The bottom line for non-profits
Measuring Success When There is no Bottom Line
All social sector organisations share the common "bottom line" of changed lives. This is where results are - in the lives of people outside the organisation - and achieving these bottom-line results is of absolute importance. Forty-five years ago, when I first began working with nonprofit organisations, many felt that good intentions were enough. "Business" subjects such as management, marketing, and return on investment were almost never discussed. Today, non profits have to think through very clearly what results are for their organisation. They must demonstrate both commitment and competence in a highly demanding environment. People are no longer interested to know, "Is it a good cause?" Instead, they ask, "What is being achieved? Is this a responsible organisation worthy of my investment? What difference is being made in society, in this community, in the life of individuals?" The successful nonprofit institution will hold itself accountable for performance inside the organisation - for effective marketing, exemplary management of human and financial resources, for contribution in all areas - but always with the central focus on its one bottom line: changed lives. - Peter Drucker, The Drucker Foundation Self-Assessment Tool
It is well known that organisations have a natural tendency to attempt to continue existing, regardless of whether they should or not. Sometimes people keep on doing what they have always done, assuming that it is doing good, even when it isn't. By analysing an organisation's bottom line, it is possible to think about things such as 'worth', 'progress', and 'results'. Without knowing what the point is, it is impossible to plan, work out direction, or judge how things are going.
Focussing on results is the best way to ensure that results are well and truly delivered. If there is a clear bottom line, which is somehow connected to changed Jewish lives, then every project will have clearer and more relevant aims. Without a bottom line it is all too easy to judge everything favourably - because everything 'does' something. It is easy to avoid conflict within your organisation by approving of everything and everybody's projects. Dissent and measurement aid progress though. Remember that 'the enemy of the best is the good' - that is, doing okay can often stop you doing great. By looking more quantitatively at what is achieved it is possible to improve, and deliver better results.
How to Use the Bottom Line Method
Decide on the Bottom Line
First, your organisation needs to decide upon what it's bottom line is. A mission statement or a clear statement of aims might be a good place to start working out what your bottom line is. For example, a hospital might have the mission statement 'To promote health and wellness'. Then the bottom line there would be 'Healthy and Well People'. Projects, ideas, and programmes could be measured against whether or not they make more people healthy and well. So a programme that gives out fresh fruit or even a free gym in the hospital might be good ideas because they make people healthy.
For Jewish student organisations it can often be hard to work out what the bottom line is. Conflicting aims give rise to confusion. This needs to be overcome. Try to work out how different aims can be put together for one 'bottom line'. For example if your student organisation aims to 'defend Jewish rights' and 'educate Jews' you might think of a bottom line that goes something like
'Safe and Knowledgeable Jewish Students'.
Audit Your Organisation According to The Bottom Line
Auditing your organisation according to the bottom line is something akin to doing your accounts. In a company, every year (or more often) an audit will take place. This means looking at the accounts, and working out what divisions in the company are making money, losing money, and ensuring that there aren't any major problems that have gone unnoticed. A similar thing works with non-profit organisations. It is necessary to think in terms of the bottom line, and measure individual projects according to the bottom line. It isn't enough that a project was well attended or received financial support - what matters is whether you increase your bottom line. So, taking the example above of the organisation whose bottom line was 'Safe and Knowledgeable Jewish Students', if they run a programme that produces safe and knowledgeable Jewish students it is a success. If they were putting a lot of energy into running a Kosher food service they might need to think twice. Kosher food, arguably, makes Jewish students neither safe nor knowledgeable, so despite receiving interest in the programme and getting funding for it, it isn't adding directly to the bottom line. Some things are worth doing anyway - for political reasons, or trust building or whatever, but in general, if a project doesn't add to the bottom line either change the 'bottom line' or change the project.
Work to Increase Your Bottom Line
Once you have worked out what your bottom line should be, and analysed your programmes to see if they do or don't contribute to it, think about improving your organisation. Think of how the projects that you are currently running could better help your 'bottom line'. So, if you are trying to create safe Jews, and you have an evening learning about the Shoah, think about whether you could include something about defending Jews in the Former Soviet Union (or something). Think of new ideas for projects too - ones that will fit in to what your bottom line is. Innovate not according to what you could do but what you should do.