The search for star quality: good impact practice by funders

Published28th November 2018

To a charity, there is a whole constellation of funders out there. Some have big pots, some small; some relevant to the charity’s cause, others a longshot; some are warm, some cool. The various alternatives of funders’ characteristics can be both baffling and exciting. In a charity’s search for funds there seems to be some coveted ‘star qualities’ that set potential funders apart from one other. One of these is good impact practice – that is, the way they plan, evidence, and use data to communicate and learn from the difference their funding makes.

Over the last few months, I have seen that many funders are doing some star-gazing of their own. Looking inwardly at their own individual approach to impact practice and also asking ‘how are we doing?’ compared to others. These funders have a desire to benchmark against peers, understand how to adopt best practice and check whether their monitoring and evaluation requests are proportionate and appropriate.

I find this encouraging, that individual funders are taking small steps towards focusing on impact and inspiring a giant leap for the voluntary sector to improve its impact practice and use overall. But, the journey is never easy, so in these next few blogs, I’ll cover some of the topics around impact practice that funders seem, to me to be grappling with.

To ‘theory of change’ and beyond?

A theory of change enables you to describe what changes you hope to achieve and how. Funders have asked me whether the theory of change is a passing fad, whether they need one and whether all grantees and projects they fund need one.

Here’s what I think: theory of change has been around for decades, so it’s a rather enduring fad. But fad or not, I’ve always encouraged funders and funded alike to declare what difference they want their work to make, and to show how what they are delivering is likely to contribute to that difference. The process of thinking this through is the main focus of developing a theory of change, rather than the narrative or diagram at the end.  So as a process, it’s a yes from me.

The product of a theory of change could be a diagram and narrative explaining the theory. I’ve seen organisations take or leave diagrams.

  • Take it: if it helps those who prefer visual representations over words and if it enables you to communicate with stakeholders.
  • Leave it: if it’s getting too messy or taking too long to get a shared picture that you all find relevant.

I would recommend that everyone produces a narrative to remind you of the thought process and what the diagram means. It’s also a simple way to communicate it to others.

I am often asked whether funders should try to develop their theory of change for the whole organisation or for individual funding programmes. My answer is to shoot for the moon and have a go. If nothing else, the thought process is well worth it and if you do land a theory of change then chances are, your strategic planning process will be shorter.

Programme level theories of change may also fall easily out of the whole organisation for one and having clear outcomes at the programme level will help to guide monitoring and evaluation. Some would argue that without an organisation-wide theory of change your programme outcomes will be out of sync with your overall aims.

If nothing else, crafting a theory of change as a funder gives great empathy for, and insight into, what charities seeking funding need to go through.

Should a theory of change be required of all grantees?

I believe that sometimes developing a theory of change is more work than it’s worth. It should be proportionate to the type of work and outcomes being funded and the capability of the organisation. If the funded work is straightforward (eg, purpose: to build a community hub; result: the community hub is built) then a theory of change is simply not needed. But the principle of thinking through what difference the funding will make and what will be delivered to make that difference should never be left out.

A theory of change comes in particularly handy for partnership working with a joint vision and possibly shared measurement to demonstrate the difference their collaborative work has made.

My experience of supporting funders and grantees to develop their theory of change is that it generates insight, builds a shared understanding of what is to be done and why, and provides a robust launch pad from which to assess impact.

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