Getting to Impact Essentials to Define, Track, Achieve, Increase and

Communicate Your Impact

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INTRODUCTIONFrom Board Members to Grant Managers to employees, impact is on everyone’s mind. Over and over we hear the following from Executives, Program Officers and Grants Managers:

“We’re expected to understand how to achieve results, increase them, report on them, and ensure they are aligned with our business priorities.”

“This year, we have to start tracking and communicating our impact.”

“We can get clear results from some grants, but it’s not easy for others.”

“How can we tell if our funding is making a difference?”

So what is holding so many organizations back from getting to impact?

For many, it’s simply too overwhelming. They don’t know where to start, what questions to ask, or what infrastructure is required to define and track results. While not a trivial undertaking, with the right focus and approach, getting to impact can be within reach for almost any organization.

This article will first explore what is driving this imperative, outline the principles of effective impact reporting and demonstrate the benefits of shifting to a results-focused approach to philanthropy.

Whether you’re just getting started on the path to achieving impact or ready to take your process to the next level and increase your impact, we hope to inspire you to take steps – small or large – to adopt a results-focused approach to your giving.

SHIFT FROM PHILANTHROPY TO SOCIAL INVESTING For most organizations, the first step in getting to results is making a shift in how you think about what you do and stop thinking about it as “grant making” or “philanthropy” and to start thinking

Authors:

Burt Cummings, CEO, Versaic

Wendy Watson-Hallowell, Executive Director, Results Consulting

The Rensselaerville Institute

Michelle DiSabato, President, Community Impact Consultants, Inc.

This white paper originally appeared on www.GMNsight.org, the journal of Grants Managers Network

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about it as “social investing.” As a social investor, you are no longer “donating dollars,” but rather investing in people or communities in order to evoke change and achieve results.

Over the last century, we have seen many great philanthropists such as Andrew Carnegie, John D. Rockefeller and Henry Ford, lead the way in giving back, believing that with great wealth came the responsibility to help others in need. The approach of these early philanthropists became part of the common culture. Subsequently corporate giving programs, community foundations and volunteer organizations began to emerge. These early organizations and programs still held that same core purpose of helping others in need. However, in the new century and in this era of social responsibility, organizations are now being held accountable not only for their role in changing environments, communities and cultures, but are also being asked what they’ve done to improve conditions for those impacted.

So what is being asked and why?

� Boards and senior executives expect contributions to align with their organization’s mission and values and are mandating that foundations deliver results for investments and report their impact.

� The ongoing trend toward transparency means share-holders and stakeholders expect to know how their dollars are being invested and what difference they are making.

� Foundations are feeling increasing pressure and expec-tations to share results through social media and info-graphics to tell their impact stories in words and images.

CHANGE IN MINDSET As we shift to an impact-focused approach, the mindset of the grant maker is evolving. There are two primary changes underway, one around how grant makers see themselves and the other around how they view what they are trying to accomplish.

As the “checkbook charity” mindset quickly becomes outdated, the way giving organizations view themselves is moving from

The new story of philanthropy is of a powerful positive force investing in change, leveraging and mobilizing a broad range of corporate assets beyond dollars, and whose singular focus is to increase the contribution companies can make to society.

From The Council on Foundations Report on Increasing Impact, Enhancing Value

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philanthropy to social investing with their role moving from being funders to being investors. The Rensselaerville Institute for more than 50 years has been working with giving organizations to help them make this shift and go from proving to improving results. Here are some of the key differences they encourage their clients to make in changing their thinking:

MAKING THE SHIFTMoving to social investing needs to be guided by the intentions of the giving organization. Some organizations are focused on simply proving the impact they are contributing to and that is a great start-ing point. Other organizations are looking to go farther and focus on improving impact. It’s not that proving your impact is a bad thing. In fact, it’s often the first step on the path to a fully realized impact initiative. But moving beyond proving to truly improving your impact is the much-needed shift that is taking place in giving organizations and will lead to a more sustainable nonprofit sector.

When you’re improving your organization’s impact, you’re focused on your grant partners tracking tangible, measurable results or

FUNDER Grant Making Cycle INVESTOR

Looks for well-written proposals that match with the mission and focuses on the front-end of the grant process

Looks for outcomes that support the giving mission/strategy and provide returns in terms of human gain

Funds programmatic approaches and evidence-based practices

Asks 3 key questions, (1) What results are we buying?(2) How likely is it that we will get them? (3) Is this the best use of our dollars given the opportunities available to us?

Primarily connects with grantees at the beginning and end of the grant period

Anticipates and evaluates changes the grantee can achieve throughout the grant period

Engages with grantees throughout the grant period and verifies that changes have occurred

Evaluates results after grant dollars are spent and often with a third party

Uses learnings to adjust strategy and increase results

Applications

Decision Making

Reporting and Improving

Managing Relationships and Tracking

Progress

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changes in behavior, not on tracking outputs. You’re willing to support your non-profit partners in building their capacity to think critically about their programs, the results they are achieving and the transition to becoming impact-focused. Their results are your results and they are the vehicles behind increasing those results over time. Being impact-focused requires a long-term view and approach to giving.

IMPACTFUL PHILANTHROPYLet’s start with a definition of impact. Impact is the vision of change that grant makers are working toward through their investments. It is often the ultimate end state that is desired and although you may never get there, getting closer to that impact is the driving force behind the work of giving organizations. Impact reporting is the process of defining, tracking, managing, understanding and communicating the tangible changes for people or places that clearly contribute to the desired impact. When impact reporting is done well, it defines, tracks, measures and achieves specific chang-es for people and places that will move the community or system closer to the desired goal. These changes for people and places are the results that grant makers anticipate and grantees achieve for those they serve through their programs and services.

Where Are You on the Path to Impact?

Grant making organizations can be grouped into three general stages when it comes to impact.

1. No impact reporting – simply tracking the funds granted, persons served, programs supported

2. Minimal impact reporting – collecting common metrics at the end of the grant to prove impact

3. Full impact reporting – an ongoing initiative based on engagement with grantees to define, track, achieve, and improve impact

The outcome capacity and priorities are different at each stage as are the practices associated with collecting and using outcomes.

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Here is a visual of the path an investor takes to achieving results:

No matter where you are on the path, it’s important to keep in mind what is possible with impact reporting. If you look at potential, it paints a very compelling picture:

� Clarity on potential and actual ‘return on investment’ in terms of changes in behavior and conditions for people and places being served.

� A portfolio of investments that have the highest poten-tial social return in both the short and long term.

� Critical data available and used by grantees, staff, board members and other stakeholders to make key decisions and improve results.

� Significantly improved efficiency and reduced requests from projects that do not contribute to your mission and intended results.

� A powerful ‘result story’ to tell across the grant making portfolio.

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PRINCIPLES OF EFFECTIVE IMPACT REPORTINGThere are some fundamentals that giving organizations need to keep in mind as they move to impact reporting:

� There needs to be a clearly defined mission, vision and areas of focus that are strategically aligned with the business and/or community need.

� Desired stakeholder results for each focus area are defined and describe the results that clearly contribute to the overall impact.

� There is a defined continuum of predictive results for those being served and the grantee’s efforts are tied to achieving those results.

� Both quantitative and qualitative results are integrated into grantee applications and reporting.

� Internal criteria for support are established and there are effective review criteria to support application reviewers and decision makers.

� Data is collected, used and shared to assess progress towards results and key learnings before time and dollars run out.

� The right tools are implemented to provide automated, transparent and streamlined impact reporting.

OBSTACLES TO IMPACT REPORTINGMany obstacles, real and perceived, can get in the way of establish-ing an impact reporting program:

Lack of understanding and clarity:

� The grant making organization doesn’t understand what impact reporting is or where to start.

� They aren’t sure what measurable results they can take credit for.

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� The impact and measurable results aren’t clear.

� Overall elements for the program and giving focus area are in place, but success is only measured by dollars out the door, geography served and types of projects funded.

Lack of process, support or resources:

� No internal system, process or ownership for capturing and using data.

� Resources (people and budget) of the grantor or grantees are tight.

� Grantees are not set up for success and don’t have the tools, training or support to capture and report results.

� Impact is not being driven strategically nor from executive leadership.

In the next section, we’ll focus on getting started with an impact reporting initiative and provide you with practical ideas for imple-mentation that will help overcome these common obstacles.

THE IMPACT LIFECYCLEUnfortunately, there’s no “set it and forget it” when it comes to measuring and reporting your impact. Impact is a cycle of asking good questions, collecting information, analyzing and communicat-ing the results, learning from the process and tweaking as you go along. But even small steps and changes will help you on the path to understanding, tracking and increasing your impact.

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ASK THE RIGHT QUESTIONSIf there is a single piece of advice we want you to take away from this article it is this: asking the right questions is the most important step on the path to impact. From setting your strategy to establishing your programs and supporting your grantees, asking the right questions will help to ensure your program is actually making the impact you intend it to make. While the questions might not always be easy to answer, the good news is that you can start with small steps. Even if you’re not ready to launch a full impact-focused initiative that is rolled up across programs, improving the questions you’re asking at any of the stages outlined below will help to improve your grant making.

SET YOUR MISSION, FOCUS AND STRATEGYTo establish or refine your mission and focus, you need to ask yourself, your team and key stakeholders in your organization some basic questions. We encourage you to keep it simple and focused. Perhaps you start with a single focus area and establish a framework for impact reporting. You can always expand your footprint once you’ve established your framework. It is much harder to recover from missed expectations or a lack of results.

STEP 1

Getting to Impact – Defining Results Sought

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Here are some basic questions to ask when establishing a result framework:

MISSION:

What is the social change we are trying to affect?

What is our role in creating that change?

How is this aligned with our business priorities and values?

FOCUS:

What are the areas of focus we will support in order to affect that change?

What strategies will we use within those areas of focus?

RESULTS:

What changes do we want to see for the people or places we want to support?

What are the predictive changes in behavior or condition that indicate those people and places are on their way to success?

PROGRAMS:

What types of programs and services will you invest in to get the end result?

SUPPORT:

What type of investments will we make to affect the change we seek? Will our portfolio include programmat-ic, capacity building and systemic change grants?

What combination of grants, cash donations, in-kind donations and community event support are we providing for the highest gains?

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Below is an example from The Starwood Foundation showing its results framework for its Workplace Readiness program.

Once you’ve set your strategy and identified opportunities for investment, it is time to create the process for successful imple-mentation, starting with putting the right management system in place all the way through to reporting your impact and telling your results story.

Here is how a fully configured grants management system, such as Versaic, supports the strategic and tactical elements of a results-focused investment process.

STEP 2

Implementing an Impact Framework

Fostering Employment

Career Development

Employer Readiness

Funding Priorities

WORKPLACE READINESS�STRATEGIC RESULT FRAMEWORK

Desired Results

Unemployed local residents obtain and

retain local living wage jobs

Local workers advance into higher career

opportunities

Local employers change their practices and policies to employ,

retrain and advance local residents

*Underserved socially, geographically or economically

Program Types

Hard Skill Training

Soft Skill Training

Social Skills Training

Advanced Skill Training

Leadership and Management Training

Global Mindedness

Employer Engagement

Job Matching

Workforce Skill Development & Training

Strategy

HOW WE CONTRIBUTE

• Direct Service Grants• Capacity Building Grants• System Reform Grants• Associate Engagement• Associate Advocates

• Collaborative Partnerships

Address the skills and access gaps faced

by underserved* or unemployed residents

in current and future Starwood

Communities

Impact

A skilled and diverse local

workforce that drives business

growth and economic success

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CAPTURE THE RIGHT DATAAnticipating the data you’ll need from grantees to track and assess impact and building that in from the start provides a solid foundation for improving your results. Collecting the right data from grantees from the initial grant application through the end of the grant period is essential for understanding, aggregating and communicating your impact. Both quantitative and qualitative data need to be included by grantees to demonstrate impact.

Quantitative data is the hard data or ‘metrics’ that represents specific changes in the behavior or condition of people and places served from a specific project or program. These need to directly contribute to the desired results of your program. Through a grants management system, quantitative data can be rolled up across all investments within a focus area or program to paint an overall

ApprovalTracking& BudgetModule

Scorecards &Portfolio Reporting

Online GrantApplication

ResultsTracking

GRANTSMANAGEMENT

SYSTEM

MEASURE OVERALL IMPACTConfirm/discuss results and impact to date

COLLECT FORMAL PROPOSALSGuide NGO’s through application, results projections and outline deliverables

CAPTURE IMPACT DETAILSGuide NGO’s in completing mid and final grant reporting to track progress

EVALUATE INVESTMENT GOALSDiscuss grant renewal and investment priorities

INTERNAL REVIEW & SELECTIONApprove request, track approval documentation and activate approval workflow

PROSPECTIVE PARTNERSTrain prospective NGO’s on results framework & milestone tracking

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picture of the impact with the ability to dig in deeper on any specific area.

Qualitative data is the narrative statement of an individual project’s success that defines the changes that a grantee anticipates for those they serve, based on the type of program or service they deliver. This data can include images, quotes, videos and anecdotes that help bring your narrative to life and can be used in board briefing books and other communications.

AUTOMATE AND STREAMLINEPutting the right grants management software in place will help you automate the entire impact reporting process and make it easier to stay connected with your grantees. This doesn’t mean you lose the personal touch. The system can ensure you ask the right questions at the right time, communicate in a timely and effective way and gently, but persistently remind your grantees of their commitments. When you automate the more routine parts of your impact reporting and focus on improving results as the main goal, you’ll find you have more time and better data for productive interactions with grantees, based on results achievement and learning integration.

Similar to setting your strategy and focus areas, the decision about which investment opportunities to pursue comes down to asking the right questions. When using an investor mindset your grant partners should be able to answer the following four key questions:

1. What results will your program achieve and for whom?

2. How will you know when success is achieved?

3. What participant results will you monitor to ensure there is enough time and money left to achieve success?

4. What are your plans to sustain the program beyond our investment?

STEP 3

Find the Right Opportunities and Partnering for Success

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Based on the grant partner responses, social investors evaluate their options based on the following criteria:

1. What results are we buying?

2. Do they align with our strategic priorities?

3. What are the chances we will get those results?

4. Is this the best investment for our limited funds?

From the initial grant application, it’s critical to set your grant part-ners up for success. You have an opportunity to educate grantees, clearly communicate your criteria for support and to help potential partners understand how they can engage with your organization. Making the application process as simple and foolproof as possible saves the grantee’s time, eliminates potential frustration and sets the tone for a positive, constructive relationship. Make sure you provide technical assistance and support to guide prospective partners through the application process.

Once the partnership is in place, creating multiple opportunities for touch points with grantees will help forge stronger partnerships. The funder mentality that relies on an end-of-grant report as the sole or primary touch point with grantees is no longer sufficient.

Increasing touch points with grantees leads to more successful out-comes and enables them to course correct before time and money run out. Supporting grantees to manage with milestones during the grant period is an effective way to understand their approach to success and ensure they are on track to meet expectations. Milestone management links key activities to participant changes that grantees use to track and manage success. This is the roadmap that determines if the project is on track to achieve anticipated results. The milestones are outlined in the grant application and progress is monitored during specified reporting periods to clarify progress and capture key learnings.

Depending on the length of the grant period, milestone reports might come halfway through the grant period or more frequently if needed. Keeping it simple and using the information provided

STEP 4

Manage Milestones and Track Progress

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by grantees during the application process to remind them of their commitments is an effective tracking approach. Focusing on the information that is critical to results success will help the grantees respond more quickly.

The insight you gain into the progress of your grantees will help you make better decisions about where and how you should invest going forward. You’ll know much sooner if a grantee is falling short of expectations and be able to put steps in place to support that grantee and get them back on track towards results achievement.

Below is an example of a progress report and score card from The Starwood Foundation.

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Engaging with your community partners and capturing a rich dataset allows social investing organizations to create a powerful narrative of the impact they are having on their business and communities. Two effective tools for this are StoryBanking and Result Cards.

Part of the Versaic Grants Management software, StoryBanking is a story capturing tool that enables grant makers to create a multimedia repository of data that provides the color commentary around a grant (the qualitative data). Grantees are prompted to upload pictures, audio, video, quotes and stories into a database that can be accessed by anyone in the giving organization who needs it. Rather than hunting around for these assets or the associated data when it’s time to create a narrative about the grant, everything is connected and readily available.

The Results Card is a tool developed by Community Impact Consultants, Inc., a strategic consulting firm, and used to help communicate the program’s mission, focus and achievements (a combination of qualitative and quantitative data). Similar to how a report card communicates a student’s performance academically and an investment card tracks performance of financial invest-ments, a Social Investment Result Card combines both of these to clearly articulate and depict the performance of your organization’s performance against its goals.

STEP 5

Tell Your Impact Story

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Either of these tools can be used in a variety of ways and with a range of audiences. Here are some examples of how they can be used:

Effective impact reporting relies on a process of learning from ex-perience and refining for improvement. The organizations that are most successful at improving their impact are continually asking themselves and their grantees key questions to enhance learning:

Questions for investors

� What are we doing well?

� What are we missing?

� Where are the hidden gems?

Questions for grantees

� Did you achieve more than the expected results, if so why?

� Did you achieve less than the expected results, if so what was the cause?

� Name up to five things you are doing differently in this program to improve results and describe how those changes are working.

STEP 6

Learn and Refine

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By incorporating learning as you go, you’ll be able to respond more effectively to the different needs of your community partners, your stakeholders and your social investing team while you’re improving your impact.

In summary, Social Investors can improve impact by making smarter investment decisions on the front end, monitoring and tracking progress, assessing risk and performance more effectively before reinvesting, and only funding groups that embrace the impact-focused model.

The tangible benefits of social investing are widespread and com-pelling. Not only are giving organizations faring better financially, they are engendering greater loyalty with both employees and customers. Today’s shareholders are becoming increasingly savvy and want to know that the investments an organization makes in the community are resulting in real change.

An impact-focused approach enables corporations and foundations to support the non-profits that are moving the needle on social change and forge stronger relationships with those community partners. It puts everyone on the same page about expectations and

SUMMARY

The Benefits of Impact Reporting

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what the organization hopes to accomplish, as well as providing a framework for evaluating results. When you understand the true value of social investing for your organization, you’ll make better decisions about how and where you invest and be better equipped to make a case for continued or increased investment.

Resources for learning more about impact reporting

• Starwood Case Study

• The Zen of Impact Measurement by Mark W. Shamley, President & CEO, ACCP — The Zen of Impact Measurement.pdf

• GMM Report — Assessing the How of Grantmaking.pdf

• Giving in Numbers 2014 Edition by CECP http://cecp.co/research/benchmarking-reports/giving-in-numbers.html

• Report on Increasing Impact, Enhancing Value — The Council on Foundations Report.pdf

• The Rensselaerville Institute — www.rinstitute.org

• Community Impact Consultants — www.communitymeasurement.com

• Versaic — www.versaic.com

Companies that increased giving since 2010 improved business performance; companies that have increased giving by more than 10% since 2010 also increased median revenues by 11% from 2010 to 2013.

From Giving in Numbers 2014 Edition by CECP

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BURT CUMMINGS CEO, VERSAICBurt has served as Versaic CEO since 2006. He conceived and directed the transformation of the company to develop a patented, flexible platform for grants, donation and sponsorship management. A technologist at heart and engineer by education, Burt’s passion is continually improving Versaic's software and customer support as well as exploring new markets and solutions for the company. His background includes executive positions at Apple as well as senior branding and marketing positions with leading organizations including Landor Associates, a Young & Rubicam company. Burt graduated cum laude from UC San Diego with a BS in Computer Science.

WENDY WATSON-HALLOWELL EXECUTIVE DIRECTOR, RESULTS CONSULTING, THE RENSSELAERVILLE INSTITUTEWendy Watson-Hallowell is a national leader at helping foundations and their grantees clarify and increase the results they achieve. She brings a deep knowledge of organizational change, outcomes, and information systems to all assignments and is comfortable with large, mid-size, and small corporate, private, family, and community foundations, and collective impact initiatives. Wendy has extensive experience in government grant-making and is an expert at looking at private public initiatives as well as collaborative investments among foundations. Over the last 25 years, Wendy’s skills have been honed in leadership roles at MTV Networks, The Rensselaerville Institute, and through other private consulting work.

MICHELLE DISABATO PRESIDENT, COMMUNITY IMPACT CONSULTANTS, INC.Michelle DiSabato is a Corporate Affairs’ Professional with more than 15 years of experience in successfully developing, designing, and implementing key business and programmatic strategies including managing and executing U.S. and international, multi-million dollar philanthropic initiatives and programmatic social impact analyses. Formerly, Ms. DiSabato was Manager of Planning and Reporting - Corporate Contributions in the New York office of Altria Corporate Services, Inc. During her tenure at Altria, Ms. DiSabato received international philanthropy experience while working in Brussels, Belgium, and Lausanne, Switzerland.

Community Impact Consultants, Inc. (CIC) is a full service consulting company working with philanthropy clients to help them make the shift to social investing and Tell Their Results Story and how they are meeting the needs of their communities.