Impact & Evaluation

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Planning for Impact

1. What is impact?

   For the purposes of the ASF curriculum, we define philanthropic impact as a significant positive effect or to strongly influence a cause, field, or community.

2. Can impact happen in a single grant?

   Although single grants can make a difference, foundations also have the opportunity to engage in a process that aligns the foundation’s efforts toward a significant positive effect. It is the difference between a foundation that happens to make a grant with impact and a foundation known for impact due to the strategic and intentional pursuit of it.

   Foundations known for impact typically outline a clear plan to achieve particular goals and intentionally apply their many assets (e.g., dollars, influence, reputation, time) according to the plan and then revise and improve the plan as needed. Whether you make small grants or big ones, moving the needle typically requires multiple grants and multiple non-grant activities for an extended period. Graphically, these activities and results might look something like this.

3. How do you achieve impact as a small foundation?

   As we all know, it takes more than a plan to get to impact. Foundations find they can maximize their impact by defining a clear purpose, developing a plan to achieve success, implementing according to the plan, evaluating their work, and using those evaluation results and other learning in the next round of planning and implementation. Achieving impact looks something like this. 

   Learn more in the ASF primer Getting to Impact Through Planning.

4. Why is it worth it to pursue impact?

   The path to impact can be challenging and therefore some may need convincing that it is worth the effort. Consider these reasons why every foundation should continually pursue impact:

   • Pursuing impact is just part of good governance. Foundations expect their grantees to have impact; it is equally important that foundations do so as well.
   • People want to see results when they invest their time and resources. Pursuing impact makes it all the more likely that you’ll actually see the results you want.
   • Small foundations play a critical role in helping communities around the world. It matters that they make a difference.

5. What is planning?

   Planning is the process of establishing goals, policies, and procedures for a social or economic enterprise. To achieve success, foundations, like many other institutions, must establish clear goals, devise a road map to reach the goals, and organize themselves to follow the road map effectively. Because foundations tend to work through others to achieve the impact they desire, they must also incorporate the work of their grantees and partners.

6. What are some of the reasons boards are reluctant to engage in planning?

   • Board members have not had successful experiences in the past, either because the process was difficult, the resulting plan was not effective, or the plan was never implemented.
   • Board members are not dissatisfied with the current status, making them reluctant to engage in a process toward change.
   • People are skeptical that planning will actually improve the work of the foundation.
   • There is little leadership to encourage change and improvement.

7. What are some reasons our board should consider engaging in planning?

   • Planning helps turn a vision into reality. Some foundations know what they want to accomplish, but knowing is just a first step. To reduce homelessness, help youngsters to read at grade level, or clean up the Chesapeake Bay, for example, you also need a plan for action—especially because money alone is not enough to guarantee impact.
   • Planning saves money. Because most grantmakers’ assets pale in comparison to the enormity of social problems, it is critical that you explore how to make the most of your giving.
   • Planning saves time. Taking time to plan the foundation’s direction will save significant time and effort down the road.
   • Planning can be done well at a low cost. Although some foundations hire consultants to help with planning, this primer aims to give small foundation leaders the tools and confidence to engage in a meaningful and manageable planning process on their own. If you are willing to dedicate the time, you can make great strides with minimal dollars.
   • Planning tells you where to start and how to adjust along the way. Rather than producing a static plan that is outdated before it is completed, we encourage you to engage in a type of planning that allows you to adjust the plan over time as you learn more about your field, expand your skills or interests, or engage future generations. It also helps you make thoughtful decisions along the way—some so fundamental that they may last as long as the foundation itself.
   • Planning helps you learn. Throughout a planning process, foundations tend to identify what they know, what they thought they knew, and what they still need to know about themselves, their areas of interest, and their opportunities to make a difference.

8. Why is it important to decide what you want to accomplish?

   If you have little clarity about what you’re trying to achieve, not only are you at risk of achieving little, but also likely to miss out on having the satisfaction of knowing you’ve achieved something meaningful.

9. What are the benefits of focusing your giving?

   • Successful businesses focus; foundations that focus see results too. Businesses choose a market niche based on the biggest bang for the buck, and foundations can benefit from applying the same logic to their grantmaking. After all, many foundations are led by those with savvy business minds.
   
   
   • A focus directs your time wisely. Board members and staff have limited time; use it wisely by focusing their efforts. A focus allows your key players to know issues and grantees more intimately and bring to bear their knowledge, reputations, and influence—all of which are equally, if not more, powerful than the foundation’s dollars.
   
   
   • A focus allows foundation trustees and staff to communicate more effectively. A focus will help you to communicate what you do and why to current and potential grantees, fellow funders, elected officials, and others interested in your work. Nonprofits, in particular, benefit when foundations are clear about their priorities, because they spend less time applying for grants from foundations that have no interest in their work.
   
   
   • A focus provides a framework for decision making. With a focus in hand, many other decisions about governance, grantmaking, administration, and investments fall into place.
   
   
   • A focus leads to fulfillment. When seasoned foundation leaders give advice to newcomers, they repeatedly share the following tip: Focus your giving. Not only is foundation work less overwhelming with clear boundaries in play, but foundation trustees and staff are more fulfilled when they know where to look for the effects of their work.

10. How can we encourage our board to work towards finding a focus?

    Even though a board may agree that there are good reasons to focus their giving, there may be additional hurdles to clear before board members are willing to define a focus for the foundation. To move the conversation forward, be sure to clarify the following:

    • You can agree on a focus. Board members may have strong and opposing opinions, but consensus is not impossible. Foundation boards can often find commonality by shifting the discussion away from personal interests or particular grantees to instead focus on values. You’ll be surprised by the degree to which integrity, opportunity, compassion, and other values can create common ground—and at a core level that makes consensus possible.
    
    
    • You can accommodate board members with other interests. Focusing the foundation does not preclude your board from setting aside a small portion of its annual giving for discretionary grants. In fact, many foundations allow board members and key staff to direct a portion of annual giving to organizations of their choice. In addition, try other ways to engage board members: putting their talents and technical skills to use, engaging them in site visits or proposal review, or encouraging them to play significant roles in other parts of the planning process.
    
    
    • A focus does not prevent the foundation from being responsive. If your foundation has historically given to just about anyone who asked, focusing will indeed be a significant change—and one that feels less responsive to certain causes. But keep in mind: Your foundation can be highly responsive to community needs by learning about the most critical ones and focusing your efforts to address them. You can also set aside a small portion of money to respond to emergencies, if that is important to your foundation.
    
    
    • A foundation isn’t limited to a single focus. In fact, many foundations have more than one focus. Just be sure that your assets, time, and energy are sufficient to achieve impact in more than one area.
    
    
    • A foundation can experiment with focus. Tentative foundations may initially apply only a small portion of the foundation’s assets in a focused manner. Of course, the benefits of a focus will only be seen if the board and staff direct their time and energy accordingly.
    
    
    • A foundation can shift from unfocused to focused over time. Even if you decide to focus your giving, you can make the shift over a period of several years to give grantees time to find new funding sources. Using a small portion of your endowment for discretionary grants can also make the shift more palatable to trustees and key staff.

11. What are some of the ways boards come to consensus about focus?

    Foundations settle on a focus in many different ways. There is no one right way, and many foundations use a combination of the methods on the following pages to inform their final decisions. For example, a foundation may choose a focus that respects the donor’s intent and also incorporates the current board’s values and passions. See below for various ways to find commonality among your board:

    Your passions

    Some boards develop a focus built on common passions. Because passions are often based on emotional connections, the following questions can help to uncover them:

    • About whom or what do you care deeply?
    • What excites you or brings you the greatest joy?
    • What angers you or breaks your heart in our community, our society, or our world?
    • What do you believe drives change?
    • What kind of future do you aspire to help create?
    • Has an event significantly shaped who you are or what you believe?

    Common values

    Even individuals with outwardly polarized views can hold similar values, and, once found, they can lead to a unifying focus.

    Uncover shared values by asking questions such as:

    • What is critical for an individual to become a productive member of society?
    • What was key to your becoming the successful and productive person you are today?
    • What values guide your life choices?

    In addition, 21/64, a nonprofit consulting group specializing in next generation and multigenerational strategic philanthropy, offers a handy deck of Motivational Values Cards, each with a value (e.g., justice, family) written on it. Individuals can prioritize the cards according to what motivates their philanthropy, then discuss their rankings with others in their group.

    Critical community needs

    Some foundations want to focus on a particular community but find that board interests are still too widespread. In these cases, it can be helpful to consider the community’s critical needs. Although board members may have their own—often well-informed—visions for a community, it can also be helpful to hear from the community about its needs. With the community’s voice in hand, board members can craft a focus that also incorporates board members’ interests, strengths, and skills.

    Donor legacy

    A foundation’s focus often reflects its donor’s interests. If your donor expressed interest in a particular focus, consider how you might respect the donor’s wishes, whether the donor is living or deceased. In the best scenarios, boards create a focus that also resonates with current board members. Even if the donor’s interests are narrow, board members can still find fulfillment by looking deeper for values in common with the donor.

    Meaningful grants

    Foundations often uncover a focus by reviewing past grants. Look for grants that addressed a particularly meaningful cause, stood out because of impressive results, or made board members especially proud.

    A single strategy

    Some foundations find focus through a single but powerful strategy. This approach allows the foundation to gain expertise that can be leveraged across issue areas. Capacity building is one such strategy used by small foundations.

    Populations of interest

    Think about the populations that interest you. For example, your foundation may want to focus on the elderly or children.

    Your mission statement

    Some foundations start the discussion of focus by reviewing their current mission statements. Although a mission statement may be specific—for example, specifying an interest in education, arts, and the environment—it may still lack focus. Each foundation must answer this question: Can we be smart, thoughtful, and effective in funding several areas, or are we wise to narrow our interests to something more manageable?

12. How does our focus relate to our mission?

    Once you’ve defined the foundation’s focus, it is useful to write a mission statement, or a concise statement of purpose for the foundation. If your foundation already has a mission statement in place, be sure to review and revise it as needed to accurately reflect the foundation’s current focus.

    A mission statement will keep the foundation on track and make your purpose clear to grantseekers, partners, and others interested in your work. It is the groundwork for all foundation activities, from the strategies you choose to the financial investments you make to the individuals you invite to be board members. A meaningful mission guides your foundation as a central force now and possibly for generations to come, helping you to:

    • Deflect funding requests outside your focus
    • Ease decision making, because some projects further your mission more than others
    • Clearly communicate your interests with grantseekers—and help them to grasp your interests quickly

    It’s best to keep your mission statement succinct—just a sentence or two at the most. A mission statement’s power is in its simplicity, or its ability to be communicated easily.

     

13. Once we have a focus, what do we do next?

    Once you know the area of focus, you’ll want to start thinking your foundation’s specific interests, strengths, and limitations, as well as the opportunities and challenges within your particular focus area. It will take some time and energy to gather this information from the foundation and nonprofits, but gaining knowledge will enable your foundation to be more effective.

14. What are the steps for developing our foundation’s strategy and goals?

    There are various methods for developing your foundation’s strategy, but it starts with having clarity about what you want to actually accomplish. Defining a focus will help to guide you, but most fields have multiple avenues for making change, each which will have a different end result. Once you have decided upon the big picture of what you’d like to accomplish, you can then ask the simple but deep questions of “what must happen before that change can occur?” This chain of questioning helps to tease out the various strategies that one can pursue to make change, as well as the various roles that nonprofits play. In addition, it encourages a foundation to consider the multiple assets it can employ to make change (e.g. field educator, convener).  It is highly unlikely you’ll be able to craft your plan at one sitting, as each level of questioning requires additional gathering of knowledge. This process might look something like this.

15. What is a theory of change?

    In the end, by moving backward from your focus to your strategies, you’ve essentially created an if/then statement about the way your foundation will work to achieve its intended impact. That is, if your foundation undertakes the strategies it identifies, then it will put into motion a sequence of events that results in your intended impact. This if/then statement is called a theory of change.

    Although your road map or theory of change is well grounded and a critical step in working more intentionally, it is still just a plan. In almost all cases, you’ll need to make some adjustments as you implement the strategies and learn more about your field or community. In fact, if a theory of change is developed and seen as a rigid plan, it can actually limit your impact. A theory of change should be seen as starting point, or a stake in the ground, that will necessarily need to be moved as you learn more and more.

16. How can we align the rest of the foundation with our plans for impact?

    Once you have clarity about what you want to achieve and your roadmap for getting there, you’ll want to create alignment with the rest of the foundation. This means that you’ll want to consider changes in the operations of the foundation so you are set up to actually achieve your goals. The following gives simple examples of questions you’ll want to ask in each area:

    • Governance: e.g. Do we have the right people on our board to accomplish our new direction?
    • Tax & legal: e.g. Do we need to change our bylaws, grant agreements, or learn more about legal compliance in a new grantmaking area?
    • Investments: e.g. Do we want to invest in a way that supports our mission?
    • Administration: e.g. Are we staffed appropriately considering new strategies?

     

17. What is a grantmaking strategy?

    A grantmaking strategy gives you clarity about your funding focus, priorities, and philosophy to guide your actual operations. In other words, it’s an outline of what you will and will not fund. It is important to lay out your interests and restrictions up front, so that you have a map for achieving your mission.

    A strategy includes some or all of the following components:

    • Program Interests
    • Geographic Focus
    • Grant Restrictions
    • Grant Types
    • Grant Sizes
    • Relationship with Grantees
    • Consistency of Grants
    • Partnerships, Collaborations and Affiliations

    When developing a grantmaking strategy, it helps to consider all of the above components—although some may not be of importance to all funders, all the time.

Evaluating for Impact

Effective Evaluation

1. How can a small foundation effectively engage in evaluation?

   There are many methods to evaluate your work, but for the average small foundation, the following framework is sufficient:

   • Target your evaluation.
   • Ask the right questions.
   • Track only what you need.
   • Learn the most important lessons.
   • Use your learning for greater impact.

   More detail on each of these steps is available in the ASF primer Getting to Impact Through Evaluation.

    

2. What are some of the reasons foundations engage in evaluation?

   Foundations engage in evaluation for many reasons. In fact, to some degree, your foundation may be motivated by all the reasons that follow. By solidifying your primary reason for engaging in evaluation at a particular point in time, you will clarify the questions to ask and increase the likelihood that grantees or others provide meaningful data, a necessary component of successful evaluation.

   Foundations undertake evaluation to:

   • Guide future strategies for new or pilot programs. Engaging in evaluation in this way can help foundations to make educated decisions about new or experimental programming.
   
   
   • Improve ongoing foundation strategies. Some foundations engage with grantees to evaluate the foundation’s cumulative effects and learn together from the data. Evaluation at this level becomes part of a foundation’s ongoing learning and improvement.
   
   
   • Make good funding decisions. Foundations often require grantees to report program results so the foundation can make decisions about renewal grants. Although common, such practices are more accurately described as assessment and are different from an evaluation intended to inform changes or improvements.
   
   
   • Hold grantees accountable. Many foundations require grantees to report how grants were used. Although widely practiced, seeking only to be accountable does not typically help foundations (or grantees) learn or improve. If fact, these practices are closer to monitoring than evaluation.

   As you might imagine, evaluation will look very different if your goal is grantee accountability versus foundation impact. Although you may initially think about evaluation as a way to monitor how funds were spent or decide the next grant, we encourage you to engage in evaluation for a deeper purpose: to improve your own practices for greater results. These types of evaluations are sure to be more fulfilling for your foundation.

3. When might a foundation consider hiring a professional evaluator?

   Although most foundations can conduct useful evaluations without hiring professionals, outside help can be useful in these situations:

   When a special skill set is required.

   Foundations often hire external consultants to develop surveys, interview grantees, facilitate discussions, lead boards in strategic decisions, and summarize data to reveal key themes and salient points.

   When objectivity and/or academic credibility are required.

   An unbiased consultant can be important in scenarios like these:

   • A foundation wants to create a safe space where grantees can comment honestly on the foundation’s application process.
   • A particular evaluation question is a “political hot button” within the foundation.
   • A foundation seeks to promote one of its strategies among grantees or to the larger community and field.
   • A foundation makes a large investment for a special initiative and concludes that something closer to “research” would provide significant benefits without comparatively significant costs.

    

4. What are some of the greatest pitfalls for foundations engaging in evaluation?

   With a little forethought, foundations can avoid many of the following pitfalls:

   • Perhaps the most common evaluation pitfall is a desire to measure results and make claims that are beyond our control as grantmakers. We want to claim that infant mortality rates declined due to a prenatal care initiative or that homelessness fell due to an affordable housing campaign. It’s natural to want to make such jumps, especially when results are positive.
     
     But many factors are at play in large-scale social change, from charitable giving to a nation’s economic health. You’ll better understand your foundation’s role in creating change if you target your evaluation on that which is within your sphere of influence.
   
   
   • The foundation fails to prioritize what it most wants to learn and therefore ends up paralyzed by massive data collection, resulting in little learning.
   
   
   • The foundation creates the evaluation plan without the input of grantees who play a significant role in the data collection.
   
   
   • The foundation collects the data, but fails to ever review it, learn from it, or use it.

    

Why Evaluate

1. What is evaluation?

   Evaluation is a systematic process of asking questions, collecting information, and using the information to answer those questions.

   Evaluation may have been overwhelming or unproductive in the past, but it doesn’t have to be going forward. Evaluation doesn’t need to be costly, labor intensive, or complicated to generate useful information. It can be simple, straightforward, and inexpensive. Even on the smallest scale, evaluation can:
   

   • Provide information for decision making
   • Measure progress and motivate your board and staff by documenting your achievements
   • Help you to be as effective as possible with limited resources
   • Help you to be transparent and credible to your community, your partners, your colleagues, your founders, and yourselves
   • Help you to learn, plan, and improve all aspects of your work

   Download a free discussion guide, Evaluation: What It Is and Isn’t.

    

2. Why might a small foundation consider engaging in evaluation?

   Even if you manage your foundation without staff, as is the case for many small foundations, it is still possible to undertake a meaningful evaluation. Consider the following reasons for incorporating evaluation into your work:

   • Evaluation is likely to take less time and money than you think. Many forms of useful evaluation do not involve professional evaluators or complex questions. In fact, the purpose of ASF materials on this topic is to give small foundations the tools and confidence to undertake a meaningful and manageable evaluation.
   
   
   • Evaluation is undoubtedly already part of what you do. Your foundation is already making assessments. For many foundations, it simply means making this process more formal.
   
   
   • Evaluation helps you to know you are making a difference. Evaluation can provide good information on where and how you’re making a difference.
   
   
   • Evaluation allows a foundation to learn from its missteps. It can even enable your foundation to transform “failures” into wisdom that accumulates over time.
   
   
   • Evaluation helps you to use your limited resources wisely. Data is one avenue to knowledge. The more your foundation knows about a field and the results of its grants, the more quickly a foundation will learn what is and isn’t working, and where to place its resources.
   
   
   • Evaluation drives you to clarify what you want to achieve. In fact, you cannot measure your success if you have not defined what success looks like.
   
   
   • Evaluation enables your foundation to be a leader. Foundations that understand how and why they are getting to impact can be more effective in generating support from others and leveraging their successes. In addition, foundations that wrestle with how they are addressing a particular issue tend to work more effectively with grantees on that issue, filling the important role of thought partner.
   
   
   • Evaluation helps a foundation show it is fulfilling its charitable purpose. Although the IRS is far from requiring foundations to evaluate themselves, foundations that engage in evaluation are better prepared to show they are using their dollars wisely and with impact.
   
   
   • Evaluation leads to impact. The process of defining your desired impact, thoughtfully asking questions that reveal progress toward that impact, collecting information to answer the questions, reviewing the findings and drawing conclusions, and using those insights to make changes all lead to more effective programs and ultimately to greater impact.

   Download a free discussion guide, Why Every Foundation Can and Should Have Impact.

3. How can we motivate the board to care about evaluation?

   Boards can be disinterested in evaluation for many reasons, but the following bullets help to clarify some misconceptions that might limit support:

   • Evaluation is about improving rather than proving. Although evaluation may approximate the activities of academic research (e.g., creating hypotheses, collecting data), its goal is not to prove your impact or worth beyond a shadow of a doubt. Rather, evaluation gives you a chance to ask important organizational questions that will inform you of important trends and provide an opportunity for immediate learning—ultimately leading to refined programs with more effectiveness and impact.
   
   
   • Evaluation is about learning rather than judging. Evaluation can bring to mind a report card or an undesirable feeling of being graded or scored. But evaluation doesn’t have to be about judgment or passing a test. Yes, evaluation may uncover areas that weren’t as successful as planned, but the goal is to learn and to become more effective. With the purpose of learning firmly in place, evaluation can even energize board members, staff, and the broader community.
   
   
   • Evaluation need not be exhaustive to be effective. Evaluation does not have to be an elaborate, scientifically rigorous process. In fact, an evaluation should not be any bigger than you can handle. Rather than look at every aspect of your work from every perspective every year, some of the most effective evaluations pose only a single question and gather information to shed light on it alone. Foundations are sure to benefit from the simple and straightforward evaluation introduced in the ASF primer Getting to Impact Through Evaluation—something any foundation can do with limited resources and without hiring an evaluator.

4. If our grantees already evaluate their work, why would we need to evaluate our foundation’s work?

   Evaluating a grantee’s program is not a substitute for evaluating your foundation’s work. Although the success of your grantees is intrinsically connected to the success of your foundation, your foundation is a separate organization with its own mission and goals. Are you reaching your goals? Your grantees cannot tell you that; they can only tell you if they are reaching their goals.

5. When is a foundation ready to engage in evaluation?

   There are a few key components to being ready for evaluation, which include: having board buy-in; having someone to manage the evaluation process and keep it on track; having good relationships with foundation grantees; and having a commitment to learning from and using the evaluation results to improve the work of the foundation.