BUSINESS
How to set
good KPIs
for your Charity
by Michelle Wilkes, Partner at Wilkins Kennedy
KPIs ARE A NECESSARY COMPONENT OF
MANAGING ANY CHARITY OR BUSINESS AS
THEY ALLOW YOU TO KEEP TRACK OF YOUR
STRATEGIC OBJECTIVES, BUT HOW DO YOU
ENSURE THEY ARE ALIGNED TO YOUR
ORGANISATION’S GOALS AND OFFER THE
BOARD THE INFORMATION THEY NEED?
What is a KPI?
A Key Performance Indicator (KPI) provides a
way to measure how well organisations are
performing in relation to their strategic goals
and objectives. They should:
• Be driven by the organisation’s objectives.
• Be clear and measurable.
• Have responsibility.
Charities need them to:
• Contribute towards informed decision-making.
• Help management and Board focus on the
right priorities.
• Demonstrate good stewardship of funds.
• Keeps the strategy on track and achieve
desired targets.
Essentially, ‘If you don’t measure it, you cannot
manage it’. You need to know what it is you are
trying to measure and have a clear understanding
of the organisation’s vision, purpose and values
as set out in its governing document.
Defining the key objectives of the charity will
help to fulfil the vision for the next 12 months
and then the longer-term, perhaps over the next
5-10 years.
1. Defining the strategy
Firstly, set out how you will achieve the defined
objectives involving SMT, Board and other
stakeholders.
Consider how you will measure success. This
could be cost, time and benefit. Objectives need
to be tangible rather than simply general wishes
BUT they can and often should be, non-financial.
Next you should spend some time developing
your key measurements. Set alongside targets,
thresholds and benchmarks, and define what
measures will help to achieve the strategies. Some
examples include:
• Theatre: achieve 90% capacity at box office
with a minimum of 20% of all tickets to under
25 concessions.
• Membership: achieve growth of under-30
memberships of 10%, with growth of 6% net
of member losses.
• Fundraising: increase participants in challenge
events to 7000, while raising £700k.
• Programme delivery: deliver service to 500
clients under the project; measure satisfaction
rating and costs per unit under programme. 4. Review and adapt
Remember when working out your key
measurements to decide who has ownership
of them. • Too many measures; don’t measure something just because
‘we can’ – it needs to be relevant. 5 to 10 key measures are
sufficient.
• Not relevant - again often because ‘we can’ but don’t have
a KPI which adds nothing to management decision-making.
• No analysis of the result.
• KPIs which are all financial – as these are seen to be easier
to manage. A mix is preferable.
2. Collecting your key data
Key tips here include:
• Track progress regularly.
• Data needs to be timely.
• Where possible embed into day to day
operations and systems.
• Link to impact reports and accounts.
Make sure you make full use of all sources of
information, for example a good data source is
an analysis of website traffic, e.g. Google
Analytics.
3. Reporting
The next stage in the process is reporting.
This should be from team to management to
Board (and stakeholders). Make sure your reports
show a clear link between the strategy as
set and the KPI result. Interpret the results
so you can demonstrate what they mean.
Look to benchmark your data over time
and potentially against others in a similar
industry/environment/size.
Importantly don’t produce too many reports –
your time can be taken up reporting on reports!
KPIs should be constantly evolving as a tool, although it is
important to keep a benchmark. They are a useful tool for
management and the Board, and a mechanism that allows
for assessment and challenge, so make sure you regularly
review the KPIs you have set and adjust them if necessary.
Common failings
There are some common failings that we often see.
These are:
For more information please contact:
[email protected]
Local offices:
Ashford: 01233 629 255 / Canterbury: 01227 454 861
Maidstone: 01622 690 666 / Orpington: 01689 827 505
Sandwich: 01304 249 997
[email protected]
www.wilkinskennedy.com
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