The Center for Effective Philanthropy: A Moral Imperative
By Phil Buchanan
Posted March 2, 2015
If we care about impact - and I think that those of us working in philanthropy and the nonprofit sector do (why else would we be doing what we do?) - then we need to know what's working and what's not. It's not always easy but it's absolutely essential, as an important just-released statement from more than 50 sector leaders makes clear.
The document, titled The Performance Imperative: A Framework for Social-Sector Excellence, calls on nonprofits to strive for "high performance" - defined as "the ability to deliver - over a prolonged period of time - meaningful, measurable, and financially sustainable results for the people or causes the organization is in existence to serve."
In my view, this is a simple, powerful, and important definition that puts results right where they deserve to be: at the center of it all. (Full disclosure: I was one of the members of the "Leap of Reason Ambassadors Community" that worked on this. That said, all the credit for the heavy lifting belongs to Michael Bailin, Cynthia Figueroa, Lowell Weiss, and Mario Morino, the latter of whom launched this effort as a follow-on to his 2011 book, Leap of Reason.)
The document moves from the definition of high performance to an articulation of what it takes to achieve it, describing "seven pillars" that organizations can cultivate to make the most progress:
- Courageous, adaptive executive and board leadership
- Disciplined, people-focused management
- Well-designed and well-implemented programs and strategies
- Financial health and sustainability
- A culture that values learning
- Internal monitoring for continuous improvement
- External evaluation for mission effectiveness
There have, of course, been nonprofit institutions that exemplify most or all of these pillars for decades.
But not enough of them.
In saying this, I am not picking on nonprofits; I believe it is the nature of organizations of all kinds not to realize their full potential. Just as many businesses struggle to perform, so too do government agencies. Nonprofits are no different in that regard, although the degree of difficulty in achieving high performance is greater due to the nature of the challenges nonprofits seek to address - the very ones that have defied market-based or government solutions.
Making progress against these challenges is often brutally tough - as is gauging progress. It is also vitally important. That is why we need thoughtful assessment and effective management.
We all know the well-worn examples - like D.A.R.E. and Scared Straight - of well-intentioned efforts whose efficacy was studied rigorously only after they'd been "scaled" and were found to be achieving no - or even a negative - effect. The costs of not knowing are high.
On the other end of the continuum, we see the enormous potential of those exemplary organizations that have consistently demonstrated results, from the familiar examples such as Nurse-Family Partnerships to perhaps lesser known organizations like BELL (Building Educated Leaders for Life) - run by CEP Board member Tiffany Cooper-Gueye.
In arguing for more emphasis on performance and performance measurement, are those of us who signed on to the Performance Imperative calling for a technocratic approach to nonprofit management, for a rejection of the passion that drives those in the sector? No, of course not. Although many assert there is a tension between the heart and the head, I think that's a false dichotomy. It is, in fact, the heart that compels us to use our head.
As Bridget Laird, CEO of Wings for Kids, puts it in this video introducing the Performance Imperative, "if we don't know we're making a difference, then there's no reason to be doing what we are doing. We can't sleep at night if we don't understand whether we're making an impact."
The emotional commitment evidenced in Laird's words, that sense that we absolutely must understand performance, provides the fortitude needed to do this work - because assessing performance for most nonprofits is much, much more complicated and difficult than it is in business. Even radically different companies working in very different industries can be assessed by universal metrics such as profit and stock appreciation.
Assessment is much tougher when it's not simply about judging financial results.
That's why the Performance Imperative is such an important document, allowing organizations to review the descriptions of each of the pillars, asking, "Are we there yet? If not, what will it take to get there?"
When it comes to assessment, we at CEP have found in our research - including in this 2012 report and a soon-to-be released follow-on to that effort - that nonprofits are committed to assessing progress and to using data to improve their programs, contrary to how they are sometimes portrayed. But the problem is often one of resources, and that's where foundations come in. Too few foundations are providing either the financial or non-financial support for organizations to do the work of being outcomes-oriented.
As David Hunter put it (in his characteristically blunt manner) in his 2013 Working Hard and Working Well: A Practical Guide to Performance Management - which is a sort of sequel to Morino's book - funders need to stop demanding "performance in which they don't invest, results for which they don't pay, and accountability from which they exempt themselves."
I think that, fortunately, there are a number of exemplars on this front from which other funders can learn: foundations providing nonprofits the kind of support they need - financial and sometimes non-financial - to operate in a way that is consistent with the "pillars" of "high performance." CEP's forthcoming research report will profile two foundations - neither among the usual suspects - that have committed to supporting nonprofits in this work in a major way.
Look - this work is hard, and requires a commitment from funders and grantees. But it can be done. More and more, it is being done. And I'd argue that it must be done - that the performance imperative is nothing less than a moral imperative.