Donors Seek Better Charity Evaluations

By Suzanne Perry

Like the people who created GiveWell, a new group that publicly evaluates how well charities do their jobs,

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a growing number of donors are looking for ways to measure whether their money is actually making a difference.

A group of alumni of the University of Pennsylvania's Wharton business school, for example, made an anonymous gift to set up the Center for High Impact Philanthropy at the university in 2006. The donors were philanthropists who were frustrated because they had trouble evaluating how much impact their gifts were having, says Katherina M. Rosqueta, the center's executive director.

The center's staff members are scouring research studies, project evaluations, case studies, expert opinions, and other sources to provide analysis to help donors judge how to get the most good out of their philanthropic dollars. "It's just like if you're a financial investor, you would look at an analyst's report to understand opportunities in a particular sector or firm," Ms. Rosqueta says.

The center will produce reports on three topics — global health and development, urban education in the United States, and improving the lives of disadvantaged Americans. While its work is designed especially to help high-end donors, the research will be available to anyone. Its first reports, one on malaria and another on urban education, will be published next spring.

The Urban Institute, in Washington, is running a project to help charities meet the growing demand to measure performance. The Outcome Indicators Project, operated with the Center for What Works, in Chicago, has published 14 reports on its Web site on topcis such as adult education, employment training, and performing arts — suggesting techniques for measuring results in areas such as increasing parental involvement in children's education and expanding housing available to needy people.

"What we're trying to do here is help nonprofits themselves go beyond outputs — how many people are served — to developing metrics on what are the actual outcomes. You may have served [so many] children, but what happened to them?" says Elizabeth Boris, director of the institute's Center on Nonprofits and Philanthropy.

She and Ms. Rosqueta both say they are trying to help people evaluate charities on measures other than just their finances and what percentage of their expenses they spend on programs versus administration or fund raising.

"We can too easily focus on what's easy to measure as opposed to what matters," says Ms. Rosqueta.