This document discusses quantifying the performance of nonprofits. It proposes using a framework of defined intended impact, theory of change, and design thinking to convert social outcomes into quantitative measurements. Specifically, it argues that understanding a nonprofit's human components (staff, donors, users) and how well it addresses community needs are important for measuring performance. Quantifying social success is challenging but important for nonprofits to assess their ability to fulfill their mission and meet goals.

1. Hagler
1
Monique
Hagler
Rhodes
College
May,
2015
Dr.
Hossler
Design
Thinking
as
a
Means
to
Quantify
Nonprofit
Performance
Introduction
When
dealing
with
the
for-­‐profit
sector,
simply
collecting
and
analyzing
a
business’s
income,
profit,
and
share
of
wallet
will
easily
accomplish
the
task
of
measuring
performance
and
success.
Although
the
nonprofit
sector
is
different
from
its
for-­‐profit
counterpart
in
many
ways,
it
is
still
imperative
that
a
nonprofit
organization
be
able
to
quantify
performance
and
success.
The
body
of
scholarly
literature
focused
on
measuring
nonprofit
success
proposes
three
specific
areas
where
outcomes
may
be
quantified:
financial,
operational,
and
social
(Sawhill
&
Williamson,
2001;Dillon,
2012;
Bagnoli
&
Megali,
2011).
Arguably,
the
most
fundamental
arena
is
the
multidimensional
influence
of
the
nonprofit’s
interactions
with
the
community
–
the
social
aspect.
The
term
“community”
is
defined
as
“a
social
unit
that
shares
common
values”
encompassing
both
geographical
and
psychological
togetherness.
When
this
is
taken
into
consideration,
the
social
arena
is
realized
as
the
network
of
service
users,
donors,
management,
board
of
directors,
and
the
general
public,
all
under
one
roof.
When
this
happens,
the
community
(social)
aspect
becomes
the
key
determinant
of
success
in
the
two
remaining
areas
–
organizational
structure
and
finances
–
by
virtue
of
their
inherent
dependency
on
the
“social”.

2. Hagler
2
Given
the
intimately
social
nature
of
the
nonprofit’s
work
and
operations,
one
realizes
how
important
it
is
to
take
a
human-­‐centric
approach
when
it
comes
to
quantifying
the
success
of
a
nonprofit’s
performance.
Unfortunately,
quantifying
social
success
is
arguably
the
most
difficult
to
achieve
because
of
its
seemingly
intangible
outcomes
(Dillon,
2012)
but
is
by
no
means
an
impossible
task.
Purpose
Statement
In
this
paper,
I
propose
that
by
defining
Intended
Impact
and
Theory
of
Change
supplemented
by
the
process
of
Design
Thinking,
the
nonprofit
may
accurately
convert
social
outcomes
into
quantitative
measurements
of
performance.
This
framework
for
performance
measurements
will
be
appropriately
grounded
in
assessing
the
ability
of
the
nonprofit
to
address
and
consequentially
satisfy
the
multifaceted
needs
of
individuals
in
the
community.
By
taking
this
approach,
both
the
individual
nonprofit
and
the
society
at
large
experience
enhanced
wellbeing,
long-­‐term
success,
and
innovative
growth.
Personal
interviews
with
experts
in
the
field
of
Design
Thinking
will
be
referenced
to
provide
support
for
this
argument.
Addressing
Community
Need
The
nonprofit
sector
is
distinguishable
from
its
for-­‐profit
counterpart
due
to,
in
part,
its
responsibility
of
answering
to
the
community
rather
than
to
that
of
the
stakeholder
subgroup
(Bagnoli
&
Megali,
2011).
Furthermore,
the
degree
to
which
a
nonprofit
is
able
to
successfully
address
community
need
is
crucial
in
determining
the
long-­‐term
success
and
stability
of
that
organization
(Anheier,
2005).
In
order
to
determine
the
performance
of
a

3. Hagler
3
nonprofit,
one
must
examine
and
then
quantify
data
regarding
the
nonprofit’s
impact,
activity,
and
capacity
(Sawhill
&
Williamson,
2001).
Here,
the
organization
must
ask:
Are
we
making
progress
towards
fulfilling
our
mission
and
meeting
our
goals?
Are
our
activities
achieving
the
program’s
objectives
and
implementing
our
strategies?
Do
we
have
the
resources
–
the
capacity
–
to
achieve
our
goals?
(Sawhill
&
Williamson,
2001).
By
asking
these
questions,
the
individual
is
then
able
to
assess
performance
according
to
the
nonprofit’s
ability
to
address
community
need.
It
is
important
to
realize
that
these
factors
of
performance
encompass
more
than
just
the
user
experience
given
the
incredibly
human-­‐centric
dependency
and
reality
of
the
nonprofit’s
existence.
Josh
Roberts
of
Southern
Growth
Studio
explains
that
“understanding
the
nonprofit’s
human
components
involved
–
their
staff,
donors,
and
users
–
is
very
important,
even
more
so
with
nonprofits
than
with
other
businesses”
(2015).
Thus,
the
performance
measures
of
a
nonprofit
must
appropriately
reflect
and
consider
the
multidimensional
influence
and
interactions
that
the
organization
has
with
its
associated
human
components
–
the
community.
By
dissecting
the
implications
of
each
area
of
performance
measurement,
the
individual
realizes
that
the
multifaceted,
interconnected
contributions
from
the
user
group,
volunteers
and
employees,
board
of
directors,
donors,
and
even
the
general
public
determine
nonprofit
success.
The
operations
of
a
nonprofit
should
not
be
approached
with
the
“us
versus
them”
mentality
for
this
very
reason.
When
examining
Impact,
one
must
ask:
Does
the
general
public
–
the
wider
community
–
benefit
from
the
work
that
we
[staff]
are
doing?
Are
we
[staff]
successfully
contributing
to
the
overall
wellbeing
of
society
by
virtue
of
our
effect
on
users
of
programs
and
services?
In
the
area
of
Activity:
Does
our

4. Hagler
4
understanding
of
the
user’s
situation
correctly
align
with
the
user
experience?
Is
there
a
better
way
to
provide
these
services
by
situating
them
in
the
context
of
the
user’s
daily
life
and
reality?
And
with
Capacity:
Do
our
volunteers/employees
and
board
members
feel
equip
and
able
to
effectively
contribute?
Does
our
nonprofit
create
and
maintain
an
environment
where
the
individual’s
potential
and
skills
are
maximized?
Are
we
completely
realizing
and
satisfying
the
needs
of
our
donors?
(Sawhill
&
Williamson,
2001).
These
questions
are
of
particular
importance
to
both
short-­‐term
operations
and
long-­‐term
sustainability
of
the
organization.
No
matter
how
successful
a
nonprofit
may
be
in
the
areas
of
Impact
and
Activity,
they
will
ultimately
fail
if
the
community
needs
associated
with
Capacity
are
not
adequately
addressed.
Understanding
the
motivation
for
giving
must
therefore
become
a
priority
for
the
nonprofit.
Holly
Lissner
of
Southern
Growth
Studio
explains
that
“stopping
to
listen
to
your
donor
base
-­‐
and
going
outside
of
your
donor
base
-­‐
to
get
an
understanding
of
the
different
personalities
and
needs
of
the
general
population
is
important
for
the
development
of
effective
strategies
for
meeting
community
need”
(2015).
Thus,
in
order
to
measure
a
nonprofit’s
Capacity,
it
is
crucial
to
determine
donor
touch
points
–
the
ways
that
financial
contributors
encounter
and
interact
with
the
organization.
One
must
ask:
What
compels
someone
to
engage
with
our
nonprofit?
Why
does
our
particular
mission
statement
matter
to
each
donor?
What
could
we
do
to
increase
the
individual’s
share
of
wallet
that
we
have?
What
sort
of
interactions
do
our
donors
desire
from
us?
(Roberts,
2015)
By
asking
these
questions,
the
nonprofit
may
then
better
understand
the
donor’s
experience
by
defining
it
through
an
empathetic
approach.
When
the
community
needs
of

5. Hagler
5
financial
contributors
are
adequately
addressed
and
satisfied,
areas
of
Impact
and
Activity
are
consequentially
maximized.
Furthermore,
addressing
community
need
is
a
process
of
measuring
social
effectiveness
in
the
delivery
of
goods
or
services
(Bagnoli
&
Megali,
2011).
Performance
measures
should
therefore
answer:
To
what
degree
has
our
activity
contributed
to
the
wellbeing
of
recipients
and
community-­‐wide
goals?
Nonprofits
frequently
fail
and
die
out
due
to
a
disconnection
between
mission,
services,
and
the
needs
of
all
people
living
in
the
community.
Brown
&
Wyatt
explain:
Time
and
again,
initiatives
falter
because
they
are
not
based
on
the
client’s
or
consumer’s
needs
and
have
never
been
prototyped
to
solicit
feedback.
Even
when
people
do
go
into
the
field,
they
may
enter
with
preconceived
notions
of
what
the
needs
and
solutions
are.
(2010)
Andrew
Carnegie
(1988)
reiterates
this
claim
and
says
that
the
individual’s
ability
to
wisely
give
or
contribute
to
another
is
inherently
limited
by
a
lack
of
understanding
of
the
recipient’s
circumstances.
This
phenomenon
is
precisely
the
reason
for
the
disconnection
between
the
nonprofit’s
services,
operations,
and
the
real
needs
of
all
people
in
the
community
that
they
fail
to
serve.
Thus,
failure
to
address
community
needs
can
be
attributed
to
a
top-­‐down
process
of
imposing
strategies
and
services
on
the
target
community
group
without
first
understanding
how
it
will
play
out
in
their
life
and
what
it
is
exactly
that
they
need
(Roberts,
2015).
As
demonstrated
here,
assessing
all
aspects
of
community
need
provides
the
foundation
for
both
quality
of
services
and
the
ultimate
survival
of
the
nonprofit
long-­‐term.
Consequently,
the
nonprofit’s
progress
towards
fulfillment
of
community
need
as
a
measurement
of
performance
must
begin
with
the
mission
statement.

6. Hagler
6
Crafting
(or
Redrafting)
the
Mission
Statement
Measuring
performance
of
a
nonprofit
must
be
considered
in
light
of
their
ability
to
make
progress
towards
or
achieve
goals
pertaining
to
the
mission
statement.
Dillon
(2012)
argues,
“Missions
tend
to
focus
on
public
good,
emotion,
and
awareness
making
it
difficult
to
quantify
success”.
Although
the
nonprofit’s
performance
does
focus
on
the
production
of
social
goods,
it
is
both
possible
and
plausible
to
quantify
success
if
the
organization
first
articulates
specific,
mission-­‐oriented
program
goals.
In
order
to
do
so,
the
nonprofit
must
adapt
a
mission
statement
that
is
broad
and
supplemented
by
statements
of
intended
programmatic
impact
and
methods
for
achieving
mission-­‐oriented
goals.
The
primary
reasoning
for
a
broad
mission
statement
is
that
it
allows
for
programs
to
evolve
over
time
in
coordination
with
a
changing
community
landscape
(McGregor,
2007).
Colby
et
al.
(2004)
explains,
“Broad
mission
statements
may
allow
for
room
to
innovate
and
to
expand
programing
in
response
to
the
evolving
needs
of
users”.
In
this
way,
broad
mission
statements
may
ultimately
maximize
community
impact
by
allowing
for
a
variety
of
solutions
while
also
taking
constraints
and
context
into
account
(IDEO,
2015).
Here,
constraints
may
include
financial
capacity
or
the
sociocultural
environment,
while
context
may
account
for
whether
or
not
there
are
other
nonprofits
within
the
community
already
providing
the
same
service.
Colby
et
al.
(2004)
argues
that
instead
of
creating
or
refining
a
mission
statement
with
narrow
focus,
the
nonprofit
should
develop
clarity
about
intended
community
impact
and
the
associated
means
for
achieving
mission-­‐oriented
goals.
By
framing
program
objectives
in
this
way,
the
mission
statement
manifests
unity
through
shared
values
and
perceptions
of
what
success
will
look
like
(Lissner,
2015).
More
importantly,
developing

7. Hagler
7
clarity
about
mission-­‐oriented
action
will,
in
turn,
strategize
programmatic
operations
and
management
decisions.
By
creating
mission-­‐oriented
goals,
outcomes
regarding
the
nonprofit’s
ability
to
address
community
need
can
then
be
measured.
Intended
Impact
and
Theory
of
Change
Before
a
measurement
system
can
be
realized
through
the
Design
Thinking
process,
the
nonprofit
must
first
define
and
articulate
the
connections
between
the
organization’s
mission,
vision,
goals,
and
programmatic
strategies
(Sawhill
&
Williamson,
2001).
Statements
of
Intended
Impact
and
Theory
of
Change
should
be
used
to
bridge
this
gap
between
the
mission
statement,
internal
operations,
and
programmatic
activities
(Colby
et
al.,
2004).
This
process
requires
that
organization
leaders
clarify
who
are
the
intended
users
and
what
“success”
will
specifically
look
like.
Setting
measurable,
mission-­‐oriented
statements
enables
the
organization
to
then
assess
progress
against
these
goals
(Sawhill
&
Williamson,
2001).
Colby
et
al.
(2004)
explains
that
Intended
Impact
“is
a
statement
or
series
of
statements
about
what
the
organization
is
trying
to
achieve
and
will
hold
itself
accountable
for
within
some
manageable
period
of
time”.
In
order
to
generate
a
statement
of
Intended
Impact,
one
must
ask:
Who
are
our
beneficiaries?
What
benefits
do
our
programs
create?
How
do
we
define
success?
What
would
make
us
obsolete?
Only
by
asking
these
questions
can
the
organization
identify
the
benefits
their
services
intend
to
provide
and
the
associated
target
user
and
community.
Intended
Impact
statements,
therefore,
articulate
strategic
priorities
encompassed
by
the
underlying
mission
statement.

8. Hagler
8
The
sequential
process
of
determining
a
nonprofit’s
Theory
of
Change
can
then
be
utilized
to
inform
the
cause-­‐and-­‐effect
relationship
between
program
objectives
and
the
Intended
Impact.
Anheier
(2005)
notes,
“Many
managers
and
organizational
subunits
find
it
difficult
to
separate
their
own
interests
from
that
of
the
organization
and
therefore
pursue
self-­‐interested
strategies”.
This
is
a
common
situation
for
many
nonprofits
and
is
not
necessarily
due
to
malicious
intentions
of
organizational
leadership.
Instead,
lack
of
clarity
regarding
what
mission-­‐oriented
success
will
look
like
incentivizes
leaders
to
pursue
their
own
individual
strategies
towards
fulfillment
of
their
personal
perceptions
of
organizational
goals.
For
this
reason,
it
is
important
that
an
organization
determine
Theory
of
Change
in
order
to
explain
how
the
Intended
Impact
will
be
pursued
and
achieved.
Theory
of
Change
explains
how
resources
(organizational
and
financial)
will
be
converted
into
the
mission-­‐
oriented
social
results
–
creating
a
strategy
for
operations
and
resource-­‐allocation
decisions
(Colby
et
al.,
2004).
This
process
requires
the
organization
to
ask:
What
is
the
cause-­‐and-­‐effect
logic
that
gets
us
from
our
resources
(people
and
dollars)
to
intended
impact?
What
are
the
most
important
elements
of
our
programs’
content
and
structure?
Are
there
other
ways
in
which
we
could
achieve
the
desired
outcomes?
What
is
the
minimum
length
of
time
our
users
need
to
be
engaged
to
achieve
these
outcomes?
(Colby
et
al.,
2004)
By
asking
these
questions,
the
mission
statement
can
then
be
used
to
create
a
framework
for
organizational
strategies
according
to
the
determined
target
user
group,
programmatic
methodology,
and
the
intended
community
impact.
The
process
of
determining
both

9. Hagler
9
Intended
Impact
and
Theory
of
Change
is
iterative
in
nature
–
informed
by
organizational
values,
beliefs,
and
operational
capacity
as
well
as
by
hard
data
concerning
community
need
and
interaction.
For
this
reason,
it
is
important
that
a
nonprofit
facilitate
this
process
with
Design
Thinking.
The
Process
of
Design
Thinking
Design
Thinking
requires
that
nonprofits
take
a
human-­‐centric
and
iterative
approach
to
determine
efficacy
of
programs/services,
which
is
measured
by
the
ability
to
address
specific
areas
of
community
need.
Holly
Lissner
of
Southern
Growth
Studio
states,
“Design
Thinking
can
help
nonprofits
by
enabling
them
to
meet
the
needs
of
the
community
in
which
it
serves,
whether
that
includes
people
running
the
organization,
the
donors,
or
the
recipients”
(2015).
Design
Thinking
works
by
integrating
human
emotion
and
intuition
with
rationale
and
analytics
(Brown
&
Wyatt,
2010).
Because
Design
Thinking
is
grounded
in
the
user
experience,
the
process
can
be
used
to
facilitate
unbiased
measurements
of
nonprofit
performance.
Oftentimes,
when
an
organization
invests
a
lot
of
money
and
time
into
the
creation
of
new
services,
“they
become
married
to
those
ideas
making
it
difficult
to
conceal
their
bias
when
looking
for
user
feedback”
(Lissner,
2015).
The
process
and
methodology
behind
Design
Thinking
works
by
significantly
eliminating
the
imposition
of
top-­‐down
perceptions
when
determining
the
success
of
programs/services
in
addressing
community
need.
In
this
way,
the
user
feedback
(data)
that
is
generated
through
the
Design
Thinking
process
provides
an
unbiased
demonstration
and
measurement
of
the
nonprofit’s
performance.

10. Hagler
10
Design
Thinking
begins
with
the
Empathy
phase
defined
as
the
work
to
“understand
the
way
they
[the
community]
do
things
and
why,
their
physical
and
emotional
needs,
how
they
think
about
the
world,
and
what
is
meaningful
to
them”
(Plattner,
2015).
Thus,
in
order
to
measure
a
nonprofit’s
performance
in
this
way,
they
must
first
define
community
need
by
going
directly
to
the
source
–
the
individuals
in
the
community.
During
the
Empathy
phase,
people
involved
in
the
Design
Thinking
process
(“designers”)
observe,
interview,
and
listen
to
target
community
individuals
that
were
defined
through
the
process
of
Intended
Impact.
It
is
important
that
designers
ask
strategic
open-­‐ended
questions
and
take
demographic
information
during
the
interviews
with
community
individuals
(IDEO,
2015).
Interviews
with
experts
in
the
community
area
of
focus
and
secondary
outside
research
are
also
essential
in
gaining
“key
insights
into
relevant
history,
context,
and
innovations”
(Brown
&
Wyatt,
2010).
By
framing
interview
questions
with
a
focus
on
“who,
what,
where,
when,
why”,
designers
utilize
ethnographic
methodology
to
begin
to
uncover
the
needs
of
individuals
as
gathered
from
the
primary
source
itself.
After
interviews
have
been
stockpiled,
designers
finish
the
Empathy
phase
by
“sharing
out”
each
story
with
other
designers
to
provide
collective
insight
captured
in
a
visual
form
(Plattner,
2015).
Following
the
Empathy
phase,
the
body
of
qualitative
data
is
synthesized
and
organized
as
a
means
to
generate
informative
insight,
uncover
the
needs
of
a
target
community,
and
ultimately
assess
the
various
ways
that
a
nonprofit
can
potentially
meet
those
needs
–
encompassing
both
the
Define
and
Ideation
phases
of
Design
Thinking
(Plattner,
2015;
Brown
&
Wyatt,
2010;
IDEO,
2015).
Most
importantly,
the
Define
phase
enables
the
nonprofit
to
capture
the
“baseline”
needs
of
target
community
individuals,

11. Hagler
11
which
can
then
be
used
to
answer
the
question:
How
effective
was
our
program
in
addressing
the
individual’s
baseline
needs
required
to
incrementally
move
towards
achieving
our
mission-­‐oriented
goals?
How
might
we
do
better?
During
these
two
phases
of
Design
Thinking,
it
is
likely
that
designers
will
realize
ways
in
which
current
programs
may
be
improved,
in
addition
to
innovative
program
objectives
that
may
be
introduced.
The
Define
and
Ideation
segment
determines
specific
areas
of
community
need
and
generates
context-­‐appropriate
ways
that
the
nonprofit
could
potentially
address
community
needs
–
a
process
used
to
inform
and
reiterate
the
nonprofit’s
Theory
of
Change.
The
final
phases
of
Prototyping
and
Testing
are
primarily
used
as
a
tool
to
generate
innovative
programmatic
strategies
to
better
address
community
need,
but
can
also
facilitate
quantitative
measurement
of
current
program
activities
as
well.
Here,
both
new
ideas
for
services
and
current
programs
are
prototyped
and
tested
within
the
target
community
subgroup.
Iteration
in
response
to
user
feedback
is
crucial
for
the
development
of
human-­‐centric
design
(Brown
&
Wyatt,
2010).
Because
of
this,
the
Design
Thinking
process
may
be
used
as
a
method
to
quantify
nonprofit
performance
by
measuring
the
ability
of
current
programs
in
meeting
target
community
need.
This
can
be
achieved
by
comparing
baseline
community
need
to
reported
user
feedback
after
the
program
or
service
has
been
realized.
Because
empathy
and
user
feedback
are
utilized
throughout
all
aspects
of
the
Design
Thinking
process,
both
the
current
performance
and
the
potential
for
more
effective
solutions
can
be
measured
using
this
method.
Although
the
Testing
phase
is
primarily
used
as
a
way
to
validate
newly
generated
ideas,
it
can
also
function
as
a
method
for
quantifying
existent
nonprofit
performance.
By
using
“baseline”
data
collected
during
the
Empathy
phase
quantifying

12. Hagler
12
specific
facets
of
community
need,
Theory
of
Change
–
the
methods
to
achieve
mission-­‐
oriented
goals
–
is
better
informed
and
programs/services
may
be
shaped
to
best
address
individual
community
needs
as
defined
during
the
Testing
phase.
Design
Thinking
as
a
Means
to
Quantify
Community
Need
and
Performance
By
going
through
the
Design
Thinking
process,
specific
aspects
of
community
need
are
converted
into
tangible,
quantifiable
data.
Lissner
(2015)
emphasizes
that
“humans
have
the
ability
to
articulate
their
own
needs
and
issues”
in
regards
to
specific
community
need,
and
this
is
exactly
what
is
uncovered
during
the
Empathy
phase
of
Design
Thinking.
IDEO
(2015)
explains,
“Human-­‐centered
design
allows
us
to
arrive
at
solutions
that
are
desirable,
feasible,
and
viable”.
In
the
case
of
a
nonprofit,
“desirable”
reflects
the
fulfillment
of
unmet
community
needs.
By
observing
human
behavior
and
the
individual’s
interactions
with
their
environment
(community),
the
nonprofit
may
then
quantify
“community
need”
through
empathetic
collection
of
data
(IDEO,
2015).
This
process
can
be
used
to
encompass
and
quantify
all
aspects
of
community
need
including
that
of
the
user,
employee,
board
member,
donor,
and
individuals
in
the
society
at
large.
Specifically,
the
Empathy
and
Define
phase
of
Design
Thinking
converts
qualitative
narratives
from
community
members
into
tangible,
quantifiable
data
points.
Dillon
(2012)
explains,
“By
knowing
community
needs,
you
can
then
measure
the
effectiveness
and
efficacy
of
the
organization’s
ability
to
meet
the
needs
of
the
people
they
serve”.
The
process
of
Design
Thinking
not
only
pinpoints
specific
areas
of
community
need,
but
also
enables
the
organization
to
quantify
targeted
outcomes
associated
with
each
community
subgroup
(Colby
et
al.,
2004).

13. Hagler
13
Moreover,
by
first
collecting
and
quantifying
specific
community
needs
during
the
Empathy
and
Define
phase,
one
can
then
measure
performance
of
the
nonprofit
by
generating
feedback
regarding
programmatic
outcomes
as
compared
to
the
original
mission-­‐oriented
goals.
For
example,
if
during
the
Empathy
phase,
the
target
community
group
consistently
reported,
“I
wish
that
someone
would
help
me
find
a
career,
not
just
a
job”,
designers
may
uncover
the
target
community
need
as
“the
desire
for
long-­‐term
and
meaningful
employment”.
If
this
community
need
is
applicable
to
the
nonprofit’s
mission
statement,
Intended
Impact
would
therefore
be
defined
as
“to
help
[target]
individuals
realize
and
secure
careers”.
This
would
be
accompanied
by
the
Theory
of
Change
which
would
include
objectives
such
as:
the
individual’s
discovery
and
specification
of
their
desired
career
path,
the
development
of
career-­‐oriented
skillsets,
career-­‐specific
education
and
training,
and/or
expanding
personal
networks
in
the
appropriate
field.
Thus,
Theory
of
Change
should
be
understood
as
the
underlying
components
or
building
blocks
necessary
to
achieve
the
mission-­‐oriented
goals
that
correspond
to
the
target
community
need
(securement
of
careers,
in
this
case).
In
this
way,
the
components
specified
in
the
Theory
of
Change
serve
as
the
facets
of
nonprofit
performance
that
should
be
measured.
The
Design
Thinking
process
not
only
functions
as
a
method
to
identify
target
community
need,
but
also
creates
a
framework
in
which
performance
of
the
nonprofit
is
appropriately
gauged
by
their
ability
to
address
and
fulfill
the
various
facets
of
community
need.
Performance
should
therefore
be
measured
through
the
process
of
gathering
user
feedback
after
a
nonprofit’s
service/program
has
been
realized.
Using
the
aforementioned
example
of
career-­‐oriented
objectives,
the
nonprofit
would
gather
the
following
data
upon
completion
of
the
program
by
asking:

14. Hagler
14
Was
the
user
able
to
identify
a
specific
and
personal
career
path?
Has
the
user
progressed
in
their
development
of
career-­‐specific
skills?
Was
the
user
able
to
obtain
career-­‐specific
training
or
education?
Did
the
user
develop
meaningful
connections
with
others
experienced
in
the
respective
career
field?
By
addressing
these
questions
after
the
user’s
completion
of
the
program,
social
outcomes
can
be
transcribed
as
quantitative
measurements.
Because
specific
community
need
is
first
illuminated
and
defined
during
the
Empathy
and
Define
phase,
it
is
then
possible
to
obtain
performance
measures
by
analyzing
the
nonprofit’s
ability
to
address
these
needs
through
programs
or
services.
Thus,
the
analytic
comparison
of
empathetic
data
gathered
from
pre-­‐
and
post-­‐interaction
with
the
nonprofit
can
therefore
be
used
as
an
accurate
evaluation
of
performance.
Understanding
and
addressing
the
needs
of
users
is
equally
important
to
quantifying
the
needs
of
donors
–
the
financial
backbone
of
operations
and
capacity
to
serve.
Lissner
(2015)
explains
that
the
best
way
to
develop
the
community
at
large
is
through
economic
stability
and
that
this
can
be
achieved
with
the
Design
Thinking
process.
In
the
case
of
the
nonprofit,
establishing
economic
stability
is
primarily
dependent
on
the
organization’s
ability
to
meet
the
community
needs
of
donors.
Robbins
(2006)
admits
that
it
is
difficult
to
determine
the
modern
motivation
for
giving
in
today’s
world.
But
if
one
is
to
approach
this
dilemma
with
a
human-­‐centric,
empathetic
design,
individual
motivations
for
giving
can
easily
be
uncovered.
By
empathizing
with
the
donor
experience,
a
nonprofit
may
first
quantify
the
specific
needs
of
donor
personalities
and
then
strategize
the
donor-­‐
nonprofit
relationship
to
best
address
these
needs
in
short-­‐
and
long-­‐term
interaction.

15. Hagler
15
Here,
it
is
crucial
that
the
nonprofit
has
clearly
articulated
and
communicated
the
Intended
Impact
and
Theory
of
Change
to
ensure
that
the
community
needs
of
both
donor
and
user
are
aligned
and
treated
with
equal
importance.
Only
when
the
nonprofit
has
successfully
addressed
the
community
needs
of
donors
can
programmatic
objectives
involving
the
user
experience
move
to
center
stage.
The
Design
Thinking
process
is
best
suited
to
establish
a
framework
for
measuring
performance
of
the
nonprofit.
Design
Thinking
enables
organization
leaders
to
clarify
and
agree
upon
what
“success”
will
look
like
within
each
community
subgroup
by
first
establishing
and
quantifying
the
underlying
community
needs
(Colby
et
al.,
2004).
In
this
way,
Design
Thinking
may
also
be
used
as
a
means
to
align
and
unify
daily
operations
of
nonprofit
employees
and
volunteers
once
mission-­‐oriented
goals
have
been
articulated
and
agreed
upon.
Oftentimes
desired
outcomes
are
social,
emotional,
or
cultural
in
nature
(Dillon,
2012)
–
outcomes
that
are
arguably
more
intangible
than
something
like
revenue
or
sales,
but
nonetheless,
are
quantifiable.
Roberts
(2015)
suggests
measuring
health
metrics,
behavioral
change,
and/or
psychological
markers
according
to
programmatic
mission-­‐oriented
goals.
Through
the
Design
Thinking
process,
empathy-­‐generated
feedback
gathered
before,
during,
and
after
the
individual
has
interacted
with
the
nonprofit
allows
one
to
consistently
track
the
nonprofit’s
performance
by
their
ability
to
address
community
need
(IDEO,
2015).
Deeper
Implications
Not
only
is
the
development
of
performance
metrics
crucial
for
the
nonprofit
to
strategize
efforts
to
best
address
target
community
need,
but
it
would
also
have
larger

16. Hagler
16
scale
effects
if
it
were
to
become
universally
practiced.
The
nonprofit
sector
works
closely
with
vulnerable
populations
on
a
daily
and
intimate
basis
–
opening
up
a
potential
window
for
research
of
the
nation’s
underserved,
disadvantaged,
and
most
misunderstood
population
subgroup
(Salamon
&
Sokolowski,
2004).
The
generation
of
social
data
would
allow
research
to
inform
and
strategize
social
initiatives
to
meet
sociocultural
goals
(McGregor,
2007).
If
universally
incorporated
by
the
nonprofit
sector,
the
social
impacts
that
organization
leaders
witness
first-­‐hand
could
be
quantifiably
measured
and
presented
in
order
to
rally
for
intervention
from
public
authorities
(Sawhill
&
Williamson,
2001;
Bagnoli
&
Megali,
2011).
In
this
way,
performance
measures
could
provide
a
great
benefit
towards
society’s
wellbeing
by
bridging
the
gap
between
for-­‐profit,
nonprofit,
and
governmental
agencies.
Performance
measures
also
work
by
legitimizing
nonprofit
operations
across
all
types
of
community
subgroups.
Sawhill
&
Williamson
(2001)
state,
“To
the
lay
public,
measures
impart
a
sense
of
focus
and
business-­‐like
competence”
and
that
“the
mission
is
being
carried
out
in
a
satisfactory
manner”
(Dillon,
2012).
Moreover,
this
perceived
“business-­‐like
competence”
is
derived
from
the
inherent
tie
between
performance
measures
and
“self-­‐imposed
‘rules’
regarding
statute,
mission,
and
program
of
action”
(Bagnoli
&
Megali,
2011).
This
measure
of
legitimacy
may
also
help
to
align
government-­‐
funding
allocation
with
effective
organizational
performance
and
generated
social
outcomes
(Cordes
&
Weisbrod,
1998;
Smith
&
Lipsky,
1993).
In
other
words,
acceptance
of
performance
measures
would
significantly
decrease
contract
failure
within
the
nonprofit
sector
–
a
situation
in
which
a
user
is
unable
to
evaluate
the
quality
of
service,
thus
incentivizing
the
service
provider
to
produce
a
lower
quality
service
(Young,
1998).
When

17. Hagler
17
the
lay
public
can
easily
interpret
nonprofit
performance,
organizational
spending
becomes
transparent
and
must
then
be
justified
by
the
ability
to
produce
social
outcomes
–
results
dependent
on
successfully
addressing
the
focal
community
need
(Roberts,
2015).
In
this
way,
“nonprofits
in
disguise”
–
the
primary
culprits
of
contract
failure
–
would
become
extinct
due
to
a
shift
towards
a
more
informed
allocation
of
donor
dollars.
Performance
measures
can
be
extremely
marketable
in
this
way.
Roberts
(2015)
explains,
“Twenty
years
ago,
individual
nonprofits
only
had
to
compete
[for
donations]
with
the
other
nonprofits
in
the
neighborhood.
But
now,
you
have
to
compete
with
an
organization
on
the
east
coast
of
Africa”.
In
the
age
of
the
Internet,
potential
donors
dollars
can
be
allocated
to
organizations
in
all
areas
of
the
world.
Although
this
is
important
for
the
progressive
wellbeing
of
mankind,
it
entails
that
increased
competition
for
donor
dollars
manifests
a
harsh
reality
for
the
survival
of
individual,
local
nonprofits
in
maintaining
economic
sustainability.
Performance
measures
could
therefore
be
used
as
a
competitive
advantage
to
secure
donor
support
through
the
validation
of
intended
community
impact.
Performance
measures
not
only
legitimize
organizational
operations,
but
also
tangibly
demonstrate
a
nonprofit’s
values
and
efficacy
in
addressing
specific
areas
of
community
need.
Smith
&
Lipsky
(1993)
describe
nonprofits
as
“incubators
of
democracy”
that
function
as
an
“idea
vehicle
where
we
can
express
individual
desires
through
civic
participation”.
For
this
reason,
performance
measures
provide
a
visible
declaration
of
organizational
values,
beliefs,
and
strategies,
making
it
much
easier
for
potential
donors
to
identify
which
nonprofits
align
with
their
personal,
individual
desires.
The
Design
Thinking
process
of
generating
performance
measures
may
also
help
to
uncover
modern
motivations
for
giving.
Tangible
data
regarding
a
nonprofit’s
performance

18. Hagler
18
not
only
enhances
the
organization’s
reputation,
but
also
works
to
educate
donors
and
potential
donors
about
the
logic
behind
programs
and
objectives.
Therefore,
performance
measures
could
be
used
to
increase
advocacy
(McGregor,
2007).
Roberts
states,
“When
you
become
more
educated
about
the
nonprofit,
you
can
become
a
better
advocate
for
them.
It
also
shows
you
a
very
tangible
way
of
seeing
where
your
dollar
went”
(2015).
Moreover,
performance
measures
enable
the
donor
and
potential
donor
to
move
past
a
basic
understanding
of
the
mission
statement
–
effectively
addressing
their
“need”
for
a
relationship
rather
than
a
transaction.
Coles
(1993)
argues
that
true
giving
can
only
occur
when
the
individual
feels
like
they
have
been
given
to.
Thus,
by
using
performance
measures
as
a
means
to
address
the
donor’s
desire
to
express
personal
values
through
civic
engagement
and
to
see
mission
validated
by
action,
the
donor
will
feel
more
motivated
to
give.
Development
of
a
framework
for
performance
measures
as
facilitated
by
Design
Thinking
provides
a
clear
benefit
for
a
nonprofit’s
long-­‐term
vision
and
sustainable
growth.
Through
the
process,
organizations
realize
long-­‐term
strategies
–
stretch
objectives
encompassing
10-­‐15
year
goals
–
by
establishing
concrete
and
tangible
ways
to
incrementally
progress
towards
achieving
the
lofty
mission
statement
(Sawhill
&
Williamson,
2001).
The
development
of
Intended
Impact
and
Theory
of
Change
statements
help
the
nonprofit
to
locate
other
areas
of
need
that
may
be
applicable
to
their
mission-­‐
oriented
goals
(Colby
et
al.,
2004).
Furthermore,
consistent
use
of
the
Design
Thinking
process
of
attaining
“user”
feedback
enhances
the
nonprofit’s
potential
to
realize
and
implement
innovative
products,
services,
and
strategies.
Not
only
does
this
maximize
the

19. Hagler
19
nonprofit’s
ability
to
successfully
address
community
need,
but
innovation
also
functions
as
the
competitive
advantage
vital
for
insuring
long-­‐term
economic
sustainability.
Conclusions
The
development
of
performance
measures
within
the
nonprofit
sector
should
be
realized
as
an
immediate
concern
for
all
subgroups
in
the
community
–
the
user,
employee,
board,
donors,
and
the
general
public.
Limited
manpower
notoriously
seen
with
the
nonprofit
sector
presents
an
undeniable
challenge
when
considering
just
how
realistic
this
proposal
really
is
(Roberts,
2015;
Sawhill
&
Williamson,
2001).
Fortunately,
although
Design
Thinking
does
require
a
dedicated
team,
the
process
itself
is
very
affordable
to
pursue
(Lissner,
2015)
and
does
not
necessarily
require
that
the
nonprofit
hire
an
outside
party.
Indeed,
the
global
design
company
IDEO
offers
a
comprehensive
self-­‐guided
option
–
The
Human
Centered
Design
Toolkit
–
that
is
closely
modeled
and
extrapolated
from
the
Design
Thinking
method
(IDEO,
2015).
Not
only
can
IDEO’s
toolkit
be
accessed
free
of
charge,
but
it
is
also
specifically
geared
to
be
used
by
nonprofits
and
NGOs
worldwide.
Thus,
failure
to
pursue
Design
Thinking
and
implementation
of
performance
measures
due
to
hubristic
protection
of
resources
(time
and
money)
would
be
a
disservice
to
both
the
nonprofit
itself
and
the
community
at
large.
It
is
important
that
performance
measures
as
generated
through
Design
Thinking
be
a
primary
concern
because
it
will
ensure
long-­‐term
success
–
financially
and
structurally
–
while
also
enabling
the
nonprofit
to
evolve
and
adapt
over
time
according
to
changes
in
the
community’s
social
landscape.
Anheier
(2005)
argues,
“Finding,
defending,
and
optimizing
niches
on
either
the
demand
or
supply
side
becomes
a
key
task
of
organizational
survival,

20. Hagler
20
and
organizations
that
fail
in
these
tasks
are
more
prone
to
extinction
over
time”.
By
consistently
interpreting
performance
using
human-­‐centric,
empathetic
methodology,
the
nonprofit
may
continue
to
successfully
address,
compete,
and
adapt
to
best
serve
the
target
community
needs
–
thereby
maximizing
long-­‐term
sustainability.
The
ultimate
goal
of
Design
Thinking
and
performance
measures
on
nonprofits
is
to
positively
contribute
to
the
wellbeing
of
the
community
and
society
at
large
by
addressing
individual
areas
of
need.
In
modern
times,
the
nonprofit
sector
has
become
inherently
responsible
for
addressing
the
human
needs
located
specifically
within
one’s
own
community.
Schneider
(2009)
explains,
“People
develop
social
capital
through
participation
in
voluntary
[nonprofit]
associations
and
this
participation
serves
as
the
building
blocks
for
civic
engagement
and
healthy
communities”.
For
this
reason,
it
is
important
that
the
nonprofit
sector
universally
implement
performance
measures
in
order
to
prevent
and
eliminate
nonprofits
in
disguise
from
having
adverse
effects
on
the
community
and
social
progress.
Thus,
in
order
for
the
nonprofit
sector
to
effectively
contribute
to
the
collective
wellbeing
of
society,
they
must
individually
develop
and
implement
a
framework
for
measuring
performance.
The
human-­‐centric
process
of
Design
Thinking
is
ideal
for
this.

21. Hagler
21
Bibliography
Anheier,
H.
(2005).
“Organizational
theory
and
structure”.
Bagnoli,
L.
and
Megali,
C.
(2011).
“Measuring
performance
in
social
enterprises”.
Nonprofit
and
Vol
Sector
Quarterly
40(1):149-­‐65
Brown,
T.
and
Wyatt,
J.
(2010).
“Design
thinking
for
social
innovation”.
Stanford
Social
Inno
Review
8(1):31-­‐5
Carnegie,
A.
(1889).
“The
gospel
of
wealth”.
Colby,
S.,
Stone,
N.,
and
Carttar,
P.
(2004).
“Zeroing
in
on
impact”
Stanford
Social
Inno
Review
2(2):24-­‐33
Coles,
R.
(1993).
“The
call
of
service:
satisfactions”.
Cordes,
J.
and
Weisbrod,
B.
(1998).
“Differential
taxation
of
nonprofits
and
the
commercialization
of
nonprofit
revenues”.
Jour
Policy
Analysis
and
Manag
17(2):
195-­‐214
Dillon,
B.
(2012).
“Organizational
leadership
and
the
balanced
score
card:
lessons
to
be
learned
from
marketing
activities
in
a
nonprofit
setting”.
Int
Jour
Bus
and
Social
Sci
3(15):105-­‐112
Hall,
P.
“Historical
perspectives
on
nonprofit
organizations
in
the
United
States”
IDEO
(2015).
“Human-­‐centered
design
toolkit:
the
field
guide
to
human-­‐centered
design”.
Lissner,
H.
(April,
2015).
“The
state
of
nonprofits
and
design
thinking”.
Personal
Interview.
Southern
Growth
Studio.
McGregor,
C.
(2007).
“The
community
benefit
standard
for
non-­‐profit
hospitals:
which
community,
and
for
whose
benefit?”.
Jour
Contem
Health
Law
and
Policy
23(2):302+
Plattner,
H.
(2015).
“An
introduction
to
design
thinking
process
guide”.
Institute
of
Design
at
Stanford
Robbins,
K.
(2006).
“The
nonprofit
sector
in
historical
perspective:
traditions
of
philanthropy
in
the
west”.
Roberts,
J.
(April,
2015).
“Addressing
community
need
with
Design
Thinking”.
Personal
interview.
Southern
Growth
Studio
Salamon,
L.
and
Sokolowski,
S.
(2004).
“Measuring
civil
society:
the
John
Hopkins
Global
Civil
Society
Index”.
Sawhill,
J.
and
Williamson,
D.
(2001).
“Mission
impossible?
Measuring
success
in
nonprofit
organizations”.
Nonprofit
Manag
and
Leadership
11(3):371-­‐86
Schneider,
J.
(2009).
“Organizational
social
capital
and
nonprofits”.
Smith,
S.
and
Lipsky,
M.
(1993).
“Nonprofit
organizations
and
community”.
Young,
D.
(1998).
“Contract
failure
theory”.