A new White Paper by Giving Evidence provides five easy and practical tools which any serious donor can use to improve their grant success rate (potentially by 75%) and together save up to £400m a year in avoidable grant-making costs.
Founding Director of Giving Evidence Caroline Fiennes, says that though 91% of funders believe measuring their impact can help them improve, one in five measures include nothing pertaining to impact at all[i].
As a result Fiennes has created these five tools that highlight what’s working, what isn’t, and what to change. They are:
- Monitoring the “success rate”—the proportion of grants that do well, that do all right, and that fail. Though the definition of success varies between grants, presumably each one is given with some purpose; this tool simply asks how many grants succeed on their own terms. It’s unashamedly a basic measure, but then it’s hard to argue that a funder is doing well if barely any of its grants succeed.
- Tracking whether “the patient is getting better”—whether that means biodiversity is increasing around the lake or whether malaria decreasing in prevalence. This of course indicates nothing about cause. But sometimes funders find that their target problem has gone away, or moved, or morphed, and they should morph with it.
- Measure and manage the costs created for charities by the funder. These are, normally through application and reporting processes. The prize here is huge: It’s estimated that avoidable costs from application and reporting processes in the UK alone are about £400 million a year. At the very least, a donor shouldn’t be a net drain on charities.
- Hear what the recipient charities think. Grantees can’t risk offending organizations that they may need in future, so funders need to ask. Listening to beneficiaries and constituents has brought significant benefits in medicine, public services and philanthropy.
- Clarify what you’re learning, and tell others. Engineers Without Borders, a Canadian NGO, finds that its annual Failure Report—a series of confessions from engineers in the field—is invaluable for internal learning and accountability. Funders pride themselves on taking risks and many programs just don’t work out; there shouldn’t be shame in learning. Giving Evidence is working with a philanthropic foundation to share the whole truth about a programme which didn’t work quite as planned.
Fiennes says: "Currently, most donors and foundation looking to understand their impact look at solely the impact of the organisations that they support. These five tools show that the donor has an impact themselves, which may be quite different – such as possibly wasting every penny that they give by making charities do loads of unnecessary work."
Fiennes offers many case studies in support of these tools including the experience of the Shell Foundation that doubled its success rate just by counting how many of its grants had been successful or had failed. It helped them spot that they would be more successful making fewer, larger more proactive grants.’[i]. Fiennes also recounts how as a charity CEO she calculated that many grants cost almost as much to service as the grant itself, making the grant an excercise of futile labour.
Fiennes also cites the findings of BBC Children in Need that found that one in four applications was successful. Though that rate is quite high for the industry, it meant that three quarters of applications were wasted. Strategy Director Sheila-Jane Malley says: ‘We're painfully aware that every application which doesn't get through was work for somebody. As a responsible organisation interested in children, we've begun to look systematically at how we can prevent as much of that work as possible.’ BBC Children in Need is clarifying its guidance still further in order to reduce unsuccessful applications and hence save charities money.
You can read more from Caroline, offering advice to City Philanthropists as our City Philanthropy Coach
[i] Shell Foundation, 2005, Enterprise Solutions to Poverty: opportunities and challenges for the international development community and the big business, www.shellfoundation.org/download/pdfs/Shell_Foundation_Enterprise_Solutions_to_Poverty.pdf
[i] A. Van Vliet, L. Baumgartner., 2013, Funding Impact, 2013, London: New Philanthropy Capital