Saving the Soul of the Social Sector

Ken Berger gets paid to say things the rest of us can't say.

After nearly 30 years working in nonprofits and 5 years as the president and CEO of Charity Navigator, Berger has seen plenty of inefficient, dishonest, and outright fraudulent nonprofits.

As bad as these corrupt nonprofits are, they're not the biggest problem facing the social sector, according to Berger. The problem isn't even dwindling funding or the need to minimize spending on overhead.

The biggest problem, as he sees it, is that most nonprofits can't prove their work has any real impact.

In a talk at New York University in October, Berger called this lack of meaningful measurement a full-on "battle for the soul" of the social sector.

The Results Problem

According to Berger, the social sector has not been able or willing to discuss this problem bluntly and openly. Berger, on the other hand, says he gets paid to be blunt.

And blunt he was during his talk at NYU: "There is virtually no credible evidence that most nonprofit organizations actually produce any social value," he said, quoting a controversial article on nonprofit impact measurement.

To be clear, he said it's not that nonprofits aren't doing good work. They just can't prove that they are.

Why does this matter? Because if nonprofits don't accurately measure and share their results, then donors, funders, and volunteers can't tell which organization is deserving of their money, time, or other support. This means support doesn't necessarily flow to the most efficient and effective nonprofits, and corrupt or inefficient nonprofits continue to receive undeserved support.

Worse, Berger says that the sector's inability to effectively measure (and learn from those measurements) means nonprofits really aren't as efficient as they could be.

In his decades working in direct service nonprofits, Berger said he saw the very real consequences of this inability to measure, learn, and improve: "I saw people get murdered, I saw people freeze to death, and I know that if we'd done a better job of measuring and managing our work, we could have done a better job."

Excuses, Excuses, Excuses

Berger says nonprofits have many reasons for not discussing their "results" problem openly, including:

• An unwillingness to "get naked and completely transparent about results" (as he put it, colorfully). No one wants to admit that they struggle to track their results, for fear of criticism and decreased support from funders and donors.
• A belief that performance measures are reductionist because "you can't possibly capture the complexity and the uniqueness of all the things we're trying to do."
• A lack of resources, also known as, "You want me to generate even MORE reports?"
• Nonprofit boards don't care about it, and donors don't care either.

Berger says nonprofits need to move past these concerns and start prioritizing results reporting: "You've got to do whatever it takes. … Get past the excuses; get past the obstacles. It's got to be done."

That's why Charity Navigator has joined with GuideStar and the BBB Wise Giving Alliance to issue another open letter addressing this important topic. This letter is addressed specifically to nonprofits and includes resources for helping all of us to:

• Demonstrate ethical practices and share data about performance
• Manage toward results by focusing on lasting impact and having a clear understanding of our finances
• Help educate funders on the "real cost" of our results

Charity Navigator's evolving ratings system are another attempt to help nonprofits address the "results" issue. Its ratings system includes categories for accountability and transparency and results reporting in addition to the much-debated "overhead" and financial management measure that Charity Navigator originally used.

In the NYU talk and elsewhere, Berger acknowledges that fixing the results problem isn't something nonprofits can do alone. Donors, funders (including government funders), social enterprises, and others also have important roles to play. For example, in an interview with Markets for Good, Berger stated:

"Funders have got to be willing to provide serious financial and technical support to charities as they work to build the required performance management and measurement systems necessary to supply meaningful information on their outcomes."

It's Time to Get Naked (Metaphorically)

As Berger said in his NYU talk, Charity Navigator's evolving rating system is an attempt to "drive more information into the public square, so that it becomes the norm in the public sector to share this kind of information."

So in the spirit of transparency, here's my personal experience with results reporting (note: this is entirely my own experience with measuring the results of my work, and is not reflective of TechSoup's impact and results measurements overall).

As the content manager here at TechSoup, part of my job is to help nonprofits and libraries learn to choose and use the right technologies to help achieve their mission.

How do I really know that I'm making progress towards that goal? Are nonprofits and libraries better informed and making better decisions than they were a year ago or three years ago as a result of the educational offerings I help create? That's a hard question to answer.

Anecdotally, I've also heard directly from nonprofits and libraries that are doing good work with the best of intentions. However, they find it difficult to measure the results of their programs.

Various studies confirm this is a broader issue, including Idealware's 2014 study on human services nonprofits trying to measure results. Idealware found that:

• Only 45 percent of respondents said they knew how well their programs were working
• About 42 percent believed evaluations accurately reflected their impact

So what do you think of Berger's remarks? Does your nonprofit struggle with measuring and reporting its impact? If you could wave a magic wand and change just one thing to make results reporting easier, what would it be? Tell us in the comments!

Learn More

• Open letter from Charity Navigator, GuideStar, and BBB Wise Giving Alliance to nonprofits on the "Overhead Solution"
• My colleague Ginny Mies' blog post on how to get started on the Overhead Solution
  
• Berger's TechSoup blog post on using technology to evaluate results
• David Hunter's "no credible evidence that most nonprofit organizations actually produce any social value" article on ineffective nonprofit results reporting
• Slides from Berger's talk at NYU (video archive coming soon), in which he also recommends exploring the Nonprofit Outcomes Toolbox and Independent Sector's Charting Impact
• Berger on the dismal state of nonprofit reporting in The Huffington Post
• Database and analytics tools available through TechSoup

Image 1: Ken Berger

Image 2: OtnaYdur / Shutterstock

Image 3: YuryZap / Shutterstock

Image 4: Oberazzi / CC BY-NC-SA

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