How to Maximize the Impact of Your Social Investments – 8 Core Strategies

How to Maximize the Impact of Your Social Investments – 8 Core Strategies

In the philanthropic funding space, having good intentions does not always mean good results. As hard of a pill as this may be to swallow, it’s an important fact that every funder should accept. Sometimes we try to get by on our good intentions, but as my friend and mentor Mark Friedman says in?Trying Hard is Not Good Enough, “It is about making a difference, not just trying hard and hoping for the best.”

Responsible?Measurement is King

Not only should we be making a difference, but the difference must also be measurable. We must fall in love with the process of collecting, analyzing, and acting on data if we want to make a positive impact that lasts. We must humbly acknowledge where we are falling short. We must come to terms with the fact that intentions are meaningless without action.

Measuring your impact and that of your grantees will help you make better decisions. You’ll be able to determine which programs are working, which might work better with some changes, and which are actually draining your resources with no measurable results. You’ll be able to appropriately re-allocate resources and funding to the programs making the greatest impact, allowing you to accelerate towards your goals faster. You’ll be ensuring you’re not just an organization of “magnificent intentions” but an organization of magnificent action and impact.

Just measuring things isn’t enough either. There is also?responsible?measurement and?irresponsible?measurement. What’s the difference? Responsible measurement takes place when measurement is used primarily as a prompt for effective dialogue rather than punishment or blame. It means always considering the context of the data before making rash decisions. It means understanding that “bad” performance may actually be stellar performance when you properly take context into account. Irresponsible measurement, simply put, is the opposite. Irresponsible measurement can be disastrous for your social mission.

8 Strategies to Maximize the Impact of Your Social Investments

In summary, if you want to be effective, you must make responsible data-based decisions on your social investments and then clearly communicate the effect of those decisions to individual donors, stakeholders, and the public.

How will you know if there is a return on your investments? What systems, actions, and tactics will make it all possible? What evidence exists to support different approaches to measuring and improving social and public sector impact? Well, that’s what my company Clear Impact has been working on figuring out over the past 15 years.

Along with my colleagues at Clear Impact , I have learned a lot while establishing performance management and reporting systems for clients across the globe. I’d like to share what we’ve learned below.

To aid you in your quest for impact, I have laid out eight core strategies in my book,?Social Sector Hero: How Great Funders Maximize Impact . Here is a quick summary of the most important points from the book:

1. Create and align with a larger common agenda

  1. To achieve real, measurable impact, you and your grantees must not act as individual superstars, but create a cohesive front through a Common Purpose, shared strategies, and disciplined measurement.
  2. A Common Purpose = Result(s) + Indicator(s) that you share among your partners and utilize to guide all strategies and activities.

2. Actively ensure you’re sustaining alignment

  1. Designing your Common Purpose is only half the battle. You must continually ensure that you hold yourself and your partners accountable for “living” the Common Purpose through aligned measurement and strategies.
  2. At the very least, you should sit down once a year for one hour to discuss progress on one metric with one grantee at a time (1×4 meeting).

3. Don’t be afraid of a “less is more” mindset

  1. Avoid engaging in any extraneous activities and/or collecting unhelpful data that distracts you from your most important mission.
  2. Results-Based Accountability’s?Turn the Curve Thinking ?process is a logical, common-sense approach to analyzing and improving your Indicators and Performance Measures. It is the single most important tool to help you and your grantees realize your social sector destiny.

4. Disaggregate your data for accurate analysis

  1. Only looking at data “totals” can cause you to act on faulty, or even dangerous, assumptions. You must disaggregate your data by race, gender, age, or any other factors to truly understand the state of wellbeing in your community.
  2. The main purpose of disaggregating data is to unveil disparities so that your strategies are appropriately designed to address root causes for specific subpopulations.

5. Implement consistent and flexible grantmaking and reporting processes

  1. Your funded partners need consistency and flexibility to achieve success. The main way to do this is to establish a handful of similar measures for each comparable set of programs, but also to allow grantees to report on a handful of optional measures that speak to their unique circumstances.
  2. Every one of your grantees should be using the same Data Management System to report data to you. This will allow for better analysis between similar programs and improve the navigation and organization of your data.

6. Develop the story behind your data for meaningful analysis

  1. Data without context is meaningless. To make effective investment decisions and create strategies that actually work, you must analyze the root causes behind the state of the data. This requires a diverse audience to explore contributing and limiting factors.
  2. Just because a data trendline isn’t where you want it to be, this does not equal “bad” performance. Even with a heroic effort, progress can stall or regress. Make sure you consider external factors before making rash decisions or budget cuts.
  3. Never ask grantees to report on data without a narrative or Story Behind the Curve.

7. Use the data and corresponding story to initiate effective dialogue and action

  1. To navigate data pitfalls (e.g. misleading data) and get closer to capturing the object of your quest, the most important tool you have at your disposal is effective dialogue.
  2. Asking your grantees the right questions allows them to surface information, challenges, and needs you can help them to address. Consider utilizing the list of Effective Questions in Chapter Eight, based on the work of Doug Krug, to guide your Turn the Curve conversations with grantees.

8. Share your performance data, action plan, and reports publicly

  1. Sharing your Indicator and Performance data publicly can create greater alignment, stoke urgency for your cause, build trusting relationships, invite more funding, and foster collaboration for results.
  2. When catered to your needs, technology can expedite and automate the more mundane parts of data entry and analysis so that you can focus more on what matters most — seizing your sword. Performance reporting software, like?Clear Impact Scorecard , can help you organize, navigate, and analyze your data quicker and easier. It also makes it easier to share your data publicly and update it.

The above recommendations are a great starting point but are, in reality, only the tip of the iceberg when it comes to performance reporting.

If you’d like to dive deeper, you can learn more about all eight strategies in a?free download of Social Sector Hero .

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