Why do Foundations Use Data?

Research from the Center for Effective Philanthropy, Grantmakers for Effective Organizations, and others suggest three reasons: accountability, learning, and communication.

  • Accountability: Most commonly, grant partners are held accountable to grant objectives or outcomes. Less frequently, foundations use data to hold themselves accountable to their mission or goals.
  • Learning: This includes learning about what strategies should work (e.g., during planning), and what strategies did or did not work (e.g., during implementation).
  • Communication: Some foundations use data to communicate needs, progress, or impacts to stakeholders or to the community. Carefully chosen data points can make communications much more powerful.

Unfortunately, recent research also documented that foundations find generating meaningfoundation-dataful information to be challenging. By considering four factors, however, foundations can generate meaningful information effectively and efficiently.

  1. Consider the relative importance your foundation places on the three main uses of data – accountability, learning, and communication. For example, a foundation with a focus on accountability might focus evaluation resources on tracking quantitative outcomes and ensuring grant partners have the capacity to generate valid and reliable data. A foundation with an emphasis on using evaluation for learning might focus evaluation resources on qualitative data using interviews, facilitated discussions, and written reports to generate lessons learned. A foundation with an emphasis on communication might use either approach, depending on the target audience. For example, quantitative data would be needed to share the success of a particular approach with other funders while qualitative data on areas for improvement would be helpful for grantees.
  1. Think about your data and evaluation goals. Will you use data to support your planning processes, provide feedback on implementation, track progress towards strategic goals, or inform resource allocation or board decisions? Or all of the above? Data to support a planning process might include needs assessments, looking for what interventions have evidence of effectiveness or what innovative approaches have not been tried. Data used to inform board decisions might include needs, solutions, and past performance.
  1. Consider how data and evaluation results will be used internally and externally. What decisions are to be made, when, and by whom? The answer to these questions will determine when data are collected and will drive processes around how data and evaluation results are packaged and shared.
  1. Identify technical issues. Most people start here, but the last item is to work through technical issues, such as determining evaluation procedures by level of investment and aggregation; who should be involved in evaluation and when; expectations around rigor; what level of information is required (client vs. program); and capacity – yours and your partners’ – around staffing, expertise, and systems.

With this information in hand, you can implement a data and evaluation system to support your mission. Start with thinking through the four factors before settling on an approach or a methodology so that you can generate meaningful information effectively and efficiently.

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