David Henderson
Los Angeles, CA
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Thursday, November, 5, 2009
Effective Social Investing




The Alliance for Effective Social Investing is an ambitious effort to develop a framework for evaluating the social value of non-profit organizations across agencies and programs.  I was cautiously optimistic about the Alliance for Effective Social Investing when I first wrote about it a year ago, back when they initially formed.  I was prompted to check-up on what the group has done in the last year after hearing an interview earlier this week with the group's chairman, Jeff Mason, on the Chronicle of Philanthropy's Philanthropy this Week podcast (episode number 16, you can download the mp3 here).

Over the last year the Alliance has produced some working papers outlining an approach, largely developed by two of their members, on how to judge the social value and effectiveness of non-profit organizations.  Their method, described in a paper titled the Guide to Effective Social Investing is largely underwhelming. 

Outcomes evaluations are tremendously complex.  Coming up with one metric to compare the effectiveness of a homeless shelter and a mentoring program seems nearly impossible.  My hope was that this group would somehow tackle this critical issue, developing a central currency of social value we could use to evaluate unlike organizations across sub-sectors. 

In hindsight, my hope, and their mission, is unrealistic.  Instead of attacking this problem with the statistical and analytical rigor it would need, the Alliance opted to instead publish a framework reliant on evaluative vagaries that at best offer guidance for producing subjective analysis.  Their system is predicated on subjectively determining how much, or how little, an organization utilizes things like "program impact data" and inhabit concepts like "capacity to deliver services/programs with fidelity"

(Guide to Effective Social Investing, page 15)We are an industry full of buzz words.  "Organizational capacity", "outcomes oriented", "tested and effective", we don't need more terminology and concepts.  What we need to do is rigorously, and analytically, evaluate what is working and what is not.

Perhaps the idea of establishing one evaluation criterion that fits all agencies is too quixotic.  A better approach is to not center evaluations on agencies at all.  Instead, evaluations should be focused on clients.  If my program is meant to reduce a family's poverty status through job placement, then my program should be judged by how much variation in client incomes is the result of my job placement services.  Using this outcome metric, one can then compare my program to any other program designed to impact a client's poverty status. 

I still have hope for the Alliance for Effective Social Investing.  If we are to become an industry that takes evaluations seriously, we need a central voice.  The Alliance can be that voice.  However, before they do, they need to start singing a different tune.

(Photo by Business Pictures)

 



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