Can an Evidence-Based Approach Save Philanthropy?

By Adin Miller, Senior Director of Community Impact and Innovations

Adin Miller

One of the most fascinating debates taking place currently within the philanthropic and nonprofit sectors reflects the tension inherent in embracing evidence-based approaches. Within this debate, the two sectors have challenged the merits of and obsession with formal evaluation outcomes, metrics, and nonprofit effectiveness. For example, see this online discourse between Bill Schambra, a noted philanthropic critic, and Will Miller of The Wallace Foundation in Nonprofit Quarterly. The debate served as the primary backdrop for a wide ranging discussion touching on issues such as scaling up organizations, funding evidence-based approaches, collecting, tracking and analyzing metrics, and overhead.

Last week, the Jewish Community Federation and Endowment Fund (JCF) brought together a diverse group of over 100 philanthropists, foundations, and nonprofits to explore this subject in more depth. It framed the discussion by screening Saving Philanthropy, a PBS-featured documentary that explores how nonprofits and funders can increase their effectiveness. The program then moved into a discussion with Daniel Lurie of Tipping Point Community, Carla Javits of REDF, Heather McLeod Grant of the Monitor Institute, and myself representing the JCF.

Here are some closing thoughts from the participants: The panel as a whole agreed on the value of focusing on metrics and outcomes in aligning resources with effective nonprofits. That conclusion fundamentally supports the concept that a funder needs to create the largest possible disproportionate impact for the investment. In no small measure, when a funder supports effective evidence-based programs, it can both signal to and attract funding and power from other institutions.

The panel also agreed that effective nonprofits have to deliver on their business models. As such, the organizations need to embrace a data-driven culture and systems that allow for data capture and analysis (interestingly, the nonprofit representatives in the room also called for funders to be more transparent with their data and findings). Funders, conversely, need to answer the demand by nonprofits for the capacity building resources needed to invest in “back of the house” items such as new database systems.

This led the panel to call for an increase in awarding operating grants and the continued need to combat grantmaking based on overhead issues. Embracing a data-driven culture, however, does not mandate that nonprofits collect and assess a tremendous volume of inputs. Instead, the panel recommended that nonprofits smartly pick a limited number of metrics to measure its performance and build upon that approach. A few other highlights from the discussion:

• Like many financial institutions, the panel predicted more mergers and acquisitions over the next ten years, especially among large national charities.
• The future of philanthropic organizations will bring more collaboration, information sharing and groupthink among nonprofits as they try to tackle widespread issues together for better results.
• It’s easy for funders to frame this debate only in the context of grantmaking. But funders should continue to embrace and make available other resources at their disposal such as technical assistance and collaborations.

The metrics debate will continue to highlight both the benefits and pitfalls of evidence-based grantmaking. In that context, the JCF will continue to strive to find a balanced approach to our work. We will need to both embrace a focus on evidence-based approaches, but also support innovation and emerging ideas in the absence of concrete metrics. How we do that will also inform the philanthropic sector and federation system.