An evaluation plan should not be considered only after the project is over; it should be built into the project. Including an evaluation plan in your proposal indicates that you take your objectives seriously and want to know how well you have achieved them. Evaluation is also a sound management tool. Like strategic planning, it helps a nonprofit refine and improve its program. An evaluation can often be the best means for others to learn from your experience in conducting the project.
There are several types of formal evaluation. One measures the product; others analyze the process and/or strategies you've adopted. Most seek to determine the impact on the audiences you serve and the measurable outcomes of your grant project. Either or both might be appropriate to your project. The approach you choose will depend on the nature of the project and its objectives. Whatever form your evaluation takes, you will need to describe the manner in which evaluation information will be collected and how the data will be analyzed.
Most sound evaluation plans include both qualitative and quantitative data. You should also present your plan for how the evaluation and its results will be reported and the audience to which it will be directed. For example, it might be used internally or be shared with the funder, or it might deserve a wider audience. A funder might even have an opinion about the scope of this dissemination. Many funders also have suggestions about who should conduct the evaluation, whether it be your own program staff or outside consultants. Some funders allow for the inclusion of the cost of evaluation as part of the project budget.