Traditionally, many of us think of evaluation as a tool for reporting program results back to a funder. But, evaluation doesn’t stop there. Evaluation is important to funders too; it can serve a critical a role in helping funders reach their goals. Funders do have a unique position which allows them to approach evaluation from different directions; they can conduct their own evaluations, do analysis of the evaluations of their grantees, or some combination. Some things funders consider about evaluation are:
Accountability and transparency.
Calls for an accountable philanthropic sector have been made from both within and outside the sector in the past several years; for example, the National Committee of Responsive Philanthropy has a campaign dating back nearly a decade for an accountable charitable sector. Their calls focus on how charities spend their money and comply with tax laws. A more recent article, from Philanthropy Magazine, points out that accountability should also include an emphasis on impact relevant to mission – while rightly pointing out that foundations achieve their missions independent of voters or public policy, giving them freedom to tackle controversial issues.
Use of resources.
Like the nonprofits they support, funders must balance their investment in evaluation with the investment they are making for more direct service. At one end of the spectrum, some foundations invest in research and evaluation as a “social R&D”, another program that helps the foundation create the change it wants to see. For example, the Robert Wood Johnson Foundation is funding initiatives that research and change the way the health care sector works, and extensively publishing the results so that others can learn from and adopt new inventions. Others would like to see the majority of their investment go towards helping people directly. For example, the Abbott Patient Assistance Foundation focuses solely on making Abbott medicines affordable for patients. In such cases, funding for evaluation or research will be a relatively small aspect of foundation investment.
Alignment of efforts.
Funders may use evaluation to determine if their efforts are aligned across grant programs, initiatives, values and their mission. Some, like the KDK-Harman Foundation, use a logic model to show how their efforts relate to each other. When efforts are aligned, the opportunity is created for greater impact, because foundations understand the synergy of all their efforts and dollars working together to serve their overall mission. Like smaller nonprofits, large philanthropic organizations struggle to isolate their impact; for example, CARE International described the complexity of determining the impact of so many different funders who have worked in Haiti, and talks about the benefits of coordinating not just relief efforts but evaluation efforts.
Informed investment.
Funders can also use evaluation to assist them in making informed investments. As in the for-profit sector, past performance can be one indicator of future success. They may require the nonprofits they fund to submit evaluation results in grant proposals, or to show a certain level of results at key milestones in order to continue funding. This is particularly true among public sector funders (such as performance measures or “GPRAs” at the federal level). With an emphasis on reflection and learning rather than penalties, this information can help funders and grantees clearly communicate about expected and actual outcomes to assist both groups in determining how to effectively invest to reach funder goals.
Relationships and collaboration.
Finally, evaluation can promote stronger, more collaborative relationships. By identifying outcomes in an objective way, evaluation can help funders communicate with their constituents – whether they are grantees, trustees, donors or community members – about shared causes and effective initiatives. When evaluation is at its best use, as a learning tool, evaluation findings can help funders, stakeholders and grantees have realistic dialogues about difficult issues and what it takes to make the change they all desire. For example, McKnight Foundation recently wrote a letter thanking grantees, saying “The McKnight Foundation continues to set ambitious goals. Together with partners, we learn and adapt to remain relevant and effective in the midst of changing circumstances.” A well-planned and executed evaluation is a two-way street of benefits for funders and their grantees by garnering, defined results, sharable outcomes, more transparent communications and stronger use of resources.