Measuring Charity Effectiveness: An Idea

Exposition on:

Our Ineffectiveness at Measuring Effectiveness

Dan Pallotta

http://blogs.hbr.org/pallotta/2010/11/our-ineffectiveness-at-measuri.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+harvardbusiness+(HBR.org)

Although an interesting article in discussing the symptoms of the problem of measuring non-profit effectiveness, I think that it misses the core problem and a potentially powerful solution.

Put simply, the core problem is that non-profits have little-to-no incentive to publish accurate and quantifiable metrics around their performance against mission. Rather, they thrive in a subjective and qualitative environment that allows them to consume resources with no consequential discipline applied to management. This isn't to say that they aren't filled with good people doing good work--they are. But, like any domain group, they play within the constraints established.

I would suggest that we take a few large leaps in a direction the author has identified while discussing new scattershot approaches--create a market for charitable giving/non-profit funding. With a disciplined brokerage scheme and common, transparent, legally-mandated and audited performance metrics. Given the clearing aspect of honest markets, I suspect that effectiveness and performance measures would shake out in a few turns of funding.

Certainly, the amount of money held and flowing to these organizations justifies a commonly reported market.