Kevin Starr at the Mulago Foundation has an interesting piece in the Stanford Social Innovation Review this month about the future of philanthropy and social entrepreneurship (note the Mulago Foundation supports VillageReach). Kevin’s blog has a number of perspectives in it that are each worthy of comment, but I’ll focus on one issue today.
Kevin is concerned about evaluations of impact, or the lack thereof, in the social sector. He expresses frustration about the sector “…operating in a dysfunctional market for impact.” Kevin had just returned from the annual Skoll World Forum, as I had. He was struck with what he heard: that highly evaluated organizations with demonstrated impact can’t always attract the capital they require. Whereas “… zombie NGOs can operate for years …” This in comparison with the private sector, where capital tends to follow the most appealing investment cases. The lack of an established social sector marketplace, where entrepreneurs – the Doers – and investors/donors find each other efficiently through common standards of evaluation, is a source of frustration for Doer and funding organizations alike.
Kevin suggests the fault lies with investors/donors for the most part – they don’t always insist on stringent evaluations of the work they fund. That’s cause for concern right there because it suggests more could be achieved with the same resources, but isn’t.
But we can’t place all the blame on the sources of funding. Doers are also charged with evaluating their performance in order to improve results, and of course many already do this. But some Doers may be reluctant to make their results public, out of fear that the challenges they face will not be appreciated. Achieving sustainable results at large scale in international development is just hard, and can be unpredictable.
But I think you have to give the donor more credit. Our supporters want to see tangible evidence of our performance, but also explanations of the challenges. Many are not foundations or organizations – they’re individuals who want to make a difference. I’d make the case for individual donors being a real force for change in wanting to evaluate the impact that financial support provides for social causes.
The smart giving movement encourages measurable, sustainable impact for their donor dollars. There’s a growing number of people eager to track the Social Return on Investment (SROI) of their personal contribution. The movement doesn’t only encourage reporting of results. In fact, it seems investors/donors also respond well to organizations that document their plans. For our donors, results matter. But they gain confidence in us when they see project plans, program metrics and financial plans online. GiveWell, and their positive rating of VillageReach, is further evidence that being more public with plans for effecting change is a natural attraction for investors and donors.
Transparency itself becomes a differentiator. And we can always improve upon that.
On that note we recently published updates to our work in Mozambique, with new details of the project plan and the financials, with an explanation of what has changed. We’ve seen some delays in deploying the model to additional provinces, but we’ve also received support that enables us to plan more effectively for the longer term. See VillageReachFocus for details, including the updated program report.