A proposal to reward failure

Here’s a grant idea we’d probably pursue if we had the funds to do so. I’d be interested in what other grantmakers think of it. I believe enormous good could be done by offering grants to charities that can prove their programs don’t work.

Proving a program’s ineffectiveness is difficult and expensive – just as much as proving its effectiveness. Few charities have done either. As a result, the world knows extremely little about what programs do and don’t work, and thus about how to change people’s lives for the better.

You should consider this a serious problem unless you think that nearly all charitable programs are effective. (If you think this, you should consider this list of duds).

Of course, one solution is to reward charities that are effective and can demonstrate it. That’s the approach we generally take. But there are problems with the incentives this approach (by itself) gives to unproven charities.

We’d like an unproven charity to examine its programs rigorously, and get our recommendation if the results turn out positive. But what if the programs it’s running turn out not to work (i.e., change lives)? Then the charity will have spent money and time to weaken its own case. Something of a scary proposition – and a reason to be less than evenhanded in conducting evaluations.

But what if a foundation said the following? “If you can really prove that your program isn’t working – not just that it’s underfunded or has room for improvement, but that it fails to change lives when carried out correctly – that’s valuable. That improves our collective knowledge of what works, and demonstrate a true commitment to your mission, not just your activities.

“For a charity that can prove its programs aren’t working, we’ll provide you with the funding to redesign what you’re doing. If you have the right mission and the wrong tactics – and the guts to admit it – we’ll help you change those tactics, so you can accomplish the goal (saving lives, promoting equality of opportunity, etc.) that you really care about.”

If there were enough funding along these lines, carefully examining effectiveness – with no preconceptions or manipulation, just an honest desire for better knowledge – would be win-win for a charity. As it should be.

Comments

A proposal to reward failure — 8 Comments

  1. great post. it would be terrific if Charities, like startup companies, would celebrate failed models. rewarding individuals rather than the Charities at the organizational level to do so would perhaps generate more interest.

  2. Like most of Givewell’s ideas, the basic driver is good and the delivery sucks. You don’t reward failure, you reward performance.

    The idea that start up companies don’t cook the books and give baseless rosy predictions to their investors (unlike the way charities interact with their grantors) is pure philanthro-capitalistic hallucinogenic fantasy. The ideas that charities should celebrate their failures is just plain negative and antithetical to the culture of the sector.

    Decide what you are going to do. Measure it. If the measurements say you are failing, understand why and change operations until the measurements say you are succeeding.

    Continually beating that very simple drum in a clear and positive way would go far in making Givewell an inspiration and healthy challenge to funders and charities.

    And Liv, far, far, far fewer millions of dollars have been squandered on charities with bad ideas than on commercial firms with bad ideas.

    The squandering or the bad ideas are not really the problem… the fact that a charity with a bad idea doesn’t go out of business is the problem.

  3. Untold psychological misery and cold will make a homeless person come to the brink of having to choose between their four legged friend, and going into a shelter. Only two shelters in the U.S. allow pets.

    If offering grants to charities that can prove their programs don’t work is a great idea, and a wonderful solution might be setting up pet shelters right along side human shelters.

  4. Holden’s underlying idea of getting nonprofits to acknowledge failures as well as tout their successes is great. But the real problem is that, unless they are doing direct services, most nonprofits don’t know whether they are succeeding or failing. I’m skeptical that nonprofits will have the motivation and capacity to find out, let alone disclose, their actual social impact unless donors begin to demand that information.

  5. How about offering to pay for the study if it shows that the charity’s approach doesn’t work? (If the study shows that it does work, they should be happy to pay for it themselves.)

  6. David and Paul – thanks for the feedback. Responded in this post.

    Brian – that’s the basic idea, but I would go further. I would try to make the grant big enough to help the charity change its approach (something that would likely be impossible if only the study were paid for). If the charity can’t change a failing approach, it may as well go out of business, so there isn’t much point to paying for the study.

  7. Holden makes a great point. Nonprofits should be rewarded for the journey toward perfection. This requires an understanding of what works and what doesn’t and a commitment to make adjustments to improve. This is what performance management is all about. Kahlil Gibran once said “Advance, and never halt, for advancing is perfection.”