Last year, one of my clients, a family foundation, realized that one of the biggest barriers to further improving their grantmaking process was their lack of a formal system for evaluating the effectiveness of the foundation as a whole.
Until recently, the foundation primarily served as a vehicle for one entrepreneur to support causes he cared about. When he left a major gift to the foundation upon his death, his family decided that one of the best ways to honor his legacy was to focus on creating lasting change. But they didn’t know where to begin evaluating the effectiveness of their efforts to do so.
Their initial instinct was to treat the effort as a research project, which would be aligned with the foundation’s work but set apart from day-to-day operations and grantmaking. But that approach would have taken energy and attention away from supporting their grantees and prevented them from having the opportunity to learn by doing.
Instead, we worked together to design some simple mechanisms for the foundation to gather input from their grantees and reflect on their effectiveness in a meaningful way. Here are some of the highlights of the framework we’re building to make small but continuous improvements across every level of the organization.
Step One: Put it on the calendar
If continuous improvement is a priority for your organization, then you need to make time for it. I recommend that foundations set aside time once a month, or at least once per quarter, to reflect on the effectiveness of specific grantees, their grantmaking program as a whole, and their internal processes.
When assessing your grantees, first make sure that they are still aligned with your mission, vision, and values. This shouldn’t take long if you have been regularly checking in with your grantees and keeping up to date on their work.
Next, ask what positive impact are they having and what information do you have to confirm that? What challenges are they facing? What is the biggest obstacle keeping them from making a long-lasting impact? And what additional financial and non-financial support can you offer them to clear those challenges? Remember, funders exist to serve grantees that are serving people and communities, not the other way around.
After that, evaluate your grant portfolio as a whole to find gaps that might limit your effectiveness. Sometimes, a foundation pours all its resources into funding innovative or experimental solutions but doesn’t commit any resources to the major policy shifts that would help translate those innovations to the broader system. If your portfolio only addresses part of the problem you wish to solve and you don’t feel comfortable expanding your scope, you should find ways to collaborate with organizations that are addressing the areas you are missing.
Finally, look at your internal processes. Does your team have the right tools to communicate efficiently with grantees, keep track of impact, or collaborate with external partners? You might learn that your team could become much more effective with an investment in new software or with additional training or professional development.
Step Two: Gather and reflect on the information you already have
Foundations have a bad habit of asking grantees for the same information multiple times and in multiple formats. And — to add insult to injury — they often do nothing with that information! It’s a chronic problem across all of philanthropy.
The last thing you want to do when implementing a continuous improvement process is overburden your grantees with requests for information. The information that you gather from grantees in their grant application, combined with what you learn from informal check-ins with program directors, provides a strong baseline for evaluating your grantees’ effectiveness.
If you feel that the information you already have access to isn’t answering all of your questions, you might want to incorporate a survey tool, like CEP’s Grantee Perception Report (GPR), to gather and organize feedback from your grantees. These tools provide a systematic way to comprehensively and anonymously gather feedback from your grantees, and the GPR’s comparative dataset allows you to compare yourself to other foundations across the country.
When gathering data, it’s just as important to gather qualitative data along with quantitative data (the GPR does both). It’s tempting to try to quantify your or your grantees’ impact with the numbers that are easiest to measure and collect — think test scores, graduation rates, homeownership rates, etc. But these numbers don’t usually tell the whole story, and focusing too much on quantitative data might lead to behavior that improves the numbers while doing little to actually solve the underlying social issue.
Any measurement of the effectiveness of a social change initiative must take into account how an individual’s perspective, understanding, or life is impacted — or else it becomes a meaningless data point.
Step Three: Dive in deep and ask the hard questions
Often, the things that hold philanthropists back from being as effective as they can be are things they have a hard time seeing. These barriers may be things that are painful to admit, such as skills gaps or knowledge gaps among staff. Or, there could be issues related to toxic power dynamics between funders and grantees, damaged relationships with community stakeholders, or interpersonal conflict between staff members inside the foundation.
To find out what is holding you back, you have to be willing to dive in deep and ask yourself the hard questions. You have to be willing to go several layers beneath the surface and name the things that are hard to name.
And as soon as you’ve named the problems, move the focus to corrective action. Don’t get stuck debating the source of the problem unless it will move you into a solution.
It’s time for a new era of philanthropy
For decades, the philanthropic sector has too often operated with specific and set ideas about how to make the world better. We know that this approach does not always lead to the solutions to complex social issues we wish to see. It’s time for foundations to reject this model, listen to their grantees, and use continuous improvement to usher in a new era of philanthropy that builds sustainable solutions and assesses progress honestly.
Danielle M. Allen is managing partner at Building Impact.