Why is it Still a Challenge to Measure Impact?
Every industry seems to have a way to measure performance. There are information management systems, standard processes and policies, and reporting tools - all designed to evaluate success. Why is it then that the $4 trillion global philanthropy industry is still having trouble measuring the impact of charitable programs?
The answer may surprise you. The philanthropy industry simply has yet to broadly adopt effective solutions for measuring performance. Unlike other industries, there is no widely accepted information management system, and there are very little standard processes and policies or reporting tools for determining impact. With all of its money and economic impact, philanthropy is still more than a decade behind coming into the information age.
While impact can be measured, it's not easy. Charitable programs, if evaluated at all, are often evaluated by the nonprofit using homegrown solutions and internal processes, which typically track activities, not results. This is because there is very little infrastructure or technology available for automating the capturing, measuring and analyzing of program results - a critical element for making impact-measurement easier.
As a result, nonprofits are frustrated and left wanting to do more. Their good work isn't getting the credit, and more importantly, the support they deserve because charities don't have the means to measure and communicate true results to grantors. In other words, nonprofits are struggling with demonstrating transparency - a critical issue in the marketplace.
When it comes to achieving transparency, it's important to understand that it is not just about access to more information. Capturing data and inundating supporters with every detail possible actually impedes transparency, not achieves it. Transparency only occurs when the information is relevant, easily disseminated and clearly understood. This is why an industry solution that helps to structure and distribute the data remains so critical.
So, what can be done? It all starts with three things:
- Grantors must be more aggressive about their demands for program results.
- Grantors must provide direct support for facilitating those results.
- There must be industry-wide solutions.
Many foundations are afraid to ask nonprofits for program results for fear they would seem like a burden or "big brother". They often wait on the sidelines for information, growing increasingly frustrated and sour about their giving. What grantors don't often realize is that by simply becoming part of the solution, they not only help equip nonprofits to answer their requests for information, they also help facilitate the true measurement of performance. This gives nonprofits the ability to learn, improve and be more successful. What results is a relationship of collaboration, partnership and trust.
The best part is you will actually see a return on your "investment." Imagine if foundations gave just a tiny fraction of their overall granting to supporting a solution that evaluated programs. What if by allocating just 1% of total granting to enabling greater program efficiency, we could transform philanthropy?
Newdea's industry-wide philanthropic platform empowers grantors and supports nonprofits to work in collaboration to improve efficiencies in philanthropy for maximizing impact. Learn what Newdea can do for your foundation and your grantees. Request more information.
