A post to Exponent Philanthropy's blog

How to Know You Made a Difference: Grant Impact Reports

By Dr. Paul T. Penley, Intelligent Philanthropy

Is my giving really making a difference? That is a question that haunts every giver. Every day individuals and foundations make decisions about where to give. Over a million active U.S. charities provide endless opportunities to support big visions and passionate leaders. The difficult task for those of us screening opportunities is how to know who is really making a difference.

The task should be easy. Charities should be measuring their performance and reporting the results. All of us who issue grants at foundations should have no more difficult a task than reading grant impact reports from previous gifts. But it’s not that simple. The quality and clarity of grant reporting is all over the map. So what do you do to raise the bar for grantee reports? Here are a few things we learned.

  1. Does the nonprofit have a budget line item for donor retention or reporting? It seems like an intrusive question at first. However, most nonprofits struggle to retain more than 55% of donors year to year. That doesn’t happen by accident. I just evaluated a charity’s strategic plan where 35% of new revenue was designated for “donor acquisition” and none for “donor retention.” Charities consistently fail to close the back door by putting all their resources into getting new donors through the front. If charities don’t have a line item for retention, you may end up with low-quality reports that don’t tell you what difference you made.
  2. Statistics x Stories = Quality Reporting. A good report will blend the head and the heart. It will provide confidence in the results and a personal connection to the beneficiaries. That’s why we ask grantees on the one hand to give us the numbers. On the other hand we ask for personal stories of success. The personal stories inspire us, but our heads need to know they aren’t the exception but the rule.
  3. Guidelines for reporting Outcomes not just Outputs. We give specific instructions for each grantee to report its accomplishments in 3 ways: outputs, outcomes, and stories of impact. The outputs are activities. For example, how many people served, where, and for how long? But we don’t get excited about nonprofits staying busy. We get excited about lasting improvement. So the outcomes reporting focuses on long-term results from the activities. How have beneficiaries defied the odds or continued success 6 months after the program?

These simple lessons can help you get the most meaningful grant impact reports after you have given. I’d be interested to know what you’ve learned about collecting reports that clearly present the difference your giving makes. What could we add to the list?

Paul Penley

Dr. Paul T. Penley is the director of research at the philanthropic advisory firm Excellence in Giving, where he evaluates the effectiveness of nonprofit organizations to advise small family foundations on strategic giving. He is the creator of Intelligent Philanthropy, an up-to-date, comprehensive, and user-friendly online charity evaluator. His expertise stems from years of international travel, outcome-based evaluations, analysis of non-profit best practices, and topical community assessments that inform strategic giving.

Comments

  1. I’ve been told the “Dark Secret of Philanthropy” is most people don’t want to know what happened with their money for fear it didn’t turn out as they hoped. Do you think that is true or do you really want clear, top-quality grant impact reports?

  2. Great information! And I might suggest that philanthropists and/or their advisors back this process up beginning with gaining clarity around what they want to accomplish with their gifts, followed by honest conversations with non-profit leaders about “deliverables” prior to gifting so expectations are agreed upon by both parties and written down in the form of a gift agreement. This set of steps is all to often overlooked or simply doesn’t happen. Especially when wealth managers, CPAs or attorneys are involved.

    • Lori – A grant LOU or MOU is a great tool for clarifying expectations. We ask for them if the nonprofit does not already provide the equivalent data in the grant proposal. That way we can reformat grant impact reports for families we serve by including the inputs, outputs, and outcomes in 3 adjacent columns in a summarized layout. The inputs state the amount and the specific purpose of the gift. Then the outputs and outcomes next to them let the family know if the money accomplished its purpose. It is a quick, concise way to capture the impact of major gifts that a family has made to a series of grantees.

Leave a Comment

Your email address will not be published. Required fields are marked *