{"id":9232,"date":"2024-06-26T11:18:11","date_gmt":"2024-06-26T16:18:11","guid":{"rendered":"https:\/\/www.nptrust.org\/?p=9232"},"modified":"2024-07-17T11:17:20","modified_gmt":"2024-07-17T16:17:20","slug":"outputs-and-outcomes-what-nonprofit-reporting-means-to-donors","status":"publish","type":"post","link":"https:\/\/www.nptrust.org\/philanthropic-resources\/philanthropist\/outputs-and-outcomes-what-nonprofit-reporting-means-to-donors\/","title":{"rendered":"Outputs and Outcomes: What Nonprofit Reporting Means to Donors"},"content":{"rendered":"\n

As a philanthropist, you want to know that your donations will positively impact the fulfillment of your chosen organization\u2019s mission. Ideally, a nonprofit\u2019s outputs will correlate directly to the achievement of their desired outcomes. But how can an interested party determine whether a nonprofit\u2019s outputs and outcomes are balanced?<\/p>\n\n\n\n

Nonprofit reporting provides insight into how an organization employs funds raised\u2014and how it measures success. When evaluating a nonprofit\u2019s impact, multiple factors should be considered. An organization\u2019s \u201csuccess\u201d (i.e. their outputs compared to their outcomes) is best determined through a holistic lens. Below is a simple, step-by-step guide for donors and advisors alike to help you interpret a nonprofit\u2019s outputs and outcomes.<\/p>\n\n\n\n

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Step One: Look at an organization\u2019s overall financial health<\/h3>\n\n\n\n

Begin your exploration by reviewing the most straightforward information available\u2014an organization\u2019s financial data. Most nonprofit organizations will provide their fiscal reports, also known as a statement of financial position<\/a>, via their website. If this information isn\u2019t readily available online, try reaching out directly to request a copy. The primary purpose of reviewing such reports is to understand the organization\u2019s net assets<\/a>, or how the organization\u2019s liabilities compare to its assets. Another purpose is to review the statement of activities<\/a> to understand how the organization spends its resources. Valuable financial information is also found in audit footnotes on financial statements, and every non-secular nonprofit organization\u2019s 990 tax form is available to the public<\/strong> via the IRS tax exempt organization search tool<\/a> on their website.<\/p>\n\n\n\n

While reviewing an organization\u2019s statement of activities, you may see some spending categorized as \u201coverhead<\/a>.\u201d It is vital to keep in mind that nonprofits are human endeavors, and human beings working for nonprofits have the same essential needs as staff in the for-profit sector. While volunteers are essential for many organizations, most\u2014if not all\u2014nonprofit organizations require a core team of part and full-time staff. Many nonprofits also own or rent physical spaces through which they facilitate their work, which also require funds to maintain. Overhead spending means different things for different organizations, but on the whole, it\u2019s important not to view it as the enemy of impact<\/a>.<\/p>\n\n\n\n

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Step Two: Set appropriate expectations<\/h3>\n\n\n\n

Myriad factors combine to determine how a nonprofit conducts itself, so it\u2019s important to look at organizations as individual institutions. Every nonprofit organization is going to have its own array of financial obligations that factor into their balance of outputs and outcomes. So, expectations surrounding how an organization \u201cshould\u201d be using their funds may be molded by considerations like the following:<\/p>\n\n\n\n