How to measure impact. Five key questions!

By: Kristina Stefanova, New Generation of Giving member

On the first day of the 2015 New Gen UK Study Tour, the last session focused on impact measurement and whether it’s working. It left with me a mix of disappointment that we’re not better at this, and hope there’s a lot that can be improved in philanthropy, both on the giving and receiving side.

Tris Lumley and Plum Lomax (as someone noted, best names ever!) from New Capital Fund went into their venture a few years back, thinking impact measurement will work magic for non-profits and donors. 

Charities would benchmark their performance, therefore seeking constant improvement on effectiveness, and donors would pick the most effective charities to give funds to.

Measuring impact should require answering the following questions:

  1. What’s the problem that needs to be addressed?
  2. What would success look like?
  3. How do we think what we’re doing leads to impact?
  4. How will we know our approach/initiative is working?
  5. How can we improve and learn?

This sounds straight forward. Yet, this kind of data is rarely collected by non-profits, let alone made public. And when it is made public, apparently very few donors actually use the information to make a funding decision.

NPC found that donors say they care about impact, but very few (2%) give based on impact delivery.

And non-profits present an interpretation of impact measurement based on what donors are asking for, rather than on what truly measures their theory of change.

An education is required on both side. 

Non-profits need to lay out their theory of change and know how to measure against it.

Donors need a culture/mindset change in how they select who to fund; they should do their research and support the most effective groups. Thus impact is delivered.

Another group we heard from on day 1 was Impetus Private Equity Foundation, who judging by the energy and ability of two of their directors - Jenny North and Elisabeth Paulson - can turn even the most disorganised and inefficient group into a stellar performer.

Impetus do what I could only think of as intense management consulting that gets non-profits to face their strategy, approach, and operational issues in a dramatic way.

Their work is along the lines of storm, norm, perform. Impetus put non-profits through an intense year long process that gets them to clearly spell out what they do and why, and evaluate whether their activities match with these aims. Because they are in essence supervised, this forces non-profits into brutal honesty.  

It's scary that services like those of Impetus and NPC are needed, and that we’re so behind on measuring impact or knowing how to make charities more effective. But it's exciting how many foundations here are trying to build the right ecosystem to make philanthropy more impactful.

New Gen UK Study Tour

Dec. 01, 2015

 Tags: new generation of giving, new gen philanthropy, impact

Philanthropy Weekly Newsletter

Sign up to our weekly e-newsletter for sector news, expert opinion and resources.

Sign up here