Announcing ImpactMatters: Auditing Charity Impact across Causes

We believe in a simple philosophy: choose your cause with your heart, but your nonprofit with your head. A powerful mission is just the start. Diligent donors then ask the next question: does the nonprofit use and produce appropriate evidence of impact on that mission?

We conduct “impact audits”, short-term engagements with two objectives:

1. Help nonprofits: Guide nonprofits in strengthening their use and production of appropriate evidence of impact.
2. Help donors: Certify to donors that an organization is appropriately evidence-based.

The result is simple: nonprofits get tailored guidance on how to improve their use of evidence, and donors can be confident their charitable dollars are advancing the mission they care about.

HISTORY

ImpactMatters was founded by Yale economist Dean Karlan and his former student Elijah Goldberg in 2015 to solve two critical gaps in the nonprofit sector. First, nonprofits that want to be more evidence-based in their work often don't have the expertise or guidance to figure out how. Second, while we now know a lot more than a few decades ago about what does and doesn't work, for example to increase literacy or reduce child deaths, it is often difficult to map that evidence-base to nonprofits.

Enter the impact audit.

APPROACH

We call these two gaps the "nonprofit rating" problem. Many nonprofit organizations struggle to use evidence to guide their decision-making. Similarly, many donors struggle to assess the impact of nonprofits. An impact audit solves these related challenges:

1. Provides value back to the nonprofit: Following the review, we provide a detailed private management letter to the organization. The management letter includes specific recommendations for how the nonprofit can improve its program and operations. In addition, the letter directs the nonprofit to resources and organizations that can help with specific needs. ImpactMatters does not serve as an consultant, but rather provides independent recommendations for how the nonprofit can improve its work.
2. Certifies appropriately evidence-based nonprofits to funders: ImpactMatters believes donors should choose their cause with their heart, but their nonprofits with their head. Our impact audits make choosing a nonprofit easier, by certifying nonprofits as appropriately evidence-based. Often, we will look for evidence from a randomized trial to make that certification. However, a core belief at ImpactMatters is that not every nonprofit needs a randomized trial: some programs cannot be tested with randomized trials, and others can rely on randomized trial results from elsewhere. We look for appropriate evidence, making the process selective while still allowing recommendations across a range of causes. As a result, donors can give with their heart while remaining confident in the impact of their philanthropy.

METRICS OF OUR OWN SUCCESS

We define success as follows:

• Organizations shift towards more evidence-based programming as appropriate
• Donations shift to appropriately evidence-based organizations
• Impact audit standards are adopted by others, creating a market for impact