In the blog entry of April 13, 2009, I wrote of a new direction for Charity Navigator, stating that “we are ... seeking to transform our evaluation system of charities to include two additional dimensions (beyond financial health) – accountability (including transparency) and outcomes.” The blog entry concluded with the promise that “You will continue to hear about these components of making wise giving decisions in the months ahead.”
So now, a few “months ahead”, one of the ways we are planning to move forward is by conducting an open forum on what we believe is one of the most important topics facing the nonprofit and philanthropic worlds today. The issue of outcomes has alternately inspired, dispirited, empowered, and angered nonprofit and philanthropic directors, managers, and practitioners since the early 90s when the concept first took hold in these sectors. Proponents of outcome-based practice see it as the surest way to achieve true effectiveness. Critics see efforts at identifying, managing towards, and tracking outcomes as a burdensome drag on nonprofits, diverting resources and attention away from the real work upon which these organizations should be focusing.
In the February 16, 2009 blog entry, “A Scary Finding on Outcome Measurement,” we noted that we had been on a “listening tour” regarding outcomes, and came away with the impression that fewer than 10% of charities seem to be measuring outcomes at all. A colleague with whom I checked these findings suggested that the overwhelming majority of charities have not even taken their first step down the outcome road.
The debate that followed the posting of that column was spirited. Kevin Jones commented that “If 90 % of non profits are not measuring, maybe the value of measurement needs to be measured.” Texas-based reader Soytri noted that if the effort associated with outcomes is to be worth it, the cost associated with gathering and analyzing the data needs to be less than the benefit accrued from having the knowledge; and blogger Vicknj pointed to a generational difference of perspective as a possible reason why the leadership of more charities are not embracing outcomes.
As the discussion spread beyond our pages, Sean Stannard-Stockton’s Tactical Philanthropy blog received a comment from outcomes consultant Dr. Robert Penna. He suggested that charities’ confusion over the availability of outcome-based tools is the root cause of so few of these organizations using them. “In the end,” he wrote, “it is up to the investor community to make the necessary expertise available to their client, partner and grantee organizations.”
All of this raises at least four questions:
A. What is the value of outcome measurement and the practices associated with it for nonprofits and social investors (donors who seek results from their investment in a nonprofit that lead to social value)?
B. Why are so few nonprofits actually using outcome measurement and so few donors asking for it?
C. Are funders doing enough to enable nonprofits to fully implement outcome measurement?
D. Regardless of the issue of funding, should nonprofits be held accountable for documenting meaningful outcomes?
As we have noted before, Charity Navigator is committed to the concept of reporting upon the outcomes success of the nonprofits we survey, as well as applying them to our own work. With that decision made, we believe that we have the opportunity to educate ourselves and advance knowledge in the field by hosting this open forum. We hope to have comment and opinion offered by some of the leading thinkers in the nonprofit sector. We trust that our readers will both participate in and profit from the exchange of information and ideas that we anticipate will result. We look forward to all of your thoughtful comments and suggestions as we travel this road together.