Can predictive techniques inform the decisions of grant-making bodies and thus improve their effectiveness? A research study setting out to answer this question has concluded: yes it can.

Z/Yen, together with Cass Business School Centre for Charity Effectiveness, has just completed a research study to trial PropheZy, a commercial application of a support vector machine, as an anomalous grant detector. The study used data comprising three grant programmes of The New Opportunities Fund (nof – now part Big Lottery Fund) between 1999 and 2001, and all City Parochial Foundation grants for 2000. Over 1800 grants were included in the study.

Three post-hoc evaluation questions were used; all questions that can reasonably be asked of any funded project and organisation:

• Did the funded work mostly achieve its objectives?
• With the benefit of hindsight, was it the right decision to have funded that work?
• Did you fund that organisation again or would you recommend funding it again?

The study proved that PropheZy demonstrated statistically significant predictive capability on The New Opportunities Fund data but not on the City Parochial Foundation data. This reflects procedural and cultural differences between the two funds. It also indicates that these predictive techniques are mostly applicable to relatively large, structured grant-makers such as Government bodies and large philanthropic foundations.

Ian Harris, Director of Z/Yen Limited, said:
“This study’s results are very exciting because they show that the automated sifting of grant applications can identify anomalies, thus reducing the risk of irregularities and/or increasing the effectiveness of the grant-making programmes by targeting intervention where it is most needed: to give grant-makers more bang for their bucks”.

Professor Jenny Harrow of Cass Business School concurs:
“Although predictive analysis is still only another tool and should not be used as a substitute for the human element of grant-making, it has real potential to contribute to risk-based grant-making processes”.

The research has just been published in Strategic Change [15: (2006)]: “Predicting the effectiveness of grant-making, Ian Harris, Michael Mainelli, Peter Grant, Jenny Harrow”.

For further information or a more detailed summary of this research please contact either Ian Harris on +44 207-562-9562 or Professor Jenny Harrow on +44 207-040-8800.

Cass Business School Centre for Charity Effectiveness is developing a research portfolio emphasising work which is primarily problem-based and empirically oriented. It includes funded and commissioned studies from independent policy groups, professional and public bodies. The Centre is also active in the national and international research networks for academic studies in non-profits.

Z/Yen Group Limited specialises in risk/reward management, an innovative approach to improving organisational performance. Z/Yen’s clients include blue chip companies in banking, technology and professional services as well as charities, government and care organisations.