The Importance of Using Data to Inform Grantmaking

By Samantha Matlin, PhD

In today's environment, with limited dollars and increased demand for resources, effective grantmaking requires more than just good intentions. To make a meaningful and lasting impact, grantmakers must not only leverage data to guide their decisions but also recognize and build upon the existing strengths and assets within the communities they aim to serve. A strengths-based, data-informed approach helps ensure that funding decisions build community capacity and foster sustainable change.

Understanding the Strengths and Needs of the Community

Before allocating funds, it’s essential for grantmakers to gain a comprehensive understanding of both the needs and the strengths of the communities they support. Administrative data can highlight challenges such as inequities in health, education, or housing.  But we also need to identify community assets—local leadership, trusted organizations, social networks, and existing initiatives already driving positive outcomes.

This could be an excellent role for qualitative data.  By pairing quantitative data (like demographic or economic indicators) with qualitative insights gathered from community members, funders can identify opportunities to build on what’s working. This balanced view enables funders to invest in strategies that reinforce community resilience rather than focusing solely on deficits.

Building Community Capacity & Measuring Impact

Assessing impact is one of philanthropy’s most persistent challenges. While quantitative output measures—such as the number of participants served or services delivered—are important, they cannot provide guidance on how to strengthen a program or whether the program is having an impact.

Community organizations may have limited capacity to collect and analyze data.  It is critical for grantmakers to assess the need to develop organizational capacity to engage in evaluation.  This may require offering professional development opportunities and/or providing dollars to engage in this work.

Data can also be used to track system-level indicators of community collaboration, such as partnership among local organizations or sharing of resources. For example, an evaluation might measure whether a grant helped build new partnerships or increased a community’s ability to address challenges collectively. These indicators capture how investments contribute to lasting systems change and local power.

By integrating both outcome and capacity data, funders can better understand the ripple effects of their work—how grants strengthen networks, amplify voices, and expand opportunities long after the funding period ends.

Driving Innovation Through Data and Community Insight

Data can serve as a catalyst for innovation, especially when interpreted through the lens of local knowledge. By identifying trends and patterns, funders can explore creative approaches that align with community strengths. For example, a data analysis might reveal that community-based peer support programs have higher engagement rates than traditional service models—suggesting an opportunity to scale a locally effective solution.

Sharing data across organizations also fosters collective innovation. When funders, grantees, and community partners exchange insights, they can identify emerging needs and coordinate responses more effectively. Open data-sharing builds trust, accelerates learning, and ensures that innovative ideas are informed by those closest to the work.

Strengthening Relationships and Trust

Effective grantmaking is built on relationships grounded in trust, transparency, and respect for mutual expertise. Data can strengthen these relationships by promoting open communication and mutual understanding. When grantmakers also share data with grantees and use it collaboratively to inform decisions, it creates a more equitable partnership.

Importantly, data should not only be used for accountability or to identify problems, but also to celebrate progress and highlight community achievements. Recognizing local successes fosters motivation and joy among grantees and residents, reinforcing a positive cycle of engagement and growth. It also helps grantees tell their own stories—using evidence to demonstrate impact, attract new supporters, and sustain their work overtime.

Conclusion

Incorporating data into the grantmaking process is no longer optional—it’s essential for making difficult funding decisions and achieving meaningful and sustainable impact. By adopting a strengths-based, data-informed approach, grantmakers can better understand community needs and assets, make evidence-based and equitable decisions, measure both outcomes and capacity, and drive innovation through collaboration.

Most importantly, using data in partnership with communities—rather than about them—builds trust and ensures that investments align with local priorities and potential. Data becomes not just a measurement tool but a bridge that connects funders and communities in shared purpose.

As the philanthropic landscape continues to be called on to address funding gaps and complex issues, funders who combine data informed decision-making with deep respect for community strengths will be best positioned to advance lasting, equitable change.