Funders: The funders’ principles and drivers of good impact practice
For funders and commissioners, ‘impact’ is the difference you make. By focusing on your impact, you can make more of a difference through your work. This means planning your path to success, carrying out high-quality evaluation, assessing your performance, and reviewing and learning from the results.
As a funder, you have a critical role to play in shaping behaviour; your approach, and the level of support you provide, strongly influence impact practice among grantees and investees.
The Funders’ principles and drivers of good impact practice provides a starting point for discussions about impact. It is designed to help you better understand how you can support grantees in their impact practice, while developing your own approach.
Principle 1. Proportionality in relation to rigour and resources.
Proportionality has implications for resource allocation (time and money) and on reporting requirements. It is important to be realistic about your impact practice— being proportionate and appropriate to the scale and scope of the work. However, it is also important to ensure findings about an organisation’s impact are compared either to similar data collected over time, or to other approaches, in order to draw meaningful conclusions.
Principle 2. Open mindedness, flexibility, adaptability and transparency.
It is important to take a flexible approach and adapt practice as appropriate. Openness and transparency build trust, foster ongoing dialogue and ensure genuine learning about what works well and what does not.
Principle 3. Acknowledgement of respective independent values.
The working practices of funders and charities are driven by their own independent values. Funding relationships, including impact practice, should be based on mutual recognition of respective values, roles and responsibilities.
Principle 4. Recognition that everyone can contribute to impact, and also to impact practice.
Widespread organisational involvement can inspire and motivate staff, trustees and stakeholders and contribute to the development of both the organisation itself and its practices.
Driver 1. Seek clarity about the difference funders and the organisations they support want to make.
Being clear about the difference you want to make is a prerequisite to planning your organisation’s activity, and central to any approach to impact evaluation. This will define the nature, scope and detail of work, help determine the type and level of evidence required and help determine the most appropriate methods and tools to collect and analyse it. It will also help identify the potential for the use of shared data or shared measurement approaches.
Driver 2. Support organisations in their impact practice, and resource for the funder’s own impact practice.
Funders play a role in supporting impact at all stages in the impact cycle. It is important to invest in work that makes a difference in the first place, and then to assess and learn from it. Only impact assessment tools that focus on evidence relevant to the desired outcomes should be used. Tools should use quantitative and qualitative data as appropriate, and should also seek to capture all impact, whether that’s positive, negative, intended or unintended. Shared measurement should be considered where appropriate, at all levels—the organisation, programme, and project.
Driver 3. Identify the difference made and assess how and why it was made.
Thorough analysis is required to draw out lessons that can inform decision making and future practice. This analysis should focus on what the change has been, and the causes of that change. Comparisons should be drawn where possible over time or against other activities, and consideration given to what could be done differently.
Driver 4. Share and act on learning and seek to improve practice.
Knowledge and learning are valuable commodities which should be shared with others. Funders should expect to learn from their peers too. But acquiring knowledge is only valuable if it is acted upon to inform decision making and change future policy and practice—this applies equally to funders and the people and organisations they support. Creating and assessing impact are not static processes: they require constant review and refinement of your approach, taking into account cost and effectiveness and, in particular, feedback from stakeholders.