What Funders Can Do to Promote Impact Measurement

New Philanthropy Capital (NPC) has recently completed an important study on impact measurement practices of UK charities. Making an Impact - Impact measurement among charities and social enterprises in the UK is authored by Eibhlín Ní Ógáin, Tris Lumley, David Pritchard (October 2012). 

In their research NPC uses a very broad definition of impact measurement and it covers a range of practices from simply recording outputs via measuring customer satisfaction to randomized control trials of the effects sorted by specific interventions. Using this broad definition – NPC finds that 84% of charities somehow measure impact.

The research observes however that less than 20% use any logic- or planning model. This is somewhat confusing since over half of the charities say – again according to the study - that they measure before and after indicators, and nearly a third claim they also do some sort of economic cost benefit planning or SROI exercise to measure impact. In my experience, if you do the latter without using some sort of planning or logic model, it is not going to help you to find out whether you made any sustained difference.

There are other puzzling findings in this important piece of research. Not the least is why in Northern Ireland – compared to the rest of the UK – charities are more inclined to use advanced impact measurement techniques (although some theories do come to mind). An important issue addressed in the study is what inspires and hinders charities in measuring impact. NPC claims funders have an absolutely critical role to play in helping charities measure their impact, requiring it or rewarding it and providing the resources required.

It seems that in the UK, governmental funding agencies are more demanding when it comes to measuring impact compared to individual donors and corporate funders, with foundations taking a middle position.  Funders, according to NPC, can remove the greatest perceived barrier to developing impact measurement which is – again according to the charities interviewed - lack of funding.  This is what NPC recommends funders do:

  • continue to lead on impact measurement. Funders have power and influence; the majority of charities invest more in impact measurement principally because of funding requirements.
  • put out a clear message on why impact measurement is important. Funders can build on our findings—that charities measure because they have to, but find it beneficial when they do—to clarify why they want those they fund to measure impact.
  • provide financial and other resources to help charities improve how they measure their impact. Lack of resources is reported to be the biggest barrier to measuring impact. Funders should fund this activity and be explicit about this support.
  • help charities make the best of their data. Our research shows that while many charities use impact measurement to learn and improve their services, too many still do not. Funders can help promote a culture of learning and improvement. They can also encourage sharing between charities.
  • encourage transparency in reporting. In the short term funders may be tempted only to fund “what works.” But funders may be more influential in meeting their own missions by helping nourish a culture and practice of transparent reporting. NPC also provide advice on how funders can improve their own evaluative practice:
  • review their own practices to ensure they are useful to charities, not driven by funders’ own needs. The research suggests that charities will get the greatest value from measuring impact if they shape their approach for their own learning, rather than a funder’s requirements. Funders have to make sure the indicators they ask for are meaningful to the organisations they support and that their requirements are proportional to the size of charity and the grant they make.
  • work together on impact measurement, seeking opportunities to work with other funders for scale, efficiency, and learning. This could include working on shared measurement frameworks, sharing learning, and harmonising reporting to help reduce the costs of reporting.
  • use impact data they receive in their decision-making.

While not a recommendation that flows directly from the research, it makes sense that funders use impact measurement and evaluation in their decision-making. The NPC study suggests that besides gentle pressure and support from funders, the availability of technical skills and tools is critical to further strengthen impact measurement by not-for-profits. After featuring conference sessions entitle Impact Island in 2011, the 2012 EFC Learning Lab brought together staff of foundations in training sessions around the topic of evaluation. 

The guides on Mapping Change and Making Measures Work For You are among GrantCraft’s most popular downloads and the TRASI collection of evaluation tools curated by the Foundation Center is a much sought after resource. This study is yet another stimulant for GrantCraft to further develop support for funders and their partners in this area.