The Economist had a great piece recently about the fragility of the public’s trust in non-profits at home and internationally. The problem? They want to believe in non-profits and their work, but they really don’t understand what it is non-profits do or how they do it. What they do know is that many non-profits have been called out recently due to missteps like inappropriate use of donated funds. So what’s potential contributor to do?
Enter terms like “transparency” and “impact” — the (not necessarily new, but definitely being revived) buzzwords of a philanthropy and non-profit sector completely plugged into a 24-hour social media machine. These days, potential donors are being warned to investigate before they buy, but this is much tougher to do in a field that’s pretty wishy-washy with numbers even on a good day. Figuring out the winners in the non-profit arena makes the stock market look like child’s play.
Transparency
In truth, if your chosen non-profit is telling you anything at all as a donor about the state of its finances, balance sheets, lobbying costs, salary payments, and true-honest-to-God-this-is-what-happened results, you’re way ahead of the game; but there’s no reason to give up the fight. While we’re moving slowly toward this goal, the recognition is there that non-profits have to stop juggling numbers and start being honest about their overhead and spending as well as how much it really costs to deliver measurable (to anyone…not just the reporting non-profit) results. Once we — the donors — make it OK to be honest about the numbers and about how much is actually needed to run an efficient and growing non-profit, the groundwork is laid to change some ingrained, “flabby” smoke and mirrors tactics that many non-profits rely on to get budgets passed each year. Donor expectations need to change.
Impact
“Impact” is one of those fuzzy-edged words that I hate when it comes to describing non-profits. Nobody knows what it means. Nobody has any context for it. “We’re making a big impact” has zero bearing on whether or not I should or shouldn’t fund your programs. Which is why I was so interested to see this in the aforementioned Economist article:
Charity Navigator is also testing a new “impact” rating, which it hopes to roll out in 2012. At first this will assess only whether a charity publishes any information about the impact of its work (but not whether this information is useful or credible). Such data are clearly imperfect. But they are better than none at all.
Here’s my suggestion: call it a “change” rating, a “results” rating, something to narrow down what is actually meant by “impact.” Because, unfortunately, like so many other aspects of non-profits and their work, there is no absolute definition for “impact” that would make it easy to judge their usefulness to society. There are no hard numbers, no regulators. All you really have to go on is what the agencies themselves tell you.
The more we slim down what that “impact” could be, the better we’ll be able to gauge which non-profit is making the most difference in the societal area that means the most to us as individuals. Until we change the language to better fit what we actually want to know, we’re going to be mired in relativity and murky, made-up numbers that don’t translate across non-profits.
Would love to hear your thoughts.