Sean at Tactical Philanthropy has continued his discussion of “high-performing” vs. “high-impact” organizations, which we previously commented on. The message he is sending (see posts here and here) is partly that we need to take the emphasis off of “funding organizations that have shown results” and put it on “funding organizations that seem ‘on the way’ to proving results.”
I believe there is a place for funders who invest as Sean advocates. However, I think that when taken too far, the idea of rewarding charities for being “on the way” is damaging – and the idea is currently being taken too far.
As we’ve written before, our experience is that there are far more nonprofits with impressive evaluation processes and evaluation plans than there are nonprofits with impressive evaluation results. The ratio is so out of whack that it actually appears to be systematic, not an accident of timing.
When you see – as Sean does – that “very, very few nonprofits have ever gone through extensive analysis that has proven that their programs have impact,” you can react in one of two ways. You can hold up those few as the best targets for more funds (especially from casual donors), or you can decide that the “high-impact” bar is too high altogether. The problem with the latter approach – at least when too many funders take it – is that there are no financial incentives for charities to show actual results, as opposed to showing impressive processes and plans.
We believe that what gets rewarded is what gets done. We hope to reward proven impact, leading to more proven impact. We believe that rewarding promises will lead to more promises.
There is also a place for funders who reward the nonprofits that are “on the way” – as Sean observes, without such funding no nonprofits could even get off the ground and become high-impact. But someone has to save their donations for the charities that have actually gotten results – and for reasons we outlined before, we think that someone can and should be individual donors.
A couple of other observations on this discussion:
- It’s refreshing to see widespread acknowledgement that “high-impact nonprofits” – nonprofits that can truly demonstrate past success – are incredibly rare. It’s worth keeping in mind next time you are confronted with traditional nonprofit marketing.
- Sean believes that identifying high-performance nonprofits can be easy. We disagree, but rather than getting into a theoretical debate, we prefer that Sean (or someone else) try to apply the proposed method to actual charities, and make recommendations for giving within certain causes. At that point it should be easier to assess how viable this approach is.