The authors of Room for Improvement have found that performance assessment often has different conceptual and practical meanings for nonprofits and foundations. Both groups, of course, want to see benefits of program participation accruing to program beneficiaries. However, while foundations view assessment as necessary to organizational health as keeping the lights on, nonprofits often view assessment as a luxury, especially in hard times. Furthermore, foundations and nonprofits seem to not be on the same page when framing performance assessment: more than half of nonprofits would like more discussion with foundations about the results of performance assessment and the same number believe that foundations prioritize performance assessment that will primarily benefit the foundation, not the nonprofit.
This tension over performance assessment – which assessments, for what purpose, and of what quality – may exist because nonprofits and foundations do not share a common understanding of the theory and design underlying a given performance assessment system. Assessment tools and sophisticated analysis are great, but if the design underlying the performance assessment system is misunderstood or flawed, then little following much matters.
Improved cooperation between foundations and nonprofits during the design phase of performance assessment could be the sweet spot between a foundation’s need to steward their dollars responsibly and a nonprofit’s need for support in executing performance assessment. Foundation staff typically have substantial expertise in both developing theories of change and assessment, while nonprofit staff offer expertise in exactly what impact they hope their program will make.
It is an ideal partnership that should be formalized. For now, let’s call this potential partnership, “Design Foundations”.
“Design Foundations” would be a collaboration between nonprofits and foundations, both big and small. This collaborative would match foundations to nonprofits that fit their portfolio and that are in need of assessment design support, either ramping up for a new assessment or revising an existing model. Other matching criteria might include geography, expertise on populations served, or technical skills needed. “Design Foundations” would be funded largely by foundations, but nonprofits could make a good faith financial contribution to the costs.
As noted in Room for Improvement, foundations typically do not fund assessment capacity building – isn’t “Design Foundations” an alternative and cheaper way for foundations to support this capacity building? Absolutely. The foundation’s financial investment in “Design Foundations” would be minimal and certainly less than the salary and infrastructure costs needed to build capacity for assessment. In return, foundations will understand the theory underlying the assessment model, know exactly what elements are included in the model, and why those elements were chosen above others. By investing in the design phase of performance assessment, foundations will have a performance assessment model they can trust producing results that they know are credible.
Three considerations for “Design Foundations”:
Long-term investment. The duration between the time performance assessment is first discussed to the moment when actionable data is first available to nonprofit staff can be several months to a couple of years or more, depending on the complexity of the organization. Foundations involved in the design of a nonprofit’s assessment model will need to exercise patience and lower expectations: the pace of results can be slow, with a focus on outputs before outcomes.
Commitment to design standards. Investment in a collaborative like “Design Foundations” would begin to address the issue underlying two troubling data points from Room for Improvement: approximately half of nonprofits believe that foundations are to some degree inconsistent in their expectations for data from nonprofits and 53 percent believe that foundations tend to value data that is useful to funders but not to the nonprofits. “Design Foundations” would provide an opportunity to systematize foundation expectations for assessment results in two ways. First, foundations would know that nonprofits participating in “Design Foundations” produced a high-quality assessment design through a process that foundations believe in. Second, through this shared design process, foundations would have a deeper understanding of an organization’s or program’s intended impact and the indicators that would tell us whether that impact is possible. There would be little need for foundations to collect a constellation of data points in order to triangulate the story of impact.
Pipeline of effective nonprofits. An additional advantage of participation in this type of collaborative is that foundations would become familiar with nonprofits that are excited and ready to assess their performance, but need time to execute. Imagine that “Design Foundations” pairs a nonprofit that wants to evaluate its effectiveness with a foundation that only funds nonprofits with proven effectiveness. The foundation would not currently fund the nonprofit because they are untested. But “Design Foundations” is not only a performance-building collaborative; it is a relationship-building collaborative. Through the intimate process of building an assessment model together, the foundation and nonprofit get to know each other in a way that funding applications and site visits simply do not allow. The foundation will trust the assessment model (and, thus, the results) and understands the nonprofit’s leadership’s abilities, while the nonprofit learns about the unique perspectives and needs of the foundation.
Nonprofits and foundations need to be on the same page when it comes to making the most of performance assessment. Identifying a problem at the results stage of the process is too late; common ground must be found in the design of the assessment model. A collaborative like “Design Foundations” – bringing together foundations and nonprofits on Day 1 of assessment – just might be a design that works.
Nathan Hutto is Senior Director of Research and Evaluation at Horizons for Homeless Children. You can find them on Twitter @HHCTweets.
Join the conversation about the findings featured in Room for Improvement: Foundations’ Support of Nonprofit Performance Assessment on Twitter using the hashtag #granteevoice.
