Giving Thoughts

Which funders are most interested in impact measurement? Corporations, it seems

By Alex Parkinson, Research Associate, and Matteo Tonello, Managing Director of Corporate Leadership, The Conference Board

We told you, when we launched this blog, that one of our focus areas wants to be social impact measurement. So we found it particularly interesting to read a new research report that attempts to provide a clear picture of impact measurement practices across different types of funders. Funders allocate grants and, with their attitude toward assessing the pursuit of social objectives, they can play a major role as driver of the impact measurement effort: however, at least in the United Kingdom, the study shows that some funder types care more than others.

The study, Funding Impact, was conducted by two prominent U.K.-based charity think tanks, New Philanthropy Capital (NPC) and London Benchmarking Group (LBG). It surveyed 114 UK funders—including net worth individuals, family foundations, and business organizations—and found that companies “are more likely to rate evidence of impact as ‘extremely important’ in the application process and in the decision to renew”.

At the same time, companies seem less likely than other funders to provide grants for impact measurement: 32 percent of corporate respondents do not provide funding for impact measurement, compared to 22 percent of non-corporate respondents.

Do the findings reflect corporations’ focus on cost effectiveness?

While this data appears contradictory, it may in fact reinforce the notion that business corporations are the most sensitive to the cost effectiveness of their contributions, and believe that it is the not-for-profit beneficiary that should propose and ultimately provide the solution to the impact measurement problem. The report does not say it, but we thought we would offer this possible explanation.

Across all funders, the report also found:

• Grantmakers have a positive attitude to impact measurement: 88 percent think that it makes charities more effective and 89 percent think it makes funder more effective too.
• Only one in five (21 percent) say they are not measuring their own impact, and 72 percent plan to boost their impact measurement over the next three years.
• The biggest challenge identified by funders when trying to understand both their grantees’ and their own impact are capacity (65 percent) and knowledge (67 percent) of the charities.
• While few funders (10 percent) say that they are not using at any stage of the funder cycle the data they collect on impact, less than half of funders confirm that the data is being used for key elements of their decision-making process such as selecting grantees (38 percent) or compiling program-wide results (42 percent).

Reactions from The Conference Board

In general, our major reaction after reading the report is that it discusses opinion-based research conducted on a relatively small sample of philanthropists. It does not investigate documental evidence of requirements or restrictions that funders impose on their grantee or applicant for the purpose of incenting its effort to measure social progress.

The authors themselves introduce the study with a word of caution on the interpretation of the findings, recognizing that the chosen methodology may lead to the overestimation of results. However, we thought that it would be worth featuring the study on our blog since it is an interesting read and it confirms the extraordinary opportunity for companies committed to philanthropy to drive the impact measurement movement.

To read the full Funding Impact report, click here.

About the authors:

Alex Parkinson is a Research Associate in the Corporate Leadership division of The Conference Board. He specializes in corporate philanthropy and sustainability. Before joining The Conference Board, Alex worked as a Senior Consultant in London and New York for corporate social responsibility (CSR) consultancy Context. He has advised some of the world’s leading multinationals on CSR communications and strategy development.

Matteo Tonello is managing director at The Conference Board. In his role, Tonello advises members of The Conference Board on issues of corporate governance, risk management, corporate sustainability and citizenship. He is the author of several publications, including the bestselling Corporate Governance Handbook: Legal Standards and Board Practices and annual benchmarking reports on director compensation and board practices, CEO succession practices, proxy voting, and corporate sustainability practices.