The document discusses evaluating and communicating the social impact of nonprofits. It introduces tools like logic models and value propositions that can help nonprofits enhance program measurement and attract more resources. Logic models visually map how nonprofits achieve impact through inputs, activities, outputs and outcomes. Value propositions define the value an organization provides to key stakeholders like clients, funders and the community.

1. Outcomes Matter:
Calculating and Communicating Your
Social "Return on Investment"
2012 TEXAS NONPROFIT SUMMIT
SEPTEMBER 21, 2012
All contents © Greenlights for Nonprofit Success
G R E E N L I G H T S . O R G

2. LEARNING OBJECTIVES
1. Provide you with powerful tools to:
 Enhance your program measurement and
evaluation
 Attract more resources and advocates in
the community
2. Share some recent Greenlights
research on program evaluation
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3. IMAGINE IF……
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4. NONPROFITS
YARDSTICK
STOCK
EXCHANGE
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5. COMMUNITY NEEDS
BROADCASTING CHANNEL
Habitat for Humanity Reports Strong 2nd Quarter Housing Starts
Red Cross +67.51
BBBS +13.29
Komen +2.25
Nonprofit Sector Industrial Average (NSIA) 1.25 on strong performance
Q3 Philanthropic Giving Forecast to Beat Main Street Estimates…….
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6. BREAKING NEWS…
“STEVE JOBS UNVEILS NEW FOSTER CARE INITIATIVE”
iParent
Apple reinvents the foster care system
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7. GREENLIGHTS 2012
EVALUATION & IMPACT STUDY
▸ 93% conduct some type evaluation, at either the
program or organizational level
▸ More than half of respondents are not confident in their
organization’s evaluation efforts
 Larger organizations are more confident
▸ Greatest barriers in conducting evaluation are limited
staff and funding, and lack of tools and technology
▸ Primary motive is to improve programs and establish
program goals
▸ Many funders require organizations to conduct
evaluation
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8. CHALLENGES TO CONDUCTING EVALUATION
▸ 81% rely on executive and management staff to
conduct evaluation
▸ Funding for evaluation tends to come from general
operating funds, and less than half of respondents have it
built into program grants
▸ Only 37% of respondents are tracking long-term client
outcomes, and roughly 50% collect data on medium-term
client outcomes
▸ Only 36% of respondents use pre/post data collection,
so it’s difficult to measure change
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9. INPUT FROM FUNDERS
▸ How program evaluation is typically funded:
 Allocate 30-40% of the total grant amount to general
operating funds or capacity building (including evaluation)
 Include evaluation as a dedicated line item in program
grants or contracts
 Directly hire an external evaluator or conduct the
evaluation themselves as funders
▸ How the funder community strengthens
evaluation:
 Technical assistance and infrastructure, e.g. database
creation and maintenance, templates, and other tools
 Professional development to build evaluation capacity and
connect grantees to other resources, consultants, and experts
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10. 3 SETS OF POWERFUL TOOLS:
Logic Models
GOOD  Enhancing existing or creating new logic models to
(but necessary) advance your mission and improve how you
demonstrate impact
Value Propositions
BETTER  Uncovering and clearly enunciating for whom and
in what ways your programs add value in the
community
Value Chain Analysis
BEST  Breaking old habits to use business-like value
chain tools to place real value on the impact of
your work
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11. Logic Models
G R E E N L I G H T S . O R G

12. LOGIC MODELS
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13. WHAT IS A LOGIC MODEL?
…aka “Logical Framework”, “Theory of Change”, or “Impact Map”
▸ A strategic tool for boiling your mission (or that of one of
your programs) down to its essential parts
▸ A visual representation of how your organization does
its work and achieves impact
▸ A theory of causality, linking the resources you use, to
the things you do, to the impact you have
▸ Has roots in value chain analysis from the for-profit
world (raw materials  production of finished goods 
marketing and sales  customer value)
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14. ARE THEY VALUABLE TO YOU?
▸ For program teams, logic models…
 Define how your programs support mission achievement
 Help staff and volunteers get clarity about what their work is
ultimately producing
 Support and frame program evaluation efforts
▸ For development teams, logic models…
 Demonstrate how giving leads to impact and “social ROI”
 Provide accountability for meaningful performance and signal
sophistication to certain “performance oriented” funders
 Depict the logical case for funding
▸ For communications/marketing teams, logic
models…
 Provide fodder for clearly and simply explaining your work
▸ For EDs and Boards, logic models….
 Provide a “strategic screen” through which they can filter
major decisions and opportunities
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15. THE BASIC LOGIC MODEL
Inputs Activities Outputs Outcomes Impact
Your Planned Work Your Intended Results
Source: Kellogg Logic Model Development Guide©
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16. LOGIC MODEL COMPONENTS
▸ INPUTS: The resources an organization needs to do its
work (facilities, staff, volunteers, grants, technology, etc.)
▸ ACTIVITIES: The core programs and initiatives of an
organization (what you actually, physically do)
▸ OUTPUTS: Direct products of program activities (number
of hours of service delivered, number of clients served,
etc.)
▸ OUTCOMES: Specific changes in clients or program
participants (skills gained, milestones reached: short,
medium, and long term)
▸ IMPACT: Ultimate benefit to the community/clients you
serve
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17. SAMPLE DETAILED LOGIC MODEL
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18. SAMPLE HIGH-LEVEL LOGIC MODEL
Activities Outputs Outcomes/Impact
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19. LOGIC MODEL WORKSHEET
AMERICORPS Logic Model Worksheet
NEED INTERMEDIATE END
INPUTS ACTIVITIES OUTPUTS
OUTCOMES OUTCOMES
We expect that once We expect that if
In order to address our We expect that if
The unmet need in our In order to accomplish completed or underway completed or ongoing
problem or asset we will accomplished this
community that our our activity we will need this activity will produce this activity will lead to
conduct the following activity will lead to the
activity will address is the following: the following evidence or the following
activity: following end changes:
described as follows: service delivery: intermediate changes:
HOW MEASURED
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20. ACTIVITY: PERSONAL LOGIC MODEL
Inputs Activities Outputs Outcomes Impact
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21. ADDITIONAL RESOURCES
▸ Kellogg Foundation Logic Model
Development Guide
 Available as a free PDF download at:
http://www.wkkf.org/knowledge-center/resources
▸ Americorps Logic Model Resources
 http://www.nationalserviceresources.org/star/ac-logic
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22. Value Propositions
G R E E N L I G H T S . O R G

23. VALUE PROPOSITIONS
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24. WHAT’S A VALUE PROPOSITION?
In the business world:
What you can deliver to
benefit your current and
potential customers,
shareholders, and
others.
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25. WHAT’S A VALUE PROPOSITION?
In the nonprofit world:
•A list of the components of value a stakeholder group
receives as a result of your work
• A core message that helps someone say “yes” to your
organization
• Part of your overall business
model
• Elements of a case for funding
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26. EXAMPLE: DALLAS CASA
▸ The “value” of Dallas CASA…
To children
To the court system
To CPS
To the community broadly
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27. VALUE PROPOSITION EXAMPLE:
DALLAS CASA
▸ The Value of Dallas CASA
A powerful voice in the court process.
To A constant presence during a difficult, frightening time.
Children… Greater access to important resources.
Greater chances for permanence, well being and success.
Information that helps courts make critical decisions about
the needs and safety of children.
To the
Thousands of hours of volunteer time every year.
Courts…
Increased focus on the needs and concerns of the children.
The community’s perspective on the court process.
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28. VALUE PROPOSITION EXAMPLE:
DALLAS CASA, CONT.
▸ The Value of Dallas CASA
An additional set of eyes on each child.
To Child Volunteer involvement to increase resources and safety for
Protective children.
Services… Strong support from the community for the protection of children.
Resources for meeting children’s needs.
Longer-term better results for children.
Increased awareness of abuse, neglect and the needs of children in
To the protective care.
Community Effective and efficient use of donor and taxpayer dollars, leveraged
Broadly… through a dynamic private-public partnership.
An important way for all community members to play a role in
making our community safe for children.
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29. A RELATED TOOL:
BUSINESS MODEL STATEMENT
▸ A companion for mission, vision, and value proposition
statements
▸ Brief summary that spells out your nonprofit’s main
economic drivers and revenue sources
▸ Examples:
 “We produce plays and conduct youth workshops, sustained
through a mixture of ticket sales, foundation grants, workshop
fees, and an annual benefit event.”
 “We provide nonprofits with valuable consulting, training, and
related services that are either free or very affordable. Nonprofits
pay about half the costs of our services thanks to the generosity
of our donors.”
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30. VALUE PROPOSITION WORKSHEET
▸ The Value of ________________ (Org or Program/Activity)
To donors
To the
community
at large
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31. VALUE PROPOSITION WORKSHEET
▸ The Value of ________________ (Org or Program/Activity)
To clients
To ________
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32. VALUE PROPOSITION WORKSHEET
▸ The Value of ________________ (Org or Program/Activity)
To ________
To ________
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33. Value Chain Analysis
and
Social Return on
Investment
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34. PRODUCT DEVELOPMENT EXAMPLE
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35. VALUE CHAINS AND VALUE CREATION
▸ For some time, for-profit buzzwords for success
have included some form of “value”
 “Maximizing shareholder value”
 “Optimizing the value chain”
 “Creating value for customers”
Michael Porter’s For-Profit Manufacturing Value Chain
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36. COST VS. WORTH VS. VALUE
▸ Cost
 A fact; it is what it is objectively; set by the seller/provider
 A measure of the resources needed to fulfill a requirement
▸ Worth/Price
 Depends on the person; more subjective (situationally);
must be agreed-upon by buyer and seller
 A measure of the usefulness, importance, or merit of
something
 Influenced by supply and demand and influenced by
comparable worth of something similar
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37. COST VS. WORTH VS. VALUE, CONT.
▸ Value
 Entirely subjective; in the eyes of the buyer/user
 Reflection of personal or organizational beliefs and
standards
 Often most difficult to measure accurately
Definitions courtesy of The
Nonprofit Outcomes Toolbox by
Robert Penna, PhD.
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38. VALUE CHAIN EXAMPLE: COMPUTERS
• Materials cost per • Manufacturing • Cost of packaging • Cost of • Cost of 3-yr
unit (screen, hard cost per unit : $50 and shipping: $10 marketing and service
drive, etc.): $175 display: $20 contract: $40
• Value of • Value of packaged • Retail price at • Price of 3-yr
manufactured PC: & shipped Office Max: service
$250 PC: $300 $450 contract: $100
Total cost per PC: $295
Price at which PC + service contract is sold (it’s market worth): $550
Total profit per PC (value added) : $255
Lifetime value to the buyer: $1000+ ???
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39. TRANSLATING VALUE TO NONPROFIT SPEAK
▸ Nonprofity ways we say “value creation”
 Making an impact
 Meeting client/customer needs
 Delivering outcomes
 Achieving our mission
 Changing lives
 Creating social profit
 Strengthening our community
 Etc., etc……
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40. COMMON NONPROFIT MISTAKES
▸ We often (mis)define “value” in terms of
 The activities we undertake
• “What we do is important so please fund us!”
 What it costs us to deliver XYZ
• Cost per program, per unit of service, etc.
 Our interpretation/guesstimate of
customer/client needs
• “That African village must really need clean water…”
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41. NONPROFIT “SOCIAL VALUE”
▸ Social Return on Investment: a measurable
indicator of the societal value created by nonprofit
and social programs, typically expressed using
financial “proxy” values that do not often have market
values. Typically includes a combination of monetized,
quantitative but not monetized, qualitative, and
narrative types of information about value relative to
resources invested.
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42. PUTTING “VALUE MEAT” ON THE LOGIC
MODEL “BONE”
Inputs Activities Outputs Outcomes Impact
• Direct costs of • Staff salaries • Comparable • Near-term or • Longer-term
supplies, • “Cost” or value market immediate value (often
materials, etc. of volunteer cost/value of the value of your difficult to
• Indirect and time related to service you program to measure) of
support costs delivering your provide (e.g. one participants/ your
(rent, overhead, program(s) hour of training) stakeholders program to
etc.) • Direct revenue participants/
generated from stakeholders
• Dollars invested
by funders, etc. your activity (if • Total Social
any) Return on
Investment
(SROI)
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43. EXAMPLE: FREE NONPROFIT MEETING SPACE
Inputs Activities Outputs Outcomes Impact
• Unused meeting • Staff time to • 233 meetings • Recouped and • Community
space market, manage held by nonprofits redirected staff “goodwill”
• Google calendar and support use • $69,900 in room time not spent value
for scheduling of the space rental costs on searching for accruing to
($22,000 cost) avoided by meeting space Mitte and
• $25,000 grant to
(estimate 60 Greenlights
Greenlights from • $3,000 in direct nonprofits (at
minutes per • 100+
Mitte Foundation non-salary costs $300/rental
for equipping market price) meeting X nonprofits
• Small marketing $26/hour in staff better able
the space, space • $3,500 in new
costs to spread time=$6,000)
cleaning, membership to focus on
the word
supplies, and revenue to achieving
upkeep Greenlights their
missions
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44. EXAMPLE: VALUE/SROI CALCULATION
Investment Measurable Value / SROI True SROI
$69,900 in Room
Rental Cost
$25,000 Grant
Avoidance for
Nonprofits Goodwill and
Mission
$3,500 in New $6,000 in Achievement
Membership Refocused Staff Value to
Revenue to Time for Mitte,
Greenlights Nonprofits Greenlights,
and
$22,000 in Nonprofits
Employment
Value to Mitte
Measurable Value Created: True SROI:
•At least $79,400, a 218% SROI Impossible to
•At best $101,400, a 306% SROI Measure
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45. VALUE CHAIN WORKSHEET
Inputs Activities Outputs Outcomes Impact
• Description, costs • Direct costs • Quantification • Quantification • Ultimate
(mainly indirect costs), required to carry and/or immediate and/or longer measures of
and/or amount of out activities measurable worth term value to long-term,
inputs needed to customers/ customers/ holistic value
stakeholders stakeholders created
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46. QUESTIONS? DISCUSSION?
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47. KEEP THE CONVERSATION GOING!
http://501community.org/TXNS
▸ Find this session, titled “Outcomes Matter:
Calculating and Communicating your Social ROI”
▸ Ask me questions, comment on the session, and
share your own ideas on calculating outcomes.
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48. Thank You!
G R E E N L I G H T S . O R G