We’ve explored the importance of evidence for measuring impact and the issues in finding it. But is it always the case that you need evidence? Might there be situations where it doesn’t exist or using it may even be unhelpful? And where does evidence come in to the responsibilities and moralities surrounding philanthropy?
In this article, we explore the bigger questions around when to use evidence in philanthropy. We thank philanthropy expert Rhodri Davies; Matthew Whittaker, CEO of Pro Bono Economics (PBE); and Caroline Greenhalgh, PhD Candidate at the University of Birmingham and Head of Development at the Childhood Trust, for sharing their expertise on impact and evidence in philanthropy for this article.
Is there ever a situation where using evidence is unhelpful?
We’ve already made the case for the importance of evidence. However, there may be times when evidence may not be of much use or there simply isn’t any.
As Rhodri puts it, you could argue that the ‘sweet spot’ for philanthropy is to test and catalyse new ideas that can then be applied at scale if they work. In this case, evidence won’t exist because it’s a new idea or intervention. He went as far as saying that the emphasis on data and impact has hindered funding to crucial but harder-to-measure systemic issues.
Matthew adds that there is a growing shift away from funding specific ‘things’ such as charities or interventions, and instead toward people and ideas, and concurred that data is unlikely to be helpful here.
Putting this into context, the percentage of philanthropic capital that gets allocated to systemic change or to bold individuals with bold ideas is negligible. This is less to do with impact, and more to do with donors’ desire to reach beneficiaries directly and to be more small scale or local in their giving. If this is your view of philanthropy and what you support, then evidence still has a very important role to play. And while there is absolutely a role for catalytic philanthropy, Caroline points out that you also do have to be building the evidence base for the programme as you trial it, otherwise you can’t know if it worked, and therefore whether it should be scaled-up.
The role for evidence in challenging economic times
At a time when the sector is struggling to make ends meet and deliver for their communities, one could ask whether it is reasonable or even appropriate, to demand good impact reporting or a commitment to building an evidence base from charities.
There are two dimensions to this point, and they have to do with the stage and type of response in question.
In Caroline’s conversations with high-net-worth donors as part of her research, it became clear that when it came to the immediate, emergency response in the first months of the pandemic, donors were taking a ‘common sense approach’ and supporting organisations where there was a clear increase in pressure on their services. When organisations are on the brink of closure, you don’t have time to look for evidence, nor is it required when your donation is to help these charities survive another day. However, in the long run, if we are to meet the growing needs stemming from the impact of the pandemic and the cost-of-living crisis, we need to understand what works. In a world with constrained resources we cannot afford to fund ineffective programmes.
Philanthropy: roles and responsibilities of taxpayer subsidies
Evidence can play a major role in shaping donation decisions, but it’s also important to consider when ensuring philanthropic giving is responsible.
Funds donors have to give away are in part subsidised by the taxpayer through Gift Aid provision. Funds that would have been paid in taxes are effectively diverted to charities and, for higher rate taxpayers, to donors themselves.
Despite this, rarely is philanthropy considered in terms of the funds’ opportunity cost, or how much control beneficiaries have in their allocation. Instead, the emphasis is always on the fact that the funds ‘belong’ to the donor and they get to decide where they should be allocated.
In this context, understanding the evidence for a particular programme or intervention gains added importance. It’s the only way donors can demonstrate that their philanthropic capital has been put to good use, and benefits the people who need it most.
An identical argument can be made for charities themselves, which are tax-exempt entities and thus also subsidised by the taxpayer.
Ultimately, not only can evidence help us to understand if a programme or intervention is working, it can also help charities and donors ensure they stay accountable to the communities and people that they are trying to help. There are important practical and moral reasons for greater and better use of evidence to inform charitable programmes and how philanthropic capital is allocated.
You can find out more about the use of evidence in measuring your impact in our other articles: