Innovation & Effectiveness in Philanthropy

This is my most recent column in the Chronicle of Philanthropy. You can find an archive of my past columns here.

More Than Money, a Lack of Research Hampers Nonprofit Innovation
By Sean Stannard-Stockton | Chronicle of Philanthropy

The federal government will soon release guidelines to spell out how it will award $50-million through its new Social Innovation Fund, one of the Obama administration’s signature efforts to aid promising, innovative nonprofit groups.

But if the draft version of the guidelines, released in December, is any indication, the fund’s approach is geared toward a view of the nonprofit world that does not reflect reality.

Like many other donors who try to apply investing techniques to their grant making, the Social Innovation Fund operates on the assumption that the major reason the nation is not filled with high-performing nonprofit groups is that too little money goes to such groups. That may be true, but the far bigger problem is that most nonprofit groups lack the incentive or the money to measure their results and get beyond anecdotal evidence to determine whether their programs are truly effective.

The Social Innovation Fund has the potential to exert a major positive influence on the field of philanthropy, but it will need to take another approach if it expects to succeed. Its guidelines seek rigorous evidence that the programs it finances work. While it acknowledges that “in many fields and in many parts of the country, such evidence is not available,” it seems to think such cases will be the exception, when they are indeed the rule.

It is possible to hold both a constructive vision of the potential future of the nonprofit world to be based on rigorous evaluation, while also recognizing the constraints of the current reality.

For instance, Nancy Roob, the chief executive of the Edna McConnell Clark Foundation, which states on its Web site that it believes that the most effective approach to philanthropy is “to make large, long-term investments in nonprofit organizations whose programs have been proven to produce positive outcomes,” conceded in a recent post on the Philanthropy Central blog that “most nonprofits, including a majority of the Clark Foundation’s grantees, do not yet have convincing quantitative evidence of their programs’ effectiveness.”

Rather than demand evidence that by and large does not exist, foundations should seek to support organizations that base their programs on research about what works, actively collect information about the results of their programs, systematically analyze this information, adjust their activities in response to new information, and operate with an absolute focus on producing results.

Nurse-Family Partnership is the nation’s premier example of an organization that has “rigorous evidence” of effective programs.

Over 30 years, the group worked to conduct research to prove that sending nurses to teach child-rearing and other skills to impoverished mothers would help ensure that their children would become healthy, productive members of society.

In fact, Nurse-Family Partnership’s evidence is so strong that President Obama has called for its program to be expanded to cover all low-income, first-time mothers and has requested $8.5-billion over 10 years to finance the effort.

But that is not the sort of organization that the Social Innovation Fund or any grant maker focused on supporting “promising, innovative nonprofit organizations” should seek to support.

Instead, grant makers should look for the next Nurse-Family Partnership, financing management improvements that allow promising organizations to build programs that can pass rigorous studies to prove their approach works.

One of the most common mistakes donors make is that they diagnose their problems to fit the tool at hand instead of finding a tool that fits the problem. Doing so creates the illusion of success but fails to fix anything.

Much of the debate over the Social Innovation Fund has focused on the tension between supporting “innovation” and “proven programs.”

But because so little money is available to help groups conduct research and gather evidence to make their programs more effective, what would be truly innovative is giving organizations money to prove their programs work.

If grant makers want to be assured their dollars will be used effectively, they should support organizations like Nurse-Family Partnership. But if President Obama and private donors really want to make a difference, they should provide support for organizations that simply have the potential to develop proven programs.

Sean Stannard-Stockton is chief executive of Tactical Philanthropy Advisors, in Burlingame, Calif., and author of the Tactical Philanthropy blog. He is a regular columnist for The Chronicle of Philanthropy.