How does a foundation or an individual donor define success in grantmaking? How can the results of an organization’s or donor’s grant investments be measured? What does a results-oriented framework for philanthropic investing encompass?
An effective way to approach these questions is through the development of a Foundation Investment Summary (FIS). The FIS is a comprehensive narrative for a program area—I will use my field, education, as an example—that describes the value context within which the foundation does its work: its vision, principles, theory of change, theory of action, key partners, progress metrics, investment strategies, and timelines.
In creating a FIS, each program area must systematically think through a core set of questions with its grantees. What problem are we trying to solve? How can this problem be solved? What is our theory of change? What foundation investments and partnerships contribute to that solution? How will we track performance, recognize success, identify failure, and report on outcomes?
Population-level and program-level accountability
A key element in the results frame-work discussed in the FIS is the distinction between population-level and program-level accountability. Population accountability specifies a measurable result for a large group. For example, a population-level result in education might be young people graduating from school prepared for college or work. Progress toward achieving this result is measured by indicators that describe how well this population of young people is being prepared for college or work—such as trends in reading and math scores, high school graduation rates, rates of college admittance and completion, and number of well-paid jobs attained.
Program or agency accountability measures the performance of the organization that is delivering a service or product to the specified population. Imagine, for instance, a local nonprofit organization that places high school students in a work internship. Program accountability attempts to determine whether the organization is in fact making students more knowledgeable about the multiple demands of a work environment. Performance measures determine how well the foundation, its grantees, and its other partners are doing their particular program work. These measures must be aligned with the indicators of the vision for the population.
Of course, it is highly unusual for any single program or agency to achieve a population-level result on its own. Nevertheless, each program or agency should be held accountable for the results of its work, and may be able to claim credit for contributing to a population-level result.
How Do We Recognize Success?
One way to track performance and determine if an investment is leading to a desired result involves a well-defined but limited number of performance measures. We track program-level accountability through an interrelated three-tiered performance mantra: what are we doing? How well are we doing? What difference are we making? Each question in turn raises further questions.
- What are we doing? How many individuals or organizations do we serve? What products have we developed and disseminated, or what services have we provided through the activities supported by the grant?
- How well are we doing? What percentage of our audience evaluates the quality of our services and products—whether, say, the service or product is timely, informative, and affordable?
What difference are we making, especially concerning:
—the impact we are having? What number or percentage of our audience shows improved knowledge, skills, attitudes, behaviors, or circumstances?
—the influence we are having? What number or percentage of our audience has been influenced by our products or services? Are they now advocating our recommended policies, adopting more effective practices, or altering their organizational strategies?
—the leverage we are having? What percentage of the project operating costs comes from our funding? What other resources are supplementing our efforts?
In developing a results-oriented investment framework, I have learned six critical lessons.
Start with results and a performance mantra. Creating a FIS forces clarity about the relationship between inputs, activities, and outcomes, as well as between investments, strategies, and results. This is the essence of a results model: begin with a clear sense of the desired results. From there, work backwards to a set of strategies, tactics, and metrics that will determine if these results are being attained.
Focus conversations with grantees around program accountability, and always bear in mind the performance mantra. This exercise creates clarity, which leads in turn to foundation transparency. It also structures conversations between a foundation and its grantees, creates more lucid strategy and disciplined execution, and provides a framework for reporting on investment results.
Not all investments achieve every type of result. Often a program area’s grants are composed of many investments—small and large—from which significant results are expected. Other grants may attempt to influence different audiences to adopt certain policies or practices. Most foundations will aim to have all their grants generate additional public and private dollars to support the results they seek.
As a corollary, it is unrealistic to seek major impact, influence, or leverage from a limited financial investment. But even limited investments can accomplish important results. For example, a $25,000 grant to start a mentoring program in a school cannot reasonably claim to be responsible for the school’s meeting its Adequate Yearly Progress goals under No Child Left Behind. Modest investments should have modest expectations about the results that can be realistically achieved.
Relationships and context matter when seeking results. Involving grantees in developing a results-focused approach takes considerable time. But such consultation can lead to important insights, as well as contribute to the establishment of mutual trust. It also helps anchor the results process in reality and keeps non-cooperation to a minimum.
Discussions with grantees about local context and environment may further elucidate what results matter most at what time. They can make accountability a joint effort that fosters transparency in expectations, problems, disappointments, and results. It takes time to create positive working relationships with grantees and understand their local situation, but that time is well spent.
Communicating results is about more than numbers. Not everything a donor needs to know about an investment is best expressed by a numerical performance measure. Indeed, results reports come to life when they detail accomplishments, lessons, and stories.
All this information puts a human face on the numbers. It also helps develop a more compelling and focused message about the foundation’s investment achievements. And a good success story is much more likely to move forward policy debate than a collection of statistics.
Sustaining a results program is not natural and includes building capacity. An investment or set of investments will not automatically produce a sustainable program, activity, or set of results. It is far easier to revert to familiar habits than to maintain or increase momentum towards the desired goals. For that reason, it is imperative to discuss program and results sustainability with grantees sooner rather than later.
These conversations are best undertaken with feedback from multiple sources, such as grantees, peers, consultants, and professional staff. In addition, the process requires assistance—capacity development—for grantees, including developing new knowledge and skills that reinforce a focus on results.
Create a learning agenda. Failure is a result. It happens. Admit it, and make the lessons learned part of the program’s learning agenda. Even short of failure, some investments do not achieve the results that were sought. Some achieve mixed results. Make sure that suboptimal results are shared with and studied by foundation staff and grantees. Periodic efforts to review mistakes should be part of every philanthropic investment.
In fact, creating a learning agenda is in many ways the most important lesson. It serves as a reminder of why results-based accountability is, in the end, so vital in philanthropy. Amidst the tedium of performance measures and reporting requirements, it is easy to lose sight of the ultimate purpose of all of philanthropic activity: maximizing effectiveness in the effort to improve people’s lives.
Bruno V. Manno is a senior associate for education at the Annie E. Casey Foundation and a contributing editor to Philanthropy. For more information on this results framework, see A Road to Results online at the Knowledge Center of the Annie E. Casey Foundation