VPP has worked to capture the performance and accomplishments of the nonprofit organizations in which it has invested--the portfolio--in a variety of ways:
- Milestones and Annual Reviews: We work with the investment partners to carefully assess their progress against goals (milestones) that they establish for themselves at the onset of the investment. VPP and its nonprofit partners undergo an extensive annual review of how well expectations have been met, that is, specifically how the organization performed with regard to the established milestones. This review is started at least ninety days prior to the agreement annual anniversary date with a Conveyance Letter that conveys initial expectations, documents accomplishments, and identifies areas requiring attention. This kicks off a process in which the organization's performance to milestones is assessed and then mutually discussed. Starting in 2006, Individual Investment Partner Summaries provide yet another way to assess progress and calibrate the investment partnership. Then based on what has been accomplished and what yet is to be done, milestones for the year ahead are confirmed or re-aligned. The annual review is greatly facilitated by the close working relationship of the VPP investment team and the nonprofit's leadership throughout the year.
- Quarterly Progress Capture: Another process, conducted on a quarterly basis internally by the VPP investment team, captures progress achieved, notable accomplishments and issues, and the respective experience of the investment relationship.
- Individual IP Summaries: As part of the annual review, the Individual IP Summaries (as described earlier) comprise two qualitative assessments:
- Progress Description: VPP develops a synopsis of the organization's overall effectiveness, key accomplishments, and a snapshot of the investment--total funding, children served, revenue growth, etc. This information is reviewed with the Investment Partner and is generally available through the VPP website and various publications.
- Assessment and Improvement Indicators: VPP more specifically assesses the progress each organization has made in strengthening its performance culture and organizational development in 13 specific categories: Overall Effectiveness, Overall Sustainability, Expanded Thinking, Accountability, Management Rigor, Outcomes Orientation, Mission and Goals, Senior Management, Effective Board, Capital and Financing, Financial Accountability, Programs and Services, and Outcomes Assessment.
This assessment tool uses two sets of indicators, one to show how much an organization has improved and changed in each area and another to represent the actual quality of performance in each area. To date, VPP has established Improvement Indicators for each organization, based on performance to milestones and the best judgment of our partner team. These Improvement Indicators are reviewed, discussed, and thoroughly vetted with the leadership of each investment partner.
The Assessment Indicators have not yet been implemented. They are defined and provided to illustrate how we will continue to evolve and refine this annual review process. We will continue to establish rigorous methodologies in the future, building on the capacity grid approach developed by McKinsey & Company in publishing their report for VPP, the Effective Capacity Building in Nonprofit Organizations.
