Nonprofits Are Being Required to Provide Hard Facts to Get Funding
"There is a movement for more accountability," said Jeff Mason, chairman of a newly formed group of nonprofit leaders called the Alliance for Effective Social Investing that gathers in Washington, D.C. "If you want to get funding, you're going to have to demonstrate that you can perform."
Mason said the alliance is devoted to identifying top-performing nonprofits and driving more money to them. The group's biggest coup: persuading two key Web sites for donor giving, Charity Navigator and Guidestar, to revamp their rating systems so that a nonprofit's social effectiveness, not just its financial performance, is evaluated.
Ken Berger, head of Charity Navigator, said it will take at least a year to implement the change. He estimated only 10 percent of the rated charities measure outcomes.
Robert Egger, founder of a Washington, D.C., nonprofit and another alliance member, said that in cash-strapped states like Ohio, it's vital that government agencies stop throwing money at organizations that aren't accomplishing social change.
Cleveland's United Way saw the trend coming and held workshops to prepare nonprofits for the data-driven age.
Judy Simpson, who led those workshops in 1999 and today is United Way's vice president for community investment, said organizations have no choice but to hire or assign a staffer to manage client data.
Some local nonprofits, like Big Brothers Big Sisters, get help from a national office, giving them access to a larger data pool and a framework for local data collection.
But at low-budget and grass-roots nonprofits, it's a struggle to satisfy the new demands.
Joy Banish, executive director at Greater Cleveland Volunteers, said her agency (the former RSVP of Greater Cleveland) can produce pages of charts and tables to illustrate accomplishments. Yet her staff is stretched thin because each funder seems to ask for a different slice of data.
Yet nonprofits say they're learning more about their operations as the research rolls in. At Big Brothers Big Sisters, for example, surveying "bigs" and "littles" in short-lived relationships helped staffers identify what went wrong. "Our program is better as a result of the studies," said Mitchell.