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Measuring Social Impact

Transforming Our Anti-Social Sector

Our sector’s trajectory does not point to a pivotal future role in solving social problems—what might a new paradigm look like, and could we ever get there?

When Thomas Kuhn wrote the Structure of Scientific Revolutions, he couldn’t have imagined how far his work would reach beyond the field of history of science. In fact he played a major role in bringing the term “paradigm” into widespread modern usage, to describe an accepted set of theories, assumptions, and practices that together constitute the “normal” view of the world. He described how periods of normal science were disrupted by revolutions, during which there would be a discontinuous transition to a new paradigm—a new normal.

I believe that the social sector needs to undergo just such a paradigm shift.

That the nonprofit sector has changed hugely in recent years is beyond dispute. It has grown, become increasingly professionalized, and over the last decade started coming to grips with planning and measuring its impact. Yet these are incremental changes, and I believe that the sector’s trajectory does not point to a pivotal future role in solving social problems and delivering social justice.

Moving toward more effective organizations

Conceptual model of a fundraising nonprofit. (All images courtesy of NPC, 2014)

A simple conceptual model of a fundraising nonprofit is made up of two main cycles: raising resources and delivering interventions. This nonprofit creates social impact if it delivers effective interventions, which it can do only if it has first raised the resources it needs to fuel its work. It maximises its social impact if it is a high-performing organization, delivering effective interventions.

There is a growing focus on what nonprofits individually, and the sector as a whole, need to do to ensure that they are high-performing and effective. I am proud to work for NPC, which has been at the heart of this movement in the UK for the last decade—a movement that appears to be gathering momentum in the United States.

So far, so good. If we live in a paradigm in which organizations are increasingly high-performing and effective, then shouldn’t we expect to see continuous improvement in the social sector? Wouldn’t we move en masse toward more effective interventions and slowly maximize the sector’s social impact?

But for this to work, we also need both halves for the nonprofit paradigm—raising the resources and delivering interventions—to follow suit. We need more effective, high-performing organizations to raise resources more readily than less impact-focused peers. At the moment, I would argue that our attention is too focused on the latter half.

Is funding moving toward impact?

In the UK and United States alike, evidence and experience show that funders on the whole are still too focused on their own particular priorities to seek out the most effective solutions (see, for example, NPC reports on nonprofits’ reporting to grant funders, nonprofits’ impact practice, motivations and behaviors of individual donors, and research by the Center for Effective Philanthropy on foundations’ views of their own impact). There are of course exceptions, such as the Edna McConnell Clark Foundation and recent strategic programs of the Big Lottery Fund in the UK, but most funding practice is still overwhelmingly funder-centric. Take a few examples:

If impact isn't central to the model—an “anti-social sector.”

The focus among donors on minimizing overhead costs: good for a donor who cares about not wasting their money, not so good for a nonprofit seeking to invest in anything that might lead to greater future effectiveness.

The lack of strategic collaboration between institutional funders: good for funders who want to know what their distinct contribution is, not so good for building coordinated action toward shared goals.

The focus in reporting by nonprofits not on learning and improvement, but on meeting funders’ requirements and compliance: good for funders who want to ensure that they haven’t made “bad” grants, not so good for anyone extracting any learning at all from the millions of dollars and pounds thrown at evaluations that sit on dusty shelves.

Overall, there is a lack of meaningful accountability among funders to those they claim to help.

The result of this funder-centricity at its worst is that the social sector exists not for those it’s supposed to help, but in fact for those who work in it, volunteer in it, and give money to it. An anti-social sector if you will.

This is an intentionally extreme interpretation, but if we look at behaviors and practices that we would expect of an imaginary anti-social sector and then find that our sector abounds with them in real life, we should perhaps revisit our asssumptions about who we are here to serve and whether we are doing well enough.

What might a new paradigm look like, and could we ever get there?

Maximizing impact.

Maximizing impact.

If we are genuinely to focus on what we need to maximize social impact, we have to start with the beneficiary, not the funder. That means understanding the lives of beneficiaries through research, experience, intuition, and every tool we have at our disposal. It also means understanding the system in which they exist, and through which we will deliver and mediate any and all interventions.

A very brief outline of a systems thinking approach to maximizing social impact would include:

  • Identifying a social issue;
  • Defining and mapping the system collaboratively;
  • Engaging stakeholders from all sectors;
  • Reviewing evidence from academia and practice;
  • Developing shared theories of change and measurement frameworks;
  • Delivering shared goals through pooled resources or clear, complementary roles;
  • Developing infrastructure for data capture, analysis, and sharing at appropriate levels;
  • Scaling social impact through scaling organizations, interventions, value chains, or practices;
  • Embedding learning and continuous improvement at a system rather than an organizational level;
  • Collecting evidence, analyzing, synthesizing, and sharing at a field level; and
  • Iterating.

Collective impact approaches are, of course, a critical element of this new paradigm. But they can emerge only once there is a commitment to taking a systemic approach—it is not clear that they can exist sustainably within the old paradigm, in which organizations still primarily compete for funding to survive.

There are a number of elements of this new paradigm that NPC is currently exploring, which I will share in more detail in a future article. They include: data labs, an innovative model of intermediating between government outcomes data and nonprofits that need it; systemic approaches to scaling, including research and action exploring the myths of scaling, and what it takes to scale impact within a system and with a fundamentally multi-sector approach; and shared measurement and collective impact, developing shared frameworks that become the standard across a whole field.

But a grave question still overshadows these new strategies—exciting as they are. They are all technical solutions—supply side solutions to the problem of how to maximize impact. They presuppose that there is a demand to maximize impact—to take the systemic view. Through programs like Inspiring Impact, we are starting to work on stimulating demand, as is Mario Morino and the movement he is starting to build in the United States.

Are we ready to embrace the new normal?

Ultimately, our collective success will rest on whether there is an appetite in the social sector, among its leaders and supporters, to embrace a paradigm shift. As an idealist and optimist, I believe that none of us wants the social sector to bear any resemblance to the anti-social sector I have outlined.

These issues are bubbling up more in the consciousness of the social sector, specifically within the field of philanthropy. In recent debates between Bill Schambra and Paul Brest about “strategic” philanthropy, the issue of the power dynamic between funder and funded has come to the fore. Ultimately, power should rest with neither party, but with those beneficiaries they seek to help. In my view, the only way to do this is to put a systemic view first.

Time will tell whether the social sector really has the leadership it needs to put its own interests after those it is here to serve.

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COMMENTS

  • BY Cheryl Gooding

    ON February 11, 2014 09:48 AM

    I really appreciate your willingness to articulate the need for a paradigm shift Tris.

    I agree with you that current sectoral approaches (both within the nonprofit and philanthropic sectors) will not create the social impact we’re striving for.  And it is critically important to acknowledge that.

    Even highly effective organizations, alone, will not eliminate social problems like poverty.  That recognition is one of the most valuable insights, I believe, of the collective impact perspective.

    At the same time, I think we need a paradigm shift in our thinking about capacity-building.  For example, it is critical that we recognize the pervasive confusion about strategic thinking, identify it as a problem and consistently provide training and coaching to build greater capacity for strategic analysis and development and execution of robust strategies.

    I also agree with you that we need to invest our resources in high performing leaders and organizations rather than spreading ourselves thin across organizations that are not high performing, which only dilutes impact.

  • Tris, I really like your analysis and the simplicity of the ‘anti-social sector’ idea.
    Going back to Kuhn, his paradigm shift was predicated on a great upheaval. So does that mean we are also going to need one here and if so what might it be?
    Seems to me there’ll need to be quite forceful circumstances to dislodge funders in particular from their comfort zone.  It’d be great, in a later article, to see more detail on your Theory of Change for this challenge!

  • BY Tris Lumley

    ON February 12, 2014 02:29 AM

    Thanks Cheryl and Tom for your comments. Cheryl - I agree with your comment on capacity building. The way I see it leadership development is an area that’s been chronically underfunded (even more so than many other elements of nonprofit capacity). Tom - thanks, and you’re right about the great upheaval. In Kuhn’s analysis experimental results that didn’t fit with the prevailing paradigm build up until they become a powerful enough force that new theory is welcomed. I will in the later article outline some of our thinking and theory of change, but at this stage just note that we need a movement in the social sector to overturn the funding paradigm. Nonprofits could have a tremendous collective power to change the system if they acted together…

  • BY Gregory Kurth

    ON February 17, 2014 10:06 PM

    Tris, I certainly enjoyed your insights on the critical juncture and perhaps stalemate that the social sector is in. From my perspective, the revolution needs to start at the funding component that you alluded to. The reality is that philanthropy has little accountability to ensure its investments have impact.  Moreover, the ability to have funders meaningfully collaborate is often more difficult than getting providers to engage creatively. At the same time, let’s not forget the biggest funding source of all - government. Unfortunately terrific leaders in the social sector are trying to build long-term sustainability within a political economy based on irregular annual appropriations processes and the vagaries of electoral politics. Just think of the energy that can be redeployed into scaling without all the “noise” in the current funding dynamics.

  • BY Tris Lumley

    ON February 18, 2014 01:16 AM

    Gregory, thanks for your feedback. I couldn’t agree more that the revolution needs to happen in the funding ‘marketplace’. The question for me is whether leaders in the social sector can put together plans that are fundamentally collaborative - so that lasting impact rather than organisational sustainability is the aim - and so compelling that they are in the driving seat in relationships with funders, rather than at their mercy. You’ve hit the nail on the head with your remark about the potential for scaling if the funding dynamics were different. And ultimately if we can’t scale what works best in the social sector, that has to mean we need to change it.

  • BY Dan Bassill

    ON April 12, 2014 09:09 AM

    Tris. Glad to read your article. I’ll take a look at your web site and hope to connect. I’ve been writing about a need for a shift in how social benefit organizations are supported for many years and have also used visualizations to try to communicate this idea. I encourage you to look at this article showing the goal of educating and changing what business and resource providers do while also influencing what service providers. do. http://tutormentor.blogspot.com/2014/03/changing-futures-for-youth-involved.html

    I saw an article on the RSA blog last week that illustrated how difficult it is to bring people into a discussion on issues like this. http://www.rsablogs.org.uk/2014/enterprise/messy-reality-project/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+rsaprojects+(RSA+blogs)

    In this article all sorts of challenges are shown that hinder engagement.  A paradigm change would be figuring out ways to bring decision makers from the resource side consistently into the internet where they’d also be reading and commenting on articles like this.

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