George Overholser of NFF Capital Partners (a division of the Nonprofit Finance Fund) is one of the smartest people in philanthropy. He is one of the leading advocates for growth capital and is my mentor when it comes to the importance of philanthropic equity.
He has written many a 25 page paper on these ideas, but as I know as a blog author, many people don’t have time to read past 700 words. So I was thrilled to recently receive a bullet point manifesto from George.
By George Overholser
- I visited with Jon Barron, who heads the Coalition for Evidence-Based Policy. Despite hundreds of millions spent each year on evaluation work, ONLY SIX youth-serving programs pass his gold-standard test of evidence-based impact: two or more randomized control tests, non-trivial levels of impact, AND, scalable. With hundreds of thousands of programs in this country, only six!
- Are we surprised? Not really.
- The metaphor is medicine. You could argue that medicine should be easier than social programs.
- Six weeks later, does the patient feel better, versus 10 years later, in a different city, does the kid go to college.
- Scientifically trained doctors in a controlled clinical setting, versus volunteers in basements or rec centers or schools of all types.
- Placebos in the form of a sugar pill versus who knows what in the form of people who don’t participate in a program
- Scaling in the form of making pills versus scaling in the form of hiring and training thousands of social workers
- AND YET…. It costs $100,000,000 to conduct a single stage three clinical trial.
- How many nonprofits have $100,000,000 available to conduct valid tests?
- The metaphor is medicine. You could argue that medicine should be easier than social programs.
- Evidence-based social progress is a scale game. A big problem for us is that very few nonprofits are yet mature enough to be able to afford what it takes to roll out good science.
- Same is true in business. I’ve had a front row seat at Capital One and at Vistaprint, both of them, by virtue of direct response marketing, are perfect environments for test-and-learn innovation. It worked great – so great that we created billion dollar companies. On the other hand, I once had to shut down a $30 million business within Capital One because IT WAS TOO SMALL TO SUPPORT THE ECONOMICS OF TEST AND LEARN.
- A second core challenge with the scale-what-works concept is silver-bulletism. Imagine this:
- 20 people sitting around a big table.
- I say, “John, please lift the table.”
- John tries and fails.
- I say, “Everybody, put three fingers under the table and lift.”
- Up it goes.
- “FUND WHAT WORKS” IS A BIT LIKE SAYING: WE WILL FUND ANYONE WHO CAN LIFT THE TABLE BY HIMSELF.
- Does that cast a blind eye to the real solution?
- A third core challenge has to do with the real pace of politics.
- Laws get passed much faster than experiments get done.
- Every side of an issue can find an “expert” to testify
- Therefore only drop-dead obvious evidence can prevail… and that is rare.
- So… real science, fund-what-works success stories are going to be few and far between.
- BUT THERE IS SUCH A THING! NURSE FAMILY PARTNERSHIP IS A SHINING EXAMPLE, as are the other five featured on Jon’s site. AS A CIVIL SOCIETY, WE HAVE A MORAL IMPERATIVE TO TAKE MAXIMUM ADVANTAGE OF THESE RARE AND POWERFUL INNOVATIONS
- So, what do we do?
- I think we need to NOT BET SOLELY ON SCALING WHAT WORKS
- Set our expectations as a country to surface scalable evidence-based silver bullet programs only about as often as we surface block-buster drugs. Maybe two or three a decade.
- Use private philanthropy, helped by government funds like the Social Innovation Fund to help surface these candidates – while recognizing it is a long and expensive journey.
- In the meantime, REFRAME the disciplines of evaluation and impact analysis around notions of:
- quality control,
- continuous improvement,
- faithful replication,
- contribution to collective efforts,
- if not impact, then put science behind outcomes and outputs
- Outputs: What did you do?
- Outcomes: What happened to the beneficiary?
- Impact: Would it have happened anyway?
6 Comments
Wonderful, clear, logical, love it.
Nice conclusion – that is what I call performance management. 1) Clear, reasonable, theory of change based on current, available research; 2) tracking the extent to which the program is implemented as intended (outputs) and outcomes achieved as expected; 3) managing to ensure that performance is up to par and making changes as necessary.
Loved this post. Cogent, rational about a complex subject.
Well said George!
This is why more $$$ should go to “high-performing” nonprofits. These are orgs that are highly likely to have social impact.
High-performers, as Sean has described in previous posts, have the following:
1. clear, reasonable goals that are inline with their available resources
2. a well thought-out strategy for reaching their goals
3. key milestones/indicators that can be used to measure progress towards its goals
4. quality data which relates their efforts to their desired outcomes so that they know what’s working and what’s not working
5. uses this data to make midcourse corrections and continuously improve
If more $$$ flow to nonprofits with these characteristics then perhaps more nonprofits will strive to be high-performing.
I get the message here. And yet when I think of real, progressive social change and of philanthropy, I harken back to the example of the civil rights movement Or the Green Village movement in India, or anti-apartheid work in S. Africa, or the overthrow of Pinochet, or …). Probably not “high performance nonprofits.” Disorganization, helpful chaos, enormous self sacrifice, limited planning, few benchmarks, shifting goals and locales, leaders vying for attention or power or their “correct” analysis, simple financial reporting if any, budgets done on a napkin, unpredictable inputs and outputs.
Sure. some progressive funders and donors seeded some vanguard efforts, but the movement generally started and succeeded without much organized philanthropy, unless you consider the thousands of hats, baskets or collection plates passed ’round in the 50’s and 60’s.
Does this mean the revolution will not be…funded?
Thanks for the comment Sam. I personally think that philanthropy and “social movements” can be related, but are not the same thing. However, I also agree that there can be much more to philanthropy than just funding high performing nonprofits.
See this post and this one.