Friday, November 20, 2009

Charity Accountability Standards: How Do You Measure a “Good” Charity?

My husband will not give money to a Nonprofit until he has looked them up on Charity Navigator. Ken Berger, President of Charity Navigator gives us a glimpse into how charities are not measuring their outcomes. I was a bit shocked at the numbers (even if they are hypothetical), but even in my own experience, I would be willing to lay money on those numbers being fairly accurate. This piece is a good lead-in to a blog I am working on about "horror stories" in the Nonprofit sector. Stop right now and ask yourself "How do we measure outcomes?" If you don't have an answer, it might be time to start creating a system. Bunnie

Charity Accountability Standards: How Do You Measure a “Good” Charity?

by Ken Berger, President and Chief Executive Officer of Charity Navigator

We have surveyed hundreds of charities across all causes to determine what data is compiled in this area of outcome measurement. We also intend to use the information to help us in developing our system. If there are some universally agreed upon outcome measures in a particular category of charities, it could help inform us on good standards. We assumed that most charities have SOME system of evaluating their outcomes. We were wrong. So far, only about 10% of the charities we have polled were able to provide us with information in this area. Furthermore it is likely that, of those that measure their outcome, a much smaller subset can prove from the data that they have truly meaningful outcomes.

We recently met with a colleague who funds organizations who can provide him with evidence of effective outcomes. He is getting similar results. The scary reality, he suspects, is that most charities (the overwhelming majority) have not even taken their first step down the outcome road. A couple of other experts with whom we have bounced this around have corroborated our findings.

We know that day-to-day survival mode is often the overriding focus and concern for most charities. In the current economic climate that reality has only intensified for most charities. So the lack of focus on outcome measurement is not likely to change any time soon, unless there are outside forces that demand it and resources that facilitate the process. We continue to assume that the larger agencies may be compiling this information, but may be reluctant to make it public. Even if this is true, only 4% of all charities have annual revenues in excess of $10 million. So our suspicion remains that the vast majority of charities are doing very little or nothing in the area of outcome measurement.

We think that the experts, foundations and charity advocacy groups are going to need to educate government policy makers and the general public about the significant importance of publicly available outcome measurement information before this situation will change. All grants, whether from government, foundations or corporations, should include a percentage to fund outcome measurement.

Why is this so important? We believe that an outcome driven culture is vitally important for a charity to be at its best and to be trusted. With all of the scandals and lack of confidence in charities, objective data will become more and more important in the public's perception of a charity's ongoing legitimacy. In such a climate, it's scary news that most charities probably are not measuring and documenting their outcomes.


Note: This is entirely hypothetical from discussions with experts and anecdotal information

2% **** Excellent
9% *** Good
23% ** Needs Improvement
36% * - Poor
30% 0-Star Exceptionally Poor

Nonetheless, we are going to continue down this road and implement an outcome measurement system once we are confident it contains the right elements. We will also be a voice for the importance of outcome measurement to whoever will listen! However, I now anticipate that whenever we begin to evaluate charities on outcomes (probably no time soon), most will not do well, if for no other reason than that they are not documenting what they are doing.


  1. I suspect charities do not try to measure outcomes because they assume that giving goods or services to people in need is itself a good outcome. Is this help the best use of resources in terms of improving lives and reducing suffering long term? However "good" outcomes are defined or measured, does the charity at least ask these questions? Forget excecutive compensation or administrative costs of charities. What we really need to know is how effective are the efforts of the charity. A charity that makes no effort to measure its long term effect does not deserve our support.