Many philanthropic initiatives are headed by people who are very passionate about the issues they are trying to resolve although often these very people are not experienced or well-trained as effective managers or organizational leaders. While passion is essential, management skills are critical to ensure an efficiently run organization.

In commercial businesses, which sell products or services, it is relatively straight forward to compare similar businesses in quantifiable terms such as selling price of their products, volume of sales, overhead costs and relative profitability. Such comparisons are not as readily available in the non-profit sector, making the identification of effective charitable organizations significantly more difficult.

To address these issues, VPC applies CPR³ for IMPACT to identify effective non-profit organizations. CPR³ for IMPACT is designed to create meaningful value for every organization that undergoes our process. VPC works with the non-profit organization to focus on generating results through the development of KPIs rather than on day-to-day activities.

VPC believes that the main factors relating to this “grey” reporting are as follows:

· A lack of focus on direct results

· A lack of transparent reporting on direct results

· A lack of a definitive cost to achieve each direct result

In our view, the non-profit sector often focus on the impact of their activities. However this can be, and often is, influenced by external factors as well as other non-profit organizations all of which are beyond the project’s control.

which is usually in the projects direct control, or at least very strongly influenced by the project. The broader impact of the activities and results of the project are however strongly influenced by external factors and are not necessarily within the project’s control. Furthermore, the impact of a project’s activities and results is usually longer term in nature and hence more difficult to report on in a timely manner. The evaluation of a project’s impact can also be a costly exercise and is perhaps best undertaken independently from its management team.

All the above demonstrate why it is difficult to report on impact and supports the reason VPC ensures a project remains focused on direct results and concentrates its efforts on achieving these in the most efficient and effective manner possible.

As a function of the CPR³ for IMPACT process, VPC ensures that a project identifies its key results and objectives at the outset, and works with management to develop plans that are focused on achieving these measurable results.

Solution – Transparent, Accurate and Meaningful Reporting on Direct Results

With CPR³ for IMPACT, non-profit organizations are capable of providing far more transparent, accurate and meaningful reports to all stakeholders. With a focus on direct results, the outcomes and achievements are then identifiable, quantifiable, clear and concise, all of which are a pre-cursor to producing meaningful and transparent reports.

Solution - Cost Per Result

It is essential to any investor, whether social or financial, that the cost of their investment is understood at the outset, together with the anticipated return. In theory, the social return on investment (SROI) formula is a good measure of a non-profit organization’s impact. However, in practice this concept is still under significant debate with input metrics often highly subjective, creating what some feel are questionable results. VPC has devised a more simplistic and practical method – Cost Per Result (CPR²) calculation, which is expanded hereunder.

Non-profit organizations seldom report on their Cost Per Result (CPR²) and usually do not calculate this in an all encompassing manner (i.e. not only considering direct costs but including distribution, overhead, administration and marketing costs). In all other sectors of the world, purchasers appreciate buying a product or service and understanding the associated costs up front. In the non-profit world, this is seldom the case. VPC believes that a more effective approach is to develop a detailed plan for the intended results and then measure the actual achieved against this at each reporting period. Such an objective approach to each organization’s CPR² will facilitate future comparisons of similar projects and will be a reliable measure of year to year performance.

Communication demands can result in additional costs for a non-profit where many donors require different forms of reporting and communication, often related to specific areas they have funded. Restricted funding received by non-profits to support certain functions often strangles their operations and limits their ability to allocate funds to other important areas, including essential administration or management costs to name a few.

VPC facilitates ongoing transparent and meaningful communication between the donor and the non-profit organization by establishing key yet reasonable requirements at the outset. VPC will remain answerable to, and plans to have an extended working relationship with both the donor and the project.

VPC’s monitoring, evaluating and reporting functions ensure accurate communication between the project and the donor, while allowing the project to focus on achieving results and the donor peace of mind knowing that their donations are being put to work in an effective business-like manner.