As first published in Guidestar's Blog trust.guidestar.org

Part 3 of 3

Both funders and nonprofit organizations seek to understand the impact of their dollars and efforts, yet few are doing it. Why is that?

In our first two posts of this three-part series, we concluded that less than 25 percent of the philanthropic sector has a strong outcomes capacity and the underlying causes of that low percentage. First, we explored how each type of organization sees their respective role in outcome achievement, along with the beliefs and behaviors that accompany that role. We reviewed other factors that can hinder outcome achievement including incentive, motivation, clarity, resources, and data use.

While many of these factors have influence, we found that the largest influence comes from the beliefs we hold about ourselves and others. Some of the beliefs we hold can limit outcome achievement and keep us acting in limiting ways, while others can empower outcome achievement and long-term impact. After working with hundreds of these organizations over the last 20 years, I’ve found that both nonprofits and those that fund them need to shift beliefs in order to move into empowered, results-focused action. With a newly empowered perspective in place, a path opens up for learning and growth that builds the capacity and sustainability of all involved as collaborative partners engaged in higher achievement together.

Below are a set of empowering perspectives (roles, beliefs, and behaviors) for both funders and nonprofits that drive high outcome achievement:

 

Empowering Perspectives for Outcome Achievement

Empowering funder perspectives creates the confidence and the focus required for a funder to link its strategy to measurable outcomes. They encourage a funder to act like a collaborative partner and to gather and integrate its learnings, which in turn sustains its ability to achieve and improve outcomes from its philanthropic efforts. Funders feel energized and informed enough to interpret their experiences through more reasonable and fact-based stories, which increases trust and consistency in their partnerships and in their ability to step into an open, collaborative, learning mindset. They engage with nonprofits to build outcome capacity in intentional ways, understanding that each grantee’s results are also the funder’s results.

Empowering nonprofit perspectives creates confidence and the focus required for nonprofits to drive successful performance management efforts, encourage collaborate partnerships, and promote a culture that uses data and integrates learnings, which in turn sustains the ability to achieve and improve outcomes for program participants. Nonprofits feel energized and empowered to interpret their experiences through more reasonable and fact-based stories, which increases trust and transparency in their partnerships and in their ability to step into an open, collaborative, learning mindset. Organizations feel empowered and worthy to engage with their funders for support to build their performance management capacity to achieve and improve outcomes.

CHANGE OPPORTUNITIES

You know that your organization is ready for change when you and others feel able to take greater risks, face dissenting views, and still feel excited about the potential for greater impact.

If you find your organization is operating from a somewhat limited perspective, there is still hope for change. Here are three opportunities you can leverage or address in your workplace. They apply to both funders and nonprofits:

  • New leadership: The time for change is when a new board chair or executive director gets engaged with the passion and courage required for high outcome achievement.
  • Learning to tell a new story: Learn to focus yourself and your colleagues on the facts, not opinions or interpretations, to reframe limiting situations and misunderstandings into empowering dialogue for more impactful collaboration.
  • Utilizing performance management frameworks and systems: Both funders and nonprofits benefit greatly when they clarify measurable results and implement tracking, assessment, data sharing, and learning adjustments as cultural norms.

GETTING INTO ACTION

With a newly empowered perspective in place, here are a few steps that funders can take to increase their outcome capacity and the outcome achievement of those they fund:

Define and ask for consistent metrics within a program area. The key to being able to compare programs/grants, roll up data, and determine overall impact is asking for apple-to-apple measurements.

Add some results-focused questions to your strategic applications and reports:

  1. Who or what will change (participant or problem overview)?
  2. What specific change is intended for how many, and by when (results statement)?
  3. How will a grantee create change for those served (project elements)?
  4. How will they know it happened (verification/evaluation)?

Assess outcome progress throughout the grant term. Don’t wait until the end of the grant term to determine if your grantee is succeeding. Make the relationship a partnership and have check-ins throughout the grant term.

Provide capacity-building dollars that support performance management practices and systems for grant partners committed to improving results from dollars and efforts. They will become the highest-performing and sustainable partners to help you achieve a strong ROI over time.

When funders are clear about the results they want to measure and integrate them into their grantmaking practices, nonprofits can determine which ones they aim to achieve, and a clear link can be made between efforts and dollars. Throughout the grant period, both funders and nonprofits gain the capacity to tell their results story at a higher level. Funders can take the lead and get the ball rolling.

As a nonprofit, focus on outcomes capacity. Regardless of where your funders are in their own outcomes capacity, most of them would rather fund a project that has clear outcomes vs. one that doesn’t. Here are a few steps you can take to increase your outcome capacity and the achievement level:

  1. Secure capacity-building dollars and proven facilitation support to define and integrate measurable outcomes into programmatic and operational efforts.
  2. Integrate strong performance management practices with capacity-building dollars to support a culture of data use and learning at all levels of the organization.
  3. Lead with participant outcomes in your fundraising and communication efforts, and show how your people, programs, and partnerships enable you to you to achieve and improve outcomes over time. Even when funders don’t ask for them.
  4. Share outcome achievements and learnings internally and externally as often and transparently as possible.
  5. Negotiate lower outcomes achievement level if funding is also lower than expected. Outcome levels will often go down when resources go down. Better to reduce quantity than quality!

Regardless of your role, you can be a catalyst by sharing this article series with your leaders to inspire them to action.