The Rise, Rhetoric, and Reality of “Impact” in Nonprofit Funding

The nonprofit sector has long been expected to demonstrate results. The expectation is fair, necessary and a part of responsible stewardship. Today, however, the conversation is shifting rapidly and across the sector.

Funders are no longer asking for outcomes alone. Increasingly, they are asking for impact.

Before fully embracing this shift, it is worth examining what “impact” means, who defines it, and what it requires in practice.

From Outcomes to Impact

For decades, nonprofits have demonstrated accountability through such measures as:

+ What programs were delivered and how many people were served (process measures)

+ What changes occurred over a defined period of time (outcome measures)

Importantly, the use of data – especially longitudinal data - has strengthened programs, informed evidence-based practices, and improved services across the sector.

Now, expectations are evolving. Funders increasingly want evidence of impact - a term that suggests deeper, broader, and more lasting change. But unlike outcomes, impact is not consistently defined.

For some, it means long-term change. For others, system-level shifts or return on investment.

The result is a powerful but ambiguous expectation.

What Counts as Impact?

“Impact” has become more than a measure. It is a form of rhetoric, and a claim in collateral materials across sectors, that is used to signal importance, often without clarity.

Measurement alone cannot answer the question, “what counts as impact?”

Quantitative data tells us what changed. But understanding why and how change occurs requires context, lived experience, and community voice.

This is where ethnographic insight is essential.

* Stories, observations, and community perspectives add depth and meaning to data. Without them, we risk mistaking what is measurable for what is meaningful.

A true understanding of impact requires both rigorous quantitative data and ethnographic insight.

Who Defines Impact?

Too often, nonprofit impact is defined externally - by stakeholders removed from the daily realities of nonprofit work.

Nonprofits bring critical expertise: deep knowledge of the issues, direct relationships with communities whose lived experiences shape services, and a grounded understanding of what meaningful change looks like.

When these perspectives are excluded, services can end up being shaped by metrics alone rather than need, and complex change may be reduced to simplified indicators.

The Reality of Measuring Impact

The reality behind impact is far more complex than the language suggests.

Nonprofit work is influenced by economic conditions, policy environments, and community dynamics. Change rarely happens quickly or in isolation.

Yet expectations often assume short timeframes, clear attribution, and easily measurable results.

Measuring impact correctly requires resources - staff, systems, and expertise - that many organizations lack due to historic barriers that have yet to be corrected.

The Risk of the Rhetoric

As impact becomes dominant language, there is a risk that rhetoric outpaces reality.

We may measure what is easiest rather than what matters most, prioritize data over lived experience, and create the appearance of precision without capturing real change.

Overreliance on either data or narrative creates an incomplete picture.

Toward a More Balanced Approach

This moment calls for balance and partnership.

If impact is the goal, nonprofits and communities must help define what impact means, what can be measured, and what resources are required.

A balanced approach recognizes that not all impact can be quantified and integrates both data and ethnographic insight.

A Moment to Shape the Future

The shift toward impact is not going away, but it is still being defined.

Nonprofits have an opportunity to ensure that impact measurement strengthens the work, reflects real change, and builds understanding.

The rise of impact is clear. The rhetoric is powerful. But the reality is still unfolding, and it must be shaped with clarity, not just conviction.

FUNDING THE FUTURE: A NONPROFIT STRATEGY SERIES

At Nonprofit Westchester, our mission is to strengthen the nonprofit organizations that serve our county. Part of that responsibility is supporting our community of professionals to anticipate shifts in the funding and resource development landscape, adapt strategies for the future, and not simply react to these trends but to help shape them.

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At NPW, we do not accept the status quo. NPW activities reflect a learning mindset where best practices are shared, and, at the same time, thought leadership is developed and new ideas are embraced.

This series—Funding the Future: A Nonprofit Strategy Series—is designed not just to track change, but to help nonprofits lead it.