Assessing Impact: The Holy Grail

Even grantmakers with deep experience funding capacity building sigh when asked, “How do you know capacity building makes a difference?” Some say it’s harder than evaluating the impact of other types of foundation investments because it doesn’t fall into a more traditional, issue-focused funding bucket. Others argue, “Impact assessment of foundation investments is hard, period.”

Whatever your opinion, know you’re not alone in thinking assessment of capacity-building impact is difficult. Not one person we spoke with claimed, “I’ve completely figured it out.” In fact, we heard, “It’s the Holy Grail” from more than one funder.

Funders agree that being able to assess the value and impact of capacity building can help foundations and nonprofits focus future capacity building more wisely. The more foundations can demonstrate the difference their capacity-building funding makes, the more they can encourage greater investment within their own foundations and across the field. So what stands in the way of funders assessing grantee capacity building?

While articles exist on what good assessment methods looks like, more guidance from a process perspective might help. Consider the following advice from funder and nonprofit colleagues about what steps to take at different points in capacitybuilding grantmaking. Note that these steps help funders leverage in-house assessment capabilities, such as existing due diligence processes and communications practices. Outside evaluators can also be incredibly useful; however, this advice acknowledges the pragmatic reality that, more often than not, funders don’t bring them in.