October 19, 2009
Do Most Nonprofit Groups Fail to Demonstrate Social Value?
Do most charities fail to show that they create benefits for society?
A foundation consultant argues that point and has stirred up a debate as he calls for more rigorous evaluation of nonprofit groups.
On the Philadelphia Social Innovations Journal, David E. K. Hunter, former director of evaluation and knowledge development at the Edna McConnell Clark Foundation, lays out what he calls “unpleasant truths” about charities.
No. 1 is perhaps the most controversial.
“While nonprofits work incredibly hard, with passion and dedication, and often in incredibly difficult circumstances to solve society’s most intractable problems, there is virtually no credible evidence that most nonprofit organizations actually produce any social value,” he writes.
Because of this problem, he says, donors must embrace “social investing,” which requires a rigorous selection process, as well as tracking charity efforts and what they accomplish, providing assistance to help the organizations improve their ability to offer services, and helping them build alternative sources of revenue.
Sean Stannard-Stockton, a philanthropic adviser and Chronicle contributor, writes on his blog that he supports the idea of social investing, but worries Mr. Hunter’s advice will get lost in his “nihilistic claim that most nonprofits and the social sector as a whole is not currently producing social value.”
Laura Deaton, a nonprofit consultant, also challenges Mr. Hunter.
“I simply don’t agree that the nonprofit sector is as broken as he asserts,” she writes on Nonprofit Local, a Web site she helped create. “For every example of ineffective programs, there are others that can demonstrate real impact.”
What do you think? Is the nonprofit world as ineffective and damaging as Mr. Hunter says? Click on the comment button below to share your views.
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Such a broadside against nonprofits ia not a credible statement. Serious donors who give in five figured donate after serious evaluation. They often give because the cause touches their heart and they see the potential. Is that not a good reason to start with? Outcome analysis is much talked about but it is neither easy nor inexpensive. The comments you make should be aimed at a certain size or segment of nonprofit where you can cite facts or give examples. Change is hard and how do you account for in Social Investing? Please do not lump the entire nonprofits together.
— Narain Bhatia Oct 19, 07:16 PM #
Futhre into his article, Hunter does make some interesting points that may, unfortunately, be lost in the inflammatory opening. For instance, funders have a role to play in strengthening the nonprofit sector. He mentions that funders use their influence to sway nonprofit actions away from mission, vision and values. Imagine a world in which funders supported nonprofits in clarifying their intended impact and building the infrastructure necessary to sustain that impact amidst change …
Imagine a world where social investing was embraced as a complementary action to charitable giving. Where rather than viewed as an either/or accountability proposition (as presented in the article), it was seen as a longer term strategy for sustaining stronger communities.
Also, specific to his truth #1, I suggest that it often isn’t a lack of actually having social value, more a failure of nonprofits to communicate their impact and social value clearly and consistently in terms/ways that connect with their stakeholders.
Clarity of intended impact and commitment of resources toward that end results in opportunities untold for communicating value in ways that make sense.
— Melanie Schmidt Oct 20, 10:48 AM #
This criticism of the non profit sector is like the old story about the kid on a beach full of star fish. A man watching a little girl pick up starfish and throw them back into the water, walks up to her after 10 minutes. He asks, “Why are you doing that? It won’t make a difference to all these star fish still on the beach?”
The girl picks up another star fish and throws it into the water and says, “it made a difference to that one.”
Solving the nation’s problems is not the job of small local non profit organizations. It is the government and society’s job as a whole. Non profits merely attack societal problems one person at a time.
That is how a number of local homeless services providers operated in Dallas, TX 10 years ago. Now, 10 years later, there is widespread community support, new facilities, and a much brighter future in Dallas when it comes to addressing issues related to homelessness. Utopia it ain’t. Steady progress over the last decade, however, it is.
Sam Prince
— Sam Prince Oct 22, 03:29 PM #