top of page

When is Being Different Not a Virtue for Nonprofit Organzations? The Importance of Benchmarking

Statistic designs

0ften standing out from the crowd can be a positive thing. It can connote self confidence and commitment to not being mediocre. 

But when it comes to managing a nonprofit, sometimes being proud of being different can indicate an unwillingness to question past practices, a “not invented here” mode of thinking, and an unwillingness to reflect. In these instances, benchmarking information that compares one institution’s performance to that of respected peer institutions can help nonprofit leaders determine if being different is justified or not. 

I will cite an illustrative story related to independent day schools.  I was meeting with a veteran Head of School at a well respected day school in Northern New Jersey, sharing a report that indicated how this school’s key performance ratios compared to those of peer institutions. We got to the page showing the Preschool student-to-teacher ratio for this school compared to those of local and national peers. It indicated that this school had a much lower student to teacher ratio than any of its peers.

The Head of School’s reaction was joyful. They said, “That is great to see. That is who we are and where we want to be!” The grin turned to chagrin when I then shared, “That is fine but just know that this cost your school an incremental $300k last year.” The Head of School reflected and said, “Well maybe we don’t want to be quite that different!” 

The Three Key Questions that Effective Benchmarking Answers

Man with Key

Benchmarking relative to respected, similar peers, provides an external perspective for the nonprofit leader to understand how their resource generation, expenditures, and program results compare to those of others and where they are similar and different. There may be very valid strategic and tactical reasons for deviation, but it is healthy to know about these deviations and question whether they are actually beneficial versus simply and the different based on historical practices whose rationale is unclear and unverified. The most effective benchmarking processes take the trouble to answer the following questions:

  1. What is the magnitude of our differences?

  2. Why are our results different? Is there a valid reason? Does the difference result in an outcome tied to our Mission or marketplace success?

  3. How would we go about improving our performance should we want to do so?


Nonprofit organizations that are reflective and data driven utilize benchmarking to know the answer to all three questions for their organization's sources of revenue, staffing patterns, compensation amounts, and purchased goods and services expenditures. They have a well thought out, data informed reason for what they do--that has been validated by external analysis-- and are thereby able to maximize their value propositions and ensure their financial vitality. In my experience, it is often the more successful and sophisticated institutions that gravitate to benchmarking, although it can actually be even more beneficial to organizations that are struggling. 

Benchmarking for Good, Inc., is a 501(c)(3) nonprofit organization whose mission it is to assist nonprofits to design and conduct Benchmarking Programs tailored to their needs and circumstances. These programs have helped scores of nonprofits generate incremental revenues and reduce unneeded expenditures and thereby maximize resource utilization and Mission attainment. 

Contact Dr. Harry Bloom at to learn more about our Grant Programs

bottom of page