Key takeaways:
-
- Many nonprofits report needing dedicated dollars for functional operations to accomplish things like impact reporting. In response, some companies allow a portion of their grants to go toward measurement and evaluation.
- It’s essential to establish clear lines of communication from the outset so your nonprofit partners know what you expect from them.
- Your nonprofit partners know their programs best — ask them what metrics they’re capable of producing.
The demand for more robust social impact measurement data is intensifying by the month as stakeholders seek better data on your community investments.
Translating your philanthropic work into tangible metrics not only satisfies stakeholder expectations but also empowers enterprises to maximize their impact and validate their efforts.
Despite its benefits, impact reporting is a common challenge for both corporate funders and the nonprofits they support.
The Oracle study Connecting Dollars to Outcomes, found that just 29% of nonprofits said they were able to effectively measure the impact of program investments, despite the belief that doing so was fundamental to success.
How can enterprises better collaborate with nonprofits to amplify their reporting capabilities?
Scrutiny Around Functional Expenses Could Be Hindering Nonprofits’ Reporting Capacity
Among several contributors, nonprofits participating in Oracle’s survey emphasized budget, specifically complex accounting constraints, as a significant hindrance to better measurement and evaluation.
The study highlighted how nonprofits must earmark every expense into one of three buckets: fundraising, programmatic, and operational. That data is often reported on and used by charity watchdog agencies to calculate the organization’s efficiency.
Notably, nonprofit leaders in the survey suggested that many are critical when dollars are allocated to functional operations or infrastructure rather than programming. They suggest this exacerbates a myth that nonprofits should be able to operate programs without administrative structure.
Nonprofit Finance Director Clare Knowlton said in the report, “The truth is, all resources spent by a nonprofit are spent in order to successfully deliver on programs.”
Investing in Nonprofit Partners Training and Reporting Needs
To address this issue, many corporate funders have allowed for a portion of their investment to be dedicated to evaluation, which can be particularly beneficial for smaller nonprofits.
This tactic can be a win-win for both parties — the nonprofit is better supported, the enterprise gains the metrics they’re looking for, and both partners can use the data to maximize impact.
During a recent ESG & CSR Board panel on impact measurement, Amy Mart, who leads Social Impact Measurement, Evaluation, and Thought Leadership at the Allstate Foundation, elaborated on this approach.
“We are really moving toward an approach where If we are willing to invest money in funding an organization and their programming, we also are willing to invest in evaluation for that work.”
— Amy Mart, Social Impact Measurement, Evaluation, and Thought Leadership at the Allstate Foundation
She said this could look like dedicating a portion of the grant to reporting or creating a separate grant specifically for external evaluation.
Amy also advised CSR leaders in the audience not to assume their nonprofit partners have the internal capacity for this work, and to be prepared to support them.
Dennis Duquette, MassMutual Foundation CEO and Head of Community Responsibility, also shared how MassMutual is supporting their nonprofit partners.
He said they have sponsored education and training for nonprofits with an emphasis on leadership and capacity building so the organization can better sustain its footing.
“We all know that sometimes, particularly for smaller nonprofits, when a leader leaves an organization, that can really bring the work to a halt or at least send it in a very different direction.”
— Dennis Duquette, CEO and Head of Community Responsibility at the MassMutual Foundation
Creating Clear Lines of Communication and Expectations From the Start
When working with your nonprofit partners, it’s essential that you’re setting clear (and realistic) expectations from the outset.
Meredith Shull, Monitoring, Evaluation, and Learning Manager at the PepsiCo Foundation, emphasized this sentiment during the panel discussion.
“For us, it’s really about making sure we’re maintaining that relationship with the partners from the beginning (the design phase of the program) so we’re clear on what we expect.”
— Meredith Shull, Monitoring, Evaluation, and Learning Manager at the PepsiCo Foundation
Meredith shared how they take their nonprofit partners through the entire reporting process by outlining what the program is designed to do and what they can measure from it.
They also walk their partners through the chosen reporting platform, which for PepsiCo is Cybergrants or True Impact.
Regardless of what platform you’re using, remember that the nonprofit will be the primary user. Meredith said it’s essential to hear their feedback and make adjustments where needed.
Working with Nonprofits to Identify the Metrics They’re Able to Measure
During the panel, Amy also shared how the Allstate Foundation is making a gradual shift from focusing on outcomes rather than outputs, but in a way that hasn’t placed an undue reporting burden on nonprofits.
Amy said Allstate asked each partner to specify which short or long-term outcome they’re willing and able to collect data on.
“We’re partnering with them and trusting them that they know what outcomes their organization is best attuned to impact,” Amy said. “Those are the ones that they’re going to stay focused on.”
On a panel earlier this year, Karem Perez, Executive Director of the Motorola Solutions Foundation, discussed a similar approach, saying the foundation allows their grant partners to largely determine the metrics they feel are most appropriate.
“You know your program and your capabilities best,” Karem said “You tell us what you’re able to report on based on this specific program. Then we’ll hold you accountable for reporting on that.”
Benchmark Your Approach with Other CSR Leaders
There’s no one-size-fits-all approach to impact measurement, but learning from other CSR leaders facing similar challenges can be a great way to iterate your own reporting.
If you and your program could benefit from benchmarking your impact measurement strategies with other corporate philanthropy leaders, then contact the ESG & CSR Board below.
Key takeaways:
-
- Many nonprofits report needing dedicated dollars for functional operations to accomplish things like impact reporting. In response, some companies allow a portion of their grants to go toward measurement and evaluation.
- It’s essential to establish clear lines of communication from the outset so your nonprofit partners know what you expect from them.
- Your nonprofit partners know their programs best — ask them what metrics they’re capable of producing.
The demand for more robust social impact measurement data is intensifying by the month as stakeholders seek better data on your community investments.
Translating your philanthropic work into tangible metrics not only satisfies stakeholder expectations but also empowers enterprises to maximize their impact and validate their efforts.
Despite its benefits, impact reporting is a common challenge for both corporate funders and the nonprofits they support.
The Oracle study Connecting Dollars to Outcomes found that just 29% of nonprofits said they were able to effectively measure the impact of program investments, despite the belief that doing so was fundamental to success.
How can enterprises better collaborate with nonprofits to amplify their reporting capabilities?
Scrutiny Around Functional Expenses Could Be Hindering Nonprofits’ Reporting Capacity
Among several contributors, nonprofits participating in Oracle’s survey emphasized budget, specifically complex accounting constraints, as a significant hindrance to better measurement and evaluation.
The study highlighted how nonprofits must earmark every expense into one of three buckets: fundraising, programmatic, and operational. That data is often reported on and used by charity watchdog agencies to calculate the organization’s efficiency.
Notably, nonprofit leaders in the survey suggested that many are critical when dollars are allocated to functional operations or infrastructure rather than programming. They suggest this exacerbates a myth that nonprofits should be able to operate programs without administrative structure.
Nonprofit Finance Director Clare Knowlton said in the report, “The truth is, all resources spent by a nonprofit are spent in order to successfully deliver on programs.”
Investing in Nonprofit Partners Training and Reporting Needs
To address this issue, many corporate funders have allowed for a portion of their investment to be dedicated to evaluation, which can be particularly beneficial for smaller nonprofits.
This tactic can be a win-win for both parties — the nonprofit is better supported, the enterprise gains the metrics they’re looking for, and both partners can use the data to maximize impact.
During a recent ESG & CSR Board panel on impact measurement, Amy Mart, who leads Social Impact Measurement, Evaluation, and Thought Leadership at the Allstate Foundation, elaborated on this approach.
“We are really moving toward an approach where If we are willing to invest money in funding an organization and their programming, we also are willing to invest in evaluation for that work.”
— Amy Mart, Social Impact Measurement, Evaluation, and Thought Leadership at the Allstate Foundation
She said this could look like dedicating a portion of the grant to reporting or creating a separate grant specifically for external evaluation.
Amy also advised CSR leaders in the audience not to assume their nonprofit partners have the internal capacity for this work, and to be prepared to support them.
Dennis Duquette, MassMutual Foundation CEO and Head of Community Responsibility, also shared how MassMutual is supporting their nonprofit partners.
He said they have sponsored education and training for nonprofits with an emphasis on leadership and capacity building so the organization can better sustain its footing.
“We all know that sometimes, particularly for smaller nonprofits, when a leader leaves an organization, that can really bring the work to a halt or at least send it in a very different direction.”
— Dennis Duquette, CEO and Head of Community Responsibility at the MassMutual Foundation
Creating Clear Lines of Communication and Expectations From the Start
When working with your nonprofit partners, it’s essential that you’re setting clear (and realistic) expectations from the outset.
Meredith Shull, Monitoring, Evaluation, and Learning Manager at the PepsiCo Foundation, emphasized this sentiment during the panel discussion.
“For us, it’s really about making sure we’re maintaining that relationship with the partners from the beginning (the design phase of the program) so we’re clear on what we expect.”
— Meredith Shull, Monitoring, Evaluation, and Learning Manager at the PepsiCo Foundation
Meredith shared how they take their nonprofit partners through the entire reporting process by outlining what the program is designed to do and what they can measure from it.
They also walk their partners through the chosen reporting platform, which for PepsiCo is Cybergrants or True Impact.
Regardless of what platform you’re using, remember that the nonprofit will be the primary user. Meredith said it’s essential to hear their feedback and make adjustments where needed.
Working with Nonprofits to Identify the Metrics They’re Able to Measure
During the panel, Amy also shared how the Allstate Foundation is making a gradual shift from focusing on outcomes rather than outputs, but in a way that hasn’t placed an undue reporting burden on nonprofits.
Amy said Allstate asked each partner to specify which short or long-term outcome they’re willing and able to collect data on.
“We’re partnering with them and trusting them that they know what outcomes their organization is best attuned to impact,” Amy said. “Those are the ones that they’re going to stay focused on.”
On a panel earlier this year, Karem Perez, Executive Director of the Motorola Solutions Foundation, discussed a similar approach, saying the foundation allows their grant partners to largely determine the metrics they feel are most appropriate.
“You know your program and your capabilities best,” Karem said “You tell us what you’re able to report on based on this specific program. Then we’ll hold you accountable for reporting on that.”
Benchmark Your Approach with Other CSR Leaders
There’s no one-size-fits-all approach to impact measurement, but learning from other CSR leaders facing similar challenges can be a great way to iterate your own reporting.
If you and your program could benefit from benchmarking your impact measurement strategies with other corporate philanthropy leaders, then contact the ESG & CSR Board below.
