The Paradox of Performance Assessment

The issue of nonprofit performance assessment seems to cause a lot of anxiety among nonprofits and funders.

On one hand, there is agreement that assessment is necessary to achieving high performance — a nonprofit cannot improve its work if it’s not assessing how it’s doing relative to the goals it seeks to achieve. Moreover, the issue has gained more prominence as there’s been more attention paid to how nonprofits can harness the rise of big data, how the concept of “Moneyball” can be applied to government and philanthropic funding, and as more nonprofit watchdogs and supporting organizations are placing an emphasis on nonprofits demonstrating their effectiveness.

Yet there’s also a sense that nonprofits are not adequately assessing their performance. For example, half of foundation CEOs reported in 2013 that their grantees’ struggles to assess their performance were hindering their foundation’s ability to achieve its goals.

So are nonprofits indeed falling short of the imperative to assess their performance? And what, if anything, can funders do about it?

In a new study CEP released today, titled Assessing to Achieve High Performance: What Nonprofits are Doing and How Foundations Can Help, we attempted to uncover some answers to these questions. Survey data collected from 183 nonprofit CEOs portrays a nuanced picture of the practice of assessment among the organizations they lead.

Nonprofits do indeed seem to be collecting information about their performance and using it to drive strategic and programmatic improvements. Their motivation for assessment comes primarily from a desire to achieve high performance as opposed to meeting funder or board requirements. However, there are still areas where nonprofits are not using performance information to its fullest extent — particularly when it comes to managing staff.

The resources nonprofits dedicate to assessment also seem to be inadequate relative to the cost and importance of this work. There is an opportunity for funders to fill part of this void — few of the nonprofit leaders we surveyed report receiving foundation support for this work.

The findings we are releasing today are not communicating an entirely new message. In 2012, we released a study that found that 80 percent of nonprofits surveyed used data to inform their efforts to improve their performance on an ongoing basis. More than 60 percent of nonprofit leaders wanted more help from their foundation funders in these efforts.

We hope that our reports help foundations understand what nonprofits are doing to assess and manage their performance — and what they need to do this work better.

Profiles in the report of two foundations rated highly by their grantees for being helpful to their assessment ability — the Mary Reynolds Babcock Foundation and The Assisi Foundation of Memphis — offer some examples of how foundations can work with their grantees on these efforts. In addition, we are sharing three profiles that demonstrate what nonprofits that are making great efforts to assess their performance are doing and learning along the way.

Over the next few weeks, we’ll be sharing perspectives on the research from leaders in the field through the CEP blog. Please join in the conversation by commenting below or on Twitter using the hashtag #GranteeVoice.

Ramya Gopal is an Associate Manager at the Center for Effective Philanthropy. You can find her on Twitter @RGopal_CEP. Ellie Buteau, PhD., is vice president, research, at CEP. You can follow her on Twitter at @EButeau_CEP.


assessing performance, funder/grantee relationships, grantee perspectives, Grantee Voice, overall foundation performance assessment, performance assessment, performance measurement, research
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