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While grantees and funders generally agree on the importance of impact measurement, they often disagree on what to measure. This is their guide to selecting approaches to metric development.
Funders need to communicate the impacts of their portfolios and make decisions by comparing investments. Grantees need to use data to improve their own organizations and attract investments. As a result, funders tend to prefer a fixed set of indicators reported on by all grantees, while grantees often want customized, organization-specific reporting. Laura Budzyna (MIT D-Lab) proposes four approaches to indicator development:
1. Prix fixe: All grantees report on the same metrics
2. A la carte: Grantees choose from among a set of funder-selected metrics
3. Made to order: Funders and grantees jointly agree on metrics
4. Bring your own lunch: Grantees develop their own metrics
This resource would be especially useful to funders and grantees in the design phase of projects, as they decide what to track and negotiate reporting requirements. Clearly communicating the basic approach to indicator development during the grantmaking process can avoid miscommunications and improve the grantmaking process.