What’s the best nonprofit to support this Giving Tuesday? Good luck finding an answer.
Even though the demand for the social sector’s help is rising amid tough economic times, there’s no good method for determining which groups are most effective. That’s why nonprofits should take a page from the for-profit world and ask the people they help whether their services actually work.
No nonprofit ranking system currently takes this approach, which is the clearest way to gauge whether people find value in a group’s services.
Charities aren’t ranked on beneficiaries’ satisfaction
Charity Navigator typically gauges impact in terms of cost effectiveness, which means, for instance, calculating how much a nonprofit spends on each meal it provides. This doesn’t show whether beneficiaries’ lives are improved.
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Candid, formerly known as GuideStar, lets nonprofits upload their own metrics, which generally defaults to the number of people served as well as cost effectiveness. Again, the true impact in people’s lives is missing.
Other charity rankers try to go further. The Pew Charitable Trusts’ “Results First Clearinghouse,” which stopped updating in 2021, relies on academic studies that outline best practices. Nonprofits are measured by whether they apply those practices.
The “What Works Clearinghouse,” which focuses on education projects, takes a similar tack. Yet this approach typically focuses on group outcomes instead of the transformation of individual people’s lives – think the difference between tracking short-term job placements and whether someone finds a job that matches and unlocks their long-term interests and potential. A similar failing bedevils most government support programs.
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A real measurement system wouldn’t start with dollars spent or academic studies, but with the people a nonprofit serves. In the same way that the customer is king in the private sector, the beneficiary is key in the social sector.
Nonprofits should gauge people’s individual transformation through their services the same way businesses gauge satisfaction from products. Only then can the social sector figure out what works, and then make it work better.
50,000 people surveyed about nonprofits’ services
The Stand Together Foundation has experimented with this approach over the past two years. We’ve surveyed 50,000 individuals across 25 metropolitan areas, with plans to launch broader surveys in more places on a quarterly basis in 2023. We ask whether they’ve sought services from a local nonprofit, and if so, which ones. They typically list several groups, including some that we support.
Then come the critical questions. On a scale of 0 to 10, we ask whether the organization has helped transform their lives for the better; how empowered they feel to overcome barriers in their life; and how likely they are to recommend the group to someone in a similar situation.
The last question is the “net promotor score” that many businesses rely on to measure their product against competitors, while the first two questions reflect a business-like approach to gauging whether an organization’s services are creating value for individuals.
The answers are market signals. People are telling us which nonprofits best address their unique needs, from school struggles to homelessness to substance abuse and more. As we get more responses, we get a decent picture of the best organizations in specific areas.
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For instance, on the transformation question, some organizations average as low as 6.2, while others reached as high as 8.6. On the recommendation question, the spread was even wider – ranging from 5.4 to 9.4. Such findings begin to indicate the most effective nonprofits, which beneficiaries and philanthropists need to know.
Imagine if more of the social sector asked the same three questions. Two critical things could happen:
People in need would have valuable information
First, nonprofits could more effectively experiment with new models and services to understand which services work the best for whom.
Second, if the groups made this information public, the most vulnerable in society could choose the ones that best meet their needs. Intermediary organizations, such as 211 call centers and government agencies, could also better recommend specific services to people. This would put significant pressure on the entire social sector to up its game.
Many nonprofits are unlikely to adopt this measurement system on their own, not least because it might show their ineffectiveness. It falls to philanthropists to demand it, starting on this Giving Tuesday.
Donors of all sizes, but especially in the high-dollar range, should pressure groups to accurately assess whether they’re holding beneficiaries down or truly lifting them up.
Donors deserve that information – and the people they hope to help may depend on it.
Evan Feinberg is executive director of Stand Together Foundation.
Story Credit: usatoday.com