Tackling the Data-Driven Funding Challenge — a New Skill for Nonprofit Managers

In Metrics and Analytics on September 1, 2010 at 8:32 am
Source: Ervin Bartis on flickr

Can you measure your mission? Many nonprofits are being asked to provide metrics of success in order to keep and attract donations and funding.         

 But it’s not exactly clear how to do this. According to a working paper posted in July to Harvard Business School’s Working Knowledge site by faculty members Alnoor Ebrahim and V. Kasturi Rangan:          

The social sector is in the midst of a search for metrics of impact. Over the past 20 years, there has been an explosion in methodologies and tools for assessing social performance and impact, but with little systematic analysis and comparison across these approaches.          

When it comes to fundraising and donors, it’s no longer enough for non-profit organizations to talk about the relative value of their mission, activities, and results. Funders are comparison-shopping, and they want to know that their gifts will deliver more bang-for-the-buck if contributed to one organization versus another.          

As a sign of this bottom-line orientation, foundations increasingly speak of their contribution “portfolios” using terms borrowed from the financial industry — and nonprofit staffs are under pressure to develop their analytical capacity.          

According to a 2009 article in The Chronicle of Philanthropy:       

The absence of common standards means that investors can’t compare the social and environmental benefits of different investment opportunities.       

The Rockefeller Foundation is working with Acumen Fund, B Lab, Deloitte, and PriceWaterhouseCoopers to develop the Impact Reporting and Investment Standards taxonomy. Work has also begun on a Global Impact Investing Ratings System (GIIRS), which will look at how third-party ratings systems can be developed and aggregated under IRIS.       

A recent article in the Wall Street Journal underscores the need:       

Many potential donors worry that charities will waste their money. Measuring the impact charities have on the problems they seek to solve—and, in some cases, deciding whether one cause is more deserving than another—has become a pressing issue for the multitrillion-dollar philanthropy industry.       

Read my entire post on The Scholarly Kitchen


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