Moving From Overhead to Outcomes
Why are nonprofits judged on their overhead costs as opposed to the results they create for society? The reason may be more practical than philosophical.
by Jason Saul and Jacob Harold
Why are nonprofits judged on their overhead costs as opposed to the results they create for society? The reason may be more practical than philosophical: charity impact data simply doesn’t exist in a standardized format. What if we could change that?
GuideStar, the nation’s largest source of nonprofit data, and Mission Measurement, a global leader in outcomes measurement, are working together to tackle this most difficult of problems.
A key step in the right direction was the 2016 introduction of GuideStar Platinum, a way for nonprofits to share the metrics they use to track progress against their missions. So far, nonprofits have shared more than 12,000 metrics on guidestar.org. Most of those metrics tracked the activity or outputs of nonprofits: that is, they measured the work the nonprofit did. A subset of nonprofits have shared outcomes data as part of their Platinum profiles. Outcomes metrics—which reference the lasting results created by nonprofits—accounted for about 20 percent of those provided as part of the Platinum program.
This kind of voluntary reporting is a crucial foundation for additional learning. Donors—and society at large—should hold nonprofits accountable for achieving their missions. But no one is better positioned to pick the most appropriate metrics than the organizations themselves.
The Impact Genome Project offers a new kind of analysis to enrich our understanding of nonprofit performance. IGP is a publicly funded initiative curated by Mission Measurement that aggregates tens of thousands of pieces of research to help identify patterns of what works. IGP analysis can then place an individual nonprofit in the context of that shared knowledge.
Nonprofits that register for free and complete the Impact Genome survey will now obtain a badge on their GuideStar Profiles that links to information about IGP. Over time, Impact Genome Project will produce benchmark data that enables donors and charities to compare programs with similar goals. This will be an iterative process but both organizations are committed to trying, learning, and trying again.
The nonprofit sector is diverse. It deserves data infrastructure that reflects that diversity. GuideStar aspires to build that infrastructure. And the nonprofit sector is sophisticated, too. It deserves analysis that builds on the best of our collective knowledge. The Impact Genome Project offers an attempt to do just that. Together, we hope that GuideStar and the Impact Genome Project can take a step toward a better future for nonprofits and donors alike.
Learn more about the Impact Genome Project
Jason Saul is one of the nation’s leading experts on measuring social impact. As the founder and CEO of Mission Measurement, Jason helps corporations, nonprofits and public sector clients create value through social change. He has advised some of the world’s largest corporations, government agencies and nonprofits, including: Walmart, Starbucks, McDonald’s, Kraft, Levi Straus & Co., Easter Seals, American Red Cross, the Smithsonian and the U.S. Agency for International Development (USAID). Prior to founding Mission Measurement, Jason practiced as a public finance attorney at Mayer Brown LLP in Chicago. In addition to his advisory work helping organizations measure and improve their social impact, Jason serves on the faculty of the Kellogg School of Management at Northwestern University, where he teaches corporate social responsibility and nonprofit management.
Jacob Harold is GuideStar’s president and CEO. He came to GuideStar from the Hewlett Foundation, where he led grantmaking for the Philanthropy Program. Between 2006 and 2012, he oversaw $30 million in grants that, together, aimed to build a 21st-century infrastructure for smart giving. Jacob was named to the NonProfit Times (NPT) Power and Influence Top 50 list in 2014, 2015, 2016, and 2017. He has written extensively on climate change and philanthropic strategy; his essays have been used as course materials at Stanford, Duke, Wharton, Harvard, Oxford, and Tsinghua. Harold earned an AB from Duke and an MBA from Stanford. He grew up in Winston-Salem, NC, where his parents ran small, community-based nonprofits.