The Center for Effective Philanthropy’s (CEP) Room for Improvement report is a very welcome addition to research on how nonprofits (or charities in the UK) can get better at assessing their own performance. This subject can generate a lot of sound and fury, and it is refreshing to see a well-researched study that raises some important questions and provides some useful qualitative and quantitative answers.
A number of CEP’s findings fit very much with New Philanthropy Capital’s (NPC) experience of advising both nonprofits and funders on how to measure impact. We find most nonprofits want to understand their performance so they can improve their services and make their case to funders. There is a lot of interest in how to do this efficiently and effectively, and most nonprofits are keen for any useful advice.
We also find that funders, such as foundations and government agencies, want their grantees to improve the quality of the evidence they generate—a goal we share. But, at the same time, nonprofits get frustrated with reporting different measures to different funders who have similar aims. We produced our own report on this, titled Turning the Tables, a few years ago.
Our own research and experience is also consistent with CEP’s finding that funders can be most helpful by providing more funding for monitoring and evaluation (M&E). Making funding for this a line item in grants can be useful, in part by sending a signal on the importance of monitoring impact or performance to grantees.
But where the CEP study is most useful is digging into the issue of how funders can be most helpful and pointing out how they might be part of the problem rather than part of the solution. Only 32% of the nonprofit leaders who responded to CEP’s survey agreed that foundation funders have been helpful in assessing progress. Moreover, the report shows that funders who tend to focus on their own data needs—perhaps because they are anxious about their own legitimacy?—are less helpful than those who are committed to helping grantees improve their internal M&E capabilities. That is sobering and should make foundations pause for thought.
What I find most striking is that the survey respondents want more non-monetary support on measuring their progress as well as funding to help them do so. The conventional wisdom on performance measurement is that professionals in general—and this includes teachers, social workers, doctors, and so on—resist attempts to measure individual performance. In contrast, most of CEP’s respondents want a greater focus on what their organizations are achieving and how to get better at measuring their progress. This is very encouraging, and may represent a cultural shift. Our own research similarly suggests that while funders have led the charge on measuring impact over the last couple of decades, many nonprofits have embraced the idea and some are now even ahead of their funders in achieving the right balance between ambition to measure performance and an understanding of what can sensibly be measured.
This suggests that we (in the UK and possibly in the US) are moving into a new phase for how nonprofits measure impact. It is not so much the case that nonprofits need to be persuaded to measure their performance or impact. It is a question of how best to do so and how to remove the barriers to measurement. This requires collaboration between funders and nonprofits over what is possible and what makes sense.
The appropriate funder-grantee model is not a consumerist one, where a funder “buys” a set of specific outcomes for a fixed amount at arm’s length the way you might buy fruit at a market. The outcomes of nonprofits, even good ones, are too uncertain and difficult to pin down to make that model work properly. What is needed, as this report shows, is for nonprofits and their funders to sit down together, roll up their sleeves, and address the tricky issues of measuring impact. This report makes that clear, and should be a call to both funders and nonprofits alike to start, or continue, those discussions.
The release of this report also neatly coincides with research that we, at New Philanthropy Capital (NPC), have led on similar issues, using responses to a survey sent to a randomised sample of 1,000 charities in the UK. Our report will be published on October 16th and available on our website the following day.
David Pritchard is Head of Measurement and Evaluation at New Philanthropy Capital.
Join the conversation about the findings featured in Room for Improvement: Foundations’ Support of Nonprofit Performance Assessment on Twitter using the hashtag #granteevoice.
- Five Hurdles to Nonprofit Performance Assessment
- A Crucial Missing Link: Where’s the Foundation Support for Nonprofit Assessment Efforts?
- Recasting the Relationship Between Foundations and Nonprofits
- A Wake-Up Call for Funders: Effectiveness Requires More Support for Grantees’ Assessment Efforts
- Wearing it Proudly: Clarity on Being Nonprofit