News and analysis
April 13, 2015

Foundations Fall Short in Giving Grantees Advice on Evaluations, Says Report

Two-thirds of nonprofits don’t get guidance from grant makers about how to use data to measure their performance, even though most foundation support comes with a demand that grantees evaluate their work, according to a report released Monday.

Almost all of the 138 nonprofits surveyed by the Center for Effective Philanthropy collected information to gauge their performance. But 64 percent of the organizations said they did not receive any support from foundations on how to marshal the data they amass.

Only 39 percent of the nonprofits said they have had "at least a moderate" amount of discussion with foundations about assessment.

"Nonprofits are really trying and making an effort, but they can’t do it alone," said Ellie Buteau, the center’s vice president for research and the study’s author. "They need and want more help from foundations, and they’re looking for other types of support, not just the money,"

That finding is surprising, Ms. Buteau said, given her organization’s 2013 study of foundation CEOs, three-quarters of whom said they were already providing such advice.

Little Staff Help

The new study found that 58 percent of nonprofits thought foundation data requirements were "at least moderately useful" in helping to assess performance.

Overwhelmingly, they said they use performance measurements to help shape strategy or improve programs.

Ms. Buteau said collecting data could also help organizations improve their own operations, but fewer than half of the nonprofits surveyed used the data they collected to decided on staffing levels or evaluate employees’ performance.

The nonprofits surveyed for the report varied in size and mission. Their median annual expenses were $1.5 million and the types of data they collected varied, depending on the organization’s focus. For instance, advocacy organizations gathered information on media coverage and policy changes, theater companies reported ticket sales, and employment nonprofits tallied job-retention rates.

Only 9 percent of the nonprofits employed at least one staff member to handle data collection, and half of the organizations allocated less than 2 percent of their budgets to either internal or program performance measurement. That seems "very low, given the amount of effort required to do this work well," Ms. Buteau said.

Offering Support

The report profiled two foundations that nonprofits have rated highly for the guidance they provide on how to use data: the Mary Reynolds Babcock Foundation and the Assisi Foundation of Memphis.

The Assisi Foundation offers a 12-week course called Before You Ask, designed to help potential grantees define their goals. Doing so, Jan Young, the foundation’s executive director told the center, enables nonprofits to be realistic about what they can accomplish and helps them plan how to measure success. A staff member also provides free educational sessions on program evaluation.

But that help doesn’t often translate into grants to help with data collection, says Ms. Young. The foundation doesn’t frequently make grants for performance measurement, largely because foundations and nonprofits lack a clear consensus on worthwhile measurements. And while she would like grantees to have a clear method of defining and assessing program goals, she says in the center’s report, cost is a barrier: "To be honest, like many foundations, it is difficult to get funding for evaluation work because sometimes a good evaluation costs more than the program or project itself."

Send an e-mail to Alex Daniels.