Measuring What Matters: Rethinking Impact Evaluation in Nonprofit Organizations

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Savanna Batson
April 17, 2026

Developing a methodology for measuring and evaluating impact poses a significant challenge for many nonprofit organizations (NPOs). While many for-profit enterprises more easily gauge success through quantifiable metrics such as revenues and expenses, many NPOs pursue social objectives that resist straightforward measurement.

Nevertheless, NPOs are increasingly called on to provide empirical evaluation of their impact to meet expectations for efficiency and accountability from board members, philanthropy and government-funded programs. As a result, proactively developing impact evaluation metrics serves as a critical strategy for organizational development.

Impact evaluation is the process of determining the extent to which observed changes in an identified outcome, both intentional and unintentional, are attributable to an intervention (Michel and Schneider, 2025). In the 1960s, program evaluation emerged as part of the United States’ War on Poverty, and for decades the nonprofit sector relied on programs as the primary unit of analysis for impact evaluation (Benjamin and Campbell, 2014). Following the implementation of programs aimed at reducing poverty, government officials sought methodologies for assessing the effectiveness of these interventions.

A central question guiding these analyses was how to identify the causal mechanisms that produced a desired effect in participants’ lives. This question remains highly relevant for nonprofit organizations that provide frontline services or close gaps in the social safety net.

Such work often includes building relationships with participants to better understand their needs, co-creating pathways for success, adjusting approaches as conditions change and connecting participants with other services (Benjamin and Campbell, 2014).

Program evaluation alone, however, does not capture all aspects of social impact addressed by many NPOs. As a result, alternative strategies for measuring impact have emerged.

For example, the co-design of an impact evaluation tool for food hubs in Leeds incorporated recognition of positive externalities beyond food provision, including reducing food waste, increasing access to healthy food, reducing food insecurity and enhancing ecological and social sustainability. Using a literature review, mapping exercise, survey, interviews and focus groups, the study developed indicators such as the number of community members served and the volume of food diverted from waste.

The project ultimately produced a methodology that integrates quantitative data, such as volumes of food distributed, with qualitative input from staff, volunteers and community members. These qualitative elements included quotes and images that reflect emotional wellbeing, sense of belonging and social connection (Bridge et al., 2025).

A second example is the evaluation of women’s and girls’ economic empowerment, which the United Nations links to self-worth, access to opportunities and resources, self-determination and the ability to influence social change (Yıldırım and Köroğlu, 2024). To evaluate these initiatives, researchers interviewed experts and developed 17 performance indicators aligned with theory of change and context-based outcome evaluation models.

Their findings showed that participation in the economy alone was insufficient to demonstrate impact. More nuanced indicators, such as control over resources, must also be considered. The resulting framework adjusted the weighting of five criteria—measurability, attainability, relevance, replicability and usability—to guide the development of more effective metrics.

In both examples, teams began by revisiting their organization’s theory of change, which provides a roadmap for achieving desired social outcomes. Amid recent fluctuations in federal and state funding for nonprofit activities, organizations should consider revisiting their theory of change to assess which indicators of social impact are currently measured and which are overlooked.

For example, if an affordable housing organization prioritizes reducing the generational wealth gap between families with real estate and those without, constructing or rehabilitating single-family homes may remain the primary intervention, with new homes serving as a key indicator. However, if the priority is broader housing equity, revisiting the theory of change may support alternative strategies such as innovative financial products or housing models.

In sum, impact evaluation is more than a reporting tool for annual reports. It is a strategic resource that helps nonprofit organizations align their work with long-term goals and improve their overall effectiveness.

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