Impact funding – Growing movement

By Todd Cohen

Efforts are underway to track the impact of the growing movement among grantmakers to boost their effectiveness and that of nonprofits they support.

“This is clearly not a trend or a fad in philanthropy,” says Barbara Kibbe, founder of Grantmakers for Effective Organizations, or GEO, and director for organizational effectiveness and philanthropy at the David and Lucile Packard Foundation in Los Altos, Calif.

GEO, an affinity group of the Council on Foundations in Washington, D.C., has 440 individual members representing 290 grantmakers, up from fewer than 50 individuals when Kibbe helped form it in 1997.

In a Packard-funded project, The Urban Institute is working with GEO to document the extent to which grantmakers are working to improve their own effectiveness and that of nonprofits.

McKinsey & Co. said in a recent study for Venture Philanthropy Partners in Reston, Va., that its research “strongly suggested that capacity-building initiatives have a proven impact on nonprofit performance.”

GEO’s third national conference, to be held in March in Washington, D.C., will feature the release of a new study on organizational effectiveness by Paul Light, vice president and director of governmental studies at the Brookings Institution in Washington, D.C.

“Everyone seems to agree that nonprofits must raise the bar on performance, but there is much less agreement on what nonprofits should do,” says Light, who adds that GEO is “making significant headway in helping nonprofits understand which interventions might produce the highest yield in improved performance.”

GEO aims to spread the word about organizational effectiveness by working more closely with affinity groups and other funder networks, says Kathleen Enright, who became GEO’s first executive director in December after serving as group director for communications and marketing for BoardSource in Washington, D.C., formerly the National Center for Nonprofit Boards.

MaryAnn Holohean, program director for the Nonprofit Advancement Fund at the Meyer Foundation in Washington, D.C., and chair of GEO’s board, says a big challenge for grantmakers is to embrace the idea that nonprofits’ organizational “capacity” is central to their ability to fulfill their mission.

“It should be integrated into the way the funder does its work and into every interaction the funder has with its grantees,” she says.

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