Measuring philanthropic impact via effective monitoring and evaluation

“Is the money I donated having an impact?”

“Will the money I give create the lasting change I want to see?”

Many families and foundations struggle with these questions, wondering if their grants are creating the positive change they desire. That is why it is important to understand the role that monitoring and evaluation can play in the assessment of programs, grantees and your overall philanthropic strategy.

First, some definitions to help you understand the measurement concepts:

• Monitoring refers to periodic “check-ins” with a nonprofit during the term of the grant.
• Evaluation is the final assessment at the end of the grant term or beyond.
• Outputs are tangible in nature as the immediate results or direct products or services.
• Outcomes are the effects or changes that follow the outputs. Since outcomes occur gradually over time, and are influenced by many external factors, it’s not easy to attribute them to one specific program or grant. Typically outcomes are measured in research control trials.
• Quantitative measurements, expressed numerically, include outputs and metrics that can be used to track progress.
• Qualitative measurements include narratives and stories about how those outputs were provided or how the activities have helped to achieve long-term goals of the organization you support. For example, it’s not only the fact that X number of meals were provided, it’s also important to know how the recipients engaged in this service – Did they feel secure in the space provided? Did they feel a sense of dignity? Were they comfortable as they were served the meals, etc.?

Monitoring various support types

There are many types of support that funders can provide to nonprofits and each support type needs its own monitoring level and frequency. Typically, with general operating support grants, there are no quantitative measurements to monitor or evaluate, as the nonprofit isn’t obligated to track how the funds were used. In this case qualitative measurements, such as a brief narrative can be a useful way to understand how the organization is achieving its long-term goals.

For more complicated programmatic support, which may require the nonprofit to track specific outputs and how the grant funds were spent, a budgeting process can be a useful tool. The budget should be established upfront and incorporated into the grant agreement, along with the milestones to be achieved and the timeframe in which to achieve them.

A budget verse actual report, coupled with a narrative, can be useful tools to monitor and evaluate a program or grant. The frequency of monitoring by the donor should be commensurate with the amount of the grant and should not become an administrative nightmare for the nonprofit.

Monitoring does not need to be complex. Stay focused on what can be reasonably answered and determine what constitutes valuable information to track. Development of measurements or milestones for the nonprofit should be a collaborative effort between the funder and the nonprofit, as you are both in this together and focusing on the same results. Engaging an outside expert that has knowledge in a particular field of interest can be beneficial in the development of milestones with the nonprofit and how best to monitor and ultimately evaluate the program. 

This collaborative effort between funder and nonprofit can be taken a step further towards the democratization of grant-making. Simply stated – any person that’s affected by the grant-making decision deserves to have a voice in making that decision. Involving the ultimate intended beneficiaries and those closest to the issue at hand can lead to better outcomes. Those that actually experience a problem first-hand have in-depth knowledge and often identify new ways to assess and tackle those problems.

Democratization

Listening is clearly the important first step towards democratization. Listening to the needs of the grantees, and also those of their beneficiaries, helps to ensure that funding decisions aren’t made in a vacuum. But full democratization of grant-making would mean the funder gives up control, actually shifting the power balance from funder to a shared practice of decision making and resource allocation among funder, grantee and beneficiary. 

Partnering with a nonprofit over a longer term can go a long way to help measure outcomes. Multi-year grants can be an effective grant-making strategy that signals to the nonprofit the donor’s commitment and support over an extended period of time. It allows the nonprofit the ability to think longer term from a programmatic standpoint and gives them the ability to course correct as needed. It also provides valuable long-term data needed to measure outcomes.

Trust-based philanthropy

One final thought to flip the concept of measurement on its head – trust-based philanthropy.  While not a new concept, we saw a resurgence of this approach as the pandemic hit and many nonprofits began to struggle to provide services for their underserved beneficiary populations. The premise is that relationships are much stronger between the funder and the grantee when it is based on trust, mutual respect, transparency, and mutual learning.

The application shifts the power dynamic to a more equitable distribution between funder and grantee.  The implementation is to provide general operating support to fund every level of a nonprofit’s work, from capacity building and operational support to leadership, programmatic support and learning.  It includes multi-year commitments with no restrictions on use of the funds in order to foster creativity, adaptability and innovation by nonprofits.

It also reduces or eliminates the administrative burdens nonprofits face when it comes to grant applications, monitoring reports and evaluations, allowing the nonprofits to focus their efforts on their mission to make a difference. Trust-based philanthropy requires the funder to learn with the nonprofit, which in turn, requires listening, garnering feedback and course correcting with the nonprofit.

Each individual, family and foundation is unique when it comes to their philanthropic approach and there is no “one-size fits all” solution when it comes to measuring impact. There is no right and there is no wrong, but rather a spectrum of ways to work with your nonprofit partners to critically assess whether donations are having an impact and creating the desired lasting change.

For further guidance on strategic philanthropy, the range of options to consider and an overview of issues a family may encounter along their philanthropic journey, please read our whitepaper: