How to write an amazing Statement of Service Performance
One of the new requirements of the External Reporting Board’s financial standards for Tier 3 and 4 Not-for-Profits (NFPs) is the preparation of a statement of service performance (SSP) report. In the NFP sector, major fund and grant providers are paying particular attention to both non-financial and financial information when weighing funding decisions. A well thought out SSP can demonstrate how the funder contributes to your successes (and challenges) and exactly what their funding helped deliver throughout the year.
At a minimum, a statement of service performance must report on two aspects; outcomes and outputs. Tier 3 NFPs must report on both outcomes and outputs, while Tier 4 NFPs need only to report on their outputs.
An outcome is what impact a NFP is seeking to have on its local community or society in the short to medium term. Outcomes are often confused with mission statements. Where missions are typically lofty and aspirational, outcomes are focused on the specific results your NFP is trying to achieve. For example, the Fred Hollows Foundation has a mission to eliminate preventable blindness but the real world outcome of this mission would be training doctors and nurses in eye surgery.
Outputs are the measureable goods and services that your NFP delivered during the year. For the Fred Hollows Foundation, the number of eye surgery training hours completed by doctors and nurses would be a measureable output.
Outputs are usually non-financial information, such as how people were reached, or how many times you performed an activity of benefit to the wider community. The amount of money spent on a key activity may not be a worthwhile disclosure as this information will already be disclosed in the financial statements.
You only need to report on significant outputs, so don’t worry about reporting on everything your NFP achieved in the year. Some significant outputs are not quantifiable, so only report quantities if it makes sense to. Otherwise, write a description. Feel free to add other relevant details or local context, if you feel this adds to your reader’s understanding.
For audited NFPs, bear in mind that your auditors will need to spend time understanding and testing the accuracy of the outputs presented in your SSP. This means that good record keeping for each output is crucial.
For organisations who rely on government contracts or grants, outcomes and measureable outputs can often be drawn from these funding agreements or contracts. Outputs can be taken from set milestones or performance measures required by the funder, while outcomes are often explicitly stated in the agreement.
For assistance with preparing your NFP’s SSP, contact your local BDO adviser.