External KPIs

A project can track dozens of metrics internally. Only a few of them matter to the outsiders who fund it. External KPIs are that select few.

The workbook's own words: "only a select few, deemed pertinent, will be utilised by outcome funders and risk investors for third-party assessment (external KPIs). The remaining KPIs must be formulated for internal monitoring and control of the project by the Project Management/Social Enterprises (Internal KPIs)."

External and internal KPIs are not rivals. The workbook says internal KPIs feed information into external KPIs — the day-to-day numbers a project manager watches ultimately support the handful of headline figures a funder relies on.

Two things must happen for external KPIs to work, per the workbook's guidance in section 4.3.2:

1. They must be distinctly outlined at the listing stage. Key project stakeholders, working with Project Management or the Social Enterprise, must clearly separate out which KPIs are external and which are internal — this is not left to be decided informally later.
2. All KPIs must be objectively verifiable, and the means of verification for each must be set out at the project design stage — whether that verification is measurable or non-measurable is itself something Funders and Project Management must jointly determine.

The workbook also ties external KPIs to reach, depth and inclusion: the attributes chosen for these — covering social, environmental and cultural parameters — are described as contextual and program-specific, meaning there is no fixed universal list; each project defines its own, appropriate to what it is trying to show outsiders.

Illustrative figures.

A skilling project for 3,000 young adults tracks 22 metrics internally — attendance per batch, trainer ratios, weekly test scores, drop-out reasons, cost per session and more.

At listing, the project team and outcome funders agree only 4 of the 22 will be reported as external KPIs:

The other 18 metrics remain internal KPIs — useful for the project team to fine-tune delivery week to week, but not reported externally because they are either too granular for an outside funder to act on, or feed indirectly into the 4 metrics that are reported.

Chapter 4, section 4.3.2 (Addressing core issues in establishing Key Performance Indicators within the Logic Model), draws the external-versus-internal KPI distinction directly. Expect a question asking who uses external KPIs (outcome funders and risk investors, for third-party assessment) and at what stage they must be defined (the listing stage).

• External KPIs are used by outcome funders and risk investors for third-party assessment; internal KPIs are for the project's own monitoring and control. Swapping the two is the most common error.
• Internal KPIs feed external KPIs, not the reverse — the relationship runs from operational detail up to headline reporting.
• Which KPIs are external is a project-specific decision made at listing, not a fixed, universal list applied to every project.
• All KPIs — internal and external alike — must be objectively verifiable. "External" does not mean a lower evidentiary bar; if anything, external KPIs face more scrutiny since outsiders rely on them directly.
• Do not confuse this distinction with Contribution, which is about how much of an outcome to credit to the enterprise — a separate question from which KPIs are reported to whom.