Wednesday, April 29, 2015

Measuring and Improving Social Impacts

Epstein and Yuthas draw few distinctions between a nonprofit organization and a public corporation. They consider the role of the manager the same for both for profit and nonprofit, where on one side you have monetary investors, while on the other you have the donors and the people they’re trying to help. Either way, the CEO is responsible for how the money is used.

In the first chapter, the authors show you how you can give the investors firsthand views of how their donations are being spent. Organizations that work with African relief can invite them on tours to see what they are supporting, or as in the case of some sponsorship charities, you can exchange letters with a child that you sponsor. The implication is that you attract more donations when the sponsors can see firsthand what their money is doing to help, rather than just telling them that it’s being used to provide education. If you tell the donors “we’re using this money to build a school building in the village to educate 50 children, then you can show them photos of the building and the 50 children. Careful planning makes all the difference.

After that, we get a chapter on the goals that you organization is trying to accomplish. Are the goals realistic? Will your efforts make any positive change? I have seen firsthand many examples of nonprofit organizations that make no positive change at all. For instance, a health insurance company donated thousands to a church food pantry in a low-income neighborhood, with the expectation that the congregation would receive meat, vegetables, and fruits. When they went to check on the place, all they saw the members taking home was government surplus food, and not good quality either. No fish, no chicken, no vegetables (unless they came in a can) and what looked like cast-off Army food. When the donors asked where the pastor was, they found that he’d taken his family on a two-week vacation to the Dominican Republic. I leave it to your imagination as to where he got the money.

One problem with nonprofits, to which the authors devote a chapter, is the measurement improvement. Too often, the organizations don’t want to create studies on their achievements, for reasons that include hardship, cost, time, and effort. Measurements can take up time, which is one reason, and sometimes it’s just difficult to measure. If you’re doing an anti-smoking campaign, how can you know if your efforts have caused smoking to cease among teenagers? How can you be certain? As with earlier chapters, the authors imply that if the effort has clear goals in mind, then it’s easier to measure the results.

It seems that the main point of this book is that you can only make serious improvements when you have clear, measurable goals. Take for instance a program where kids paint murals on building walls. The organization needs paint, brushes, paint rollers, drop clothes, and a van to drive the kids around. The measurement will be how soon the mural was painted, how much paint was used, and to reward the donors, you show them the results. If the organization provides a dance studio for low-income kids, then you decide what kind of space you need, the instructors needed, and in the end, you measure how much skill the students have gained, and show that to the donors.


Nonprofits are no different from the average corporation. In the end, the management has to be accountable to whomever provides the funding.

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