Rating Guatemalan Nonprofits – a force for growth in the sector

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Rating Guatemalan Nonprofits – A Force For Growth In The Sector

One of the tasks Pionero Philanthropy has been working on this year has been refining its methodology and approach regarding the evaluation of current and future partner nonprofits going forward.

The Original “Clunky” Methodology 

When Pionero started, we combined our experience working in the nonprofit sector with Academic literature and evaluation models from development organizations such as the UN, USAID and DFiD and decided on our 5 Evaluation Pillars of Sustainability, Transparency, Efficiency, Impact, Need. 

We subsequently came up with relevant questions relating to each pillar whilst balancing common foreign donor expectations with Guatemalan realities and created a nonprofit questionnaire which we filled out at every nonprofit visit. All this collected information in conjunction with background research carried out by our researcher was collated into a nonprofit report for each partner.

A more Measurable Approach

As more nonprofits showed interest in partnering and as we updated nonprofit reports, it became clear that we needed to implement some form of scoring / rating system.

Originally, we resisted implementing such a system because we felt that each nonprofit was so unique that applying a rating system would encourage unfair comparisons leaving little room for nuance and meaningful differentiation. 

We thought that a rating system would disadvantage smaller nonprofits because larger organizations are usually better positioned to satisfy stricter donor requirements because their resource base allows for more time to be allocated to non program related tasks such as needs analysis, strategic planning or monitoring and evaluation. We feared that donors would disregard smaller, lower rated nonprofits who, despite their rating, have impressive potential for exponential impact within their communities.

Nevertheless, despite disparities between nonprofits being made more obvious through applying a rating system, this is not necessarily negative and we saw greater benefits to the nonprofits and the sector as a whole where Pionero would give scores and resulting Bronze, Silver or Gold Seals of Excellence.

The Benefits of a Rating System 

So what changed Pionero Philanthropy’s mind to implement a rating system and why is a scoring system beneficial to the Guatemalan nonprofit sector?

1. Data Driven Comparisons are Beneficial for Research

Although we understand the value in subjective, narrative information about nonprofits, numerical data was lacking in our evaluation process or was lost in paragraphs of text. We also wanted to perform more analyses across datasets which is best performed by using numbers.

We hope that the data collected and available on our website will be useful to many actors including nonprofits, donors, academics and more.

2. Data-Driven Comparisons Pinpoint Areas of Improvement 

With 0-2 points available for each of the 50 subcategories of our 5 pillars, nonprofits will be able to zoom in on the areas where improvement is needed thereby making it clear where they need to focus their efforts.

Pionero Philanthropy also has a Nonprofit Resource Center which contains details of each measurement and supporting resources, websites and templates so nonprofits will be able to take immediate action to improve their scores.

3. The Rating System can Empower Nonprofits and Increase Awareness of Donor Expectations 

The Pionero rating system is based on 50 Academic Best Practices based on US donor expectations and standards but adapted to the Guatemala nonprofit context.

We hope that by spotlighting to partner nonprofits these standards, that partners will be better prepared to respond to foreign donor standards independent from Pionero Philanthropy which we hope translates into more funding and growth opportunities!

4. The System Encourages Sector-Wide Growth and Investment

Through the rating system and encouraging nonprofits to improve and grow in key areas of interest to donors, we hope in the long term help to lift the sector further and drive more investment and attention to the country. 

5. Ratings and Seals of Excellence are Quick Visual Tools to Promote Partner Nonprofits

We hope that through the Pionero website displaying and promoting our partner nonprofits and their Seals of Excellence, that donors and other collaborators will feel more confident in reaching out to our partners thanks to Pionero’s 3rd party Seal of Approval.

Furthermore, we hope our partners will proudly display their seals in newsletters, email signatures and social media which we hope will further increase outside interest in these great causes.

Implementation of the Rating System

Pionero Philanthropy will be implementing its new rating system across in 2021 where staff will be repeating in person visits to current partners and carrying out the methodology from scratch with new partners visits.

Cada Niño was Pionero Philanthropy’s first pilot evaluation of its new methodology rating system. Pionero was very impressed with the Guatemala based nonprofit’s response to their evaluation and the efforts they made to improve their rating in key areas of Sustainability, Transparency, Efficiency, Impact and Relevance.

Pionero has already completed a pilot evaluation with the new system with encouraging results from the Guatemala City education based nonprofit, Cada Niño.

Pionero Philanthropy was very impressed with Cada Niño’s response to the new rating system and saw how following the rating and feedback given by Pionero, the nonprofit managed to make substantial improvements which drastically improved their rating.

We hope that in the long run, improvements to ratings and their resulting impacts will lead to a more prosperous and successful Guatemala nonprofit sector.

For more information about our rating system and methodology, please get in touch! We would love to connect with you.