Charities rarely consider reporting to donors to be a joy or a strengthening process - more often it's basically compliance, and a dead-weight cost. So I was interested to find an outlier: the Inter-American Foundation, a US-based funder that supports grass-roots development in Latin America, gets better grantee feedback on its reporting process than do the 260 or so other funders about which the Center for Effective Philanthropy in the US has solicited grantee feedback. Giving Evidence uncovered its secret sauce.
The CEP does anonymous surveys of a funder's grantees, and the IAF has twice topped its all-time list on the question "how helpful was participating in the foundation's reporting/evaluation process in strengthening the organisation/programme funded by the grant?" Yet the IAF's grantees aren't just blindly in love: of all the funders with whom the CEP has worked, the IAF scored in the bottom half on how fairly the foundation treated them, and in the bottom 7 per cent on its policy influence.
The most obvious anomaly with the IAF is its strong engagement with its grantees. It visits each of them several times, not just inspecting but also to verify their data and help them to collect and interpret the information. This process is expensive - about 8 per cent of the IAF's total spend.
The key insight is that the reporting process itself is part of the intervention. Grantees said the reporting process benefited them in four ways, each perhaps as useful as the money itself.
- Data Many grantees were not previously gathering data at all or very much. The process supports them in gaining an empirical basis for their decisions.
- Capacity Grantees learn to collect, handle, interpret, present and use data. This is particularly important for the organisations with the least-developed skills in management and analysis, and for those that have not collected data before at all.
- Confidence In their ability to collect data and that their data are accurate and complete. Some grantees find this useful in their dealings with other organisations, such as other funders.
- Credibility Among their beneficiaries or communities and with other organisations. Grantees frequently used terms such as "accountability" and "transparency".
It's worth dwelling on this, even for those who aren't funders or aren't involved in grass-roots work. Soliciting feedback can be part of the intervention. Most charities ask beneficiaries for feedback, and it's easy to think of that observation or measurement as separate from the actual work.
These IAF findings suggest otherwise. So do many stories from non-profits, including that of the women in Kolkata who learned to write so they could put their feedback into an NGO's suggestion box. (Physicists won't be surprised, because even quantum theory tells us that observing a system changes it.) Many non-profits working with vulnerable groups have difficulty gathering beneficiaries' views: they have so seldom been asked their opinion that they barely have one or know how to express it.
The asking itself - and coaching people to answer - can create important changes, perhaps even more than the formal intervention itself.
Caroline Fiennes is director of Giving Evidence and author of It Ain't What You Give