Charity Navigator announced two days ago that it was moving away from rating nonprofits based on their overhead to program expense ratios, to looking more deeply into transparency, governance, financial strength, and lo and behold, outcomes. While some might say (and are), “Charity Navigator, you are arriving rather late to the party,” the entity, like Guidestar, is a prominent resource that many donors use when making decisions about whether or not to support a nonprofit. They have 3 million users and research shows that their ratings impact donor behavior. Thus, they carry a lot of weight in getting donor perceptions to change about how best to evaluate nonprofits’ effectiveness and impact.
At the same time, Ken Berger, the new-ish CEO of Charity Navigator, who is leading the changes in how the organization evaluates and rates nonprofits, back in February reported that, in doing research to guide their new direction, they found that less than 10% of the charities they polled had systems in place for measuring their actual outcomes, and that their findings had been corroborated by others in the field.
Many of us track the number of clients that participate in our programs, how many pounds of food / supplies are distributed, and so on, but these are outputs, not measures of how programs are changing lives and impacting well-being. Reasons commonly cited include:
- Doing so generally takes more effort (and resources) than measuring outputs,
- Historically most funders, while wanting evaluation results, do not fund the systems development and staff time it takes to measure outcome-based results, and
- Most nonprofits feel the highest-priority use of their resources should be to funding programs.
With Charity Navigator, and others – among them, Guidestar, Philanthropedia, GiveWell and GreatNonprofits – denouncing overhead ratios and purely financial measurements as indicators of charity quality and focusing more on outcomes, it is realistic to assume that nonprofits will be feeling some pressure over the coming years to focus more on outcomes measurement. And closer to home, there is at least one group of funders working on a common reporting guidelines that focus specifically on impact/outcomes.
I know that outcomes measurement can be (at least perceived to be…) difficult, but was very surprised that Charity Navigator’s findings were in the 10% range.
So in the interest of doing some informal research, I’m curious… If you work in the nonprofit sector, does your organization measure its outcomes? If so, how… and is it an onerous process? How does doing so benefit you? And if you are not measuring your outcomes, why not? No clear benefit? Lack of resources? What would it take to motivate you to do so?
Thanks for your feedback!
Filed under: Best Practices, Philanthropy/Fundraising | Tagged: outcomes, Charity Navigator, impact | Leave a Comment »
