Nonprofit Groups Should Embrace Evaluation

All donors want to know that their investment is making a difference. And we certainly should be channeling more of our scarce charitable resources into what we know gets better results.

Several high-profile federal initiatives, such as the Social Innovation Fund, prioritize funding to community-based solutions that can demonstrate evidence of success. The Baltimore Workforce Funders Collaborative is one local beneficiary of this approach, thanks to a $600,000 grant made possible through the combined efforts of the federal government, the Abell Foundation, the Annie E. Casey Foundation, the Harry and Jeanette Weinberg Foundation and others.

In order for more Maryland nonprofits to effectively compete for these performance-based funds, they and their funders would be well advised to embrace the power of evaluation not only as a means for accountability, but also as a learning practice to strengthen program and organizational effectiveness. A better understanding of what works, why and how helps to ensure that resources flow to high-performing nonprofits that are delivering services that benefit people and communities.

For that reason, Grantmakers for Effective Organizations teamed up with Innovation Network and the Maryland Philanthropy Network to gather funders in Maryland who want to help nonprofits use evaluation to learn how to improve and increase impact. Many of the principles presented that day are applicable to all donors and are useful to guide your evaluation efforts.

-Don’t assume one size fits all. First, identify what questions need to be answered, and then decide what information or evaluation would be appropriate, mindful of any financial, logistical and other constraints. Providing tailored assistance or support for capacity building (e.g., via unrestricted and reliable funding) can help nonprofits do evaluation right.

-Focus on more than just proof. Grants and other forms of philanthropy often target complex problems or systems that do not lend themselves to easy answers, and most grants are too small or focused to address these issues comprehensively. Sometimes it can be more helpful to use evaluation to measure progress, not just to prove whether something succeeded or failed.

-Embrace failure. Evaluating as you go makes it possible to change course along the way if something is not working. A project’s failure can produce lessons that lead to better results in the future as long as we understand what happened and why, and if we’re willing to share what we learn with others.

"Looking through the prism of learning, evaluation is not merely an accountability exercise, but a powerful tool for performance improvement,” said Kathleen Enright, president and CEO of Grantmakers for Effective Organizations. "As the philanthropic world continues to wrestle with the realities of these challenging economic times, the focus on accountability among nonprofits is important, but it should not be the primary reason grantmakers evaluate. The primary reason should be to learn and improve.”

If our nonprofit sector is going to meet the challenges facing their communities, they need to understand and learn from local solutions that work. And we need to support them in this effort.