Thursday, February 18, 2010

Outcome Forum Participant - Paul Shoemaker

Our next guest on the Open Forum is Paul Shoemaker, Executive Director of Social Venture Partners, Seattle, an Affiliate of SVP International a federation of SVP organizations in 23 cities in the United States, Canada and Japan. Paul is the Founding President of SVPI and currently sits on their Board of Directors.

1. What is the value of outcome measurement and the practices associated with it for nonprofits and social investors?

Paul Shoemaker: Invaluable, vital. Philanthropy starts with people’s heart and values, nothing wrong with that. But far too often it ends there and doesn’t also come from the head, with a foundation in the true social impact of people’s giving. Many nonprofits have been just as lax at developing and utilizing true social outcomes (via theory of change work) themselves. How can a nonprofit, whatever their endeavor, not know what their intended outcomes are and how to best (never perfectly) measure? About a year ago, I wrote a piece for Nonprofit Times and I suggested a “new deal” – philanthropists will commit to unrestricted funding if nonprofits commit to true, robust social outcomes measurement.

Ken Berger & Dr. Robert M. Penna : We agree with the spirit of what Paul says, but also believe that the issue runs a bit deeper. As he states, there is nothing wrong with the “heart and value” trigger to making charitable donations. The impulse to help is one of humankind’s more laudable traits. But the larger issue is that most people never get past the “heart and values” level of response or analysis. We believe there are at least three reasons that the sector should examine. The first is that many, if not most charities, base their fundraising, on a problem. They present a crisis, an unconscionable set of circumstances, an immediate need…and then wait for people’s natural sense of right and wrong to kick in. The more dramatic they can make the problem seem, the more, many believe, they will realize in contributions, grants, and other support. But this focus on The Problem usually says nothing about the achievable goals towards which they might be working. Instead, the implication is that “we’re working to make this problem go away,” a task rarely realistic or achievable. And then the next year, they come back and say “See? The problem is still here, but now it is even bigger…we need more money.” Promised nothing tangible, the public comes to expect little tangible in terms of progress, and the head, which might ask “How much progress have you made?” is instead overruled by the heart which responds anew to the presentation of the problem.

A second problem is charities’ accent on activity. They tell the public that “We’re doing this; we’re doing that. We serve….We provide…” Unfortunately, the effectiveness of what they are doing is rarely mentioned. The public, for its part, accepts activity as a proxy for accomplishment.

But the third problem and the one that enables the first two, is that there is a real lack of information, particularly objective information, on the impact (or at least outcomes) various charitable ventures are actually having. This is the central reason why Charity Navigator is moving to a new 3 dimensional rating system.

2. Why are so few nonprofits actually using outcome measurement? Is it that so few donors asking for it, or is it something else getting in the way?

PS: It starts with funders – very few will invest sufficiently in nonprofits’ capacity to do so. It isn’t free. And then yes, many donors don’t ask for it or they want only the stories (stories are great, but not sufficient). And then some, not all, nonprofits are not nearly as rigorous as they should be about outcomes themselves, regardless of the first two points.

KB&RP: We agree that it starts with the funders, and here we primarily mean the institutional donors such as foundations and even government. All too often they see the training and guidance that is necessary to bring a charity fully into the world of outcome measurement as an “extra” that represents a questionable expenditure in the best of times, and an inconceivable one in the worst of times. This short-sightedness is made all the more remarkable in an era when they are increasingly asking for at least some mention of outcomes and results in their grant applications and reporting instruments: they ask for it, but provide few if any resources to support their request. The result is that many nonprofits either don’t bother, or put old wine in new bottles, submitting activity and output information when asked for outcomes. If funders accept this –and way too many do- the practice becomes standardized and the result is a shell game that simply hides the fact that nothing has changed.

We think Paul is erring on the side of extreme caution when he says that “some” nonprofits are not as rigorous as they ought to be about outcomes themselves. Our investigation into the issue, in point of fact, indicates that the vast, overwhelming majority of charities are not only not being “rigorous” regarding outcomes, but are in fact doing virtually nothing in this regard. In the end, only “informed donors” will force charities, and those institutions that support them, to be more rigorous and honest about results.

3. Are funders doing enough to enable nonprofits to fully implement outcome measurement?

PS: No, not even close

KB&RP: We could not agree more. Few funders –and SVP is among them- are even looking at capacity building for the organizations they support.

Dr. David Hunter makes the point that many charities not only lack information showing they are helping the situations they are addressing, they can’t even show that they are not making things worse. One would think that at a time of incredibly scarce resources, that those are questions institutional donors (and ultimately all donors) would want answered.

4. What are investor/funder organizations doing, beyond asking for outcomes, to actually foster the movement and its spread throughout the sector?

PS: Investors and funders have to co-lead this with nonprofits. First, invest in non-profits’ capacity to articulate, and most importantly, use outcomes (regardless of reporting to funders) in their work. Fund their capacity or give them unrestricted funding so they can do so. Next, ask for outcomes and don’t fund organizations that don’t have or report them. We want to give to what we care about AND have that giving be as effective as possible.

KB&RP: This, we believe, is one of the great failures of the nonprofit sector. But there is no excuse for being either “too busy to learn,” or making believe that if we simply do more of what we’re doing now that things will substantially improve. If our sector is to truly be of help to those we serve, we have no choice but to get serious about both outcomes and the capacity for using them. Morally, there is no other choice.

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