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| Best Practices: Philanthropy |
Measuring Up
Matthew Schuerman
10/01/2005
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Ask each candidate
what it does differently from the next one: Knowing the approach a group takes
to a problem will help you decide if it matches your philanthropic goals. Beware
of organizations with similar names: The Children’s Wish Foundation, a $15
million nonprofit based in Atlanta, may sound confusingly like the Make-A-Wish
Foundation, a $125 million network of 74 local chapters headquartered in
Phoenix.
3. How Well Do You Do Your Job? A donor can learn a lot from how a
nonprofit tries to evaluate itself. Do not be overly impressed with large
numbers unless the numbers are what counts. An arts education program that
reaches 25,000 children within a single year may seem effective at first glance,
but what is the quality of the experience? Do schools ask for repeat visits?
Many organizations, particularly in the human services arena, conduct biannual
organization-wide evaluations of their activities that they should be willing to
share with important donors. “The rule is, ask the organization what kind of
measuring system it has in place,” says Betsy Mangone, vice president of
philanthropic services at the Denver Foundation. “Some of their goals may be
hard to measure, but listen to what they have to say and consider whether it
makes sense to evaluate them in that way.”
When donors contribute to specific
programs, they generally do not ask for a customized evaluation of that program
unless their gift surpasses $100,000. This is because a study of any
sophistication is going to consume at least 10 percent of the program’s budget.
In these cases, the donor can discuss with the development officer and program
director what to measure and how. The donor can also join with other grantors
who are involved in the same program to come up with a standard evaluation
format that the nonprofit can use for all donors.
4. What Is Your Per-Unit Cost? Just as some nonprofits tend to hide their actual activities behind a
lofty mission statement, they may try to camouflage inefficiency in the guise of
nobility. The Hulda B. and Maurice L. Rothschild Foundation was solicited for a
grant by a nonprofit that would send handymen to the homes of elderly people who
needed household repairs. It sounded good: Rothschild focuses on senior
citizens, and its board was all in favor of keeping them at home and out of
nursing homes for as long as possible. But when Rothschild President Rob Mayer,
the great-nephew of the couple whose fortune endowed the foundation, asked how
many home visits the group planned to conduct in a year and how many hours each
visit would take, he was surprised. He calculated that the foundation would be
paying $150 per hour, or three times the going rate for labor. “It would have
been cheaper to have just given the money directly to the homeowners and let
them use the Yellow Pages,” he says. “It never occurred to them. The cost was
immaterial because they thought they were doing such wonderful work.”
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