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Philanthropy journal – Taking stock – The value of evaluation

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By Todd Cohen

The time is ripe for charities and donors to make it their business to keep track of the impact they’re having.

The ailing economy and Sept. 11 terrorist attacks have unsettled donors and confused them about which causes to support, as well as triggering fear among charities that they may not be able to raise the money they need.

But today’s growing uncertainty represents a chance for charities and donors to strengthen philanthropy and themselves by finding ways to clearly and simply measure the difference they make.

Many funders for years have asked charities to evaluate their impact, often tying future funding to charities’ performance.

But instead of informing and driving the work of charities and funders alike, evaluation and outcome-based funding often result in little more than routine reports destined to collect dust on a shelf.

The good news is that philanthropy can use evaluation to transform itself.

Whether you are a charity or a funder, evaluation helps you think about what you want to accomplish, set goals, measure how well you’re doing and shift gears if you need to.

To make evaluation work, however, you have to be willing to acknowledge, study and learn from your mistakes.

That’s a critical challenge, particularly at a time when Americans are asking big questions about how to support charity.

By mapping their own future and tracking their own progress, charities and funders can help philanthropy become more productive and effective.

Funders can do a better job of giving away money and prompt charities to do a better job of delivering services.

And by improving the services they provide, charities can make a more convincing case to prospective donors and volunteers.

The time, effort and expense needed to build evaluation into the work of charity can seem overwhelming, but it is a critical tool – and a growing number of nonprofits and consultants offer assistance in learning about evaluation, along with tools both to make assessments and to improve operations and programs.

The economic boom of the 1990s is over, and times are getting leaner for philanthropy. These lean times can be highly productive, however, if philanthropy is willing to change.

The challenge is to get back to basics. Without retreating from innovation fueled by the entrepreneurial spirit of the New Economy, philanthropy has a chance to retool itself, figure out where it’s headed and do a better job.

Much of philanthropy is rooted in the heart and in connections between donors and charities.

By changing itself into a force that continually learns and improves, philanthropy can build on those connections with businesslike operations, programs and services that better fulfill its mission of healing and repairing our communities.

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