Years ago, I worked for a large anti-poverty nonprofit in Boston. We were eager to evaluate our programs so that we could measure what was working and improve what wasn’t. However, persuading foundations to fund this evaluation proved challenging. While foundations wanted to see evidence of impact when asked for program funding, they were often hesitant to provide the funding necessary to do that work.

Later, as a foundation program/strategy officer, I experienced the situation from the funder side. Fortunately, I worked for a foundation that valued evidence that showed not only how well a program worked, but also how to make it work better – and that funded evidence-building accordingly. But they were not the norm.

Today, donors and impact investors increasingly use data and evidence to inform their funding decisions. Fully 96 percent of nonprofits report that they have at least one donor who requires impact data reporting. More than a third of foundations have a dedicated evaluation unit.¹

But despite increased demand, the dominant approach to evaluation remains slow, expensive, and insufficient. There is a lack of coherence and alignment among funders, evaluators, and nonprofits, with the result being evaluation that doesn’t help support improved outcomes for communities.

Getting the process right is important: Strong evidence-building practices are the social sector equivalent of research and development (R&D), the process by which organizations can learn and adapt and improve –  and ensure that the social sector is not left behind in our rapidly evolving world.

Funders are in a unique position to make sure that data and evidence works in the best interest of everyone involved, most importantly, the communities we are all trying to serve.

Here are five tips to help build the next generation of evidence:

Inviting and supporting grantees to lead
Logically, nonprofits should lead their own evidence agendas. But in the current ecosystem, evidence building is usually conducted to either, one, answer questions researchers are interested in or, two, to prove to funders that programs are “effective.” Nonprofits are too often the “caboose” of the evidence-building train, when they should be the engine. Funders can change this dynamic by supporting nonprofits in leading the evaluation process, based on the learning agenda and priorities of the grantee. Evidence building should allow nonprofit leaders to guide their programs toward better performance and outcomes for their beneficiaries.

Supporting learning and implementation
Evidence building has limited utility if nonprofits have insufficient capacity to interpret the evidence and make adjustments based on what they learn. Funders must go beyond simply supporting research studies to supporting learning, implementation, and organizational development in service of improvement. Organizations need flexible, unrestricted donations combined with the recognition that R&D – a disciplined process for learning, testing and improving – is a must-have for building evidence. Flexible funding can be a game-changer for organizations that are hungry to learn how to increase and improve their impact.

Promoting continuous practice
No single study will make a program perfect. Rather, evidence provides information that (ideally) allows for incremental improvements. A continuous process – integrated with decision making and operations and connected to learning and strategic goals – will drive better quality and impact. Continuous improvement requires the resources and space for experimentation. Funders should consider staged funding to allow for learning, failure, and adjustment over time. A series of smaller-scale studies may allow for a more continuous, cost-effective, and lower-risk approach to evaluation.

Embracing data and technology
Generating useful insights from evaluation will require new capacity and investment in tools, technology, and talent. The for-profit sector has long embraced technology and tools to capture and use data to better serve its customers. As one nonprofit said, “We need the infrastructure, and it won’t build itself.” By building capacity and data infrastructure for themselves and their grantees, funders can accelerate change, reduce costs, and better manage and understand the data they are collecting.

Being realistic
As a funder, consider the importance of creating opportunities for research and development in the social sector – and of being realistic about what it takes. Explore what it will take for your grantees to strengthen their impact. Establish clarity about what research questions will help your grantees make their programs more effective. Methodologies should be appropriate to the stage of organization, to the questions being asked, to the available data, and to the goals of the organization. An eye for what is practical, reasonable, and most of all, useful,  will help ensure that evidence building is a tool for creating greater long-term impact.

At Project Evident, we believe evidence building – led by practitioners in alignment with funders – will result in better outcomes for communities. We believe this is the next frontier for social sector leadership – leadership that must be equipped with the necessary tools, talent, and funding in order to deliver greater impact. Funders who care about impact can help bridge the R&D gap by helping organizations continue to innovate and adapt to the evolving needs of their communities.

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Original contribution by Kelly Fitzsimmons, Founder and Managing Director at Project Evident.

¹Center for Effective Philanthropy and Center for Evaluation Innovation, “Benchmarking Foundation Evaluation Practices” (2016); Open/Impact, “The Giving Code: Silicon Valley Nonprofits and Philanthropy” (2016); Innovation Network, “The State of Evaluation 2016” (2016).