Evaluating the Impact of Your Giving
The reasons people give money away can vary from getting a tax deduction to supporting a cause dear to a friend's heart. The most idealistic of philanthropists, those who, in the words of John D. Rockefeller, Sr., wish to "promote the well-being of mankind" want something lasting to come of their money.
While most donors know that effective grantmaking requires follow-through, even more importantly, it requires preparation. And the best giving is done if clear expectations exist and the donor takes a longer-term view of his or her contributions.
How can you make your giving have more of an impact?
First, select an issue that appeals to you and learn as much as you can about it. Identify which organizations are working on this issue and how they are handling it. If your issue is arts in education, for example, perhaps you'll find that one nonprofit sends performers to local schools while another sponsors weekend film workshops. A third runs a citywide theater competition for teenagers, while a fourth buys musical instruments for schools that cannot afford them. Which approach makes the most sense considering what you want to achieve and what your community needs?
Second, wade in slowly. Acquaint yourself with an organization by giving a little to the general operating fund or to an established project. Be mindful that though many philanthropists prefer giving to projects rather than to operating budgets, grantees would rather have it the other way around.
Due diligence can include reviewing tax filings and annual reports, as well as talking to other donors to the nonprofit. You can also consult a charity watchdog group, like Charity Navigator for a sense of how responsibly an organization spends money. Also, ask to see the nonprofit's annual self-appraisal: what goals does its board use to monitor performance and how did they do last year? If it doesn't have one, it could be a signal that the organization is not interested in how well it meets its goals. One of the best out there is provided by New Profit, a fund that invests in social entrepreneurial organizations.
Third, when it comes time to support start-up projects, make sure to do the groundwork. Ally with other donors if possible. Provide planning funds, and ask for a written proposal that outlines a timetable and itemizes costs.
Fourth, follow up before the project even starts. Smaller donors don't have the money to underwrite extensive evaluations and ought not to belabor grantees with paperwork that distracts them from their main mission. Ask the organization how it is measuring the success of the project for itself, and together design what the midpoint and final reports will look like. If you are piggybacking onto a larger donor's gift, you might be satisfied to receive a copy of the evaluation that foundation is getting.
Be sure the nonprofit will measure not just outputs; how many children attended, how many classes held, but also outcomes; or whether the program achieved its loftier aims. Sometimes the measurement is approximate: for example, students can fill out questionnaires before and after a program and indicate how much likelier they are to pursue further education, or a career, in the arts.
It's easy for a donor to expect too much. Remember that you are a partner of the nonprofit and that an evaluation of a program you supported is really an evaluation of your grantmaking decisions. Did you give them enough time to plan? Did you think there was a need when there wasn't? If the money turns out to be well spent, you will know where to put your money next time.
Adapted from an article for Community Foundations of America, copyright 2004