MAKING YOUR MONEY WORK FOR THE CAUSE
The frontier for nonprofits these days is impact. How do you measure the social good you do? For that matter, how do you measure which cultural arts are worthwhile or what kind of educational efforts will be effective a decade down the road?
What does “success” mean in the charitable arena?
Lately, forward-looking practitioners are walking away from trying to define or measure “impact,” mostly because such a goal is so big and amorphous that it’s impossible to realize. Donors and charities can’t really measure it.
As one research group puts it: “How do you prove impact?”
Instead, as donors continue to demand greater roles and results, nonprofits are increasingly focusing on “outcomes” as signs of success. That is: Do grantees and groups achieve the stated goals of the funding? While that’s still not easy to calculate, at least it’s visible and tangible. Such measurement allows for progress.
But then a corollary challenge arises that’s equally thorny. Let’s say you do quantify the outcome—which now is becoming a proxy for impact. Then how do you best demonstrate those results to donors and the larger community in order to build awareness, contributions and continuing progress?
“Philanthropy is a tough transition for people who have made money in the business environment and are used to performance measures on a quarterly or daily basis,” says Phil Buchanan, who directs the Center for Effective Philanthropy in Boston, which works with nonprofit organizations to have greater impact. “Donors need to be realistic. Even the largest donors in the world must be conscious of what you can achieve given the resources you have. If you really want to feel and see results of giving, you need to stay pretty focused. It’s very hard to do.”
For example, in 2005, Suzanne Wright and husband Bob, then vice chairman of General Electric and former CEO of NBC Universal, founded the Autism Speaks foundation because their grandson was diagnosed with the disorder the previous year. Autism now affects 1 in 150 children in the U.S., according to the U.S. Centers for Disease Control and Prevention, more than ten times the number of a decade ago.
Helpless against autism’s effects on their family, the Wrights decided to leverage their considerable resources and media influence to build awareness and fund research for a cure. Yet even given the couple’s high profile and their professional staff, says Wright, “running a foundation has given us a new perspective on giving. We understand, more than ever, the challenges of operating an effective and efficient not-for-profit that donors can be confident is spending their money wisely.”
Moving the needle is going to be subjective. Decide for yourself what will make you feel that you’ve made a difference, whether a certain amount of money raises, media awareness or some research that changes the complexion of your cause.