By Miles Wilson, director of philanthropic and nonprofit services
During the past year I spent much of my public speaking time talking about two separate issues. The first issue was the Budget Control Act of 2011 and what I viewed as a potential game changer for the American nonprofit sector. The second issue has not been in the news, yet it’s one that has impeded the progress and impact of the nonprofit sector, and that issue is building the capacity of the sector.
While the jury is still out on the impact of the Budget Control Act, the verdict on nonprofit capacity building has been in for many years now and it appears the court is unwilling to act on it. To quote Penelope McPhee and John Bare’s (2001) introduction to the report Building Capacity in Nonprofits “everyone – from practitioners to foundation CEOs – is calling for increased attention to the capacity-building needs of nonprofit organizations. So far, however, the rhetoric is ahead of the work.” It’s now 12 years later, and not much has changed.
As a senior staff member of the Johnson Center for Philanthropy (an organization that is steeped in sector research and committed to promoting data-driven decision making), I believe in the power of data to inform our work, improve our decisions, and move us intentionally ever closer toward real impact. Funders too are insisting that their grantees adopt data-driven approaches, most often by requiring performance assessments (evaluations) for the programs they fund. This requirement by funders is not only appropriate, but necessary for accountability and for determining if the funder is supporting the right kind of approaches. However, there is a serious concern is that nonprofits lack the capacity to effectively assess and demonstrate their effectiveness – meaning funders might not be getting the kind of quality data they need to answer questions about the value and impact of their grantmaking.
As someone who provides training and technical assistance to both foundations and nonprofit organizations every day, I was not surprised by the Center for Effective Philanthropy’s 2012 report titled Room for Improvement: Foundations’ Support of Nonprofit Performance Assessment. The most significant findings outlined in the report are the following:
- Eighty-one percent of nonprofits believe they should demonstrate the effectiveness of their work.
- Sixty-two percent of nonprofits would like more help from their funders around performance assessment.
- Seventy-one percent of nonprofits don’t receive any support from their funders around performance assessment.
- Fifty-three percent of nonprofits believe their funders prioritize their data needs over the nonprofits needs.
What I find most interesting among these findings is the last item. I say this because as an investor in nonprofits, the funders’ data needs ARE the nonprofits data needs. Data reported to a funder is a product of the nonprofit’s data systems and its staff skills at collecting, analyzing, and reporting data. Why would a funder invest precious resources in a nonprofit and then not protect their investment by ensuring the nonprofit can accurately and confidently report its grant performance – and as importantly, use the data for program improvement purposes? Based on my own experience as a grantmaker, this represents another example where the excitement of funding programs seems to overwhelm efforts to shore-up the environment where the grant needs to perform.
As field professionals, we work in an environment where new and exciting program ideas and ways of funding those ideas are being generated seemingly faster than many of us can learn them. While I welcome innovation and the development of our field, I wonder about the strength of our foundation – the body of knowledge and action that undergirds our field. I think it’s up for question whether we have properly and fully incorporated our learning about good practice into our efforts to advance our work. However, it’s my deepest hope that at some point very soon our work will catch up with our rhetoric.
Established in 1992 with support from the W.K. Kellogg Foundation, the Dorothy A. Johnson Center for Philanthropy promotes effective philanthropy, community improvement, and excellence in nonprofit leadership through teaching, research, and service. The Johnson Center is recognized for its applied research and professional development benefiting practitioners and nonprofits through its Community Research Institute, Frey Foundation Chair for Family Foundations and Philanthropy, The Foundation Review, The Grantmaking School, Johnson Center Philanthropy Archives and Library, and Nonprofit Services.
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