Monday, February 19, 2007

Nothing happens if nothing happens

What are appropriate performance measures in philanthropy? Once on staff at a typical endowed foundation, how do you know if you're succeeding? How does your boss know? Can foundation professionals be held accountable for success or failure of their grant making strategies? Or, as the title of this post suggests, does "nothing happen if nothing happens?"

The Agitator poses this question a slightly different way - How do you know if a nonprofit is not good enough? Tom asks:

"But how is performance by a nonprofit's leadership team generally appraised? What questions get asked, and by whom?

Have you eradicated cancer yet? Stopped global warming? Saved all the children? Ended domestic violence? Eliminated hunger? Produced more literate students?"

Its hard for those who do the work - even harder to know if those who are funding some of it are performing. Some foundation executives have performance measures that hold them accountable for leverage - attracting "other people's money" to the work they support. Others set performance benchmarks for each portfolio. For the most part, endowed foundations have only one real measure - payout. Did the funds get out the door, credibly and legitimately. Its a measure, but not one that requires anyone to actually accomplish much.

What are the best performance measures for foundations? And how do they translate to staff, board, and organizational practice?

1 comment:

Dennis Whittle said...

Hi Lucy,

I was just thinking about this question the other day in relation to my 14 years at the World Bank. One of the demoralizing things about working there is that there are few feedback loops from the customer. The feedback you get is internal - from the bureaucracy itself: you manager, the senior team, the board. Like any rational person, you tend to respond to that feedback, and you orient your behavior to please the bureaucracy, not the client. This is totally natural, and does not presume anything about the motives or the character of the person.

From my experience with foundations and many (though not all) ngos, the incentives are the same.

In my mind, the question is not so much about holding people accountable. Although that is important, a far more powerful influcence on their behavior is to link their actions to outcomes on the ground.

So the first priority is getting good feedback loops in the system. In my experience that alone can change behavior even more powerfully than top-down "accountability" systems that may be easy to game.

Step two is to link feedback to resources or even compensation. There are several ways that this could be done. If I had not left the World Bank, I was planning to launch a limited voucher system that would allow client country reps to pick and choose among products offered by Bank teams. This would send shock waves through the system, and you can be sure that the bureaucracy would then rally to try to stop the practice. But if you could instead gradually expand the practice, you just might fundamentally change the dynamics of the system.

Another method of doing this would be allowing beneficiaries or clients to vote on the quality of service given by program officers or the bank/foundation/ngo itself. What if an ngo's president's salary were linked to independent surveys of beneficiaries? Or a program officer's?