Nonprofits Need Funder Support for Performance Assessment, Study Finds

Although many grantees of large foundations would like to collect and analyze more — or better — data about their performance, few receive foundation support for such efforts, a report from the Center for Effective Philanthropy finds.

Based on a survey of nonprofit leaders, the report, Assessing to Achieve High Performance: What Nonprofits Are Doing and How Foundations Can Help (36 pages, PDF), found that while 99 percent of survey respondents said they collect some type of performance assessment data, 71 percent wish they had more detailed data, had a larger volume of data, or could collect data more frequently, while 40 percent wished they had better metrics and more meaningful data with which to assess their performance. Respondents also indicated that the most useful type of data was information from programmatic assessments or indicators of outcomes they are seeking to achieve (56 percent), followed by information about the number of beneficiaries served or service provided (43 percent) and financial information (29 percent). According to the report, nonprofits use performance information primarily to improve their programs and services (83 percent), inform their strategic direction (68 percent), and communicate publicly about their progress (70 percent).

The report also found that 55 percent of the nonprofits surveyed spend 2 percent or less of their budgets on performance assessment; 60 percent neither use a third-party evaluator nor employ full-time staff for evaluations; and only 36 percent say their funders tend to provide financial or non-monetary assistance for performance assessment. As for funders' data reporting requirements, 58 percent of nonprofits surveyed found them at least moderately useful, while 25 percent found them only a little useful at most.

To bolster nonprofits' performance assessment and management, the report calls on funders to consider engaging in more — and deeper — discussion with grantees about such efforts; funding grantees' efforts to measure performance; aligning reporting requirements with grantees' goals; and helping nonprofits share what they learn from their performance assessments about what does and doesn't work.

"Our findings suggest that nonprofits are committed to performance assessment, contrary to how they are often portrayed," said Ellie Buteau, CEP's vice president for research and the report's lead author. "Most nonprofits cannot do this all on their own — they have neither the infrastructure nor the resources necessary to do this work as well as they'd like. We hope our findings can help foundations understand what nonprofits are looking for and how foundations can better support them in assessing and improving performance."

"New CEP Research Sheds Light on Nonprofit Performance Assessment." Center for Effective Philanthropy 04/13/2015.