Measure RII, not only ROI

I’m indebted to Sean Stannard-Stockton at Tactical Philanthropy for his post today, which drew my attention to a February post by Charity Navigator CEO Ken Berger on how less than 10% of charities measure the outcomes of their programs.

This subject of measuring not only your program outputs (meaning the number of people you helped) but your program outcomes (meaning the effect that your program actually had on solving the overall problem you set out to tackle in the first place) remains, sadly, quite virgin territory for nonprofits, especially Christian ministries. We tend to pull out the “Yes, but if at least one person is saved, then it’s all worth it” arguments, which works really well until you start checking into some of Christ’s own ROI (return on investment) language, where the consistent principle emerges that to one who is given much, much is expected.

In any case, I recommend Tom Ralser’s ROI for Nonprofits as the essential read in this area. It’s not near as dry as it sounds–it’s actually kind of a fun read. No one else explains the difference between outputs and outcomes better than Tom.

But what I wanted to draw your attention to today is that if 10% of nonprofits are measuring ROI, the number measuring RII must conservatively be estimated at the smallest fraction of 1%.

By ‘RII’ I mean ‘Return In Investor’–a term I just wove out of whole cloth to refer to something that is essential to–and, frankly, unique to–Transformational Giving and the subject of coaching champions.

In TG we say that satisfactory outcomes in the field are necessary but not sufficient measurements of giving success. We also must ask:

How was the giver changed (‘transformed’) as a result of this gift?

Secular fundraisers will almost certainly label such talk woefully naive and misplaced. After all, what does it matter how or even whether Bill Gates is being transformed so long as his foundation is making effective strides in the elimination of malaria?

But Christian fundraisers ought to carry the extra ‘burden’ of examining (and, yes, measuring) how champions change or ought to be changing as a result of their giving. At the risk of sounding like a heretical fundraiser but an orthodox Christian, I’d echo Jesus’ words in Mark 8:36, ‘What good is it for a man to gain the whole world, yet forfeit his soul?’

But is it really possible to measure RII?

Absolutely. For a great example, check out Frank Lofaro’s interview with World Vision’s Atul Tandon for the Christian Leadership Alliance magazine and website.

Hired to serve as VP of Marketing and Communication for World Vision, Tandon renamed his position Vice President of Donor Engagement, and the article about what he’s done is so good that it’s worth memorizing.

To quote Tandon:

When I arrived at World Vision, I found an organization singularly focused on its mission—building a better world for children. That is not a bad thing. It is wonderful. World Vision works in nearly 100 countries with over 5 million children and family members. If you add up the numbers, about 100 million people every year are helped.

But when we were embracing children, we had our backs to someone else: the donor. We seemed to think of them as ATM machines. You send out a direct-mail piece, make a phone call, do a presentation, get the check for $10 or $100,000, and off you go. To me, it was an earth-shattering realization that we were leaving out one of the two primary stakeholders in building a better world for children. The donor is a partner and an equal stakeholder in this transformation.

In other words, World Vision was doing a great job measuring ROI but its mechanisms for measuring and reviewing RII were nowhere near as developed.

So what mechanisms does World Vision now use to measure what I call RII? Tandon again:

We perform donor surveys once a year on key questions: Are you more aware of the poor? Is your time with World Vision enabling you to serve the poor better? Is your walk with Jesus Christ changing because of your walk with the poor? The critical question is, Have you changed the way you spend your money and your time? In 2003, 59 percent of our donors said they had changed the way they thought about and spent money and time. Today, that number is up to 76 percent. God has been faithful.

What does it profit a Christian nonprofit to measure its ROI if it does not also measure its RII?

About Pastor Foley

The Reverend Dr. Eric Foley is CEO and Co-Founder, with his wife Dr. Hyun Sook Foley, of Voice of the Martyrs Korea, supporting the work of persecuted Christians in North Korea and around the world and spreading their discipleship practices worldwide. He is the former International Ambassador for the International Christian Association, the global fellowship of Voice of the Martyrs sister ministries. Pastor Foley is a much sought after speaker, analyst, and project consultant on the North Korean underground church, North Korean defectors, and underground church discipleship. He and Dr. Foley oversee a far-flung staff across Asia that is working to help North Koreans and Christians everywhere grow to fullness in Christ. He earned the Doctor of Management at Case Western Reserve University's Weatherhead School of Management in Cleveland, Ohio.
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4 Responses to Measure RII, not only ROI

  1. Pingback: Transformational Giving seeks transformation, not attention « Transformational Giving

  2. Pingback: Five things I think I think about TG, Part I: Nonprofit as Church Renewal Movement « Transformational Giving

  3. Pingback: Overcoming Measurement Objection 2: TG measurement is subjective « Transformational Giving

  4. Pingback: The Best Gift Your Nonprofit Can Give the World: A Viable Plan to Go Out of Business | Transformational Giving

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