Nonprofits: Forget ROI. Here’s a better way to measure social media

For some, it’s impractical to try to measure social media’s return on investment. Try asking “To what end?” instead of quantifying cost savings.

I’ve been mulling over social media return on investment (ROI) and how it doesn’t necessarily work for nonprofits, especially when organizations apply it as a litmus test to see if it reduces cost or increases revenue.

Don’t get me wrong. I believe that for social media to be effective, organizations must align it with their communications objectives. But for nonprofits, those objectives are not solely money or efficiency for everything that can be measured.

By aligning social media to organizational objectives and using measurement, you can answer this question: “Of all the ways we could be investing our resources, is social media the best choice to get the social change results that we want to see?”

For more than 90 years, ROI has been polished, refined and so deeply embedded in business thinking that Wall Street views it as the only legitimate way to measure business performance.

Should nonprofits use a narrow ROI definition in their quest to improve program results? Why not apply a “theory of change” method instead?

Why use a theory of change?

In his essay on how nonprofits can use a theory of change, David Hunter asks and answers this question: “How can nonprofits walk the line between unsupportable optimistic claims and mind-numbing ‘over-measurement’?”

A theory of change is a specific, measurable description of a social change initiative that forms the basis for strategic planning, on-going decision-making and evaluation. It defines all the results and preconditions required to achieve a long-term goal on a visual map that lays a pathway for social change.

How it works

In its simplest form, a theory of change consists of a series of “so then” statements that guide an organization’s programs to achieve socially meaningful outcomes. It requires stakeholders to articulate underlying assumptions which the organization can test and measure, and it charts an incremental path toward results.

In their paper, “You Can Get There From Here,” James Connell and Adena Klem define a theory of change as a description of why and how a program or initiative works. A theory of change should be:

1. Plausible. Stakeholders believe the logic of the model is correct, “If we do these things, we will get the results we want and expect.”

2. Doable. Human, political and economic resources seem sufficient to implement the action strategies in the theory.

3. Testable. Stakeholders believe there are credible ways to discover whether the results are what they predicted.

4. Meaningful. Stakeholders see the outcomes as important, and the magnitude of change in these outcomes was worth the effort.

Integrating social media measurement with your theory of change

It begins with a “To what end?” discussion on your team that leads to articulating objectives. The intent is to get past saying, “We’re going to get 1,000 fans on Facebook.”

If you keep asking “To what end?” and laying out the results, you can see the road ahead. You can’t prove cause and effect, but you begin to see how to move along the path.

Social media is often seen as a separate thing relegated to an intern or part-timer who works in isolation; the efforts are not aligned or connected with larger organizational goals. Perhaps using a theory of change model can help with alignment beyond tactics or financial results.

What do you think? Does your organization use a theory of change that identifies precisely how and where social media fits in? I’d love to hear about it in the comments.

You can learn more about theory of change at the Philanthropy 411 blog.

Beth Kanter is a visiting scholar at the David and Lucile Packard Foundation, and is a co-author of “The Networked Nonprofit .” She also writes Beth’s Blog: How Nonprofits Can Use Social Media, where a version of this article originally ran.

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