Funders Focus On Metrics To Improve Outcomes

Managers at Mercy Housing and Shelter Corp. in Hartford, Conn., assumed the main users of its soup kitchen were homeless individuals who frequented the shelter overnight.

They learned from an evaluation they conducted that while half the clients of the soup kitchen were in fact homeless, the other half were families and children living in apartments in the neighborhood. The evaluation results also showed that while food was the biggest need for all clients of the soup kitchen, a second big need was for medical services.

So the agency, which had a clinic in its facility, now is moving its meals program to new space on the second floor and creating a medical suite on the lower level.

Mercy is one of roughly 30 agencies in north-central Connecticut that participated in “Building Evaluation Capacity,” an 18-month program the Hartford Foundation for Public Giving offers to its grant recipients. The program is modeled after one developed by the Bruner Foundation in Rochester, N.Y., that is designed to help nonprofits “think evaluatively and use evaluation in a strategic way.” The Hartford Foundation aims to help nonprofits better understand and use evaluation to track and improve their impact, said Annemarie Riemer, director of the foundation’s Nonprofit Support Program.

The foundation is one of a growing number of funders using metrics to evaluate the impact of grantmaking, to help the agencies they fund better track their own impact, and in the process help themselves and their grantees become “learning” organizations that can improve their programs and operations to better fulfill their missions.

“We’re trying as a field to move beyond just counting the number of kids in after-school programs or the number of poor people who receive health-care services,” said Heather Peeler, vice president for programs at Grantmakers for Effective Organizations (GEO) in Washington, D.C., a coalition of 370 grantmaking organizations. “We’re trying to understand how these programs make a difference in people’s lives,” she said, “and that’s complex.”

Among 700 foundations responding to a survey GEO conducted in 2011, roughly 70 percent said they evaluated their work, a percentage that was unchanged from a similar survey GEO conducted in 2008. Of the foundations that evaluate their work, approximately 80 percent seem to be using the evaluations for “accountability” purposes, with only about 60 percent using the data collected to strengthen future grantmaking. Only 30 percent use it to “strengthen knowledge in the field” Peeler said.

GEO’s leadership believes foundations should use evaluation metrics for all those reasons, she said. “Grantmakers should be accountable to their communities,” Peeler said, “but more focus should be on using evaluation as a learning tool.”

The growing attention to metrics and evaluation is the result of a number of market factors, according to sector experts. Those factors include the desire by funders in a tough economy to better understand the return on their investment, as well as a growing number of products and services offered by vendors and consultants to help foundations and nonprofits better measure their impact.

“Funders are having fewer resources and greater demands,” said Althea Gonzalez, North Carolina program manager for Hispanics in Philanthropy, an organization that raises money from other funders and makes grants to groups that are led by and serve Latinos and is headquartered in San Francisco, Calif. Gonzalez is based in Asheville, N.C.

“We want to make sure we’re making good investments, and strategic investments,” Gonzalez said.

Peeler of GEO explained that the number of companies and consultants offering evaluation products and services has grown in response to market demand. “We need as many tools and resources as possible to help understand and navigate measurement,” she said. “Unlike the business world, social change isn’t about counting widgets.”

The growing popularity of evaluation also might be partly the result of foundations wanting to insulate themselves against criticism, particularly if the evaluation is “activity-based rather than outcome-based,” Gonzalez said.

But with nonprofits and funders becoming more “bottom-line-oriented,” she said, “there’s going to be an increasing need to be able to demonstrate that the investment was effective, and to tell the story of that investment.”