“There’s a lot of baloney in that sandwich…”

Chris Wilder headshotWhat 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.

6 replies
  1. Timothy Hill
    Timothy Hill says:

    Hi Chris,

    Great and important questions you ask. I am on a Health Care Reform Committee that has been meeting for over 1 year now attempting to get the Santa Clara County Health and Hospital System prepared for the bigger challenges we have ahead as the Affordable Care Act is implimented. We have discussed the major issues we feel that need to be dealt with for our Health and Hospital System to have a chance to be competitive with the for profit systems that more people will have a chance to choose from. The most important issue is that we in the SCCHHS have to deal with is our attitude and treatment of our customers. I can not say it any better than we have to make our system the first choice not the last resort as it has been for many years. How do we do that? By treating our customers/patients like they are our own family members (the best quality care that we can offer) with friendly and compassionate care and treatment. Next we have to look at how we can streamline our system of eligibility and providing care. People wait for long hours to get eligible for our services, long waits on the phone, getting disconnected and have to call back and wait again. Then they become eligible and they have to wait hours and hours again, especially in the Emergency Room which is and entry gate for many people into our system. These are not easy problems to deal with, but they would be well worth the effort to make changes in a positive manner, so that our system can survive and thrive (to borrow a catch phrase from Kaiser) Thanks for soliciting input from the rank and file. I think this approach of getting input from the front line workers is what will truely make a significant difference. Tim Hill, RN/Public Health Nurse

  2. Alyson L Abramowitz
    Alyson L Abramowitz says:

    I work primarily in the private sector as a Management Consultant. While you are correct that the one external measure of publically held companies is stockholder value, others, such as sales and profitability are widely used. Most companies use metrics extensively internally and to direct their external and internal efforts.

    A foundation has every right to take credit for its people’s actions whether they are creating the iphone, reducing malaria deaths, or producing world leading TBI research, if they are facilitating that. This is a place where the non-profit community can learn from the for-profit world about marketing and producing ROI. A believe you aren’t giving VMC enough credit from what I’ve seen in working on a conference with VMC-supported personnel.

    • E. Christopher Wilder
      E. Christopher Wilder says:

      Thanks Alyson…perhaps we should take a cue from the for-profit world and toot our own horn a bit more! On the measurement question, of course for-profits have other metrics like sales and profitability, which drive shareholder value (usually), but all boil down to the same measurement: Dollars. We charities are increasingly being asked to measure ourselves with slide-rules and microscopes that are being invented and re-invented as we go. Again – this is NOT a bad thing, just a very HARD thing! And, we have to do all the $$$ measurement as well.

  3. Ken Berger
    Ken Berger says:

    Chris,

    Great blog post! Feel free to use the baloney line with impunity!

    In answer to your question about Pallotta and his TED talk, it had no relationship whatsoever to what we are doing. We have been working on this for years. In fact, I have been actively debating Pallotta and pointing out the fundamental problems with his approach for years. My most recent article can be found here – http://www.huffingtonpost.com/ken-berger/a-lot-a-pallotta_b_3961517.html

    Finally, I commend you on your good works and hope we can stay in touch as we move forward in this “Battle for the Soul of the Nonprofit Sector” – http://www.philasocialinnovations.org/site/index.php?option=com_content&view=article&id=163%3Athe-battle-for-the-soul-of-the-nonprofit-sector&catid=20%3Awhat-works-and-what-doesnt&Itemid=31&showall=1

    Regards,
    Ken Berger
    Charity Navigator

    • E. Christopher Wilder
      E. Christopher Wilder says:

      Ken, it’s a treat to wake up to your reply, which surprised me…and of course made me think. Yes, I look forward to keeping the conversation going as we figure out where the sector is headed. I think the part that makes me the most defensive is that we 501c3’s are held to such a variety of standards while the for-profit world are held to far fewer…and what we’re on about is ultimately more important.

      As Cisco CEO John Chambers said (and I’m paraphrasing) in a speech I heard maybe 10 years ago, “regardless of our mission statement, what we REALLY do is create shareholder value. We do anything else and our shareholders could sue us! As soon as making routers and switches becomes not the best way to create that value, we’ll do something else.”

      That would be great to see, like if some single or group of charities actually figured out how to “cure” homelessness! March of Dimes – and their shift in focus after (essentially) wiping out polio comes to mind.

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