Assessment a challenge for funders

Ellie Buteau
Ellie Buteau

Foundations are doing more than they did a decade ago to assess their performance but still are not satisfied with their ability to measure their impact and want their boards to be more involved in assessment, a new report says.

Nearly 75 percent of 173 CEOs of U.S. foundations awarding at least $5 million in grants a year who responded to a survey by The Center for Effective Philanthropy say assessing foundation effectiveness is among their top priorities.

Yet over 60 percent say too few foundations understand their overall performance, and 56 percent say nonprofits should be held to higher standards of evidence to show the effectiveness of their work, says The State of Foundation Performance Assessment, a report by The Center for Effective Philanthropy.

Seventy percent believe foundations should place greater emphasis on understanding the effectiveness of grantee programs and organizations they are considering funding.

Foundations also seem to be using a broader range of information to assess their financial, operational and programmatic performance than a decade ago, and many are combining that information to assess their overall performance, the report says.

“Our survey results suggest a shift in foundation assessment practices over the past decade,” the report says. “Yet, we still do not understand the degree to which foundations’ efforts to assess their effectiveness results in genuine changes that lead to heightened foundation impact.”

A big challenge for foundations is the degree to which their boards are involved in assessment, the report says.

Over half of CEOs surveyed want their board members to be more involved in assessment of foundation effectiveness, with another 19 percent of CEOs wanting board members to “be more involved that the board wants to be,” the report says, although 27 percent say neither they nore their board want to board to be more involved.

Twenty-nine percent of CEOs say the biggest hurdle to greater board involvement is a lack of understanding of the issue areas served by the foundations they head.

At the same time, 21 percent of CEOs say the board’s expectations for what can be understood about impact “do not align with what staff believes is realistically possible to capture,” while 18 percent say the board does not support allocating necessary resources that a useful assessment requires, and 13 percent say the board does not have a strong enough understanding of the foundation’s goals and strategies.

“It is important to stress that there is significant work to be done before foundations can answer that tough question, ‘How are we doing?’ with real confidence, Ellie Buteau, vice president for research at The Center for Effective Philanthropy and lead author of the report, says in a statement.

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