April 30, 2008
IRS Plan to Monitor Charity 'Effectiveness' Draws Rebukes
The news that the Internal Revenue Service is stepping up efforts to ensure that charities are effective has elicited angry responses from the nonprofit world.
According to a Chronicle of Philanthropy article, Steven T. Miller, commissioner of the IRS’s tax-exempt division, said last week the agency will be “more aggressive” in monitoring the “efficiency and effectiveness” of nonprofit organizations.
Mr. Miller said that “every charity should make responsible and appropriate use of its resources to achieve its charitable purposes.”
But Abby Levine, foundation advocacy counsel for the Alliance for Justice, asks: “who determines what is responsible and appropriate? I, for one, do not think the IRS used its resources — taxpayer dollars — in a responsible and appropriate manner when it mailed letters alerting taxpayers that they may receive a tax refund of an undetermined amount and at an undetermined time.”
Writing on the alliance’s Nonprofit & Foundation Advocacy blog, Ms. Levine derides Mr. Miller’s desire for indicators to measure nonprofit effectiveness and efficiency. “It’s doubtful such indicators exist — or, even more importantly, should exist. Rather than focus on shortcuts and cursory evaluations of organizations, let’s focus instead on whether we are actually making a difference for the people we serve,” she writes.
Alan Strand, director of financial services for the California Association of Nonprofits, agrees. “The myopic thinking that all nonprofits are the same just because they are nonprofits still baffles me. Especially in people who task themselves to regulate us,” he writes on the association’s Nonprofit Accounting Boot Camp blog.
Perhaps the strongest reaction came from the anonymous author of Nonprofit Challenges, a blog operated by Oculus Direct, a nonprofit consultant company.
The writer called Mr. Miller’s remarks “fighting words. At least they should be to those of us with half a brain in the nonprofit community.”
“The last thing we should want is to have the government aggressively monitor a nonprofit’s efficiency and effectiveness!!! Isn’t that an oxymoron?? To have government in the same sentence with efficiency and effectiveness? My gosh – the irony of this is beyond belief,” the writer says.
What do you think of Mr. Miller’s plans? Click on the “comment” link below to join the discussion.
— Ian Wilhelm
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I posted this essay about perfomance measurement and the nonprofit world on my blog (www.cfctreasures.wordpress.com and on the ARNOVA nonprofit research listserv). It has generated a lot of discussion.
The Good Samaritan & “Performance Measurement”
by Bill Huddleston
Currently, there’s a lot of hype in the world about being “results oriented” and the culture of “performance management” has seeped its way into almost every realm of American life, including business, government and now, the non-profit world as well.
Well, why shouldn’t it? Doesn’t it sound like it’s the only way to be, after all, who could be “against results” or against “performance measurement.” It sounds great, but like the question, “When did you stop beating your wife (or husband)?” it sets the stage in an extremely negative, and skewed fashion.
Let’s use a historical example, the story of the good Samaritan from the Bible is one that I believe is so widely known that it qualifies as a societal story, not just a religious one.
To recap, in the parable a traveler is robbed, beaten, stripped of his clothes and left for dead. Two different people walk by, leaving the robbery victim alone. Then a man from Samaria (the Good Samaritan) comes upon the man, and even though the two different groups hated each other, he stops to render aid. The Samaritan takes pity on the victim, bandages him, pours oil and wine on his wounds, then puts the victim on his donkey and takes him to an inn and takes care of him. The next day, the Good Samaritan gives the innkeeper two dineri (this was about a month’s earnings at the time) and tells the innkeeper, “Look after him, and when I return I will reimburse you for any extra expense you have.” (The story is from Luke 10:29-35).
Now let’s apply modern performance measurement and outcome techniques to this story.
With 2000 years of history the story still resonates, how many people have been helped because someone remembered the story of the Good Samaritan and acted in a way that was not perhaps their first impulse? We will never know, and to the performance management crowd, this incident would be recorded today as “too expensive” and “ineffective” – after all, the Samaritan only helped one person. We don’t know if the Samaritan ever came back and paid those extra expenses, and it was a month’s earnings to help just this one person.
It would also received the rating of : “Results Not Demonstrated” – we don’t know if the victim ever recovered, was permanently injured, or had mental impairment due to his injuries. All we know is that he had the crap beat out of him, multiple people walked by, until the “unclean” Samaritan stopped to help.
According to the performance measurement tools, the Good Samaritan “program” was a failure and had no impact.
I think not.
Copyright Bill Huddleston, All rights reserved.
www.cfcfundraising.com
Blog: www.cfctreasures.wordpress.com
BillHuddleston@verizon.net
— Bill Huddleston Apr 30, 03:59 PM #
I think the IRS has the right idea. I am a student at the University of Maryland College Park. I am very interested in poverty and homelessness so a few weeks ago, my boyfriend and I went to Shepherd’s Table in Silver Spring, MD. We were planning to talk to some of the staff and interview some of the residents that utilize Shepherd’s dinner service. We got there a little passed 6 pm and decided at the last minute to just get on line and get a plate of food like the residents. We sat down at different tables in hopes of talking to some of the people who eat there regularly. We were extremely surprised by what we were told. Residents are barred from the premises for 2 weeks if they ask for a second helping of food. They are barred for 1 month if they complain that they are still hungry. I asked one gentleman named Oscar if they were denied a second plate of food because Shepherd’s tries to serve so many and Oscar said “if that was the reason why do they throw out trash bags full of donated food in the dumpster right out there! I’ve eaten pies, bread and other kinds of food from their trash bags and if they catch us climbing in the dumpster they threaten to bar us from the property forever! Don’t they know we are hungry?”
My boyfriend spoke to a woman named Yvette who said she was denied underwear and a clean pair of pants because Shepherd’s clothes closet was not open. Yvette said “I told that mean old woman that I bled on myself and needed clean clothing and she said I should have been there at 10 am like everybody else!” Yvette said “people who donate clothing to this place would be very surprised to know that as soon as they donate clothes and food here it is bagged up and taken right back out of here. Some of it gets thrown in the dumpster and some goes out of here in her car. When my boyfriend asked whose car Yvette said “who do you think? She keeps loads of supplies and refuses to give them out to us but people are donating those things for us not for her to hand out one at a time. How do you give a woman one tampon or one Kotex pad? I’ve seen it with my own 4 eyes and it happens all the time”.
The revelations were startling and depressing especially for an organization whose mission is supposedly “to provide help to people who are homeless or in need by providing basic services, including meals, social services, medical support, clothing, and other assistance in an effective and compassionate manner.”
Do we really need another non-profit organization that says one thing and does another? Especially when it brags about its “services” and its compassion? The IRS should make these places prove how effective they are and a good start would be to interview the clients.
— Ren May 1, 07:29 PM #
Mr. Miller acknowledged in his comments referenced in the original story by the Chronicle that the I.R.S. does not have the responsibility for this oversight but he is willing to have them exercise it. He is stepping into a vacuum. A vacuum caused in part by the non-profit sectors’ inability to address and resolve the issues the have brought so much attention to it and consequently, to the attention of the federal government and the I.R.S.
Since the oversight process is going to begin with an agency not designed to exercise such authority but simply acting on opportunity you have a flawed system. If the object of Mr. Miller’s comments was to state that there is need for this oversight then why not propose the creation of an organization specifically designed to accomplish that. Rather he advocates for the expansion of his bureaucratic empire. An empire designed primarily to collect taxes. Remember the axiom the power to tax is the power to destroy. If the power to regulate such abstract and intangible concepts as efficiency and effectiveness is placed in the hands of an agency like the I.R.S. – who as its Commissioner has already indicated does not have the mandate to regulate – what prevents them from destroying?
John C McGee
Woodstock, GA
— John C. McGee May 6, 01:57 PM #