Imagine trying to keep track of the impact being made by hundreds of different projects at once, each one tackling complex, deeply interconnected issues. Now imagine trying to track that impact when the reports that you receive are of varying quality and veracity. You have imagined your way into the world of a grant manager; we believe that providing these actors with better tools could unlock a tremendous amount of impact.

There has also been some skepticism about whether the incentive structures of foundations are conducive to impact maximization. However, there are several reasons why we think that focusing on foundations is a compelling opportunity to make significant impact. Foundations allocate a staggering amount of funding, so even equipping a small number with better impact measurement tools could result in a considerable amount of money being redirected to more effective interventions. Foundations might have rigid theories of change and areas of focus, but within those parameters, they do seem to want to measure and improve their impact.

After speaking to over 50 major actors in the grantmaking space, we have started to be able to identify some commonly shared problems.

Methodology

Methods used by foundations to evaluate impact typically aren’t very rigorous or scientific. Variables aren’t controlled and so, even if improvement is made, it’s hard to ascribe it to a particular grant or understand why it is making a difference. Knowing these things would be valuable to foundations giving large grants (100k+) and wanting to know whether to fund an intervention again.

Truthful Reporting

Charities are asked by foundations to provide impact reports after they have received funding. The problem is that non-profits are incentivized to share only the most flattering subsets of data and bury more uncomplimentary information. Without information from failures, foundations can’t learn about where best to allocate their funding or share that learning more widely.

Measuring Impact Over Time

Grant managers often have considerable experience and expertise. Rather than judges, they should be empowered as collaborators. By being provided with accurate, live information on the progress of programs, grantmakers would be able to support grantees with intelligent, timely input.

Shared Knowledge

Foundations have operated in the same way for 600 years, with funding decisions being made by a few key people. We believe that future grant-making will be informed by crowdsourced knowledge. Shared data would enable foundations make predictive analysis on impact, de-risk decisions by tapping into collective wisdom, and identify opportunities for collaboration.

Read the full article about the new measurement approach for grantmakers by Kieran Hammond at Medium.