August 21, 2008
Grants Evaluation: Funders Want Introspection
By Judith Margolin
Evaluation has become a buzzword for today’s nonprofits, grantmakers, and government oversight agencies. There are a number of reasons for this, high on the list being attention by some members of Congress who are taking a careful look at nonprofit expenditures, including those of foundations, and the fact that investigative journalists have been focusing on the small number of nonprofits that take unfair advantage of their tax-exempt status.
In the wake of the passage of the Sarbanes-Oxley Act in 2002, nonprofit board members have become increasingly aware of their personal liability as stewards of the public trust. What all this adds up to is growing pressure on those who run the nation’s nonprofits to justify their existence. One way to do this is by conducting evaluations of their activities to determine if they are having the desired impact.
The objectives of an effective evaluation program are closely tied to an organization’s mission and basically ask the question, “are we succeeding at what we set out to do?” Here are the commonly accepted characteristics of a successful evaluation program:
- Evaluation as conducted by your nonprofit should be systematic. It should be ongoing (i.e., not something you do only once or twice a year) and built into the very fabric of your management systems.
- It should focus not just on your outputs (the numbers you serve or the programs you run), but also on outcomes (what has changed as a result of these activities) and ultimately should seek to measure your impact on the community in which you operate. This is a tall order for many nonprofits, when in the past simply counting heads was the primary means of measuring success.
Evaluation, as it is practiced today, might be conducted by in-house staff, by outside consultants, or by a combination of the two. It need not be overly complicated. One of the simplest ways to conduct an evaluation is to ask your audiences, staff, and volunteers what they think of the service being provided and how it might be modified or improved. Many organizations already do this exercise. But in the current environment, such efforts need to be more formal and more transparent.
Among the most common reasons to evaluate are the following:
- The board wants you to do it, and in fact is insisting on it;
- A donor or prospective funder might be asking for evidence of effectiveness;
- The executive director is considering a shift in focus and wants to determine where opportunities lie to make a greater difference before proceeding;
- New leadership might be in place; and,
- By far the most compelling reason to engage in evaluation, you could want to learn how to do a better job at what you’re already delivering to your client base.
There could be equally compelling reasons why you might not want to evaluate. It’s usually not cost-free, and the increased costs could be in staff time, not just dollars. You might not have the staff expertise to engage in formal evaluation, or you could be fearful of what you are going to find out.
On the other hand, there really is no choice. In today’s competitive funding climate, your nonprofit will need to be creative in finding a way to fit evaluation into your budget, to get these important services donated, or to find a funder who will pay for them, if you are to become a true “learning organization.”
For the latest (2006) edition of The Foundation Center’s Guide to Proposal Writing, author Jane Geever interviewed 40 grantmakers. The topic of evaluation frequently came up. According to the interviewees, the evaluation component of a grant proposal to a foundation should include evidence of a solid evaluation plan, including both objective and subjective data.
Indeed, it is best if the evaluation is built into the initial conceptualization of the grant project, not tagged on at the end. Most funders said that they expect to see at least one or two paragraphs as part of the project description section of the proposal portraying a well thought-out plan to evaluate and some projected indicators of success, either qualitative, quantitative, or both.
Today’s grants decision makers view a healthy evaluation plan as evidence of a well-run organization, one they can have confidence in and one whose leadership is not afraid to ask hard questions. Still not convinced? An additional reason to spend some time on the evaluation section of your grant proposal is that it may well pave the way for future funding.
To quote one of the grantmakers interviewed: “Having a good evaluation component in place helps position the grantseeker for the next grant.”
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Judith Margolin is vice president for planning and evaluation at the Foundation Center and editor of The Foundation Center’s Guide to Proposal Writing and The Foundation Center’s Guide to Winning Proposals.
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This article is from NPT Instant Fundraising, a publication of The NonProfit Times.
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