Wednesday, February 6, 2013

The First Step Toward a Measure of Outcome

On December 8, 2008 I posted a blog here titled, “A Measure of Outcome”. In that blog entry I discussed the critical importance of knowing the outcomes of the work of charities and made the following promise, “we are setting a goal over time of offering an expanded rating system to more comprehensively evaluate nonprofits and separate great organizations from the rest”. Over the intervening years we have been working hard to do just that. The launch of CN 2.0 in 2011 was a step in that direction. However, on January 23, 2013 we took our greatest leap forward in that effort. We launched the new Results Reporting dimension to our evaluation of charities (the overall system is now called CN 3.0 and includes three dimensions – (1) financial health, (2) accountability & transparency, and (3) results reporting).

The reason this is such a big deal has been explained in a number of places on our web site as well as in that original blog post back in 2008. Today, I would like to share a specific story that I think sums it up. A couple of months ago, before we shared the draft concept note regarding Results Reporting with a group of 140 experts, we wanted to run it by a hand full of people we considered the most respected experts in the field. One of that small group was the former head of the Hewlett Foundation (our largest foundation funder) and now a professor at Stanford Law School, Paul Brest . He had told us in the past that he was maintaining a “wait and see” attitude toward the work Charity Navigator was doing in the area of outcomes and nonprofit performance. A few days after sending him the materials, our Board Chair (Pat Dugan) and I had lunch with Paul to get his reaction. I will never forget what he said when we asked him what he thought of what were working on. He replied, “this is the most important work going on in the nonprofit sector.” After almost falling off my chair, I turned to Pat and said, “Did you hear what Paul just said?” Pat smiled and simply replied, “Yes I did.” We mentioned Paul’s comment (with his approval) in our discussion of Where We Are Headed and at the end of that document, gave our own interpretation of why we think Paul made that statement. We explained that,
We believe it [i.e. the work we are doing on results reporting and what will follow] is that important because donors will have access to much more robust information than ever before about each charity’s ability to bring about long lasting and meaningful change in the world. It is also important because many more charities will become focused on measuring and managing their performance. In other words, we believe this work and the new rating system that is evolving out of it is critically important because our users will be able to direct even more money to high performing charities.  Ultimately we believe this will lead to a significant and measurable improvement in human welfare and acceleration in solutions to our world’s most persistent problems.
I think that sums it all up in a nutshell. I give my most heartfelt thanks to Paul Brest for putting some serious “wind in our sails” as we move forward on this endeavor to help change the nonprofit sector and, by extension, the world for the better!

In the coming months I will be using this blog site to explain a bit about each of the five elements of the Results Reporting dimension of our evaluation system. Stay tuned!