Goodbye Monitoring & Evaluation (M&E), hello Monitoring & Collaboration (M&C).

NGOs / Philanthropy / Impact Investment

Good news: philanthropy is growing, everywhere. Individuals, corporations, Banks, Foundations give more and more. As a result the amount of resources available for NGOs around the world is increasing exponentially.

With this welcome trend comes a strong emphasis on ‘measurement’. What donors — increasingly — want is quantitative and qualitative information on the impact achieved with their dollars. The demand for ‘impact’ data is growing and meeting such demand becomes more and more the condition for NGOs and social enterprises to get funded.

In a context where donors ask for more information and NGOs need to provide that information to be successful, the question of whether there are appropriate systems in place to support data collection and analysis becomes critical. In the non-profit world, those systems are generally referred to as “Monitoring & Evaluation” (M&E) systems. And here is where the problems begin.

It is important to appreciate that the overwhelming majority of NGOs try to do their best with M&E, and many Donors, to their credit, are playing an important role in driving a renewed emphasis on measurable results and social change. Yet today most non-profits and social enterprises are not really in a position to provide frequent and robust data and analysis on their impact. This is driven by two fundamental problems. First, most NGOs see M&E as a tool to collect the information needed to secure funding, to ‘satisfy’ donors. Donors too often require organizations to develop unique reporting systems that meet their own idiosyncratic approach to impact measurement, in turn driving organizations to measure for donors rather than themselves. Second, a lack of unrestricted funding, general operating support and grants for enhancing M&E systems limits organizations ability to invest in the capacity and staff required to provide relevant impact data.

This year— in the framework of Epic’s global selection process[1] — I have discussed this topic with dozens of organization around the world. I can confirm that the approach to M&E is often presented as a function of ‘what the donors want’. M&E becomes de facto a “good news machine”. The good news machine is designed to confirm that results are achieved rather than to provide timely feedback on what is and is not working. This dysfunctional equilibrium is somehow in the interest of the NGO (that can thus justify requests for funding) and, quite frankly, this is what many donors want as well. How many donors want to hear bad news?

In this context, there are two key problems with M&E. The first is with the “M”: monitoring is often regarded as a mechanic exercise of data collection. This isn’t backed by a ‘culture’ of monitoring. Data gets stored somewhere and then eventually used when it comes time to write a donor report or the ritual Annual Report.

The second problem is with the “E”: evaluation is virtually absent from most NGOs. Robust, external evaluations are often too costly for NGOs or simply take too much time. So, even when they are performed (as it is the case with large NGOs or development agencies — I have some direct experience about this at the UN), the results of evaluations are often coming when projects are already closed, when people have moved on, when circumstances have changed… In other words: evaluations — even when they are very insightful — often end up being unused.

This must change.

I argue that we need to move from monitoring and evaluation (M&E) to monitoring & collaboration (M&C). What do I mean by this? The M&C concept rests on 3 key pillars:

(1) Collaboration: the nature of the donor-NGO conversation around impact needs to change. We need to move beyond an old-fashioned, top-down approach whereby an NGO ‘implements’ programs and a donor ‘controls’ the impact. Collaboration and trust should be at the center of a new ‘pact’ between donor and NGO. A pact among actors that work together towards common objectives and are not afraid to have a frank dialogue on what works and what doesn’t. This dialogue is supported by jointly agreed success metrics.

(2) Data: M&C should be nourished by robust and relevant data. Data should help not only to measure impact but also to achieve impact. Donors and NGOs should invest time and resources in identifying and collecting data and information that allows a rigorous assessment of how well an NGO is or is not performing and in the long term what impact it is achieving. This means for instance moving beyond a focus on ‘activities data’ (that are often of little use), and moving beyond a simplistic use of metrics like “# of beneficiaries” or “cost-beneficiary ratios” that can often be misleading or unsuitable to compare the performance of different projects or organizations.

(3) Technology: technology is now available — at low cost — for NGOs and donors to collect, store, analyze and share data in ways that were unthinkable just a few years ago. More and better information can be made available to NGOs and to donors, in real time. The space for innovation in this field is enormous (I will write more on this in another post). Donors need to enable organizations to invest in these critical systems by providing funding specifically for their development or by enabling organizations to investment themselves via unrestricted grants and general operating support. Data collected by our team at Epic Foundation revealed that 92% of non-profits and social enterprises who applied to our global selection process this year felt they had “great ideas for innovation but we don’t have the resources to try innovations.” This must change if we want to enhance the effectiveness of monitoring, and more broadly of the social sector.

Philanthropy is a large, fast growing industry. People and organizations are giving more and more because they believe NGOs can deliver impact. Collaboration, data and technology can help both NGOs and donors have a smarter, truthful dialogue and work together towards shared objectives, with evidence at hand. It is time for innovation in this space, it is time for Monitoring & Collaboration.

[1] During 2015 Epic Foundation has reviewed applications from 1,400 NGOs and social enterprises.