Unintended Influence of Funder-Mandated Performance Metrics on Nonprofit Service Delivery

Overview: Nonprofits receive financial support from external sources, often having to engage in performance evaluation driven by funder priorities. This qualitative study explored the perceptions of employees within nonprofits regarding the influence of funder-mandated performance metrics on service delivery. Findings examine the unintended influence and social justice implications for service delivery.Proposal text: Nonprofit organizations fill an important societal role, working to address multifaceted social issues that are often large in scale and impervious to change (Carnochan et al., 2019; Head & Alford, 2015; Lee, 2020). To provide high-quality, impactful, and effective services, nonprofit organizations also face the high-stakes challenge of presenting evidence of significant social change to avoid losing critical financial support (Kim et al., 2019; Mosley et al., 2019; Prentice, 2016). Nonprofit leaders are required to provide non-financial indicators to convey to funders that they have used the funding effectively to impact clients' lives in a successful and positive manner. Accountability demands made by funders primarily focus on short-term outcomes, constraining agency learning, or the ability to work toward complex issues with long-term goal setting (Bryan, 2019; Carnochan et al., 2019). The difficulty is finding a balance between accountability and transparency to external funders while meeting the needs of clients and employees and providing services that facilitate positive social change in alignment with the agency's mission and values (Campbell & Lambright, 2016; Frayne, 2014). Although metrics can help hold nonprofits accountable for their work and potentially aid them in effectively allocating limited and competitive resources, the expectations for performance measurement may create obstacles for nonprofits. Such obstacles may include socially constructing definitions of performance, effectively defining the impact upon client services, and identifying barriers to implementation of evaluation standards.

Methodology
This qualitative study utilized a grounded theory methodology to explore the perceptions of administrators and staff members within nonprofit organizations regarding the influence of funder-mandated performance metrics on service provision. A purposive sample of 16 direct service providers and administrators from eight nonprofit organizations engaged in semi-structured interviews. Participants were recruited from multiple agencies within one major metropolitan city located in the Midwestern United States. The interviews utilized a semi-structured and were initially in-person, however, due to agency closures and lockdowns associated with the COVID-19 global pandemic, subsequent virtual interviews were conducted over the phone or via Zoom.

Results
Qualitative analysis revealed that funder-mandated metrics influenced nonprofit organizations across three main themes including the client, program, and agency levels. Notably, findings suggest that several outcomes unintentionally influence definitions of client success, the client-provider relationship, and client experiences. Funder-mandated metrics requirements can impose subjective and restrictive definitions of success on clients. These metrics can also influence the relationship between direct service providers and clients, influencing the scope of services and time allocated to working with clients. Finally, the influence of metrics can be directly experienced by clients, who often felt less autonomy over their personal goals and decision-making.

Conclusions
As nonprofits continue to navigate these funder-mandated metrics requirements, understanding nonprofit staff perceptions on the influence of funder-mandated metrics upon service provisions becomes more relevant. There is a clear need for funders to take direct action towards building more evaluation capacity among nonprofits, as well as to reevaluate metrics requirements of agencies, particularly with concern around what metrics are normalized, cultural-bound or are privileged.