What Distinguishes High Impact Nonprofits? Experts Weigh In

What distinguishes high impact nonprofits from average ones? The Stanford Leadership Study, spearheaded by researchers Bill Meehan and Kim Jonker, identify seven factors which they call the “engine of impact.”

These seven factors include:

  1. Mission
  2. Strategy
  3. Impact evaluation
  4. Insight and courage
  5. Organization and talent
  6. Funding
  7. Board governance

There is no one critical factor, but rather all seven must work together to propel the nonprofit forward – hence the term “engine of impact.” With a combination of all seven factors working in concert, nonprofits can serve more people and achieve their mission on a grand scale.

Only a Handful Meet the Criteria for High Impact Nonprofits

There’s good news and bad news when it comes to the engine of impact. The bad news is that only about 20% of all nonprofits believe they meet the criteria of a high impact nonprofit. The good news? Among the remaining 80% who fail to meet the criteria of high impact nonprofits, there’s plenty of room for growth, and many are well on their way to achieving it.

One core concept the study posits is  the importance of external audits or evaluations. Among the nonprofits surveyed, only about 40%  utilize external evaluations. .

What Is the Impact Engine?

These seven factors encompass many overarching concepts that set strong nonprofits apart from struggling ones. Mission and vision, for example, provide leadership and guidance not just at the top, but to all who work at the nonprofit. With a strong mission and vision statement, nonprofits can guide, organize, and adjust their work to fulfill the mission and ensure that all work they undertake supports their mission-driven environment.
Funding is another example of a broad concept that has specific, measurable impacts. Funding, talent organization and board governance  comprise the fuel that keeps the engine of impact turning. Without enough fuel, a car sputters and stops. So too, a nonprofit without adequate funding, poor funding management, and poor governance and organization cannot achieve success as a strong nonprofit.

What Are Nonprofits Doing Right?

Among the nonprofits surveyed during the study, several key findings emerged.

  • 56% of the nonprofits in the study had Board Governance in place, with Funding close behind at 52%.
  • 50% of nonprofits had systems in place to evaluate their impact, which is more positive news. Without such an evaluation, it is difficult to assess areas of focus for the future.

Where did nonprofits fall short?

  • Just 35% had a stated strategy in place
  • 18% lacked a clear Mission statement
  • 17% lacked insight and courage, two elements that enabled nonprofits to take a long, hard look at their work, evaluate its success or failures, and make improvements for the future.

How Does Your Organization Measure Up?

Before you decide where your organization fits in this evaluation, the study’s authors have put together a free online quiz to help you assess your nonprofit. Take the quiz, then return to the Welter Consulting website for more information and articles to help you build your nonprofit impact engine.

Take the Next Step with Welter Consulting

After completing the nonprofit impact engine survey, how does your organization measure up?

Most organizations will find one or more areas in which they could improve. That’s nothing to panic about. Instead, it provides ample opportunities for change and growth.

Once you’ve identified key areas with room for improvement, it’s time to get to work. If you’re unsure where to start, contact Welter Consulting. Welter Consulting bridges people and technology together for effective solutions for nonprofit organizations. We offer software and services that can help you with your accounting needs. Please contact Welter Consulting at 206-605-3113 for more information.