Hagler  1  

Monique  Hagler                                                  Rhodes  College    

May,  2015                                                          Dr.  Hossler    

 

Design  Thinking  as  a  Means  to  Quantify  Nonprofit  Performance    

 

Introduction  

When  dealing  with  the  for-­‐profit  sector,  simply  collecting  and  analyzing  a  business’s  

income,   profit,   and   share   of   wallet   will   easily   accomplish   the   task   of   measuring  

performance   and   success.   Although   the   nonprofit   sector   is   different   from   its   for-­‐profit  

counterpart   in  many  ways,   it   is   still   imperative   that   a   nonprofit   organization   be   able   to  

quantify  performance  and  success.  The  body  of  scholarly   literature  focused  on  measuring  

nonprofit   success   proposes   three   specific   areas   where   outcomes   may   be   quantified:  

financial,   operational,   and   social   (Sawhill   &   Williamson,   2001;Dillon,   2012;   Bagnoli   &  

Megali,  2011).    

Arguably,   the   most   fundamental   arena   is   the   multidimensional   influence   of   the  

nonprofit’s   interactions  with  the  community  –  the  social  aspect.  The  term  “community”  is  

defined  as  “a  social  unit  that  shares  common  values”  encompassing  both  geographical  and  

psychological   togetherness.   When   this   is   taken   into   consideration,   the   social   arena   is  

realized  as  the  network  of  service  users,  donors,  management,  board  of  directors,  and  the  

general   public,   all   under   one   roof.   When   this   happens,   the   community   (social)   aspect  

becomes   the   key   determinant   of   success   in   the   two   remaining   areas   –   organizational  

structure  and  finances  –  by  virtue  of  their  inherent  dependency  on  the  “social”.    

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Given   the   intimately   social   nature   of   the   nonprofit’s   work   and   operations,   one  

realizes  how  important  it  is  to  take  a  human-­‐centric  approach  when  it  comes  to  quantifying  

the   success   of   a   nonprofit’s   performance.   Unfortunately,   quantifying   social   success   is  

arguably  the  most  difficult  to  achieve  because  of  its  seemingly  intangible  outcomes  (Dillon,  

2012)  but  is  by  no  means  an  impossible  task.    

 

Purpose  Statement    

In   this   paper,   I   propose   that   by   defining   Intended   Impact   and   Theory   of   Change  

supplemented   by   the   process   of   Design   Thinking,   the   nonprofit   may   accurately   convert  

social   outcomes   into   quantitative   measurements   of   performance.   This   framework   for  

performance  measurements  will  be  appropriately  grounded  in  assessing  the  ability  of  the  

nonprofit   to   address   and   consequentially   satisfy   the  multifaceted  needs   of   individuals   in  

the  community.  By   taking   this  approach,  both   the   individual  nonprofit   and   the   society  at  

large  experience  enhanced  wellbeing,   long-­‐term  success,  and  innovative  growth.  Personal  

interviews   with   experts   in   the   field   of   Design   Thinking   will   be   referenced   to   provide  

support  for  this  argument.  

 

Addressing  Community  Need  

  The  nonprofit  sector  is  distinguishable  from  its  for-­‐profit  counterpart  due  to,  in  part,  

its   responsibility   of   answering   to   the   community   rather   than   to   that   of   the   stakeholder  

subgroup  (Bagnoli  &  Megali,  2011).  Furthermore,  the  degree  to  which  a  nonprofit  is  able  to  

successfully  address  community  need  is  crucial   in  determining  the  long-­‐term  success  and  

stability  of  that  organization  (Anheier,  2005).  In  order  to  determine  the  performance  of  a  

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nonprofit,   one   must   examine   and   then   quantify   data   regarding   the   nonprofit’s   impact,  

activity,  and  capacity   (Sawhill  &  Williamson,  2001).  Here,   the  organization  must  ask:  Are  

we   making   progress   towards   fulfilling   our   mission   and   meeting   our   goals?   Are   our  

activities  achieving  the  program’s  objectives  and  implementing  our  strategies?  Do  we  have  

the  resources  –  the  capacity  –  to  achieve  our  goals?  (Sawhill  &  Williamson,  2001).  By  asking  

these   questions,   the   individual   is   then   able   to   assess   performance   according   to   the  

nonprofit’s  ability  to  address  community  need.    

  It   is   important   to   realize   that   these   factors   of   performance   encompass  more   than  

just  the  user  experience  given  the  incredibly  human-­‐centric  dependency  and  reality  of  the  

nonprofit’s  existence.  Josh  Roberts  of  Southern  Growth  Studio  explains  that  “understanding  

the   nonprofit’s   human   components   involved   –   their   staff,   donors,   and   users   –   is   very  

important,   even  more   so   with   nonprofits   than  with   other   businesses”   (2015).   Thus,   the  

performance   measures   of   a   nonprofit   must   appropriately   reflect   and   consider   the  

multidimensional   influence  and   interactions   that   the  organization  has  with   its  associated  

human  components  –  the  community.    

  By   dissecting   the   implications   of   each   area   of   performance   measurement,   the  

individual  realizes  that  the  multifaceted,  interconnected  contributions  from  the  user  group,  

volunteers   and   employees,   board   of   directors,   donors,   and   even   the   general   public  

determine  nonprofit  success.  The  operations  of  a  nonprofit  should  not  be  approached  with  

the  “us  versus  them”  mentality  for  this  very  reason.  When  examining  Impact,  one  must  ask:  

Does  the  general  public  –  the  wider  community  –  benefit  from  the  work  that  we  [staff]  are  

doing?  Are  we  [staff]  successfully  contributing  to  the  overall  wellbeing  of  society  by  virtue  

of   our   effect   on   users   of   programs   and   services?   In   the   area   of   Activity:   Does   our  

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understanding  of   the  user’s   situation   correctly   align  with   the  user  experience?   Is   there  a  

better  way  to  provide  these  services  by  situating  them  in  the  context  of  the  user’s  daily  life  

and   reality?   And   with   Capacity:   Do   our   volunteers/employees   and   board   members   feel  

equip   and   able   to   effectively   contribute?   Does   our   nonprofit   create   and   maintain   an  

environment  where  the  individual’s  potential  and  skills  are  maximized?  Are  we  completely  

realizing   and   satisfying   the   needs   of   our   donors?   (Sawhill   &   Williamson,   2001).   These  

questions   are   of   particular   importance   to   both   short-­‐term   operations   and   long-­‐term  

sustainability  of  the  organization.    

  No  matter  how  successful   a  nonprofit  may  be   in   the   areas  of   Impact   and  Activity,  

they  will  ultimately  fail  if  the  community  needs  associated  with  Capacity  are  not  adequately  

addressed.  Understanding   the  motivation   for  giving  must   therefore  become  a  priority   for  

the  nonprofit.  Holly  Lissner  of  Southern  Growth  Studio  explains  that  “stopping  to  listen  to  

your  donor  base   -­‐  and  going  outside  of  your  donor  base   -­‐   to  get  an  understanding  of   the  

different   personalities   and   needs   of   the   general   population   is   important   for   the  

development  of  effective  strategies  for  meeting  community  need”  (2015).  Thus,  in  order  to  

measure   a   nonprofit’s   Capacity,   it   is   crucial   to   determine  donor   touch  points   –   the  ways  

that  financial  contributors  encounter  and  interact  with  the  organization.  One  must  ask:    

What   compels   someone   to   engage   with   our   nonprofit?   Why   does   our  

particular   mission   statement   matter   to   each   donor?   What   could   we   do   to  

increase   the   individual’s   share   of   wallet   that   we   have?   What   sort   of  

interactions  do  our  donors  desire  from  us?  (Roberts,  2015)  

By   asking   these   questions,   the   nonprofit   may   then   better   understand   the   donor’s  

experience  by  defining  it  through  an  empathetic  approach.  When  the  community  needs  of  

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financial  contributors  are  adequately  addressed  and  satisfied,  areas  of  Impact  and  Activity  

are  consequentially  maximized.    Furthermore,  addressing  community  need  is  a  process  of  

measuring   social   effectiveness   in   the   delivery   of   goods   or   services   (Bagnoli   &   Megali,  

2011).   Performance  measures   should   therefore   answer:   To  what   degree  has   our   activity  

contributed  to  the  wellbeing  of  recipients  and  community-­‐wide  goals?  

  Nonprofits   frequently   fail   and   die   out   due   to   a   disconnection   between   mission,  

services,  and  the  needs  of  all  people  living  in  the  community.  Brown  &  Wyatt  explain:    

Time  and  again,  initiatives  falter  because  they  are  not  based  on  the  client’s  or  

consumer’s  needs  and  have  never  been  prototyped  to  solicit  feedback.  Even  

when  people  do  go  into  the  field,  they  may  enter  with  preconceived  notions  

of  what  the  needs  and  solutions  are.  (2010)  

Andrew  Carnegie  (1988)  reiterates  this  claim  and  says  that  the  individual’s  ability  to  wisely  

give   or   contribute   to   another   is   inherently   limited   by   a   lack   of   understanding   of   the  

recipient’s  circumstances.  This  phenomenon   is  precisely   the  reason  for   the  disconnection  

between   the   nonprofit’s   services,   operations,   and   the   real   needs   of   all   people   in   the  

community   that   they   fail   to   serve.   Thus,   failure   to   address   community   needs   can   be  

attributed   to   a   top-­‐down   process   of   imposing   strategies   and   services   on   the   target  

community  group  without  first  understanding  how  it  will  play  out  in  their  life  and  what  it  is  

exactly   that   they   need   (Roberts,   2015).   As   demonstrated   here,   assessing   all   aspects   of  

community   need   provides   the   foundation   for   both   quality   of   services   and   the   ultimate  

survival   of   the   nonprofit   long-­‐term.   Consequently,   the   nonprofit’s   progress   towards  

fulfillment   of   community   need   as   a   measurement   of   performance   must   begin   with   the  

mission  statement.  

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Crafting  (or  Redrafting)  the  Mission  Statement  

  Measuring  performance  of  a  nonprofit  must  be  considered  in  light  of  their  ability  to  

make  progress  towards  or  achieve  goals  pertaining  to  the  mission  statement.  Dillon  (2012)  

argues,  “Missions  tend  to  focus  on  public  good,  emotion,  and  awareness  making  it  difficult  

to  quantify  success”.  Although  the  nonprofit’s  performance  does  focus  on  the  production  of  

social   goods,   it   is  both  possible  and  plausible   to  quantify   success   if   the  organization   first  

articulates  specific,  mission-­‐oriented  program  goals.    

  In  order   to  do  so,   the  nonprofit  must  adapt  a  mission  statement   that   is  broad  and  

supplemented  by  statements  of  intended  programmatic  impact  and  methods  for  achieving  

mission-­‐oriented   goals.   The   primary   reasoning   for   a   broad   mission   statement   is   that   it  

allows   for   programs   to   evolve   over   time   in   coordination   with   a   changing   community  

landscape  (McGregor,  2007).  Colby  et  al.  (2004)  explains,  “Broad  mission  statements  may  

allow  for  room  to  innovate  and  to  expand  programing  in  response  to  the  evolving  needs  of  

users”.  In  this  way,  broad  mission  statements  may  ultimately  maximize  community  impact  

by  allowing  for  a  variety  of  solutions  while  also  taking  constraints  and  context  into  account  

(IDEO,   2015).   Here,   constraints   may   include   financial   capacity   or   the   sociocultural  

environment,   while   context   may   account   for   whether   or   not   there   are   other   nonprofits  

within  the  community  already  providing  the  same  service.    

Colby  et  al.   (2004)  argues   that   instead  of   creating  or   refining  a  mission  statement  

with  narrow  focus,  the  nonprofit  should  develop  clarity  about  intended  community  impact  

and   the   associated   means   for   achieving   mission-­‐oriented   goals.   By   framing   program  

objectives   in   this  way,   the  mission   statement  manifests   unity   through   shared  values   and  

perceptions   of  what   success  will   look   like   (Lissner,   2015).  More   importantly,   developing  

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clarity  about  mission-­‐oriented  action  will,  in  turn,  strategize  programmatic  operations  and  

management   decisions.   By   creating   mission-­‐oriented   goals,   outcomes   regarding   the  

nonprofit’s  ability  to  address  community  need  can  then  be  measured.    

 

Intended  Impact  and  Theory  of  Change    

  Before  a  measurement  system  can  be  realized  through  the  Design  Thinking  process,  

the  nonprofit  must   first  define  and  articulate   the  connections  between   the  organization’s  

mission,   vision,   goals,   and   programmatic   strategies   (Sawhill   &   Williamson,   2001).  

Statements   of   Intended   Impact   and   Theory   of   Change   should   be   used   to   bridge   this   gap  

between  the  mission  statement,  internal  operations,  and  programmatic  activities  (Colby  et  

al.,   2004).   This   process   requires   that   organization   leaders   clarify   who   are   the   intended  

users   and  what   “success”  will   specifically   look   like.   Setting  measurable,  mission-­‐oriented  

statements  enables  the  organization  to  then  assess  progress  against  these  goals  (Sawhill  &  

Williamson,  2001).  

  Colby   et   al.   (2004)   explains   that   Intended   Impact   “is   a   statement   or   series   of  

statements  about  what  the  organization  is  trying  to  achieve  and  will  hold  itself  accountable  

for  within  some  manageable  period  of  time”.  In  order  to  generate  a  statement  of  Intended  

Impact,  one  must  ask:  Who  are  our  beneficiaries?  What  benefits  do  our  programs  create?  

How  do  we  define  success?  What  would  make  us  obsolete?  Only  by  asking  these  questions  

can   the   organization   identify   the   benefits   their   services   intend   to   provide   and   the  

associated   target   user   and   community.   Intended   Impact   statements,   therefore,   articulate  

strategic  priorities  encompassed  by  the  underlying  mission  statement.    

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  The  sequential  process  of  determining  a  nonprofit’s  Theory  of  Change  can  then  be  

utilized   to   inform   the   cause-­‐and-­‐effect   relationship   between   program   objectives   and   the  

Intended  Impact.  Anheier  (2005)  notes,  “Many  managers  and  organizational  subunits  find  

it   difficult   to   separate   their   own   interests   from   that   of   the   organization   and   therefore  

pursue  self-­‐interested  strategies”.  This   is   a   common  situation   for  many  nonprofits  and   is  

not   necessarily   due   to  malicious   intentions   of   organizational   leadership.   Instead,   lack   of  

clarity   regarding   what   mission-­‐oriented   success   will   look   like   incentivizes   leaders   to  

pursue  their  own  individual  strategies  towards  fulfillment  of  their  personal  perceptions  of  

organizational  goals.    

  For  this  reason,  it  is  important  that  an  organization  determine  Theory  of  Change  in  

order  to  explain  how  the  Intended  Impact  will  be  pursued  and  achieved.  Theory  of  Change  

explains  how  resources  (organizational  and  financial)  will  be  converted   into  the  mission-­‐

oriented   social   results   –   creating   a   strategy   for   operations   and   resource-­‐allocation  

decisions  (Colby  et  al.,  2004).  This  process  requires  the  organization  to  ask:    

What   is   the   cause-­‐and-­‐effect   logic   that   gets   us   from   our   resources  

(people  and  dollars)  to  intended  impact?  What  are  the  most  important  

elements   of   our   programs’   content   and   structure?   Are   there   other  

ways   in  which  we   could   achieve   the   desired   outcomes?  What   is   the  

minimum   length   of   time   our   users   need   to   be   engaged   to   achieve  

these  outcomes?  (Colby  et  al.,  2004)  

By  asking  these  questions,  the  mission  statement  can  then  be  used  to  create  a  framework  

for  organizational  strategies  according  to  the  determined  target  user  group,  programmatic  

methodology,   and   the   intended   community   impact.   The   process   of   determining   both  

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Intended  Impact  and  Theory  of  Change  is  iterative  in  nature  –  informed  by  organizational  

values,   beliefs,   and   operational   capacity   as   well   as   by   hard   data   concerning   community  

need  and  interaction.  For  this  reason,  it  is  important  that  a  nonprofit  facilitate  this  process  

with  Design  Thinking.    

 

The  Process  of  Design  Thinking    

  Design   Thinking   requires   that   nonprofits   take   a   human-­‐centric   and   iterative  

approach  to  determine  efficacy  of  programs/services,  which  is  measured  by  the  ability  to  

address  specific  areas  of  community  need.  Holly  Lissner  of  Southern  Growth  Studio  states,  

“Design  Thinking  can  help  nonprofits  by  enabling  them  to  meet  the  needs  of  the  community  

in  which   it   serves,  whether   that   includes  people  running   the  organization,   the  donors,  or  

the  recipients”  (2015).  Design  Thinking  works  by  integrating  human  emotion  and  intuition  

with  rationale  and  analytics  (Brown  &  Wyatt,  2010).  Because  Design  Thinking  is  grounded  

in   the   user   experience,   the   process   can   be   used   to   facilitate   unbiased  measurements   of  

nonprofit  performance.    

Oftentimes,  when  an  organization  invests  a  lot  of  money  and  time  into  the  creation  

of   new   services,   “they  become  married   to   those   ideas  making   it   difficult   to   conceal   their  

bias  when  looking  for  user  feedback”  (Lissner,  2015).  The  process  and  methodology  behind  

Design  Thinking  works  by  significantly  eliminating  the  imposition  of  top-­‐down  perceptions  

when  determining  the  success  of  programs/services  in  addressing  community  need.  In  this  

way,   the   user   feedback   (data)   that   is   generated   through   the   Design   Thinking   process  

provides  an  unbiased  demonstration  and  measurement  of  the  nonprofit’s  performance.    

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  Design  Thinking  begins  with  the  Empathy  phase  defined  as  the  work  to  “understand  

the  way  they  [the  community]  do  things  and  why,  their  physical  and  emotional  needs,  how  

they   think   about   the   world,   and   what   is   meaningful   to   them”   (Plattner,   2015).   Thus,   in  

order  to  measure  a  nonprofit’s  performance  in  this  way,  they  must  first  define  community  

need   by   going   directly   to   the   source   –   the   individuals   in   the   community.   During   the  

Empathy   phase,   people   involved   in   the   Design   Thinking   process   (“designers”)   observe,  

interview,   and   listen   to   target   community   individuals   that   were   defined   through   the  

process  of  Intended  Impact.  

 It   is   important   that   designers   ask   strategic   open-­‐ended   questions   and   take  

demographic  information  during  the  interviews  with  community  individuals  (IDEO,  2015).  

Interviews  with  experts  in  the  community  area  of  focus  and  secondary  outside  research  are  

also   essential   in   gaining   “key   insights   into   relevant   history,   context,   and   innovations”  

(Brown  &  Wyatt,  2010).  By  framing  interview  questions  with  a  focus  on  “who,  what,  where,  

when,  why”,  designers  utilize  ethnographic  methodology  to  begin  to  uncover  the  needs  of  

individuals   as   gathered   from   the   primary   source   itself.   After   interviews   have   been  

stockpiled,   designers   finish   the   Empathy   phase   by   “sharing   out”   each   story   with   other  

designers  to  provide  collective  insight  captured  in  a  visual  form  (Plattner,  2015).    

  Following   the   Empathy   phase,   the   body   of   qualitative   data   is   synthesized   and  

organized   as   a   means   to   generate   informative   insight,   uncover   the   needs   of   a   target  

community,  and  ultimately  assess    the  various  ways  that  a  nonprofit  can  potentially  meet  

those   needs   –   encompassing   both   the   Define   and   Ideation   phases   of   Design   Thinking  

(Plattner,   2015;   Brown  &  Wyatt,   2010;   IDEO,   2015).  Most   importantly,   the  Define   phase  

enables   the   nonprofit   to   capture   the   “baseline”   needs   of   target   community   individuals,  

  Hagler  11  

which   can   then   be   used   to   answer   the   question:   How   effective   was   our   program   in  

addressing   the   individual’s   baseline   needs   required   to   incrementally   move   towards  

achieving  our  mission-­‐oriented  goals?  How  might  we  do  better?  During  these  two  phases  of  

Design  Thinking,  it  is  likely  that  designers  will  realize  ways  in  which  current  programs  may  

be  improved,  in  addition  to  innovative  program  objectives  that  may  be  introduced.    

  The  Define  and  Ideation  segment  determines  specific  areas  of  community  need  and  

generates   context-­‐appropriate   ways   that   the   nonprofit   could   potentially   address  

community   needs   –   a   process   used   to   inform   and   reiterate   the   nonprofit’s   Theory   of  

Change.  The  final  phases  of  Prototyping  and  Testing  are  primarily  used  as  a  tool  to  generate  

innovative   programmatic   strategies   to   better   address   community   need,   but   can   also  

facilitate  quantitative  measurement  of  current  program  activities  as  well.  Here,  both  new  

ideas   for   services   and   current   programs   are   prototyped   and   tested   within   the   target  

community  subgroup.  Iteration  in  response  to  user  feedback  is  crucial  for  the  development  

of   human-­‐centric   design   (Brown   &   Wyatt,   2010).   Because   of   this,   the   Design   Thinking  

process   may   be   used   as   a   method   to   quantify   nonprofit   performance   by  measuring   the  

ability  of  current  programs  in  meeting  target  community  need.    

This   can   be   achieved   by   comparing   baseline   community   need   to   reported   user  

feedback   after   the   program   or   service   has   been   realized.   Because   empathy   and   user  

feedback   are   utilized   throughout   all   aspects   of   the   Design   Thinking   process,   both   the  

current  performance  and  the  potential  for  more  effective  solutions  can  be  measured  using  

this   method.   Although   the   Testing   phase   is   primarily   used   as   a   way   to   validate   newly  

generated   ideas,   it   can   also   function   as   a   method   for   quantifying   existent   nonprofit  

performance.   By   using   “baseline”   data   collected   during   the   Empathy   phase   quantifying  

  Hagler  12  

specific   facets   of   community   need,   Theory   of   Change   –   the  methods   to   achieve  mission-­‐

oriented  goals  –  is  better  informed  and  programs/services  may  be  shaped  to  best  address  

individual  community  needs  as  defined  during  the  Testing  phase.    

 

Design  Thinking  as  a  Means  to  Quantify  Community  Need  and  Performance    

  By  going  through  the  Design  Thinking  process,  specific  aspects  of  community  need  

are   converted   into   tangible,   quantifiable   data.   Lissner   (2015)   emphasizes   that   “humans  

have  the  ability  to  articulate  their  own  needs  and  issues”  in  regards  to  specific  community  

need,  and  this  is  exactly  what  is  uncovered  during  the  Empathy  phase  of  Design  Thinking.  

IDEO   (2015)   explains,   “Human-­‐centered   design   allows   us   to   arrive   at   solutions   that   are  

desirable,  feasible,  and  viable”.  In  the  case  of  a  nonprofit,  “desirable”  reflects  the  fulfillment  

of  unmet  community  needs.    

  By   observing   human   behavior   and   the   individual’s   interactions   with   their  

environment   (community),   the   nonprofit   may   then   quantify   “community   need”   through  

empathetic   collection   of   data   (IDEO,   2015).   This   process   can   be   used   to   encompass   and  

quantify   all   aspects   of   community   need   including   that   of   the   user,   employee,   board  

member,  donor,  and  individuals  in  the  society  at  large.  Specifically,  the  Empathy  and  Define  

phase   of  Design  Thinking   converts   qualitative   narratives   from   community  members   into  

tangible,  quantifiable  data  points.  Dillon   (2012)  explains,   “By  knowing  community  needs,  

you  can  then  measure  the  effectiveness  and  efficacy  of  the  organization’s  ability  to  meet  the  

needs  of  the  people  they  serve”.  The  process  of  Design  Thinking  not  only  pinpoints  specific  

areas  of  community  need,  but  also  enables  the  organization  to  quantify  targeted  outcomes  

associated  with  each  community  subgroup  (Colby  et  al.,  2004).    

  Hagler  13  

Moreover,  by   first   collecting  and  quantifying  specific   community  needs  during   the  

Empathy   and   Define   phase,   one   can   then   measure   performance   of   the   nonprofit   by  

generating   feedback   regarding   programmatic   outcomes   as   compared   to   the   original  

mission-­‐oriented  goals.   For   example,   if   during   the  Empathy  phase,   the   target   community  

group  consistently  reported,  “I  wish  that  someone  would  help  me  find  a  career,  not  just  a  

job”,  designers  may  uncover   the   target  community  need  as   “the  desire   for   long-­‐term  and  

meaningful  employment”.   If   this  community  need   is  applicable   to   the  nonprofit’s  mission  

statement,   Intended   Impact   would   therefore   be   defined   as   “to   help   [target]   individuals  

realize   and   secure   careers”.   This  would   be   accompanied   by   the  Theory   of   Change  which  

would   include   objectives   such   as:   the   individual’s   discovery   and   specification   of   their  

desired  career  path,  the  development  of  career-­‐oriented  skillsets,  career-­‐specific  education  

and  training,  and/or  expanding  personal  networks  in  the  appropriate  field.  Thus,  Theory  of  

Change  should  be  understood  as  the  underlying  components  or  building  blocks  necessary  

to   achieve   the   mission-­‐oriented   goals   that   correspond   to   the   target   community   need  

(securement  of  careers,  in  this  case).    In  this  way,  the  components  specified  in  the  Theory  

of  Change  serve  as  the  facets  of  nonprofit  performance  that  should  be  measured.      

The   Design   Thinking   process   not   only   functions   as   a   method   to   identify   target  

community  need,  but  also   creates  a   framework   in  which  performance  of   the  nonprofit   is  

appropriately  gauged  by  their  ability  to  address  and  fulfill  the  various  facets  of  community  

need.   Performance   should   therefore   be  measured   through   the   process   of   gathering   user  

feedback  after  a  nonprofit’s  service/program  has  been  realized.  Using  the  aforementioned  

example  of  career-­‐oriented  objectives,  the  nonprofit  would  gather  the  following  data  upon  

completion  of  the  program  by  asking:    

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Was   the   user   able   to   identify   a   specific   and   personal   career   path?  Has   the  

user  progressed  in  their  development  of  career-­‐specific  skills?  Was  the  user  

able   to   obtain   career-­‐specific   training   or   education?   Did   the   user   develop  

meaningful   connections   with   others   experienced   in   the   respective   career  

field?    

By  addressing  these  questions  after  the  user’s  completion  of  the  program,  social  outcomes  

can  be  transcribed  as  quantitative  measurements.  Because  specific  community  need  is  first  

illuminated  and  defined  during  the  Empathy  and  Define  phase,  it  is  then  possible  to  obtain  

performance  measures  by  analyzing  the  nonprofit’s  ability  to  address  these  needs  through  

programs  or  services.  Thus,  the  analytic  comparison  of  empathetic  data  gathered  from  pre-­‐  

and  post-­‐interaction  with  the  nonprofit  can  therefore  be  used  as  an  accurate  evaluation  of  

performance.    

  Understanding   and   addressing   the   needs   of   users   is   equally   important   to  

quantifying   the   needs   of   donors   –   the   financial   backbone   of   operations   and   capacity   to  

serve.   Lissner   (2015)   explains   that   the   best   way   to   develop   the   community   at   large   is  

through  economic  stability  and  that  this  can  be  achieved  with  the  Design  Thinking  process.  

In  the  case  of  the  nonprofit,  establishing  economic  stability  is  primarily  dependent  on  the  

organization’s  ability  to  meet  the  community  needs  of  donors.  Robbins  (2006)  admits  that  

it  is  difficult  to  determine  the  modern  motivation  for  giving  in  today’s  world.  But  if  one  is  to  

approach  this  dilemma  with  a  human-­‐centric,  empathetic  design,  individual  motivations  for  

giving  can  easily  be  uncovered.  By  empathizing  with  the  donor  experience,  a  nonprofit  may  

first   quantify   the   specific   needs   of   donor   personalities   and   then   strategize   the   donor-­‐

nonprofit   relationship   to   best   address   these   needs   in   short-­‐   and   long-­‐term   interaction.  

  Hagler  15  

Here,  it  is  crucial  that  the  nonprofit  has  clearly  articulated  and  communicated  the  Intended  

Impact  and  Theory  of  Change  to  ensure  that  the  community  needs  of  both  donor  and  user  

are  aligned  and   treated  with  equal   importance.  Only  when   the  nonprofit  has  successfully  

addressed  the  community  needs  of  donors  can  programmatic  objectives  involving  the  user  

experience  move  to  center  stage.    

  The  Design  Thinking  process  is  best  suited  to  establish  a  framework  for  measuring  

performance  of  the  nonprofit.  Design  Thinking  enables  organization  leaders  to  clarify  and  

agree   upon   what   “success”   will   look   like   within   each   community   subgroup   by   first  

establishing  and  quantifying  the  underlying  community  needs  (Colby  et  al.,  2004).   In   this  

way,  Design  Thinking  may  also  be  used  as  a  means   to  align  and  unify  daily  operations  of  

nonprofit  employees  and  volunteers  once  mission-­‐oriented  goals  have  been  articulated  and  

agreed   upon.   Oftentimes   desired   outcomes   are   social,   emotional,   or   cultural   in   nature  

(Dillon,  2012)  –  outcomes  that  are  arguably  more  intangible  than  something  like  revenue  

or   sales,   but   nonetheless,   are   quantifiable.   Roberts   (2015)   suggests   measuring   health  

metrics,   behavioral   change,   and/or   psychological   markers   according   to   programmatic  

mission-­‐oriented   goals.   Through   the   Design   Thinking   process,   empathy-­‐generated  

feedback  gathered  before,  during,  and  after  the  individual  has  interacted  with  the  nonprofit  

allows   one   to   consistently   track   the   nonprofit’s   performance   by   their   ability   to   address  

community  need  (IDEO,  2015).    

 

Deeper  Implications  

  Not   only   is   the   development   of   performance   metrics   crucial   for   the   nonprofit   to  

strategize   efforts   to   best   address   target   community   need,   but   it   would   also   have   larger  

  Hagler  16  

scale  effects  if  it  were  to  become  universally  practiced.  The  nonprofit  sector  works  closely  

with  vulnerable  populations  on  a  daily  and  intimate  basis  –  opening  up  a  potential  window  

for   research   of   the   nation’s   underserved,   disadvantaged,   and   most   misunderstood  

population  subgroup  (Salamon  &  Sokolowski,  2004).  The  generation  of  social  data  would  

allow   research   to   inform   and   strategize   social   initiatives   to   meet   sociocultural   goals  

(McGregor,   2007).   If   universally   incorporated  by   the  nonprofit   sector,   the   social   impacts  

that  organization  leaders  witness  first-­‐hand  could  be  quantifiably  measured  and  presented  

in   order   to   rally   for   intervention   from   public   authorities   (Sawhill   &   Williamson,   2001;  

Bagnoli  &  Megali,  2011).  In  this  way,  performance  measures  could  provide  a  great  benefit  

towards   society’s   wellbeing   by   bridging   the   gap   between   for-­‐profit,   nonprofit,   and  

governmental  agencies.    

  Performance   measures   also   work   by   legitimizing   nonprofit   operations   across   all  

types   of   community   subgroups.   Sawhill   &   Williamson   (2001)   state,   “To   the   lay   public,  

measures   impart  a  sense  of   focus  and  business-­‐like  competence”  and  that  “the  mission   is  

being   carried   out   in   a   satisfactory   manner”   (Dillon,   2012).   Moreover,   this   perceived  

“business-­‐like   competence”   is   derived   from   the   inherent   tie   between   performance  

measures   and   “self-­‐imposed   ‘rules’   regarding   statute,   mission,   and   program   of   action”  

(Bagnoli  &  Megali,  2011).  This  measure  of   legitimacy  may  also  help  to  align  government-­‐

funding   allocation   with   effective   organizational   performance   and   generated   social  

outcomes  (Cordes  &  Weisbrod,  1998;  Smith  &  Lipsky,  1993).  In  other  words,  acceptance  of  

performance  measures  would   significantly  decrease   contract   failure  within   the  nonprofit  

sector   –   a   situation   in   which   a   user   is   unable   to   evaluate   the   quality   of   service,   thus  

incentivizing  the  service  provider  to  produce  a  lower  quality  service  (Young,  1998).  When  

  Hagler  17  

the  lay  public  can  easily  interpret  nonprofit  performance,  organizational  spending  becomes  

transparent  and  must  then  be  justified  by  the  ability  to  produce  social  outcomes  –  results  

dependent   on   successfully   addressing   the   focal   community   need   (Roberts,   2015).   In   this  

way,   “nonprofits   in   disguise”   –   the   primary   culprits   of   contract   failure   –   would   become  

extinct  due  to  a  shift  towards  a  more  informed  allocation  of  donor  dollars.    

  Performance  measures   can   be   extremely  marketable   in   this   way.   Roberts   (2015)  

explains,   “Twenty   years   ago,   individual   nonprofits   only   had   to   compete   [for   donations]  

with   the   other   nonprofits   in   the   neighborhood.   But   now,   you   have   to   compete   with   an  

organization  on  the  east  coast  of  Africa”.  In  the  age  of  the  Internet,  potential  donors  dollars  

can  be  allocated  to  organizations  in  all  areas  of  the  world.  Although  this  is  important  for  the  

progressive  wellbeing  of  mankind,   it   entails   that   increased  competition   for  donor  dollars  

manifests   a   harsh   reality   for   the   survival   of   individual,   local   nonprofits   in   maintaining  

economic   sustainability.  Performance  measures   could   therefore  be  used  as  a   competitive  

advantage  to  secure  donor  support  through  the  validation  of  intended  community  impact.      

  Performance   measures   not   only   legitimize   organizational   operations,   but   also  

tangibly   demonstrate   a   nonprofit’s   values   and   efficacy   in   addressing   specific   areas   of  

community  need.  Smith  &  Lipsky  (1993)  describe  nonprofits  as  “incubators  of  democracy”  

that   function   as   an   “idea   vehicle   where  we   can   express   individual   desires   through   civic  

participation”.   For   this   reason,   performance   measures   provide   a   visible   declaration   of  

organizational  values,  beliefs,  and  strategies,  making  it  much  easier  for  potential  donors  to  

identify  which  nonprofits  align  with  their  personal,  individual  desires.    

  The  Design  Thinking  process  of  generating  performance  measures  may  also  help  to  

uncover  modern  motivations  for  giving.  Tangible  data  regarding  a  nonprofit’s  performance  

  Hagler  18  

not   only   enhances   the   organization’s   reputation,   but   also   works   to   educate   donors   and  

potential  donors  about  the  logic  behind  programs  and  objectives.  Therefore,  performance  

measures  could  be  used  to  increase  advocacy  (McGregor,  2007).  Roberts  states,  “When  you  

become  more  educated  about  the  nonprofit,  you  can  become  a  better  advocate  for  them.  It  

also  shows  you  a  very  tangible  way  of  seeing  where  your  dollar  went”  (2015).  Moreover,  

performance   measures   enable   the   donor   and   potential   donor   to   move   past   a   basic  

understanding   of   the   mission   statement   –   effectively   addressing   their   “need”   for   a  

relationship  rather  than  a  transaction.  Coles  (1993)  argues  that  true  giving  can  only  occur  

when   the   individual   feels   like   they   have   been   given   to.   Thus,   by   using   performance  

measures  as  a  means  to  address  the  donor’s  desire  to  express  personal  values  through  civic  

engagement  and  to  see  mission  validated  by  action,  the  donor  will  feel  more  motivated  to  

give.    

  Development   of   a   framework   for   performance   measures   as   facilitated   by   Design  

Thinking  provides  a  clear  benefit  for  a  nonprofit’s  long-­‐term  vision  and  sustainable  growth.  

Through   the   process,   organizations   realize   long-­‐term   strategies   –   stretch   objectives  

encompassing   10-­‐15   year   goals   –   by   establishing   concrete   and   tangible   ways   to  

incrementally   progress   towards   achieving   the   lofty   mission   statement   (Sawhill   &  

Williamson,  2001).  The  development  of  Intended  Impact  and  Theory  of  Change  statements  

help   the  nonprofit   to   locate  other  areas  of  need   that  may  be  applicable   to   their  mission-­‐

oriented   goals   (Colby   et   al.,   2004).   Furthermore,   consistent   use   of   the   Design   Thinking  

process   of   attaining   “user”   feedback   enhances   the   nonprofit’s   potential   to   realize   and  

implement   innovative  products,   services,  and  strategies.  Not  only  does   this  maximize   the  

  Hagler  19  

nonprofit’s  ability   to  successfully  address  community  need,  but   innovation  also   functions  

as  the  competitive  advantage  vital  for  insuring  long-­‐term  economic  sustainability.      

 

Conclusions    

  The  development   of   performance  measures  within   the  nonprofit   sector   should  be  

realized  as  an  immediate  concern  for  all  subgroups  in  the  community  –  the  user,  employee,  

board,   donors,   and   the   general   public.   Limited   manpower   notoriously   seen   with   the  

nonprofit  sector  presents  an  undeniable  challenge  when  considering  just  how  realistic  this  

proposal   really   is   (Roberts,   2015;   Sawhill   &   Williamson,   2001).   Fortunately,   although  

Design   Thinking   does   require   a   dedicated   team,   the   process   itself   is   very   affordable   to  

pursue  (Lissner,  2015)  and  does  not  necessarily  require  that  the  nonprofit  hire  an  outside  

party.  Indeed,  the  global  design  company  IDEO  offers  a  comprehensive  self-­‐guided  option  –  

The  Human  Centered  Design  Toolkit  –   that   is   closely  modeled  and  extrapolated   from  the  

Design   Thinking   method   (IDEO,   2015).   Not   only   can   IDEO’s   toolkit   be   accessed   free   of  

charge,   but   it   is   also   specifically   geared   to   be   used   by   nonprofits   and   NGOs  worldwide.  

Thus,  failure  to  pursue  Design  Thinking  and  implementation  of  performance  measures  due  

to  hubristic  protection  of   resources   (time  and  money)  would  be   a  disservice   to  both   the  

nonprofit  itself  and  the  community  at  large.    

  It  is  important  that  performance  measures  as  generated  through  Design  Thinking  be  

a  primary  concern  because  it  will  ensure  long-­‐term  success  –  financially  and  structurally  –  

while  also  enabling  the  nonprofit  to  evolve  and  adapt  over  time  according  to  changes  in  the  

community’s  social  landscape.  Anheier  (2005)  argues,  “Finding,  defending,  and  optimizing  

niches  on  either  the  demand  or  supply  side  becomes  a  key  task  of  organizational  survival,  

  Hagler  20  

and   organizations   that   fail   in   these   tasks   are   more   prone   to   extinction   over   time”.   By  

consistently   interpreting  performance  using  human-­‐centric,  empathetic  methodology,   the  

nonprofit  may  continue  to  successfully  address,  compete,  and  adapt  to  best  serve  the  target  

community  needs  –  thereby  maximizing  long-­‐term  sustainability.    

  The  ultimate  goal  of  Design  Thinking  and  performance  measures  on  nonprofits  is  to  

positively  contribute  to  the  wellbeing  of  the  community  and  society  at  large  by  addressing  

individual   areas   of   need.   In   modern   times,   the   nonprofit   sector   has   become   inherently  

responsible   for   addressing   the   human   needs   located   specifically   within   one’s   own  

community.   Schneider   (2009)   explains,   “People   develop   social   capital   through  

participation   in   voluntary   [nonprofit]   associations   and   this   participation   serves   as   the  

building   blocks   for   civic   engagement   and   healthy   communities”.   For   this   reason,   it   is  

important  that  the  nonprofit  sector  universally  implement  performance  measures  in  order  

to   prevent   and   eliminate   nonprofits   in   disguise   from   having   adverse   effects   on   the  

community   and   social   progress.   Thus,   in   order   for   the   nonprofit   sector   to   effectively  

contribute   to   the   collective   wellbeing   of   society,   they   must   individually   develop   and  

implement  a  framework  for  measuring  performance.  The  human-­‐centric  process  of  Design  

Thinking  is  ideal  for  this.    

 

 

 

 

 

 

  Hagler  21  

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