It was a great honor to attend the third Philanthropreneurship Forum in Vienna last month, and to speak on a panel discussing impact. Unlike fellow panelists who were mostly representing well-known philanthropists and donors, I spoke as the Director of Roots of Health, a largely unheard of reproductive health organization in the Philippines that is funded in large part through grants and donations. It was a unique opportunity to be able to speak about the realities we recipient organizations face.
The non-profit world has improved by leaps and bounds over the last few decades with thousands more organizations existing today than ever before. While this is a great benefit to the myriad causes organizations exist to serve, competition for funding is fierce. These days donors want to know the potential impact of the projects they fund to ensure they get the most “bang for their buck”. While it is a positive development to have impact-driven funders, the funding for this impact assessment is often overlooked.
If funders care about the long-term impact of the projects they invest in, they should care about the organizations that implement those projects. Too often funders focus on “project-only” costs at the expense of overhead outlays, administrative staff, management costs, equipment or software that benefit the organization beyond the project. This model displays the lack of trust in the nonprofit sector. And while understandable, there are ways to find reliable, trustworthy partners.
As a 2016 winner of the Stars Impact Awards, we have seen firsthand the way the Stars Foundation invests in organizations. Instead of focusing on glamorous short-term projects, the Stars Foundation invests in organizations that have demonstrated they are doing good work and allows them to decide how to spend the funding that is associated with the award.
Of course there is a lot of research and vetting that precedes this kind of funding. There are phone conversations, in-person visits, reviews of financial reports, etc. But these are all possible and important for building healthy relationships.
Another organization that specializes in non-profit assessment is Fieldworks.
Like the Stars Foundation, they showcase grassroots organizations that have proven themselves to be doing effective work. Fieldworks believes that smaller, local organizations are in better positions to respond to problems than large international organizations that often swoop into different countries and try to implement programs without fully understanding local contexts and norms. Their goal is to connect potential funders with these smaller, effective nonprofits. They recognize that grassroots organizations need a platform in order to connect with potential supporters so they’ve created a tool to do just that.
Fieldworks conducts in-person visits to grassroots organizations to assess their strengths. They collect a variety of data in all aspects of the organization, from human resources to financial systems to organizational values and Monitoring & Evaluation (M&E). They then display the resulting data to potential funders and volunteers using simple tools that clearly display the strengths and weaknesses of organizations and how best to support them.
Both Stars and Fieldworks assessed the overall “health” of our organization. They were particularly interested in our Monitoring & Evaluation processes and how we track our impact. We welcomed these conversations because M&E, which is a critical component of any project, is often an overlooked area.
M&E is how organizations measure the impact they have. Typically, M&E officers or teams design survey tools and identify data indicators that need to be collected in order to be able to show if a program or intervention made a difference. While it may sound simple, in practice it can be complicated and time-consuming. It requires qualified, experienced staff, relevant software and a commitment from all members of the organization.
When funders limit the amount of money that can go towards this important work, they are limiting the organization’s ability to properly assess the work being carried out to demonstrate if the program has had any of the desired outcomes.
I hope that future donors will become interested in long-term organizational stability and be more willing to earmark funding for administrative costs, recognizing that Monitoring & Evaluation is vital for demonstrating impact and that an organization’s overall health is crucial for implementing successful projects.