The Nonprofit FAQ

How can foundations better evaluate the impact they are having? What are the major benefits of doing so?
Any foundation will benefit tremendously from developing a rigorous self-assessment system, allowing it to:

    Make the case for its work. Foundations are facing increasing scrutiny from media and government regarding their work. Developing an improvement- and data-based self-assessment system will allow a foundation to rise to these challenges, and demonstrate to donors the true impact of its work.

    Improve program efficiency. Opening a foundation up to self-assessment puts learning at the center of efforts to improve. This positively influences grantees and their programs and ultimately strengthens the foundation.

    Impress the board. Foundation boards are often frustrated by the use of administrative expense as the sole, universal measure of performance. Developing a comprehensive strategy for results-based measurement will open up more honest and satisfying discussions about what really matters: the outcomes of the foundation-funded programs.


Developing a results-based measurement system


The Bridgespan Group's case study, "The Anne E. Casey Foundation: Answering the hard question: What difference are we making?" provides some recommendations for developing a results-based measurement system for evaluating the impact of foundations. The full case study can be found at http://www.bridgespan.org/learningcenter/resourcedetail.aspx?id=400.



1. Obtain commitment from leadership at the board, foundation and program levels. Gaining alignment among leadership will mean a greater chance at success.



2. Develop an explicit strategy for measuring success, taking into consideration the foundation's mission, specific goals, barriers to achieving that vision and the results by which the foundation should hold itself accountable.


3. Collaborate with grantees to obtain their input and help them clarify their own goals and means of measuring outcomes.



4. Stay in it for the long haul, using feedback from grantees and foundation leadership to continually improve systems and processes.


Other Resources


The Center for Effective Philanthropy also compiled a survey report including insights from over 200 foundation CEOs, trustees and senior executives. "Higher Impact: Improving Foundation Performance" can be found at http://www.effectivephilanthropy.org/images/pdfs/CEP_Higher_Impact_2005.pdf.



The Bill & Melinda Gates Foundation prepared a report analyzing eight approaches to adding cost considerations to the measurement of impact and social value creation. "Measuring and/or Estimating Social Value Creation: Insights into Eight Integrated Cost Approaches" can be found at http://www.gatesfoundation.org/learning/Documents/WWL-report-measuring-estimating-social-value-creation.pdf.





Posted 02/10/09 -- YBL