By Todd Cohen
Community Foundations of America, a consortium of 125 community foundations, is spearheading an effort to create Web-based software to help nonprofits and foundations better measure the impact of their programs and grants, share what they learn and use it to better allocate their resources.
CFA, based in Louisville, Ky., has commissioned B2P Commerce in Chicago to develop the product, to be called ImpactMgr.
B2P, in turn, has teamed up with Microsoft to design the product and will market it to nonprofits and private foundations, while CFA will market it to its members.
The new product “empowers nonprofit organizations and the organizations that fund them to articulate, measure and report on their programmatic performance,” says Jason Saul, B2P’s founder and CEO.
ImpactMgr will be tested this spring and summer at three community foundations, and will be available to other CFA members in October, says Carla Dearing, CEO of CFA, a membership group that develops products and services for its community-foundation members.
B2P, which will maintain and continue to develop the product, is working with the Chicago-based Central Region .Net Solutions Group of Microsoft Consulting Services to design it.
And the Center for What Works — a Chicago nonprofit founded by Saul that helps nonprofits systematically assess and improve, or “benchmark,” their operations — will help train program officers at foundations and nonprofits to use the new tool.
Saul says the tool is designed to help nonprofits define the outcomes they want their programs to achieve, track performance measures related to those outcomes and summarize those results in reports to donors and other funders.
“The future of philanthropy depends on one thing – return on investment,” he says. “And these words that keep getting bandied about — like ‘effectiveness,’ ‘outcomes,’ ‘performance’ – are worthless if there are not tools available to implement those ideas.”
To test the product, each of the three community foundations will focus on at least one grant priority area, such as the arts or youth services, and work with roughly 30 grantees.
B2P and CFA are investing $350,000 to develop the product’s technology and Microsoft is contributing tech-development support, while B2P and CFA are investing $250,000 to train community foundations to use it and the Center for What Works is contributing educational training.
The community foundations, in turn, will train participating nonprofits.
Dearing says the new product will strengthen the edge that their local role gives community foundations in competing for donors with other intermediaries such as financial-services firms and commercial gift funds.
“If our value-added is local impact and community leadership, which it is, then our ability to measure and demonstrate our impact is important and is going to become increasingly important in the future,” she says.
The new product, she says, will avoid the thorny issue of agreeing on uniform standards that has stymied past efforts, typically in the academic world, to assess the impact of foundation and nonprofit programs.
“We’re going to collect data and then determine what’s uniform,” she says. “The facts are powerful if you have them and can use them.”
The software will be designed to let foundations work with individual grantees to define outcomes they want their programs to achieve, and metrics they will use to track those outcomes.
“It’s a negotiation between the program officer and grantee,” Dearing says.
Over time, she says, data from different funders could be analyzed and even aggregated to help develop consistent standards for measuring the impact of programs in fields ranging from the arts and young people to economic development, the environment, health and human services.