I was recently talking with a colleague about how it’s time that we, as a sector, revolutionise our approach to impact measurement. This got me thinking about another component of the for-purpose sector that might benefit from being shaken up a little: grant-making. Having worked as both a fundraiser and a grant-maker, I’ve been musing for a while on what could benefit all parties. This article is first of a two part series that summarises my thoughts and insights on the topic. 

Establishing the effectiveness of philanthropic donations can be extremely difficult, especially when you’re seeking to address cross cutting social issues. When making large philanthropic donations and grants, it can be tempting to take a contractual approach: agreeing quantifiable targets for the recipient to report on a regular basis. While this is an important starting point, donors should seek to build open and long-term relationships with the not for profits (NFPs) they support to achieve the greatest impact for the end beneficiary.

Numbers don’t tell a story: service delivery
There are very few areas of life where we believe that cheapest is best. The cheapest car? The cheapest hotel? The cheapest lawyer? Yet, when it comes to NFPs we often succumb to the belief that the organisation reaching the greatest number of people on the smallest budget is the one most worthy of our support.

NFPs are incentivised to produce big numbers and are consistently under pressure to ‘do more with less’. NFPs should, of course, deliver efficiently – but a balance must be struck to ensure quality is not compromised.

NFPs typically deliver services for which the end user does not pay (or does not pay the full cost). The feedback loop is therefore much looser than in the private sector (where user demand defines value though decisions on quality and price point) and does not necessarily include input from the end user.

Numbers don’t tell a story: social challenges
NFPs work to address social problems that are complex and multifaceted. The causes of inequality, poverty, homelessness and addiction, for example, are complex and multifaceted. As a society, our responses must address these challenges appropriately.

Balance the focus on short-term, quantifiable outcomes with progress towards identifying and addressing the root causes of social challenges. Some funders need to go where the problem is and the money currently isn’t. Funders who are truly interested in solving social challenges need to be open to working with NFP partners who take measured risk in trialling new solutions to tackle complex problems.

Quantifiable information is helpful, but rarely creates a full picture of NFP impact. Getting the question and method right is crucial to impact evaluation. We need to identify important questions and answer them reliably. In working towards long term, sustainable social change donors should look at the NFP’s theory of change and work with the organisation to demonstrate rather than prove their impact. This shift in perspective, when made authentically, can enable more a holistic capture of genuine impact.

Keep an eye out for part 2 of the tips for grant-making greatness series, which will go live next week!

2 Comments

  • Abi Taylor says:

    Hi Jonny,
    Thanks for your reflections. I certainly agree that NFPs should collect and analyse data to help understand their impact and to improve their work (look out for part two of this blog!). My experience is that most NFPs are either doing or are working towards this. Where I see space for improvement is funders focusing their monitoring on capturing quantitative information at the expense of qualitative data, in turn pushing NFPs towards more narrow M&E. I’d like to see funders taking more of a holistic interest in social impact – though I know many funders have resource constraints of their own to contend with.
    Abi

  • Jonny says:

    This is interesting. I would agree that numbers aren’t sufficient to understand impact but my experience here in the UK is that not for profits are too easy to use that as an excuse not to sweat their numbers. Everybody should be thinking about what they can do with their database in terms of recording richness of information and generating analysis to illustrate what’s going on with their work, which could be about beneficiary need, the difference they’re making and everything in between. Everybody involved in managing the data should know what can be achieved with a simple Excel pivot table, even if they have to ask a friendly geek to do the work.

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