What is program evaluation, and why and when does a nonprofit organization need it?

Program evaluation is a large umbrella term for the application of rigorous research techniques to assessing the effectiveness or usefulness of an organization’s policy or program.  Program evaluation requires measurement – most commonly by measuring an organization’s mission.  In a sense, an organization is its mission.  Does the organization have a way of measuring how they are achieving their mission?  Can the organization clearly know whether their objectives and goals are being met?

Secondly, program evaluation is needed when required by a funder.  Even if not required for funding, evaluation of a mission or program can provide clarity, help guide the purpose of an organization, and assist with strategic planning.

Recently the White House launched the Social Innovation Fund (SIF) grant competition through the Corporation for National and Community Service, which includes federal government funding and matched private funding for “effective nonprofit community organizations.”  In particular, the SIF is concerned with getting the most investment bang for the government buck.  To quote directly from Stephen Goldsmith’s Feb. 17, 2010 White House blog,

” [the SIF] offers nonprofits critical support with respect to management, staffing, data collection, fundraising and other challenges that they will need to overcome as they grow.

It provides for investments in multiple nonprofits in an issue area or geography, allowing the best innovations to rise to the top.

Critical to this last point, the SIF provides funding and incentives for nonprofits to evaluate their effectiveness.  Grant makers will be true partners in these evaluation efforts and be jointly held accountable for results.

The SIF’s focus on evaluation is so critical, especially for government.

Billions of taxpayer dollars are spent each year on programs in the issue areas that the SIF will focus on – economic opportunity, youth development and school support, and healthy futures.

What if that funding could be more accurately focused on the best solutions?  And what if the knowledge about what works were shared broadly, so it could be used in any community across the country?  The benefits would be enormous.  Through evaluation and knowledge-sharing, the SIF has the potential to transform how our nation tackles social challenges.

Discussing the SIF last year, the First Lady said it best when she noted:

“By focusing on high-impact, results-oriented non-profits, we will ensure that government dollars are spent in a way that is effective, accountable and worthy of public trust.”  “

Especially in economies when funding dollars are scarce and ultra-competitive, funders are vigilantly searching for evidence that their grants have made a difference and added value.  As well, organizations are eager to show funders that they are spending grant dollars wisely and that their programs are creating real change.  Evaluation can accomplish this.