Interest in evaluating the impact of philanthropy - both quantitatively and qualitatively - is growing, as is the capacity to monitor activities and work towards better defined outcomes, according to a new report.

Interest in evaluating the impact of philanthropy - both quantitatively and qualitatively - is growing, as is the capacity to monitor activities and work towards better defined outcomes, according to a new report.

As evaluation becomes an increasingly important issue to high net worth individuals, who are looking to gain more bang for their buck from donations in a tight investment climate, Credit Suisse has teamed up with Rockefeller Philanthropy Advisors to release a report on the evaluation process, entitled Strategic Philanthropy: Guide to Evaluation (view here).

Benefits to the grantee

“Best practices have moved from evaluations that are strictly top-down and funder driven to a more collaborative process” between funders and grantees, according to the research.

While benefits to donors include providing accountability around their goals, proper evaluation processes also allow grantees to benchmark themselves against their peers and contribute best practices in the field.

Particularly, there is a “convergence” between the philanthropic sector and capitalism, with the idea of “double bottom lines” of profit and social/environmental returns, according to the paper. This approach has been pioneered by the entrance of business tycoons, such as Bill Gates, into the philanthropic world.

Conversely, the idea of environmental, social and governance analysis has been filtering through to the investment community for many years now. This is both as a means to manage risk, and as a way of addressing investors’ ethical considerations.

New opportunities

As venture philanthropy catches hold, with the idea of fostering a relationship between grantor and grantee more akin to the investor-entrepreneur relationship, there is “a growing field of organizations offering evaluations services to grantmakers,” the study says.

However, there are challenges thrown up by this: each funder may have different motives and goals, “demanding unique reporting requirements,” and placing a heavy burden on the grantee.

Part of the answer to this problem could be a more collaborative approach to evaluation, which many grantmakers are now adopting, working both with grantees and end-users, say Rockefeller Philanthropy and Credit Suisse.

“A cooperative approach allows for program-wide support for the metrics and richer learning opportunities across stakeholders,” according to the paper.