As grantmakers have been looking to increase the impact of their funding dollars, nonprofits have come under a great burden of proof to illustrate the effectiveness of their programs and initiatives. One of the most common tools for nonprofits to measure their social impact is through a performance assessment, but nonprofits often lack the resources to perform a thorough assessment and many grantmakers do not offer financial support to carry them out even as they become more influential in the grantmaking decision process.
It is important for grantmakers to understand the challenges and opportunities that nonprofits face as part of a performance assessment. Lauren Gilbert of BELL recently wrote Five Hurdles to Nonprofit Performance Assessment for the Center for Effective Philanthropy discussing her own experience. She outlined five hurdles beyond cost that nonprofits must address when going through a rigorous, independent research assessment. The hurdles included:
- Capacity: Nonprofits do not always have the infrastructure, personnel, or experience to plan and carry out an independent performance assessment.
- Required Partnerships: Foundations and grantmakers often assume that nonprofits can find willing community partners to assist in carrying out evaluations, but finding and maintain partnerships may be difficult.
- Human Element: Creating a control group can often mean nonprofits must deny their services to some participants, creating real world consequences for the individuals and communities being studied. Gilbert warns nonprofits not to lose sight of the humanity involved in the testing.
- Receptiveness: Nonprofits, policymakers and grantmakers need to be receptive to outcomes of the performance evaluations. Gilbert emphasizes that research should be utilized as more than a tool for growing funding revenue bases.
- Imperfect Science: Measuring social impact is an imperfect science attempting to evaluate less tangible outcomes that are greatly influenced by outside factors. The constraints applied to the studies can also greatly affect the results leading to misleading conclusions in side by side comparisons. Less rigorous assessments often produce more favorable seeming results.
Grantmakers continue to develop new best practices when it comes to measuring the effectiveness of their grant dollars in the communities they seek to impact. As they do, they should keep in mind the challenges that grantees face in undergoing a performance assessment. Above all else, assessments should be focused on finding the most effective means to carry out our missions and benefit the communities we serve, not just as a way to justify more philanthropic investment.
– Kaitlin Ostlie, MCF administrative assistant