How many times have you been asked, “What’s your return on investment?” Whether you’re talking about dollars spent or people served, thinking in terms of outcomes can help change the way grants are made according to Wendy Watson-Hallowell, director of the philanthropy practice at the Center for What Works at the Rensselaerville Institute.
Watson-Hallowell compares the difference between how funders think and how investors think. A funder funds groups, programs, specific categories, and geographies that are in line with the funder’s mission. Funders make decisions based on fairness. They receive and grade grant proposals, which can be tough because their grading is based on criteria. They spend most of their time making new grants, and they measure and evaluate the results of a grant after the fact. Proving attribution for a funder can be expensive, as it is difficult to evaluate the results in this way, especially for funders who are one of many on a project.
In contrast, an investor is focused on the results. Investors start the process by being clear about result goals and assumptions before grantmaking even begins. In particular, they are interested in the expected results of the grant, the chances those results will be achieved, and whether the grant is the best use of their money. Investors remain clear about their goals throughout the entire process and reserve plenty of time for understanding returns. They also seek to verify and increase results as they go along.
How they verify and increase results is the topic of a webinar that Watson-Hallowell will lead for GMN members on Monday, August 26 »