Board role key to assessing impact

By Todd Cohen

Foundations are falling short, yet again, carrying out the work they also are demanding from nonprofits.

Nonprofits in recent years have faced escalating demand from foundations to measure the impact of their work.

That is a reasonable expectation because, by tracking and understanding the difference they make, nonprofits can figure out how to do an even better job while also showing funders the results they can expect from investing their dollars.

But while making that demand of nonprofits, foundations are not doing as much as they can to gauge their own impact.

So foundations are wasting a big opportunity to better understand and improve the effectiveness of the strategies they use to invest in their communities.

Among 173 CEOs of U.S. foundations making at least $5 million in grants a year who responded to a recent survey by the Center for Effective Philanthropy, over 60 percent say too few foundations understand their overall performance, and 56 percent say nonprofits should be held to higher standards of evidence to show the effectiveness of their work.

While foundations are doing more than they did a decade ago to assess their performance, the report by the Center says, “we still do not understand the degree to which foundations’ efforts to assess their effectiveness result in genuine changes that lead to heightened foundation impact.”

Over half the CEOs surveyed want their boards to be more involved in assessment, with nearly three in 10 saying the biggest obstacle to greater board involvement is a lack of understanding of the issues areas their foundations address.

“The challenge of how best to engage boards in the important work of performance assessment is not simply about involvement for the sake of involvement,” the report says.

“CEO’s who report impediments (other than resource allocation) to board involvement in assessment,” it says, “tend to believe that their boards have a less accurate understanding of the impact the foundation is having on the communities and fields in which it works.”

Assessment is important for nonprofits and foundations alike because it can serve as a guide to working smarter and, for nonprofits, as a tool to help secure the resources it needs.

To make assessment work, nonprofits and foundations need their boards to understand the value of assessment and to be engaged, strategically and in a meaningful way, in the job of making it work.

Assessment also can take significant time and resources.

So nonprofits should be building those costs into funding requests they make to foundations.

And foundations should be including those costs in the grants they make, while building into their own budgets the cost of assessing their own work.

Ultimately, assessment matters because it can help foundations and nonprofits better serve people and places in need.