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.
Hi Holden, thanks for commenting on the debate. I agree that “taken too far” it would be silly to focus on performance to the exclusion of results. That’s why I wrote my post on the link between performance and impact.
I don’t believe I ever said that identifying high-performance nonprofits was “easy”, but I do think it is “easier” than identifying proven high impact organizations.
You make a great suggestion regarding someone applying this method. I would argue that New Profit is already using a version of this method. On their website they state that they, “promote the development of performance-based approaches to philanthropy.” While they frequently refer to “impact” most of their metrics are performance based.
If impact was fungible, so that X units of impact in international development was transferable to X units of impact in inner city education, I would agree with you that focusing on just proven high-impact orgs would be best. But since most people care deeply about the kind of impact they achieve, I think high-performance philanthropy is generally a better approach for most people.
All that being said, most high-impact organizations are high performance organizations. As I stated, I think high-impact is a “holy grail” to head towards. So nothing I’ve written should be seen as a suggestion that the types of organizations GiveWell recommends are somehow not good targets for philanthropists.
Sean, thanks for the response.
What I think would be helpful would be for someone to publish the details of how they determined that charity A, as opposed to B, was worth investing in as a “high-performance” organization. At that point we could have a meaningful discussion about the extent to which that approach to evaluation was reasonable, reliable, and replicable.
I agree that different kinds of impact are not fungible. But I think there is a strong argument for basing your giving on where you can have impact, not just where you would like to have impact (more discussion here).
Sean, to clarify – you say that GiveWell-recommended charities (which I would classify as “high-impact”) are reasonable targets for philanthropists, but you also seem to say that philanthropists overfocus on “high-impact” as opposed to “high-performance.” Do you think too much is currently going to “high-impact” organizations? Do you feel that there are specific donors/funders who should be giving less to, say, the Nurse-Family Partnership, and more to “high-performance” competitors who haven’t demonstrated the same results?
So I did try and capture an inclusive definition of what high performance looks like in my posts here and here. Just as in the for-profit space, I don’t think high-performance can be boiled down into a small set of metrics. Life is more complicated than that. But that doesn’t mean we can’t find many agreed upon principals.
I agree with you that MORE money should flow to high-impact organizations. My argument was that philanthropists should focus on searching for high-performing organizations rather than focusing on trying to prove impact. I believe that testing for impact is the domain of high-performing organizations.
Remember, I don’t suggest a high-performing organization is better or more deserving of funds than a high-impact organization. I argue that high-performing organizations are the path to high-impact. In the limited case of nurse family visitation programs, I can think of no better organization than Nurse-Family Partnership. But any organization implementing NFP like “proven” programs is not going to have the same effect. NFP is a high-performing nonprofit deploying proven high-impact programs. My argument is that funders should focus on locating high-performing organizations and giving them the funding they need to evaluate their programs and improve them until they are proven to be high-impact.
Sean, you have outlined a general approach to assessing “high-performance” nonprofits; New Profit has a portfolio published that you feel corresponds to a similar idea; but what we still don’t have is someone being specific about how they determined that charity A, as opposed to B, is high-performance. Specifically, I as a donor don’t know what to make of New Profit’s recommendations. I don’t know how these charities were assessed, who else was looked at and why they didn’t make the cut, what I should be expecting to accomplish with a gift to one of these, and how to compare that to what I’d get with another charity in another cause.
I feel it is hugely underselling NFP to state that it’s a good choice for “nurse family visitation programs.” The reason NFP is an appealing option for me as a donor is not because it is a nurse family visitation program. In fact, when I started looking for good charities, it never occurred to me that nurse family visitation programs existed, much less that I would end up recommending one. All I was trying to do was find a charity that can help close the opportunity gap in the US. For a casual donor trying to do that, NFP is the best option I know of, precisely because it is “high-impact,” i.e., it can demonstrate that it actually has gotten results and not just that it is running a well-conceived and well-executed experiment.
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