Anthony Pisapia

In a for-profit business you have a problem and your success in solving that problem is determined by revenue. If you’re successful, you’ll have revenues that sustain you before you run out of investor money.

In nonprofits, it doesn’t really work that way. You pick a problem to solve, but how do you know if you’re successful?

Is contributed revenue a measure? I would say it’s not an accurate one. You can raise tons of money on the back of a compelling cause without making an impact.

Is earned revenue a measure? Yes, this is more accurate. People need your service so badly they are paying for it. That says something. That provides a real measure. But not all nonprofits can rely on earned revenue as a measure.

So here’s my advice:

1. pick a problem that actually needs solving,
2. determine what success will look like,
3. and pick your measures.

A typical measure from a nonprofit may be: “we’ve fed 200 people.” But if you set out to end world hunger, is that really solving the problem? If you set out to feed 200 people, then you’ve achieved your goal. But if you set out to end world hunger, you’ve got some work to do.

Measures will tell you alot. Maybe you didn’t pick a high enough leverage point? Maybe you’re missing something, or not well researched enough? Maybe you picked the wrong measures. The one thing you can’t do is live in a fantasy land where your goal is to end world hunger and you’re feeding 200 people a day. Get over yourself and ask hard questions, “what does success look like and what are we measuring?”