Larry McGill of the National Committee for Responsive Philanthropy argues that as foundations endeavor to understand and mitigate the negative impacts of world changes, they should use data tools to create market intelligence that respects the complexities of the real world situations they attempt to change. The four essential areas of study he outlines are: the ecosystem of constituencies, their specific needs, intervention mechanisms and the other organizations in the space. This data will give foundations more rigorous methods of holding themselves accountable for their outcomes and underlines the importance of collaboration:
Prospective funders don’t just want to make an investment and hope for the best – they want to be confident that their investment will actually create positive change. And they have every right to ask for compelling evidence that their grantmaking has a reasonable chance of paying off. But while funders have become increasingly focused on holding grantees accountable, they are still largely blind to the fact that how they work is every bit as important to achieving impact as the work of their grantees. If foundations actually understood this, they would be doing much more than they are now to hold themselves accountable for the outcomes they seek to achieve. Specifically, they would be paying better attention to the role that data can play in increasing their effectiveness. In fact, if we wanted to measure just how well foundations are holding themselves accountable, I would argue that we should track the extent to which they compile, share and use data about their work. To understand why data is crucial to the way foundations work, we need to look more closely at what “achieving impact” actually amounts to. First of all, achieving impact is not simply a function of finding and funding the right grantee. As Mark Friedman explains in his must-read book, Trying Hard is Not Good Enough, achieving lasting social impact is possible only through “broad partnerships that take collective responsibility for progress.” No organization, no matter how powerful, can single-handedly bring about true social impact. What a single organization can do is create specific programs that can make a difference for certain people in certain communities at certain times.
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