Observations on the World’s First RFP for Social Impact Bonds

BIG NEWS FROM DOWN UNDER

The Treasury Department of New South Wales (NSW), Australia, recently issued the world’s first Request For Proposals for a “Social Benefits Bonds Trial.”  “SBB” is the latest entry in the continuing search for a commonly-accepted name for Social Impact Bonds (SIB), otherwise referred to (primarily by the U.S. and some state governments) as Pay-for-Success (PFS) Bonds or Contracts.  (Thankfully, I won’t be wading into that debate and will use “SIB” here.)  As a former government lawyer who has litigated more than $2 billion in public procurement and contracting disputes, I’m happy to report that the NSW Treasury has drafted an excellent RFP that deserves wide consideration.  

The Burdens and Benefits of Evaluation

William Schambra, Director of the Bradley Center for Philanthropy and Civic Renewal at the Hudson Institute, makes a fair point in his article, “Measurement is a futile way to approach grant making,” when he laments that “ever more elaborate schemes for ensuring measurable outcomes” have imposed “a substantial and growing burden of measurement for the nonprofit world.”  And he’s right, too, when he observes that “even when measurements have been duly gathered, research shows that they have little impact on actual grant making, not affecting the amount of money spent on a program.”  But he overshoots the mark when he acknowledges, with refreshing candor, that “I happen to believe that measurement is finally a futile way to approach grant making.”  Useful evaluations of nonprofit performance are not a one-size-fits-all proposition, and the costs and value of assessing effectiveness can and should be calibrated as befits the purpose of evaluation:  to get more funding with less effort to more effective organizations.

2011: The Year Philanthropy Starts to Become a “Long-Term Solution”

An apparent disagreement between two of the sharpest minds in philanthropy is just too tempting to resist.  Herewith, an unsolicited response to Matthew Bishop (co-author of Philanthrocapitalism and The Road From Ruin, and NY Bureau Chief of The Economist) and Lucy Bernholz (founding President of Blueprint Research & Design and blogger extraordinaire at Philanthropy 2173) on the subjects of predicting trends in philanthropy and the relationship of private giving to public policy.

I Beg to Differ

I take a back seat to no one in my admiration of the Nonprofit Finance Fund, so it pains me to dissent from Rebecca Thomas’s thoughtful article, "New Ways to Rate Charities Don’t Help Donors Make Smart Bets," published in the Chronicle of Philanthropy, but dissent I must.  The simple answer to her important questions – “So why the rush to rate and rank? Why not provide information and let donors decide?” – is that donors aren’t willing to wade through unprocessed information about nonprofits to make more informed decisions about which charities to support.  Given the choice between making steady improvements in sites like Charity Navigator and continuing to leave donors without any meaningful guidance about which nonprofits are most effective, I’ll take better rankings every time.

SIF and the Office of Inspector General: Time to Chill

Before we jump the gun once again, perhaps it would be a good idea to understand what the OIG does first.