For years, nonprofits have been pleading their case to the philanthropy community via Form 990′s and ratios of overhead vs. program cost. No more. The big charitable reporting organizations – Guidestar, Charity Navigator and 3 others – have just announced a move away from the overhead ratio as a measure of nonprofit effectiveness.
The reporting organization’s press release suggests that new measurements will be more impact-focused, covering things like financial sustainability, governance and transparency, and actual outcomes.
The news has many nonprofit managers cheering, as overhead has long been regarded as an obtuse and easily misleading measure of actual organizational impact. But drawing up a new set of well-defined and universal metrics is not likely to be an easy task – certainly not for any single organization or even set of organizations. Since we ‘re up to our knees in the Internet and social media, maybe the time has come for true crowd participation in the development of these metrics?
Peter Campbell of IdealWare, who broke the story to us, writes on this concern:
“We have to share our outcomes and compare them in order to develop actual standards. And there are real opportunities available to us if we do compare our methodologies and results.”
Couldn’t agree more. In fact, this might be the perfect time to unleash all the data, methodology and creativity that’s been sitting behind closed doors – and let it all have a conversation with itself. We’re convinced that collaboration and open data are concepts whose time has come, especially when there’s ample opportunity to improve the impact and flow of philanthropy dollars.
Of course, the other side of this coin is the new pressure for nonprofits to get rigorous with their own impact management, assessment and communication. This report (pdf) from the Foundation Center affirms exactly that: in the wake of recession, foundations and grant-makers are getting increasingly strategic with their funding decisions. A critical mass seems to be gathering around this issue, too, as organizations like SVT Group and others devise innovative ways for nonprofits to measure and manage the impact of each dollar spent.
We can loop all of this back to mapping. Depending on the context, maps are slick communicators, organizational efficiency drivers and well-filtered knowledge pools. In his blog, Campbell suggests that “NPO’s who have have never had the wherewith-all to invest in technology systems to assess performance do so.” We agree – especially in the case of mapping. But it’s worth mentioning that doing so doesn’t have to be costly, either cash-wise or time-wise. Two favorite mapping platforms of ours, Google’s Fusion Tables and IBM’s ManyEyes are both free and exceedingly easy to use. See posts about each here and here.
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