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Indicators of Effectiveness: Understanding and Improving Foundation Performance

October 17, 200517 October 2005

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This report communicates the results of preliminary research into data sources that can inform performance assessment. The report provides a model for measuring overall grantmaking performance. Because of the cost and difficulty of obtaining direct indicators of social benefits, the researchers investigated indirect indicators of grantmakers’ effectiveness. The extensive research and statistical analysis for this report include foundation CEO surveys and interviews, grantee surveys, trustee interviews and financial data. Although based on 23 of the largest US foundations, the results are instructive for other organizations interested in using performance measurement to improve the results of their grantmaking.

The survey results show that grantees generally have a positive view of grantmaking foundations. Interestingly, the detailed statistical analysis shows that grantee perceptions of grantmakers are not influenced by the size or the type of the grant or the grantee’s program area. Rather, the most important factor in grantee satisfaction is “a perception that the foundation has a culture of responsiveness, approachability and fairness”. Grantee opinions are also affected by the perception of whether the grantmaker “has made a positive impact on the grantee organization”. Additional research results show that the time between grantee application and notification of results averages 4 months and that the average time taken to prepare an application is 46 hours.

Although the report finds that the comparative data on grantmaking organizations is very valuable, possibly the most important conclusion is that “the ultimate selection of relevant measures and the interpretation of indicators must be made by an individual foundation based on its strategy”.

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