I’m meeting with someone from Google.org next week to talk about what kind of information I think they should make available about nonprofits in Google Finance and other ways that Google.com’s mission statement to “organizing the world’s information” can be directed at the Third Sector.
In preparation, I’d like to spend some time speaking as a community about this issue. I encourage you to leave comments or email me your thoughts.
In response to the thread I started on the Google Finance Red Cross board about how effective they are, I got a comment from Leyla Farah of Cause + Effect public relations:
One item I’d offer: a measurement of “average cost of impact” – in other words, the organization’s total budget divided by the total number of people (or animals, or acres of land) it’s benefited within a specific time period. That metric would (1) force each organization to provide a definition of how it helps people (etc.) – and (2) force it to account for all the costs associated with providing that help.
While Phil Cubeta of Gift Hub scolded me for focusing on metrics:
Paradise Lost versus Gone with the Wind. What metrics do we use to determine which is better? Some subject matter requires judgment, taste, discernment, even wisdom. We have movie critics, book critics, educators to help us make more discriminating judgments. Before we cry ourselves hoarse over metrics, we have to ask whether philanthropy is more like art or more like business. The call for metrics can be a bullying move by the half educated to impose their MBA logic on a sector whose reason for being is that it stands in contrast to both government and business. As the old saying goes, “Do not attempt to cure what you do not understand.” Stressing metrics, Sean, is in terrible taste. You paint yourself as Barbarian.
Personally, I’d like to state that I don’t intend to stress metrics as being valuable unto themselves. However, I do think that all things in life can be judged, at least in each person’s personal view, as being bad, good, better and best (I’m sure there are some exceptions, but you get the point). I think it is critical that we find ways to judge nonprofits so that philanthropic dollars can flow to the organizations that do the most good in the world. To me, funding the best of what is available is far more important than trying to invent the next big thing. I think that information about nonprofits is what is needed and this is why I care about nonprofits being in the Google Finance portal.
As a professional investor in for-profit companies, I can tell you that there are very few (none) golden metrics that allow you to comprehensively judge one for-profit against others. Even very widely used metrics like “price to earnings ratios”, “dividend yields”, “profit margins”, and “earning growth rates”, have been show in practice to be very useful, but not in any way adequate to judging the superiority of one investment choice vs. another on their own.
In my Philanthropy Predictions for 2008 that I wrote for the Chronicle of Philanthropy, I made one reference to measurement:
A United Way-authored outcome-measurement template will be adopted by the sector as the standard format for nonprofit organizations to report on their effectiveness. The narrative-driven form will soon be available for download from the home pages of many nonprofits.
Note that I suggest a “narrative-driven form”. If you read analyst reports on for-profit investments, you’ll see a lot of numbers and metrics, but the heart of the report is a narrative about the company.
This brings me to an excellent comment from the thread mentioned above from an anonymous “young staffer”:
If I may carry the Paradise Lost vs. Gone with the Wind analogy a little further, I think it raises some interesting points.
The first is that there are plenty of potentially relevant metrics with which one could back up one’s a claim for each work’s superiority: their longevity in years, the number of universities that include them in introductory freshmen humanities courses (as a proxy measure of their centrality to our cultural canon), a RottenTomatoes.com-style survey of critics. I can even imagine poor grad students counting allusions to them in last year’s bestsellers.
Relying solely on any one of these potentially valid measures, however, would obviously leave you wide open to criticism for the flaws of your methodology and the limits of the analysis. To construct a strong argument for your preferred choice, one could use both the metrics and qualitative measures. Same goes for nonprofits – the measures are neither perfect nor complete, but that is not the same as nonexistent.
I think the other point is the difficulty of comparing apples and oranges. Let me reframe the question as “Paradise Lost” work of literature vs. “Gone with the Wind” work of film. Both are widely-considered seminal works in their mediums. It’s not hard to imagine metrics, like those above, that could easily distinguish each as a leader within its respective medium. It is much harder, however, to compare them very convincingly across mediums. An author and a film buff might reach very different conclusions about which one matters more in today’s culture. Their distinctive values and tastes will influence that decision.
The same, I think, is true for nonprofits. Too universal a measure like “average cost of impact” might not be helpful for identifying whether a great afterschool program in New York or a great community health program in Uganda is better. The costs and the measures of impact are on different scales. But metrics certainly might help you identify each within its field as the seminal nonprofit. From there, one’s values and tastes might be expected to guide your choice.
So there you have it, a good beginning to an important conversation. If there was a single webpage, like this one for the Red Cross, or this one for Cisco Systems, that contained all the information you would like to see when you wanted to examine a nonprofit for the first time and decide if you might want to support them, what information would you like there to be on the site?
Google.org owes me nothing and anything I tell them might be ignored. But on the other hand, I will deliver the message that we co-create over the next week in this discussion. Someone from one of the largest (and oldest) foundations has already asked me to pass on their offer of help to Google.org after reading my posts on the subject. I do think that any effort that you the reader put into this discussion will be heard by the powers that be at Google.org, even if they do not take action.