions.

Once nonprofits have a solid system for measuring success, there’s one more stage – communicating their impact to clients and funders, so that it’s easier to attract more resources and generate more results. For nonprofits passionate about making a difference and fighting for resources in a competitive landscape, that should be the fun part.

Christopher Gergen is CEO of Forward Cities, a Founding Partner of HQ Community, and author of Life Entrepreneurs: Ordinary People Creating Extraordinary Lives. Stephen Martin is chief of staff at the nonprofit Center for Creative Leadership in Greensboro. They can be reached at authors@forwardimpact.info and followed on Twitter through @cgergen.

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