Impact reporting shows stakeholders the tangible and positive outcomes of your programs and services. However, putting together these key documents leaves you with lots of data to consider. How you craft your nonprofit impact report will depend on your audience, program, mission, community needs, timeframe, and other crucial factors.
Effective reports go beyond quantitative or financial data to showcase how your outcomes impact real lives. Here’s everything you need to know when creating impact reports for nonprofits.
Understanding Impact Reporting for Nonprofit Organizations
Nonprofit impact reporting is the process of compiling data to track and communicate an organization’s success. While for-profit companies can simply measure revenue, nonprofits must manage multiple metrics and proxies to gauge their impact and social return on investment (SROI).
Tracking and reporting your impact numbers is crucial for transparency, accountability, compliance, and trust with donors, stakeholders, employees, and community members. Effective reports show impact for funders and prove that their money is being used as intended, tangibly benefiting their intended communities. It also establishes whether your organization is achieving its desired goals. You can then use these insights to adjust your services according to your mission goals.
While annual reports present your entire year’s financial data for stakeholders, regulators, and grant agencies to see, impact reports hone in on specific projects and outcomes, such as how effectively a new social work program uses funds and delivers services to its target demographics. Combining these two report types can present stakeholders with a complete picture of the year.
Benefits of Impact Reporting for Nonprofits
Reliable impact reporting has many advantages for your nonprofit, from supporting staff motivation to enabling faster, clearer communication. The key benefits of nonprofit impact reports include:
- Trust and credibility: Detailed reports with specific, tangible metrics lay out the exact ways your programs align with your organization’s core missions and make a difference in your community. These insights give stakeholders more to go on than just your word, driving trust and credibility while directly explaining how funds are being used.
- Organization growth: Report program impacts to track progress and develop better long-term strategies for success. Additionally, these reports offer a chance to analyze internal opportunities for growth, sustainability, and refined goals, such as by identifying variables that unnecessarily drain your budget or initiatives that don’t fully align with your mission.
- Funding: Impact reports show funders the outcomes and effectiveness of your human services programs, showcasing exactly where their contributions are going. Consistent positive impacts can encourage funders to maintain or increase their donation amounts and potentially influence other donors or community members to get involved, too.
- Employee and supporter motivation: Nonprofit data analytics gives case managers, volunteers, and other internal teams insight into how their work contributes to positive outcomes. These insights can raise teams’ motivation, productivity, satisfaction, and retention by letting them tangibly see the positive outcomes of their efforts.
- Beneficiary and support engagement: Tracking and showcasing your successful client outcomes can attract more potential clients and beneficiaries, giving them confidence that your services can genuinely improve their lives. Impact reports can also increase support for your nonprofit’s cause and help supporters recognize how their contributions have influenced meaningful outcomes.
Who Reads Impact Reports and What They Expect To See
Nonprofit organizations share impact reports with various stakeholders, including funders, staff, and volunteers. However, your reports should focus on different information based on each report’s specific audience.
Your nonprofit could benefit from reporting impacts to the following audiences:
- Funders: Donors, grant agencies, and other contributors will want to ensure their funds are used responsibly and effectively, especially if they have mandated specific uses for the funds. Impact reports for funders often focus on cash flow, spending, and the specific programs they’ve contributed to, along with any compliance requirements of your grant.
- Staff and volunteers: Impact report for case managers, employees, and volunteers spotlight your organization’s positive outcomes and mission impacts. These insights establish that their efforts aren’t in vain and highlight their most and least effective contributions.
- Board members: Share concise, high-level impact with board members and other key stakeholders to showcase your most significant impacts, program progress, and mission strategy. Impact reports for board members typically begin with an executive summary featuring top-level insights and your most notable program achievements.
- Community stakeholders: Community stakeholders include other organizations, groups, government agencies, or individuals in your community who contribute to or are affected by your organization. These stakeholders are typically most interested in your real-world impact, success stories, and mission progress when reviewing impact reports.
As you develop your impact reports, focus on both clarity and relevance. Go beyond citing numbers to consider ways you can frame your data to show stakeholders exactly what each number means and how it translates to real-world value.
For instance, instead of simply reporting your SROI, cite the specific impacts and outcomes that this metric represents, such as the number of jobs created or families you helped. Check out our guide to social impact assessment for more information.
How To Structure an Effective Nonprofit Impact Report
A well-designed, structured impact report will clearly showcase your real-world impact and leave a lasting impression on stakeholders, funders, and other readers. Storytelling, visuals, and client quotes can further enhance your reports’ effectiveness by highlighting what the numbers and data mean in real life.
Follow these steps to develop an effective nonprofit impact report that includes all core components.
1. Start With an Objective and Goal
First and foremost, define your report’s purpose and primary goals. Your intended audience can significantly alter the focus of your report, whether you’re sharing cash flow data with funders or mission progress with board members.
Additionally, consider the scope of your current report. For instance, are you spotlighting a specific program or service type, or summarizing your annual or quarterly data?
Understanding your impact report’s objective helps you align the data you present with your broader goals and organizational mission. Consider the relevant key performance indicators (KPIs), actions, and outcomes to keep your goals measurable and trackable.
2. Provide the Methodology and Approach
Your impact report should explain how you measured your impact and drew your conclusions. For example, instead of stating that “70% of clients were happy with their services,” you could instead phrase this data point as, “70% of clients reported that they were happy with their services during their final evaluation surveys.”
Even if these added details seem mundane, they can significantly boost your report’s credibility, transparency, and accountability by laying out the precise paper trail that led to your conclusions. Consider sharing the following details about your methodology to establish that your data is high-level:
- Timeframes: Cite the timeframe your data was drawn from, whether you’re sharing annual, quarterly, monthly, or weekly trends.
- Processes: Explain how you collected data, such as with Google Forms surveys or customer relationship management (CRM) systems.
- Sources: Explain where you drew your metric from, such as whether clients or case managers reported specific data and what tools and platforms they used to do this.
3. Highlight Results With Key Metrics and Outcome Indicators
Identify and track all of the KPIs related to your mission and program goals to make your impact report as comprehensive as possible. Tracking multiple impact metrics simultaneously boosts credibility and reduces the risk of overlooking specific details or factors that negatively affect client experiences.
For example, if your goal is to increase the number of clients you see per month, you should obviously track the number of new clients, appointments, and individuals served during that time. However, you should also look at clients’ completion rates, staff productivity, and post-treatment survey results to ensure the rising caseload isn’t negatively impacting your services.
The impact report for your nonprofit should also differentiate between quantitative and qualitative results:
- Quantitative data: These KPIs are numerically measurable, providing hard data on your program’s success. Examples include the number of people served, outcomes achieved, program counts, and revenue earned from fundraising campaigns.
- Qualitative data: These KPIs aren’t always as easily measurable, instead focusing on the human side of your services and experiences. Examples include real-life stories, client testimonials, feedback results, direct quotes, client motivations, and staff observations.
4. Outline How Resources Were Allocated
Most nonprofit impact reports should include a section for financial transparency, highlighting how your organization allocated and used its funds and other resources. For example, you should report the number of staff hours dedicated to programs within your report’s timeframe. Similarly, use your SROI data to compare the money you invested in a specific program with the value your services ultimately created.
Your resource allocation data can serve as a crucial benchmark for the rest of your data, showcasing the level of your impact. Consider spotlighting the following return on investment (ROI) indicators:
- Operational KPIs: Track data management trends, the time spent on each case, and denial frequency to identify improvements or changes to your day-to-day operations.
- Program and client outcomes: Report your programs’ service utilization, client satisfaction, and goal achievement rates to share how your services impact clients and families. Consider the KPIs related to your nonprofit’s specific services, such as reduced recidivism or improved employment rates.
- Fundraising KPIs: When managing fundraising campaigns, track your total funds raised and total campaign costs to estimate your cost per dollar raised (CPDR), donor acquisition cost (DAC), and overall fundraising ROI.
- Donor KPIs: Track your donors’ retention rate, lifetime value (LTV), average gift size, contribution frequency, and conversion rates to gauge how well you engage donors.
5. Acknowledge Challenges and Learnings
Your impact report is also a space to share your organization’s most significant challenges and the lessons you’ve learned from past successes or failures. Be honest with stakeholders when discussing your program’s obstacles and limitations, and frame these challenges as opportunities for learning and improvement.
Even if the data isn’t as marketable or impactful as you’d like, this level of transparency reinforces trust and credibility with stakeholders and funders. You can further show how you are actively using data to close gaps and improve services.
Potential obstacles to acknowledge in your impact report include:
- Program capacity limitations
- Data collection gaps
- Data inconsistencies
- Reduced client engagement
- Resource constraints or low-funding periods
- Goals that were previously unclear or vague
6. Conclude With an Insight-Driven Call to Action
Finally, explain how your report’s insights will inform your future planning and decision-making processes. For instance, what have you learned from your program’s successes, and how will you address your most significant challenges and obstacles in the next quarter?
Keep your next steps realistic and grounded in your findings, such as by explaining how you can refine services to be more productive, impactful, and budget-friendly. This section can also serve as an effective call to action (CTA), encouraging more support from donors, volunteers, and stakeholders to help your organization achieve its goals.
Structuring Impact Reports for Engagement and Accessibility
As you structure your impact report’s nonprofit data, put yourself in the shoes of its readers. Consider the KPIs they care about most and whether they’ll be able to understand what your quantitative data actually means. Use these insights to organize your content for easy scanning, comprehension, and engagement.
Consider using captivating visuals, such as charts, graphs, and photos, to break up text-heavy reports and effectively communicate impacts. Additionally, adapt your report for both digital and print formats, ensuring your data is easily digestible and accessible to all readers.
Collecting and Analyzing Data for Impact Reporting
While presentation is important, your impact reporting’s reliability hinges significantly on how you collect, store, and maintain your secure data. Inconsistent documentation, data siloes, difficulty connecting case-level data to outcomes, and other common challenges can impair your conclusions and sever stakeholder trust.
Effective data management contributes to more accurate metrics, clearer insights, and easier reporting processes. Case management and reporting systems such as Casebook support effective and consistent data management to help you maintain reliable, high-level insights.
Follow these best practices to support effective data management and impact reporting:
- Standardize your data collection processes to track consistent metrics and avoid missing KPIs.
- Centralize data storage across all programs to simplify operations and reduce the risk of siloed data.
- Consistently update data over time to maintain your data hygiene.
Using Impact Reporting To Strengthen Organizational Insight
Effective nonprofit impact reports build stakeholder trust and inform future planning when revising services and developing new programs, especially with continuous tracking. Case management software for nonprofits like Casebook can improve the effectiveness of your impact reports and the insights you draw from your data management processes.
Book a Casebook demo and contact us today to start developing impact reports for your nonprofit.