On Friday, Bob Ottenhoff wrote about the new Charting Impact initiative that gets nonprofits to answer five questions as part of a public report that is intended to encourage donations and grants to flow towards effective nonprofits.
But can five questions answered with a couple of pages of text really help donors understand which organizations are effective?
I think they can.
Last year, I created my own list of "five questions every nonprofit should be able to answer" with the same intentions of Charting Impact; to help funders understand which organizations are effective. In developing my questions and speaking about them with nonprofits and donors, I've come to the conclusion that with these types of questions, it is how the nonprofit answers them, not the specifics of the answers that matter.
The fact is, there is no short, simple answer that can prove effectiveness. This is true in the for-profit sector as well. Even in a field where the goal (profit) is easily measureable, there are no reliable, simple data that can answer the question of whether an organization is (and will continue to be) effective. But the Charting Impact questions don't seek to get nonprofits to provide any specific data. The elegancy of their approach is that the questions give each nonprofit the freedom to answer in the way that is best suited to their particular situation while requiring that they respond in a manner that reveals the organization's strategic strengths and understanding of the environment in which they operate.'
The questions are:
- What is your organization aiming to accomplish?
- What are your strategies for making this happen?
- What are your organization's capabilities for doing this?
- How will your organization know if you are making progress?
- What have and haven't you accomplished so far?
By focusing at the level of goal setting and accomplishment, the questions are applicable to any organization trying to achieve any goal.
Given that the projects backers — GuideStar, BBB Wise Giving and Independent Sector — have such reach in the nonprofit sector, I think it is feasible that Charting Impact reports could become standard reports available on most all nonprofit websites for organizations included in the GuideStar database. Encouragingly, unlike so many external review processes that only add to the burden of tasks that nonprofits must accomplish, the Charting Impact report should be relatively simple for effective organizations to complete. Any organization that finds it difficult to complete will find it a highly useful process to go through in their journey towards becoming more effective.
Most importantly, I think the Charting Impact report helps undermine the fantasy that someday we'll have a simple, quantitative rating system that will answer the effectiveness question. While the report is only a starting point in a donor's mission to discover which nonprofits are effective, it does start the journey off in the right direction by asking the most important questions in a standard format while allowing them to be answered in a free form format that recognizes the vast differences between different issue areas and levels of organizational development.
PS: For those nonprofits that think foundations should be subject to the same level of accountability that they require of nonprofits, note that the Charting Impact questions can easily be turned around and asked of funders. In fact, the Hewlett Foundation has already published their report.
