What are we accomplishing? How do we know we’re using our donor’s dollars in the best ways? How do we measure our successes? Are we really solving problems?

 These are not just good questions for any public benefit corporation (like the VMC Foundation) to ask; they are the questions that Charity Navigator will now be asking of nonprofits around the world in a move they call CN3.0. Paul Brest, former CEO of the William and Flora Hewlett Foundation, calls it “the most important work being done in the nonprofit sector.” High praise, indeed.

But Charity Navigator’s new direction – to capture the results and outcomes of a charity’s work – is also drawing fire. Many agencies wonder how to measure outcomes when their mission is to serve immediate, day-to-day needs. Are you “solving problems” if you feed a hungry family, knowing they will be hungry again tomorrow? How do you capture satisfaction of a client when that client is a 5-year-old child on an operating table in a war zone?

In a fantastic NPR story this morning, Charity Navigator CEO Ken Berger said this about some nonprofits’ concern over their new rating system: “There’s a lot of baloney in that sandwich.”

That’s a great line. I’m totally going to use that.

Worth noting is that the for-profit sector has no similar accountability expectation. Companies like General Motors or General Foods are measured by shareholder value and little else. Whether a video game maker is improving children’s health, or the degree to which Starbucks is strengthening gender equality overseas take a back seat to “are they making money?”

Seriously though, I wonder the degree to which Ken Berger began re-thinking this rating question after he (and millions of us) watched Dan Pallotta’s TED talk called “The Way we Think About Charity is Dead Wrong”. If you haven’t seen it, please do. Like, right now. I’ll wait.

There. Pretty compelling, right? So it makes me wonder about the VMC Foundation. What problems are we actually solving? How do we meaningfully measure our results?

This would be easy if we did just two or three things…but we do more. The VMC Foundation:

• Boosts medical center morale by throwing parties and running softball leagues
• Manages complex grant agreements to provide everything from newborn care technology to reduction in readmission rates for patients with chronic conditions
• Advertises the world-class care available in our spinal cord and brain injury rehab center
• Gives away thousands of new bikes every year to kids who otherwise may never have one
• Outfits VMC’s clinics with beautiful artwork, creating healing environments
• Participates in hospital committees, interview panels, and conducts staff appreciations
• Runs financials for the hospital gift shop, launched a farmers’ market, runs medical conferences…

…I really could go on and on. We’re proud of all this, but how would we begin to evaluate our overall effectiveness and whether we’re “solving problems?” We probably shouldn’t take credit for work done by VMC’s doctors and nurses, even if we brought in a big grant that pays for what they do. If our medical center’s patient satisfaction scores go up, what role did we play? What if they go down; are we then to blame?

But we also cannot just evaluate ourselves on how much money we raise or the number of programs we run. Are we moving the needle on people choosing to get care at VMC? Are we keeping staff proud of their work and reducing turnover or absenteeism? What about our overall work to improve public health (evaluating what doesn’t happen is always a challenge; how many people didn’t get the flu because they got a flu shot because they responded to our campaign)? What, in short, can we take credit for?

Just because these questions are hard doesn’t mean we shouldn’t ask them. I think Charity Navigator is on to something very important…even if I don’t know how to respond to it yet.

If you do, or have ideas, please share them. This is normally the kind of thing reserved for a 2-day board retreat, but I have a feeling that crowd-sourcing ideas here might be useful. Let’s see if I’m right.