WALL STREET JOURNAL
CHARITY AIMED AT CHANGE
An idea for solving ‘100 million dollar problems.’
By William A. Schambra
It is often noted that, after billions of dollars in government spending over the past several decades, we have seen precious little progress in solving American’s major social problems, from family breakdown to dysfunctional schools. But what about America’s nonprofit sector—organizations that concentrate their efforts on exactly such problems, with money from charities, trusts and personal philanthropies? They too spend enormous sums. Is their record any better?
Not really, says Steven H. Goldberg in “Billions of Drops in Millions of Buckets.” We should not, he cautions, blame the American character for this failure: There is plenty of compassion and generosity to go around. Nor is bad thinking at fault: There are plenty of bright ideas and innovative programs. No, it is the whole structure of giving that condemns even the best efforts: We collect and spend our charitable dollars in a haphazard and fragmented way, he argues, diluting whatever problem-solving force they may have. READ MORE ...
PHILANTHROPY ROUNDTABLE
THE MAN WITH A PLAN
Steven Goldberg Wants Philanthropy to Walk the Talk about "Transformative Impact." But Will His Prediction-Market Strategy Work?
By Matthew Bishop and Michael Green
Steve Goldberg is probably the most ambitious man in American philanthropy. He expects the nonprofit world to live up to its own hype and solve—yes, solve—the knottiest social problems. Note the subtitle of his book: “why philanthropy doesn’t advance social pro-gress.” Not “can’t” or “won’t,” mind you, but simply “doesn’t.”
He has a point. Despite all the efforts of philanthropists, social indicators have weakened for the average American over the last 30 years; from educational attainment to preparing for an aging population, we are not ready for the nation’s big long-term challenges. Yet Goldberg thinks that the answers to those problems are within the reach of philanthropy, if only money were spent more wisely. And he has a plan to fix it. READ MORE ...
IT'S YOUR WORLD BLOG
TIE FUNDING TO PERFORMANCE
Curb Traditional Fundraising; Book Lays out Plan for an ‘Impact Index’
By Jane Wales, Vice President the Aspen Institute, President & CEO, The World Affairs Council/ The Global Philanthropy Forum
Some of the best nonprofits have been prevented from growing as large or becoming as capable as they should be. What’s needed, according to Steven Goldberg, a consultant to nonprofits and social entrepreneurs, is a new nonprofit capital market that would take the form of a prediction, or information, market, akin to political polls. In a new book, Billions of Drops in Millions of Buckets: Why Philanthropy Doesn’t Advance Social Progress, Goldberg argues that such a market, while not a silver bullet, would increase social impact by fundamentally restructuring the sector, turning philanthropy from being loyalty-based – guided by fundraising and relationships – to merit-based – guided by performance. The idea of a nonprofit capital market has been mentioned by many thought leaders in the sector, Goldberg acknowledges. Nonetheless, he feels it has not received sufficient attention to date. Such a virtual stock market or “Impact Index” would allow philanthropists to know what various nonprofits accomplish, through evaluation and transparency, and not just what nonprofits are trying to accomplish, through anecdotal reporting. Such data will help make the most promising nonprofits, with the greatest likelihood of “transformative social impact,” stand out from the “weeds,” he writes.
Goldberg is not alone. Most established foundations are making the case for improved impact assessment — and for a decision-making process that is based on objective measures. And most organizations that study or support the sector — including GEO, FSG, Independent Sector, the Foundation Center and UPenn’s Center for High Impact Philanthropy — have made the case as well. But, we may be better at devising viable metrics than we are at changing behavior. And so Aspen’s program on Philanthropy and Social Innovation will convene thought leaders, practitioners and funders to consider how impact measures and other data can lead to field-wide learning — and changed behavior. Engaging in this workshop series will be members and partners of the Global Philanthropy Forum.
Before detailing his plan for this Impact Index, Goldberg writes about the problems of the current financial structure governing the sector. Traditional fundraising takes too much time and offers too little money, as foundations offer too many small, short-term grants with lots of strings attached. This practice reduces foundations’ risks of failure, he writes – but may also lead to less significant achievement. The sector’s most critical flaw, he says, is the fact that funding is tied to relationships, not performance.
The release of Goldberg’s book is timed to take place when the discussion of metrics and evaluation is taking place in all corners of the sector — but has not yet exhausted us. Superb work has been done and is being undertaken by many organizations on both the local and the national levels. For some, this is the time to take the discussion the last mile, from thought and successful experiment to field-wide change. But, in trying to do so, we might want to bear in mind the resilience of human nature. Both performance and relationships will surely play a role.
