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Thursday, October 18, 2018

Does Impact Information Affect How You Give?

During Giving Season 2017, Charity Navigator partnered with several organizations helping charities measure and report on the impact of their programs. This ‘impact-related’ information takes many forms. Some partners look to help charities determine how their projects and programs will affect their respective populations. Others attempt to more deeply evaluate the structure of charities’ programs, including on-site technical assistance visits to better understand organizational operating procedures. 

Ideally, these actions provide important information for donor decisions related to charity performance and the progress being made toward organizational goals and objectives. These approaches allow a potential donor to see a leading indicator of how their donation will help address the problems the charity is trying to solve. 

This type of planning falls into the realm of ‘theories of change,’ often presented in the form of a ‘logic model.’ A logic model is a linear, logical outline of the resources, activities, and results a program is intended to achieve. It can also provide a ‘leading’ indicator of the work a charity plans to do.

Building a logic model should help identify appropriate indicators that can be tracked capturing hard numbers that meaningfully reflect the work the charity is doing. These numbers can provide ‘trailing’ indicators to show donors, during a specific time period, the translation of dollars into program activities. Each of the approaches our partners have built is grounded in prior academic research and experimental results.

A Stanford Social Innovation Review article suggests a good summary of the different levels at which a charity could measure impact:

  • Outputs: These are the direct results of the activities done by the nonprofit.
  • Outcomes: These are the observed effects of the outputs on the beneficiaries of the nonprofit. 
  • Impact: This is the degree to which the outcomes observed by a nonprofit are attributable to its activities.

As a charity moves from outputs to outcomes to impact, it can become increasingly difficult to measure impact-related results. These are the results Charity Navigator and partners seek to inform.

At Charity Navigator, we are interested in how donors react to these leading and trailing indicators. We want to look at how donors respond to charities reporting on their indicators, regardless of the approach. In 2017, we displayed data from our partners Classy, GlobalGiving, and GuideStar. For the most part, this data represented logic models, theories of change, outputs, and a few data points around outcomes. 

On our website, we ran a test designed to measure the change in donor behavior when they were presented with impact information provided by a charity. Presenting this data to users increased the average donation to a charity through our Giving Basket by a few cents. Since most site visitors do not donate on our site, this was a nice increase in donations. But the result was only weakly statistically significant, so there is still a moderate chance it represented ‘noise’ in the data.

To further our testing In 2018, we are introducing a fourth partner, ImpactMatters. They provide ‘Impact Audits’ to non-profits which quantify the impact of donations made to a charity and how the donation affects the program participants. As part of this audit, they also endeavor to measure what would happen to the participants without the program in place, which allows their measurement to move into the area of Impact as defined above.

We are also collecting more data to try and better understand if people are reading the impact information for a charity before making a donation, and better understand how impact information affects donors’ behavior. We look forward to continuing this work and helping charities and donors better understand how to measure and track their performance and progress.

Written by Matt Dragon, Director of Engineering, Marwah Maasarani, Senior Program Analyst, and Emily Williams, Director of Programs, at Charity Navigator.

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