Why? Many small, local nonprofits (and likely some larger ones, too) haven’t been given the toolkit yet to help them become high-performing. Does that mean that they aren’t providing value or making an impact? No. It simply means that we do not yet have proof that they are.

I’m not talking about the extreme example above of a poorly operated program whose leaders refuse to improve their quality. I’m talking about the amazing community-based nonprofits who really are making a difference and who don’t have, and may never have, the capacity to measure with the rigor that others would like to see.

In your example with teen mothers, you ask how we can justify having them receive services from an ineffective program when they could have received services from one that works. My answer is that “we can’t” justify it, but also that this simply isn’t the reality in most communities. So, I’m also talking about the nonprofits who have a terrific mission that could meet a great need in communities where there are no other resources, and who aren’t ever going to be high performing or high impact without the support to become so.

What makes me uncomfortable about most folks in the “effective social investment” sector is the top-down “stick-instead-of-a-carrot” approach. Instead of withholding funds from nonprofits who aren’t high performing or who can’t demonstrate high impact, why not instead put funding toward making them so?

Why not fund leadership training for organizations that aren’t high performing?
Why not provide executive development and coaching for leaders that don’t understand or practice outcomes-based measurement?
Why not fund local and regional support centers that will create opportunities for networking and connections that will allow high-performing organizations to mentor those that aren’t?

None of these involve a “stick.” None of these involve “withholding funds.” None of these adopt the “only-whoever-measures-best-wins” approach. In fact, they all involve lifting the whole sector up at the same time. That’s a win/win approach to philanthropy.

Funding to build performance management capacity should be more easily available – and if social investors choose to fund organizations to become high performing, that would be great progress. That is the kind of change we need from the funder/donor community.

My point is, though, that ALL organizations – even small ones – can manage performance at some level, and if they do not make progress with funding and resources to build performance management capacity, well, then it’s time to direct the money to organizations that will make good use of it.

I’ve worked in, and now with, nonprofits for many years, and I know very well that not all organizations are willing to change – we need to support change where there is drive to make it happen. There is so much at stake.

In my opinion, however, it is critical to ensure that ALL organizations become high performing (and, as mentioned above, I believe output programs that provide food and shelter in the short term can also be high performing by managing the quality of their services). If organizations struggle to become high performing, we should help them get there. If organizations refuse to acknowledge the need to manage performance in order to ensure that clients actually benefit – and prefer to stick their heads in the sand, pleading ignorance about whether clients truly benefit because it is “too hard” to measure it – I believe they should no longer be in business.

I believe advocating for “diversity” in the sense of allowing poorly operated programs that have no intention of improving quality to continue their “work” is simply irresponsible. How can we justify the poor life prospects of teen mothers and their children receiving services from an ineffective program when they could have received services from one that works? Even worse, how can we justify that we allow such ineffective services to continue because we didn’t insist on performance management and consequently didn’t even know they were ineffective in the first place?