Making Change Happen: Creating an Outcome-Based Strategy

Planning for your philanthropic journey starts with identifying the destination. In other words, donors create their giving strategy by clearly stating the outcomes they want to see, then identify the specific actions that they believe will produce those outcomes. This guide is intended to help you do exactly that.

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Introduction

Effective philanthropy is not wishful thinking with a budget, nor is it a pastime for wealthy people who seek a sense of service simply by writing checks. On the contrary, effective philanthropy is about the thoughtful creation of something new in the world.

It harnesses rigor and strategy—as well as commitment and strength of heart—to build a practical path from donors’ ambitions to their desired impact. It starts with a philanthropist’s values and motivations, and moves through the careful, well-researched selection of appropriate goals until it produces its core element—a giving strategy. This strategy is hugely important because it dictates how a philanthropic investment will actually make change happen.

Many in philanthropy use the term “theory of change” to describe this planning and evaluation process. But for this guide, part of the Philanthropy Roadmap series, the donor’s journey is far more important than an industry’s jargon.

The key point here is that planning for this journey starts by identifying the destination. In other words, donors create their giving strategy by clearly stating the outcomes they want to see. Then donors identify the specific actions that they believe will produce those outcomes.

You will find outlined here a process that can help both experienced and emerging philanthropists. The goal is a functional model for creating social change, complete with plans for how to monitor the progress of the project.

 

Five Questions

Five Questions

Here are important questions that will orient our overview:

What change do you seek?

Identify the goals of your philanthropy by first defining the problem you want to address. Understanding the problem often suggests the approaches that might bring beneficial change.

How will change happen?

Specify the programs, initiatives and activities that will trigger change. Examine the assumptions that support your strategy.

Where will you see change and who will benefit?

Describe the program in detail. List the groups of people directly affected by it. What about other donors and parallel projects? Will the work raise awareness for the entire target community?

When will you see change?

Decide on a time horizon for the program. How will that affect investment strategy, risk and complexity?

How will you evaluate results and update your strategy?

Plan to measure your goals against actual results. Schedule regular reviews of progress. Consider allowing enough flexibility in the model to adjust and adapt to changing circumstances.

Question 1

What change do you seek?

Many donors come to philanthropy already knowing what issues they care about. It might be addressing climate change, or funding education reform, or helping combat type II diabetes. Yet, despite this clarity, the first step in creating a solid strategy is often to define the problem even further.

Why? It’s logical: how we understand the problem informs how we seek change to address it. This often entails clarifying motivations, framing the big issues that relate to those motivations, narrowing your focus and listing the outcomes you want to see. (Our guide Your Philanthropy Roadmap covers this process in more detail.)

Once a donor has chosen a focus and desired outcomes, the specific planning can begin. That usually means research— not just to better understand the problem and survey programs that have attempted to address it, but to formulate detailed goals for your giving program.

What are the contexts and causes of the problem? What interventions have worked? Which ones haven’t? Are there examples of programs in parallel situations? Where is there unmet need? How do the groups directly addressing the problem answer these questions? Will your outcomes really address the problem? Are your goals achievable? How much risk of failure are you willing to take on in setting your goals?

At this point, the task can seem overwhelming. But donors should not lose heart. Hard work now can save considerable disappointment and many dollars down the line. This early decision-making is what brings structure to your plan of action. So sound knowledge of the situation is essential.

Personal advisors, family members and professional philanthropic advisors can help here. The main driver, however, remains the vision of the donor. It’s worth remembering, too, that philanthropists are sometimes pioneers of social change and as such, research on problems is not always relevant or even existent. There will always be a role for intuition and personal insight in deciding what change should be sought.

It’s exciting to be part of this. It will be even more exciting when we’ve got the thing done. - Bill Gates, on coming close to eradicating polio

Question 2

How will change happen?

Once the problem is well-defined, philanthropists often find it much easier to determine how to create the specific results they seek.

As usual, each new stage brings a new set of questions. This set can help donors formulate the action points of their strategy:

What organizations, institutions and partners will help catalyze change?

What is the best combination of programs and activities? Will a new initiative be required? Will it require coordination with other civil society or government entities?

Will collaboration increase effectiveness? Donors can bring together nonprofit organizations and other funders working on the same issue?

How long will your program take?

How much money will it take?

What will success look like?

How much time and money are you willing to invest in assessment?

 

Where are the gaps in your change model?

Key steps in the strategy are sometimes doubtful or simply missing—for example, a literacy program in a developing country might lack a building for instruction or adequate transportation for students. Sometimes funders must consider areas outside their initial interests if they are to build a truly achievable plan.

What assumptions does the model depend on?

For example, does the goal of funding research towards curing a disease assume one researcher’s approach is most promising? Does the pace of the research depend on the support of other donors? Will the activities carried out by the scientists result in actual progress towards a cure?

Assumptions aren’t necessarily bad in philanthropy. In fact, it’s hard to avoid them entirely. However, identifying assumptions can help a great deal in evaluating a giving strategy. These assumptions can be tested by comparing them against the outcomes of the giving program. Then the program—or the assumption— can be adjusted. Donors should consider being transparent with nonprofit partners about those assumptions.

In a similar fashion, all strategic giving is a work in progress. Your theory of how to make change happen is just that— a theory. That’s why it’s important to initiate giving programs and then evaluate their outcomes. This cycle allows philanthropy to evolve and follow a path of continual experimentation and improvement.

Question 3

Where will you see change and who will benefit?

To create a testable philanthropic strategy, donors often need to link specific goals with specific outcomes. That means the plan for change must give a detailed description of what funded programs will actually do, and who will be affected, so donors can compare their strategy with real results.

For example, a donor who sought to help homeless youth might develop a plan to fund direct services organizations which distribute food and other basic necessities of life. The outcomes could be measured in the number of meals served, the number of young people given shelter, the number of doctor visits, clothes handed out, et cetera.

Or the same donor could also fund organizations that provide ways to increase educational opportunities for homeless youth, reasoning that more education, more training and more skills would give young people more resources to succeed in life. Outcomes could be seen in the number of homeless young people who go back to school, the number who receive college prep and financial aid counseling, the number who undertake vocational training, the number achieving a high school equivalence degree, or enrolled in drug treatment and rehabilitation programs.

Or the same donor could seek change on the same issue at a systemic level, working on advocacy and policy issues. Measurable outcomes could include: the passage of new laws or bylaws, a shift in public opinion as measured by surveys, or the creation of new collaborations or coalitions to work for systemic change. At this level, it’s worth noting that measurable results can be very hard to achieve and donors often must confront a greater risk that their philanthropy may not produce tangible results in a short time frame.

Answering the “who” question is a big part of answering the “where” question. In this example, the initial focus is obviously young people who are homeless. But depending on which approach a donor takes, the list of people directly affected by the program could include medical staff, educators, volunteers, legislators and other policy-makers. Since homelessness presents different challenges in different communities, targeting awareness in an entire community might also be a goal.

As donors consider their model’s details of where change will happen and who will benefit, they can also be watchful for flaws in their approach. One of the strengths of this planning process is that it allows donors to spot weaknesses in their approach and correct them before any money is granted.

It’s like investing in R and D in the business world. We can say to teachers: what do you dream? If you had this money, what could you do? - Founder of the Intrepid Philanthropy Foundation

Question 4

When will you see change?

Effective giving usually relies not just on how we decide to give, but for how long.

The time horizon for a philanthropic program can stretch from less than a year to many decades. Such flexibility is fitting as problems vary from the urgent (disaster relief) to the very long-term (scholarship support for students in need).

In the last two decades, there has been a dramatic swing toward limited-term philanthropy by some high-profile donors. And yet, the norm is still to pursue social change through a private foundation in perpetuity.

Of course, the donors call the tune here. The problems they define, and the outcomes and approach they set will often suggest a time frame for their giving. Still, many donors find it useful to include issues such as how the amount of giving will affect their investment strategy, how the amount of risk in their programs will affect the duration of their investment, and how the complexity of what they want to achieve will affect the time they allow for their giving programs.

Some of the biggest and most impactful funders in the world allow for mistakes and the re-adjustment of their giving programs when they set their time horizons. They find building flexibility into their strategy allows them to learn as they go and incorporate mid-course corrections that ultimately create greater effectiveness.

Question 5

How will you evaluate results and update your strategy?

Many funders know how important it is to have reliable, relevant information about the programs they fund. Assessment, done in tandem with grantees, can provide this information. Without it, donors risk investing in programs that don’t produce desired outcomes. With it, donors have a built in way to adjust their giving—and their strategy— to increase effectiveness.

Here, common sense is a great initial guide. Donors naturally seek to measure goals against results and strategy against real outcomes. Donors and their partners should have a clear sense of the baseline against which results will be measured and what outcomes will be captured. Regular reviews of progress provide essential information to allow such assessment to take place.

And what exactly can assessment do? Here are three main uses:

Accountability

At the most fundamental level, donors want their grantees to be accountable. Any strategy for sustainable social change depends on grantees carrying out the actions they have promised. Much can be learned by basic follow-through and review of performance.

Decision Making

Many donors assess their grants as a way to make decisions about future giving: they want to understand which nonprofits should continue to get support, and which should be abandoned. Or, they may use assessment to make decisions about how to help their grantees be more effective. Donors may also use their assessments of grantees as a way to assess their own role in the change process: have we made good choices? How can we improve our decision-making?

“Proof of Concept”

Solid evidence that a program is making sustainable change is cause for celebration, but it also provides information that can leverage further development. Often evidence of success offers a funder and the nonprofit a chance to attract other funders and expand the initiative’s reach. A successful program can also become a model for other programs.

For most philanthropists, the assessment of giving leads them to update their giving strategy which leads to more giving, more assessment and more strategic updating. Donors creating their philanthropic plan should consider allowing enough flexibility in their model to review, assess, adjust and adapt their plans to changing circumstances.

Moving Forward

Moving Forward

Creating an outcome-based strategy for giving allows donors to tell the story of their philanthropy in advance. It invites them to make clear the end results they seek and then go through a thought exercise developing the steps that logically lead to those results.

In short, it’s a draft script for change.

Like all drafts, it exists to get the ideas flowing and the project started. The expectation is that it won’t be perfect and that it will require revisions. Because it is a work in progress, philanthropists can relax a little and experiment a lot. They can ask questions. Of themselves. Of family and friends. Of their advisors. Of other donors. Of nonprofits and social entrepreneurs.

Once the questions subside, donors can consider sitting down at a keyboard and actually writing the story of their strategy. (Or asking someone else to write it.) They can include everything—the problem, the goals, the outcomes, the assumptions, the sequence of change, all of it. This allows donors to share their change strategy with stakeholders and get feedback. It also allows them the opportunity to look for flaws in their model for change and its logic.

The beauty of creating such a narrative is that it helps evaluate strategy even as it helps formulate it. Once written, a story of philanthropic change will give a fresh perspective on a donor’s purpose, and like hearing prose read aloud, will quickly show you what rings true and what could be improved.