Surprising Truth about Funders and Data
Measuring social impact is messy and complex at best. For many nonprofits, determining the most effective way to measure their impact can seem like a quest for buried treasure without a map. It’s easy to get lost in a mire of questions: Are we tracking the right data? Are we using the best process to track the data? Who should be responsible for collecting the data? There are high expectations when it comes to data, but little to no resources to help nonprofits find their way.
Despite the complexity, the majority of Texas nonprofits are finding a way to collect data and use it to drive strategy. According to a recent Nonprofit Finance Fund (NFF) survey, Texas nonprofits reported:
55% have a logic model or theory of change (49% nationally)
95% collect output data on program effectiveness (92% nationally)
76% collect outcome data on the impact of their services (74% nationally)
Given the focus and attention on data over the past several years, these statistics may not be surprising. What is surprising was what nonprofits reported being able to (and not being able to) openly discuss with funders. Of the 13 categories listed, at the top at 49% of NPOs reporting that they can have open dialogue about program expansion. At the lowest, only 1% of NPOs report that they can discuss “paying off loans” with funders. What stood out most was this stat:
Only 22% of Texas nonprofits said they could have an open dialogue with funders about measuring program outcomes. What exactly is the fear factor when it comes to talking to our funders about measuring program outcomes? The reasons are varied, but it’s safe to assume that nonprofits may be afraid of looking ill equipped to meet their mission if they admit the struggle of measuring their impact.
The funding community could do a lot to ease these fears and use their resources to lead the charge in this effort, such as:
Invest in grantees’ ability to evaluate their work.
Funders need to find out what their grantees really need when it comes to evaluation. Do they need increased access to data or do they need skill building opportunities? Even a small financial investment could go a very long way.
Talk to grantees about what’s working and what’s not working when it comes to measuring their impact.
Building a system for evaluation is no easy feat. Understanding where the pain points are may lead to conversations that present possible solutions.
Collaborate with other funders in the community.
Having the right data isn’t just about accountability for grant dollars, it’s about solving problems in a community. Funders need to work together to maximize resources and determine how to best lead the way in this effort.
The good news for Greater Austin is that we have many forward thinking funders who have already made a commitment to build data capacity in the organizations they support. With the support of Mission Capital, area funders (such as the Michael & Susan Dell Foundation, St. David’s Foundation, the Andy Roddick Foundation, the Applied Materials Foundation and others) have been working on a collaborative effort to promote the critical importance of the effective use of data in solving community problems. Our work is culminating in a one-day “Data Institute” this fall that will bring this issue to the forefront and encourage continued, productive discussion.