Beyond Ratings
by Brian Reich | 31 Mar 2010, 9:11am
The Boston Globe reported this morning that a new rating system has been developed to help donors identify which nonprofit organizations are most worthy of support. Alas. A new rating system isn’t what we need if we want to improve the work of the nonprofit sector, and to deliver the outcomes that donors are looking for when they make a donation. To be successful as a sector, and as a society, we have to go beyond ratings.
Let me back up for a moment…
Back in November I wrote a post on my Fast Company Experts Blog entitled “What’s Wrong With the Analysis of “What’s Wrong With Charitable Giving-and How to Fix It.”
The post was in response to a terrific column in the Wall Street Journal by Pablo Eisenberg, a Senior fellow in the Center for Public and Nonprofit Leadership at Georgetown Public Policy Institute in Washington, D.C. about the challenges facing the philanthropic world. Eisenberg wrote: “Much of current philanthropic giving, by foundations and individuals, neither meets the needs of our charitable organizations nor addresses some of our most urgent public needs” and offered nine recommendations for how to fix these problems. I argued that Eisenberg’s analysis of the challenges facing the nonprofit and charitable community and his suggestions for how to fix the system didn’t go far enough.
One of the fundamental problems is that there are too many nonprofits. Here is what I wrote at the time:
There are more than a million registered nonprofit organizations in the United States, and tens of thousands of new nonprofits are created every year. They are all competing for the same dollars and in many cases fighting to serve the same need. I believe in the free market, and a vibrant community of organizations all working to address serious issues will spur new ideas and innovation in how to serve the public. But there is such a thing as too much. There are simple too many nonprofits, too many messages, too many options, and not enough success. More money won’t solve that problem, it will only make it worse. We need to take a good, hard look at all the organizations out there and make some choices about which ones are truly effective and worthy of continuing to operate. We need to find the groups that are operating successfully and figure out how to apply their expertise to other areas that are struggling. We need the organizations who are focused in the same areas to collaborate and work collectively to make progress. And we need to get rid of the egos — the people who run organizations more often than not get in the way. So ask yourself: is your organization having a real, meaningful measurable impact? And are you helping advance the whole community with your work? If not, please step aside and let someone else use the limited resources we have more effectively.
Until we figure out which nonprofits are performing effectively, AND work to get rid of those that aren’t performing, the same problems will continue to persist. Moreover, the impact and effectiveness of the organizations that are doing well will be limited by the inefficiency of the space overall. Rating systems alone won’t push us far enough. We need something different.
The new rating system that the Globe highlighted was devised by Root Cause, a research and consulting firm dedicated that helps donors “better invest’’ their money in those charities that perform well, in partnership with GuideStar, a nonprofit watchdog group that evaluates charities based on the Internal Revenue Service’s Form 990 - a required annual financial filing for nonprofits. The project is being funded (to the tune of $500,000) by the William and Flora Hewlett Foundation. Root Cause is currently only rating organizations in Massachusetts (where Root Cause has its headquarters) who are working on the issue of school readiness. But, they have plans to rate school readiness programs nationwide, and over time apply a similar rating system to other social issues.
The Globe article quotes Debra Snider, a GuideStar vice president, saying “Root Cause’s reports will help fill an information gap in the charity world.” And that is where Root Cause and GuideStar have missed the mark. The problem is not the information gap. The problem is that there are too many nonprofit organizations who are not performing — and the nonprofit/philanthropic sector isn’t doing anything to change that. The problem is that when we celebrate the successes of individual organizations, as opposed to looking at how the entire issue is being approached (and where the outstanding weaknesses that need to be addressed still exist) we don’t to get to the… um… root causes. We are shuffling deck chairs.
A different focus is needed. Data helps to impact behavior. More information helps to create a more informed audience, and a more informed audience - at least in theory - makes smarter choices about how to behave. In this case, when Root Cause suggests an organization is deserving of financial support, because their work is having a meaningful, measurable impact on the issue of school readiness, the likely result in that highly rated organizations will receive more donations. But what about the organizations that aren’t performing as well — will the rating system help them to understand how to have a more measurable impact so they can (quickly) make changes to how they operate? If an organization does not receive a high rating, is it reasonable to suggest that they should not be operating — because any energy or resources they spend competing for attention from donors (or serving their target audience) comes at the expense of a program that is having an impact? If a highly-rated organization serves its population, but other organizations, in other sectors, fail to deliver against their mission - doesn’t that undermine the ultimately effectiveness of the group being rate?
We are all connected - as a society, in communities, online and offline. We can’t escape that. To use the old adage, we are only as strong as our weakest link. Thus, until we serious address the weaknesses that exist among the lower-rated other organizations… or even take steps to put those under-performing organizations out of business, very little can change. We should be using the data that Root Cause and other organizations collect to identify ways to solve the problems that exist in the sector, not simply continue to to elevate the high-performing organizations. Someone should take the rating system that Root Cause has developed and suggest, in no uncertain terms, that any organization that meets their criteria is worthy of funding should continue to operate, and the organizations that do not should cease their activity. Root Cause could and should be doing that.
But even that is not enough.
We need to move beyond ratings. It is easier to highlight the successful organizations than to call out those which are failing. It is also more enjoyable to be seen as a champion of good causes and to support donors in their efforts to give money to high-performing groups than to be the one who crushes the dreams of well-meaning social entrepreneurs and cause champions. But if the goal is to help donors to support organizations that are having the greatest impact on society, and to ensure that all organizations are working towards achieving the impact we all want to see realized (in the case of the first Root Cause ratings, related to school readiness), then we have to fix the underlying problems at the same time. We have to see how the pieces fit together. We have to determine what the barriers to real progress are - and how to break them down. The full potential of even the successful organizations, and the investment of the donors remains painfully limited otherwise.
Thus, we need to move beyond ratings. Ratings are clean and straightforward. Real change is messy and painful to pursue. Impact is elusive and difficult to achieve. So, while ratings certainly influence the way people think about an issue by helping them to compare organizations or rank priorities, they are only a small part of the overall equation. Data is just data. Ratings are just a tool — like any widget or app that some nerd can create in their garage. Ratings systems do more to reinforce what is wrong with the nonprofit sector than to fix it.
As I have said time and time again, tools facilitate change, they don’t make it happen on their own. The nonprofit and social entrepreneurship worlds continue to fall short when it comes to educating and supporting change. They suffer from shiny object syndrome like everyone else. Every day new tools and apps and widgets are developed with the promise of saving the world. Nonprofits and social entrepeneurs pick and choose when to apply the appropriate context to a situation they are trying to address.
Yes, its easier to focus on one thing, and to assume that it will trigger the other actions - and outcomes - that we desire. But its not that easy. Change isn’t that simple. Donors look to ratings systems, like the one developed by Root Cause, and make simple choices about which organization to support. But the larger context isn’t known or understood. Within the rating systems, an organizations might be successful, but is it addressing the larger societal need? Is the most urgent need, given both short-term and long-term desired outcomes, to serve a single population, or to address the underlying challenges that exist in the entire sector? Does it make sense for the nonprofit sector to compare organizations based on their effectiveness - or their ability to manage their organization - or look instead at how different groups, through collaboration, might fill needs across a particular community or issue? If a donor wants to see their dollars applied to fixing what ails the world, a ratings system doesn’t deliver.
Ratings systems reinforce what we know about the nonprofit sector already — that its not working well enough. Knowing is only half the battle — and not enough to make the kinds of changes we need to make. After all, if we really knew what was was wrong, and how to fix it, we would probably be doing that work. Instead we are still serving our causes, building up organizations, highlighting performance metrics that are based on old understanding of how complex challenges are address — and not solving the problems that we need to solve. We are focused in the wrong place. We are celebrating the wrong things. We should move beyond ratings systems and focus on finding solutions.
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TAGS
: Boston Globe GuideStar Nonprofits Philanthropy ratings Root Cause William and Flora Hewlett Foundation
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Why Today’s NYTimes Giving Section Isn’t Good Enough
by Brian Reich | 12 Nov 2009, 10:27am
The New York Times published its ‘Giving’ section in today’s paper. I was totally underwhelmed. Here are my comments, in the form of a series of Tweets that I fired off during my commute into work this morning:
It’s refreshing to see the NYTimes Giving Section cover new philanthropy stories with different and refreshing angles (note sarcasm).
Thanks NYTimes - I wasn’t aware Target gave away 5% to charity. Causes let’s people tap social networks to raise money? Fascinating.
I am going to have to check the archives, but I am sure the NYTimes has never written up the WH Office of Social Innovation - that’s huge.
And that story about corporations having to do more than just brand themselves with a cause - I had never considered that. Thanks NYTimes
Dear NYTimes - if you want to continue to be my (or the) paper of record, you have to elevate your game. Start with your Giving section.
Dear NYTimes - why don’t you write up Lucy Bernholz’s ideas for how to re-shape the policy and governance structure behind non-profits?
Dear NYTimes - why don’t you write up the Wal-Mart Foundation’s ideas for how to end hunger, to go beyond just making donations?
Dear NYTimes - how about being a forum for the discussion about activity vs impact (and how many argue online hasn’t made it’s mark yet)?
Dear NYTimes - maybe you could tell us about the innovative mobile programs that enable individuals to volunteer while waiting for a bus?
With all due respect to the NYTimes Giving Section, there are more and better stories out there than what was in the paper today.
I came up with some (not so new, but newer than what is in the paper) better ideas for the NYTimes Giving Section on my walk to work.
Dear NYTimes - your yesterday’s news approach to the Giving Section today proves what everyone says about the print media not getting it.
Dear NYTimes - if you want ideas, or help, covering what is really important in philanthropy, let me know. I will help and others will too.
My frustration is driven by three issues:
1) There are better stories out there. The was little new ground covered in the stories offered by the New York Times as a part of their Giving Section today. Is the ‘paper of record’ not paying attention to what is going on in the world today? Do they not read the existing mainstream media coverage of nonprofits and charities, or the blogs and other sites that talk about the philanthropic community? Not only are there better stories out there - new innovations, different perspectives, approaches that are having more impact, and the like. But even within the stories that they covered - Causes, Target, the White House Office of Social Innovation, cause marketing and branding for corporations, to name a few - there are other voices and important perspectives that should have been included. The coverage was stale, incomplete — and barely worth the effort to read it.
2) The New York Times still has influence. Because people still view the New York Times as one of the leading news organizations in the country (and in some ways it still is, but apparently not when it comes to the issues related to philanthropy), their coverage in today’s Giving Section will have legs. People will read about it, blog about it, talk about it, and shape their plans based on what the New York Times says is important. But the news they offer is stale, the perspectives are incomplete, and as a result, the potential harm it can do probably outweighs the good. Nonprofits and charitable institutions continue to struggle - for reasons including (but certainly not limited to) the economy and the rapid changes in technology and how information travels. The New York Times had an opportunity to elevate the discussion, to change minds, to educate those who don’t have the luxury of being a part of philanthropic community every day, wrestling to figure these things out. But instead, the New York Times’ contribution to the discussion will do nothing to help any organization understand or deal with those issues, or the countless others that are out there, and probably will stunt the discussion somewhat, because of the need to go back and revisit issues that had, at least in my opinion, already been considered and addressed.
3) We do this to ourselves. Society has changed. How people get and share information, what we view as important, how we spend our time, energy and money have all changed. And all those changes are shifting the role and responsibility of the media as well. The New York Times (clearly) is no longer the authority on all issues - and in the case of their coverage of philanthropy, as demonstrated by today’s Giving Section, there are some areas where they are woefully behind the curve. There are all sorts of new and better sources for information, analysis and insight about the philanthropic community. And yet, for some reason, organizations still look at the New York Times as an important voice in this conversation. PR firms pitch their stories to the New York Times, even though they know that they don’t have the best examples or the greatest impact. Donors and ‘experts’ will put the groups profiled in today’s Giving Section at the top of their list of success stories, and must support organizations, despite the fact that many other, more compelling opportunities exist - and need help if they are going to break through. Bloggers, and columnists, and advocates for the nonprofit community will tweet, and re-tweet, and crow about the coverage in the Giving Section, ignoring all the other powerful examples and potentially game-changing opportunities that are out there. We do this to ourselves.
In the back of our heads, we know that the coverage in the New York Times isn’t good enough, isn’t far-reaching enough, and won’t change anything. But we let it happen anyway, year after year after year. Put another way, until the philanthropic community calls the New York Times out for not doing enough, for not covering the best stories in the best ways, the coverage will never change, and the space will never make the leaps forward it needs. So, let me do that now:
November 12, 2009
Dear New York Times:
You can do better.
I expect more of you.
Your truly,
Brian Reich
Subscriber (and someone who is active in, and concerned about, the philanthropic community and the ways in which the media covers its work - and potential).
That’s it. Now, get to work.
TAGS
: Causes Giving Section New York Times Philanthropy Target White House Office of Social Innovation
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Hello, Bill!
by Brian Reich | 28 Jun 2008, 2:00am
Bill Gates retired as the head of Microsoft yesterday. After 33 years leading the global software company he founded in his garage, he will now devote his full attention to philanthropy through the work of the Bill and Melinda Gates Foundation.
Regardless of what you think about Microsoft, or Bill Gates personally, know that he’s a genius and the experience and perspective he now brings to the philanthropic world are significant.
What’s his secret? What should we look for as a hint of how he’ll take his business experience and apply it further to his work around the globe? The Seattle Times quoted Gates in his farewell speech to Microsoft, saying:
“My life’s work really is about software and working with incredible people,” Gates said with tears in his eyes at a gathering on the company’s Redmond campus. “And I love working with smart people.”
We should all be so lucky.
As he has done in the software industry for more than three decades, Bill Gates will not only do more and better things for philanthropy through his direct work, but he will fundamentally change the way foundations, non-profits, governments, and other institutions conduct their work through his leadership. He has already create dnew models for how we address the most pressing health and other issues around the world and I am confident that more dramatic shifts are ahead.
So, Bill Gates, if you are listening — as you say goodbye to one career and begin another, I say “hello!”, and welcome (full-time now) to the world philanthropy. I, for one, am very happy you are devoting your time, energy, and talents to these critically important causes and I look forward to the opportunity to work with you, and learn from your leadership, whenever and however, that opportunity presents itself.
