Ken Berger: What do you see as the value of outcome measurement and the practices associated with it for nonprofits and social investors?
Alan Sorkin: We believe that they are absolutely essential. Funders, for far too long, have been giving without guidelines of effectiveness. With funds drying up and the needs even greater, funders and social investors must be concerned with providing funds only to organizations that can demonstrate impact and effectiveness. A dollar given to an ineffective organization is a dollar wasted that could have been given to an effective organization. Within SVP, accountability and results are among our shared principles. Partners are mutually accountable to each other, their Investees [our grant recipients] and community. They achieve and document measurable results, both in their own work and through their nonprofit partnerships.
KB: Why are so few nonprofits actually using outcome measurement? Is it that so few donors are asking for it, or is it something else getting in the way?
AS: The short answer is that outcome measurement is difficult. Social Venture Partner nonprofit investees understand that they have a much better chance of funding if they can talk about their outcomes and impact in a meaningful way. As long as funders do not require clearly defined outcomes, nonprofits will lag behind.
KB: Are funders doing enough to enable nonprofits to fully implement outcome measurement?
AS: No. Many funders still persist in underwriting programs without providing funds to measure the effectiveness of those programs. They should also be funding capacity building so that increases in effectiveness can be tracked and measured.
KB: What are funding organizations doing, beyond asking for outcomes, to actually foster the movement and its spread throughout the sector?
AS: I can’t speak for other organizations, but SVP is tracking our member organization outcomes in the areas of both philanthropic development and nonprofit effectiveness. By way of example, we recently had a USC outside evaluation measuring our impact. We are constantly looking to improve our own performance and that of our investees.
SVP is a network of individuals who care passionately about making the world a better place. Fundamental to the SVP approach is engagement. Partners give of their time, professional skills and creativity, bringing together the worlds of grant making, volunteerism, nonprofit capacity building, and philanthropic education. SVP-International is the network association of the 25 SVP community organizations across the U.S., in Canada and Japan.
Ken’s Commentary: In thinking about Mr. Sorkin’s responses, a number of points come to mind:
- Mr. Sorkin mentioned that many funders still persist in underwriting programs without providing funds to measure the effectiveness of those programs. At the same time, he noted that without measurement, they could be wasting their investment. Could it be that, just as we observed with public charities (see A Scary Finding on Outcome Measurement), less than 10% of foundations fund the systems, services, and staff needed to measure and manage performance?
- Of those foundations that do require measurement, how many actually help the agency receiving the funding look at the bigger picture of agency performance, as opposed to performance just of the grant? Any?
- Are the measurements that are conducted truly meaningful? We have heard that for many funders, as long as something is filled in on the grant application and the final report (under the heading “outcomes”), no closer look happens. Garbage in and garbage out. So just as with the nonprofits they fund, even if a foundation says it measures outcomes, they may not actually do so. They’re using the latest jargon, but nothing has really changed about the way they do business.
- How many foundations measure their own performance in a meaningful way?
- Mr. Sorkin's short answer to why more nonprofits are not effectively managing their performance (and perhaps why more funders are not asking for them) is that working with outcomes is difficult. There may be more going on here than just technical difficulty with measurement. I am told the most common reason nonprofits don't do it is because they don't have to. As long as funds can be secured the old fashioned way - telling a sad story, why should nonprofits go through the hard work of managing their performance?
- In conclusion, I suspect the reasons why more nonprofits are not managing their performance fall into the following categories:
a. Ignorance of how to do it
b. Fear of what they might discover
c. Lack of resources to do it
d. Lack of commitment to doing it
e. Conscious resistance to doing it
So, that do you think? We’re eager for your thoughts….