Non-Profit Dashboard 2: Building the Right One

In a previous post, I made the case for non-profits to implement dashboards to aid in accountability and to help them stay focused on what is most important to the organization. Once you’ve decided to develop one, the next step is to determine what should go into a dashboard.  A dashboard can be bloated, with too much information and be difficult to maintain or comprehend, or can contain too little or the wrong information and be ineffective.  The trick is to find the right amount of information with the appropriate displays for your organization.

Too big. Too small. Just right

While there is a mind-numbing spectrum of information that can be used in dashboards and deciding what should or should not go in it can seem overwhelming, there are really three basic elements to consider when designing and building your dashboard:  1.) Who will be using the dashboard?  (Users), 2.) What information to include in the dashboard both with regard to measurement and tracking? (data and KPIs),   and 3.) What are the decision-rules you’ll need to make use of  the dashboard? (signal lights).

Define the User

A dashboard can be either simple or complex depending on the objectives.  The first step is to ask who you are creating it for and for what purpose.   You can create the tool for an internal audience that is privy to confidential information  and used for accountability or decision-making– such as your internal staff or the Board of Directors.  Or you can create a dashboard to communicate your successes and or projected needs with an external audience – such as program recipients, donors and the community.  For most non-profits, the best place to start is to create a dashboard to communicate with your Board of Directors.  By providing a quick overview and summary of where the organization is in relation to its goals, critical needs and what deserves praise, you can make the most of the limited time you have with your Board of Directors to garner their guidance and support.

Determine your KPIs

The second element is the data itself that you will be collecting and displaying in the dashboard.  You want to choose information and measures that will reflect the overall health of the organization.  These are often referred to as Key Performance Indicators ( KPIs, the info that reflects the performance of the organization against targets and the mission.   You will also need to decide the time period and metrics to be used which are inherent to the item being displayed.

For a non-profit, typical KPIs that an organization will track and include in a dashboard are:

1.)    Programs – including program effectiveness,  participant satisfaction and volunteer hours and efficiency

2.)    Fund Development – New Donors, New Corporate Sponsors and Grant and Government support

3.)    Compliance and Governance – Forms filled and submitted on time, audits completed

4.)    Finances – Cash in Reserve, Budgeting,

5.)    Human Resources – Performance Evaluations, Volunteer Satisfaction, Turnover

6.)    Board Of Directors – Attendance at meetings, new Board members joining,  Executive Director Performance evaluation

Each of these areas would have their own data collected and displayed, together providing a snap-shot of the health of the organization.

Check out this excellent example of a dashboard developed and presented to a Board of Directors.

Decisions, Decisions

Having that information in one place is all well and good, but if you don’t know what to make of it, or have a way of quickly determining what needs your attention, it can be just a jumble of numbers and graphs leaving your team and the Board members to figure out what to do with the information.  That’s where signal lights and rules come in.  These help you decipher what decisions or actions are needed as a result of the information you see.  Like traffic signal lights, the decision trigger symbols are typically red, yellow and green.  Red signifies “Needs immediate attention” or Action”; Yellow means “Watch” while Green signifies “On track” or “Celebrate”.  The signals show up either as color-coded images next to information, or are color-filled boxes in the matrix of information.  A user can quickly scan and focus on the areas needing their immediate attention based on the colors.

Color-coding is not enough.  For each KPI that you include in the dashboard, you need an accompanying set of targets and rules to determine what actions are needed when.  You want to not only determine your target, but also the different points where action is needed.   For instance, if your target is to have $60K of cash on hand at any one time to cover payroll, and $40K means you are heading into trouble while $20K cash on hand signals that you’re in deep trouble, you’ll code the KPI with the appropriate color based on the rules established.

I recommend that you start simple with only a handful of KPIs to start, and as you become more comfortable and proficient with updating and presenting the dashboard, you can add and improve upon it.   You’ll find a rhythm for the timing for updates and recalibrate the targets to adjust to changing environments and situations.  If you invest in dashboard software, you can customize each dashboard for the individual user, based on the level of their access to the information, ensuring that everyone is well informed and working off of current and pertinent information.

There are a number of excellent sources  that can help you through the process including Lawrence Butler’s book “The Nonprofit Dashboard: Using Metrics to Drive Mission Success. I highly recommend the book. It includes not only detailed descriptions of the basic elements relative to non-profits and instructions for developing a dashboard, but also supplemental CDs and templates to use.

In my next dashboard article, I plan to cover how you approach implementing a dashboard and realizing that you are instituting a cultural change not just technology change.  It also entails engaging your team and getting them bought into the process.  I’ve found that the real value lies in the conversations that happen in the planning stages in order to develop the dashboard.   Getting everyone involved as well as setting up training is critical to the success.

Jess Gutierrez LR Jess leads the Non-Profit practice group and his work over the past twenty five years includes supporting foundations, research institutions, land trusts, and children’s support agencies. He works with management teams and Boards on the development of financial reporting systems, policies and procedures, strategic planning, forecasts and budgets, and recruiting and training accounting personnel.

If you would like to speak with Jess, please use the Comments section to make a request.

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