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Mind the Gap! Bridging Funder and Grantee Approaches to Measurement

September 14, 2016

Methods of measurementsOver the past thirty years, the total value of philanthropic assets in the United States has more than doubled, while the poverty rate has remained unchanged and income inequality has grown.

There are lots of reasons for this lack of progress, but facts like that make it hard to argue that foundations and nonprofits are successfully pursuing an anti-poverty mission.

At Root Cause, we believe a big reason nonprofits and foundations struggle to create the change we all seek is their failure to articulate the hypotheses underlying their approach to change, to use data to test those hypotheses, and to use the results of those tests to refine those approaches and build a body of evidence about what works.

For the past year, I've been making the rounds at regional and national conferences to talk about why measurement and evaluation matter. I've also had the chance to sit down with dozens of nonprofit and foundation leaders for extended conversations about what's at stake here.

The good news is that many foundation and nonprofit leaders share our point of view and have a real sense of urgency about using data and evidence to improve nonprofit practice and achieve better results.

The bad news is that everyone seems to be on a different page. Even among those pursuing a performance-measurement agenda, there is little in the way of dialogue, transparency, or knowledge sharing. Nonprofits develop theories of change in isolation, as if meaningful change happens through a single intervention here or a single intervention there, while funders articulate their own theories of change without much regard for what their grantees are doing.

The result: a boatload of metrics gets collected but neither funder nor grantee gains much insight into what works or how their efforts can be leveraged to drive real, systemic change.

What to do? We'd like to suggest the following:

1. Only track metrics on which you plan to act. If you can tell me what your nonprofit will do differently when a particular metric fails to meet expectations, chances are you're working with great data. Stay away from metrics that someone, somewhere along the way thought would be cool to track but can't be acted on. That's bad data.

2. Align the priorities of grantees and funders so that both want to see the same things being measured. Most of the data grantees collect are required by a second party — usually a funder or government agency. Sometimes these metrics lead to insights that are useful to the grantee. More often than not, they're only useful to the second party. Metrics that are only valuable to one party — whether funder or grantee — should be reexamined. Ideally, funders and grantees should co-develop a performance-measurement framework that can serve as the basis for learning and accountability.

3. Budget and pay for data collection, analysis, and reporting. It stands to reason that if a funder requires a metric to be reported, the grant funds should cover the cost of data collection, analysis, and reporting. At Root Cause, part of our performance-measurement work involves precisely mapping the capacity load for data collection, analysis, and reporting. Our clients — nonprofits and funders alike — typically underestimate the time and cost requirements for their measurement work, even though it is essential for ensuring that actual change is taking place.

For nonprofits, measurement is a critical opportunity to learn and refine their approach. For funders, measurement means understanding the relationship between your investment and the intervention you've chosen to fund. Nonprofits and funders need to engage in conversation up front about measurement — especially its costs. Funders who underestimate those costs can find that their data requirements morph into an unfunded mandate for grantees.

Full support for measurement is an essential ingredient in creating the culture of learning we believe is essential to producing better outcomes at a systemic level. You know that old cliché about the definition of insanity? Continuing to approach measurement with underfunded half measures is sure to produce the same result we've gotten for the past twenty years: too much noise and too little impact.

Headshot_Steve PrattStephen Pratt is a partner and the director of advisory services at Root Cause, a nonprofit that partners with other nonprofits, foundations, and governments to improve their outcomes, grantmaking, and people’s lives.Before joining Root Cause, Pratt served as CEO of two direct-service organizations, two capacity-building intermediaries, and a scholarship foundation, and also helped launch six nonprofits.

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