Creating a Financial Index for Thurston County Nonprofit Organizations

Nonprofit directors in Thurston County lack a measure to gauge the financial health of nonprofits, including trends in donor giving, government and private contributions, program revenues, and services provided. We studied the feasibility of creating such a measurement index. The purpose of a financial index for nonprofit organizations is to communicate with the public – especially potential donors – regarding the general trends in financial support, services needed in the community, local charitable giving, and the nonprofit sector’s ability to meet community needs. Rather than oblique, general statements encouraging community support for a given cause, the local nonprofit community could point to trends of giving and their ability to fulfill local service requests – trends drawn from consistently-gathered data series over time.

We found that such a measurement index and database would be feasible undertakings for improving communication between the nonprofit sector and citizens of Thurston County. Specifically, we pose three recommendations:

  • that the index be constructed from a stratified, non-random, purposeful sample of twenty 501(c)(3) charitable nonprofit organizations that focus their service areas on Thurston County;
  • that the database be hosted at a graduate academic institution as a long-term partnership with the local nonprofit sector with graduate students determining the actual index rating; and
  • that selected nonprofits be surveyed annually for numbers of service requests, clients served, and contributions received; that public economic data such as employment and wages be refreshed every 2 years; and that an in-depth qualitative survey be given every 4 years to directors of the non-profits selected.

Through examples discussed in the report, we find that other communities have successfully measured economic impacts from their local nonprofit organizations. This suggests that there are models to emulate when considering creation of a Thurston County measurement tool. However, the examples also show the difficulty of measuring data for which there is not a standard reporting system already in place.

To view the complete report, please click the links below.

Feasibility Study

Annotated Bibliography