Five ways to improve the social impact of your grants

Posted on 19 Mar 2019

By Andrew Callaghan, Australian Social Value Bank

Impact specialist Andrew Callaghan of the Australian Social Value Bank reveals some simple concepts to help power up your social impact credentials.

Define your outcomes: You need to be clear on what outcomes you are looking to achieve through your grant giving. Importantly, these outcomes need to be realistic.

We often see "miracle jumps" in logic models, where the leap from short-term outcomes to longer-term impact is far too big. Organisations can forget all the principles of attribution and the externalities that affect their assumptions for longer-term impacts.

Know that outcomes data isn't easy, and plan accordingly: Data collection is complex and can involve a huge amount of administrative and logistical thought for grantmakers. Think about the type of organisations you are going to fund and whether they have the capacity, systems and expertise to collect data that lives up to your expectations. Outcomes data requirements should be relative to the size of the grants, the size of the organisations you are funding, and the purpose you will use the outcomes data for.

Budget for impact measurement: If you want the evaluation of impact to be carried out to the same standard as the actual grant program activities, then you need to provide separate funding or ensure grant applicants have adequately budgeted for evaluation.

Good practice in impact measurement recommends allocating 5-20% of the program budget to evaluation. While 20% may seem like a huge amount of your total grant fund available, it is money well spent if you learn that 80% of your investment has been ineffective and wasted, and if this leads to you changing the focus of your grants or who you fund next time.

Support grant recipients: Many grant recipients will be highly capable of delivering the programs or projects they promised in their grant applications. However, they may not be experts in evaluating impact or used to the approach you want them to take in reporting impact.

Grant providers should have a support team who can advise grant recipients on implementation of impact measurement or commission experts to support your grant recipients.

Be consistent in your reporting requirements: It is important that you as a grant giver can examine the aggregate performance of your grant recipients to help you to understand your total grant impact, and that you can compare individual grant recipients to each other to help you to make future funding decisions.

To make this possible, you need to be consistent in your reporting requirements - in the way data is collected, in the way it's presented, and in the principles underlying it.

As in the accounting profession, you should undertake an auditing process to ensure that evidence is collected and analysed correctly.

I like this summary of the reason why from social value pioneer Jeremy Nicholls: "Assurance can only come from a third party ... acting on behalf of those who receive the impact."