To Increase Global Impact, Manage to Local Outcomes

August 26, 2011; Source: Business Week | For all the buzz among nonprofits about generating “collective impact,” work on the ground shouldn’t be driven by collectively identified or mandated outcomes, writes Mario Marino, Chairman of Venture Philanthropy Partners, in his new book Leap of Reason: Managing to Outcomes in an Era of Scarcity. Rather, he says, the nonprofits themselves should be in the driver’s seat when choosing the most important outcomes for their communities, and funders should support them in this role.

Marino says that this is because the practice of “managing to outcomes”—or a “performance management system,” as it is commonly called—involves far more than collecting information about results. It represents a commitment to systematically “collect and use information to plan, make decisions, track, course-correct, and improve” performance and outcomes. Such systems are fully integrated into program activity, and must reflect the specifics of an organization’s work at a specific point in its evolution.

This isn’t to say that nonprofit organizations don’t need to do a better job of holding themselves accountable for outcomes. Marino asserts that many nonprofit organizations aren’t well managed, especially with regard to outcome assessment, because their leaders lack key skills. He also chastens funders who generally don’t provide resources for effective ongoing outcome tracking. Even worse, he argues, funders can actually jeopardize effective nonprofit work because they’ve become overly enamored with their own outcome goals and measurement processes. This puts grantees in the position of having to gather volumes of data that don’t actually inform effective implementation, Marino says.

Time is of the essence when it comes to adding outcome-assessment capacity because according to Marino, we’re in the midst of a “profound structural shift” in the role of the public sector. It’s a shift that’s already painfully evident in sustained state and local budget cuts. He says that “the reality today is that outside of healthcare, the expansion of public funding and government services as a share of our economy is going to come to an end, if it hasn’t already. In this new era, public policy debate increasingly will focus on how best to use or repurpose existing resources” even in the face of increasing demand. He further notes that it will no longer be “good enough to make the case that we’re addressing real needs. We need to prove that we’re making a real difference.”

Now, funders and nonprofit organizations need to partner in new ways to do it right.—Kathi Jaworski