Assessing the impact of unrestricted funding
We partnered with the Institute for Voluntary Action Research (IVAR) to explore how funders monitor and assess the impact of unrestricted grants and what successes and challenges they have encountered.
What’s in the report
As we move toward offering more long-term unrestricted grants, understanding how to assess their impact is critical. With only a few established frameworks available, this research sheds light on emerging practices and offers guidance to other funders navigating similar challenges. At the end of the report the Foundation team reflects on how we used the research to inform our learning and evaluation approach for our Future Communities Fund. In the Appendix we also share the guide of our end of year conversations with our funded organisations. By sharing this report, we aim to foster collaboration and learning with other funders who offer unrestricted grants and are interested in assessing their impact.
Our learning partner, IVAR, conducted a desk review of academic and grey literature on unrestricted funding followed by interviewing nine funders to explore the context, purpose of their approach and their methods for assessing the impact of unrestricted funding. Documents published by funders were also reviewed for relevant content.
Key findings
A Framework for Assessing Impact
The research identified five distinct approaches funders use to evaluate the impact of unrestricted funding. These approaches can be used individually or in combination and form a framework that funders can use to define what “impact” means to them and design tailored approaches for assessment. The framework highlights key questions funders typically ask themselves as part of their chosen approach:
- Organisational Development: Are we strengthening the organisations we support, and how can we improve?
- Outcomes-Oriented: Are we helping organisations deliver positive outcomes for their communities?
- Systemic Change: Are we advancing long-term change goals and identifying areas where we can positively influence systems?
- Funder Performance: Are our funding practices enabling funded organisations to excel, or can we do better?
- Adaptation-Oriented: Do we understand the evolving needs of funded organisations, and are we adapting effectively?
Key recommendations
Using strategy to drive impact assessment practice: In addressing the question: ‘What does impact look like and how do we assess it?’, funders need to reflect on their strategic purpose, values and priorities and make that judgement accordingly.
Adopting a strategic learning approach: Impact assessment practices that focus on forward-looking ‘what next?’ questions help funders take actions that will increase their likelihood of success.
Championing impact as a collective achievement: Funders who engage with funded organisations as equal partners are more likely to build collective wisdom to drive change.
Taking a fresh look at outcomes: Giving unrestricted grants allows funders to look for more nuanced and flexible ways to explore impact, moving away from conventional approaches to setting and measuring outcomes that often ignore complexity and fail to generate meaningful change.
Entrenching reflective practice: In a complex social world, simple measures can rarely capture impact. Using qualitative data insights can help funders to understand impact, generate learning and make informed decisions about future funding.
Looking to get involved?
Funders’ practice in assessing the impact of unrestricted funding is still embryonic. Here are some resources if you are looking to develop your approach:
IVAR’s report for the Open and Trusting Funder Community: A shared endeavour: Five approaches to assessing the impact of unrestricted funding
Evaluation reports from unrestricted grants: Giving Big: The impact of large unrestricted gifts to nonprofits, Emerging Impacts: The Effects of MacKenzie Scott’s large unrestricted gifts, BUILD Developmental Evaluation Final report.
Gold dust: Measuring the value of unrestricted funding. New Philanthropy Capital (NPC).
Unrestricted funding and non profit capacities: Developing a conceptual model. (Wiepking & de Wit).
Subscribe to our blog, or email Dr Asimina Vergou, Head of Learning and Impact asimina.vergou@coop.co.uk to find out more about how we evaluate and learn from our Future Communities Fund.