Why Evaluation is Important to Your Nonprofit

By Lindsay Anderson, Consultant

Let’s be honest, the term “evaluation” can be intimidating or off-putting; sometimes both! But the importance of program evaluation is worth paying attention to and doing something about as the results are what your grantors are looking at when they evaluate you and the funding requests you make.  

Evaluation can play a big role in ensuring your organization is meeting the needs of your community and providing programming that is not only effective but also efficient. This information is important not only to your grant funders but to your other stakeholders as well. This might be why a recent survey by Morariu et al., of U.S.-based 501(c)(3) organizations found that in 2016, 92 percent of responding nonprofit organizations reported engaging in evaluation activities within the past year, up from 85 percent of responding nonprofits in 2010. These organizations reported evaluation was important in not only knowing if they were meeting the needs of their funding agencies but so they could know if their approach was truly working.  

Let’s break down what program evaluation actually is, why it matters, and a general guide to how you do it. 

What it is
Assessing your programs’ effectiveness and efficiency

Generally speaking, evaluation is a systematic method for collecting, analyzing, and using information to answer questions of effectiveness and efficiency for projects, policies, and programs. Evaluation can help answer big questions about how well your program is doing at meeting community needs, measuring the difference the program is making, and how much the program did. Respondents to the Morariu et al survey reported using a variety of evaluation approaches to answer these questions including outcomes evaluations (91 percent), performance measurement (86 percent), process evaluation (85 percent), formative evaluation (77 percent), impact evaluation (77 percent) and return on investment (51 percent). 

Why it matters
Demonstrating your programs’ impact

Evaluating your nonprofit’s efforts is important to being as effective as possible, for demonstrating the impact your program is making, and using that data to secure resources and expand community partnerships, leading to program sustainability. Survey respondents reported several priorities for conducting evaluation including strengthening future work (95 percent), learning whether original objectives were achieved (94 percent), learning about outcomes (91 percent), and responding to future demands (86 percent) by learning from implementation (85 percent). 

How you do it
In 2016, only 8 percent of responding nonprofit organizations reported having evaluators on their staff, demonstrating an increased need for consultation with external professionals to support their evaluation efforts. Even when involving external evaluators, you can expect your evaluation to follow a sequence of steps as it progresses, like the ones proposed by the University of Washington’s School of Public Health:

Step 1: Define your stakeholders

  • Involving stakeholders from multiple levels of your program (including direct service staff, administrators, participants, etc.) can help you better understand the various perspectives of your program. Getting everyone on the same page can help to clarify program goals / objectives and the activities needed to achieve them.

Step 2: Describe the program

  • When describing the program, it is helpful to consider several important questions, such as: What is your program goal? What activities are necessary to achieve these goals? How will you know you are making progress toward your goal? What resources do you need to implement your planned activities? And who do you plan to serve?

Step 3: Focus the design of your evaluation

  • This is where you define the specific purpose of the evaluation and the questions you are trying to answer. It is helpful to think about how the information will be used and choose methods that are most appropriate for collecting the information you need to know.

Step 4: Collect your data

  • This is where you collect the data - qualitative (stories and words) or quantitative (numbers) that will be used to answer the questions of your evaluation.

Step 5: Draw conclusions

  • Using the data you collect, you can set out to answer your questions and make recommendations for how programming can be improved moving forward.

Step 6: Present findings and ensure use

  • Evaluation findings are most effective when shared with a multidisciplinary team of stakeholders. It is equally important for direct service providers to know the findings and recommendations of an evaluation as it is for administrators. Conversations around findings should focus on how recommendations can be incorporated into each level of the program / organization to ensure evaluation use.

The bottom line
In the end, nonprofits are accountable to all their stakeholders from grantors and donors to the board, those they serve, and the larger community. Your stakeholders need to know you’re serving your mission through effective and efficient programs. Evaluation is the means for demonstrating that.


National Council of Nonprofits. (n.d.) Evaluation and Measurement of Outcomes.  Retrieved from:https://www.councilofnonprofits.org/tools-resources/evaluation-and-measurement-of-outcomes 

Morariu, J., Athanasiades, K., Pankaj, V., & Grodzicki, D. (2016). State of evaluation 2016: Evaluation capacity and practice in the nonprofit sector. Retrieved from: https://www.innonet.org/news-insights/resources/state-of-evaluation-2016-evaluation-capacity-and-practice-in-the-nonprofit-sector/ 

Social Solutions. (n.d.). Top 5 reasons to focus on nonprofit program evaluation. Retrieved from: https://www.socialsolutions.com/blog/top-5-reasons-to-focus-on-nonprofit-program-evaluation/

University of Washington School of Public Health.  Six steps of program evaluation. Retrieved from: https://www.nwcphp.org/evaluation/tools-resources/program-evaluation-tips

Lindsay Anderson