ABSTRACT
Quote:
Not everything that can be measured is important … and not everything that is important can be measured.
Albert Einstein
Case Problem:
Will performance metrics for a non-profit funding facilitator be the same as non-profits?
Chapter overview (case synopsis)
Non-profits globally started as member-led organisations. These organisations served multiple and diverse purposes. They then gave way to Private Foundations with a centralised structure. Private Foundations grew globally due to government-backed tax reliefs to such private foundations as non-profits. A professionalised non-profit model followed the private foundations. This model depended on grants, contracts and earned income. With increase in sophistication of non-profit organisational structures, marketing, impact and performance evaluation have received greater focus. Typically, performance metrics relating to revenue earned, capacity created, customer satisfaction, and outcome achievement, dominate assessment of non-profits. This case is about the use of performance metrics to judge non-profits.
Socially responsible consumers would like to assess performance metrics of non-profits before committing their funds for a purpose. Two components of performance namely revenue generation and customer satisfaction depend on targeted socially responsible consumers. Non-profits belonging to different sectors, projects and countries have different objectives. Using the same performance metrics can be an issue. This case is about the non-profit crowd-funding platform, GlobalGiving. This non-profit facilitates funding for its non-profit partners’ projects globally. Crowd funding facilitation involved choosing the non-profit partners based on a rigorous selection process and a competitive marketing pitch.
Charity watchdogs help prospective donors in evaluating performance of non-profits. They use published financial information and other compliance documentation in evaluating outcome achievement. GlobalGiving scored very high across all parameters. In comparison, similar organisations, or applying the same metrics for its own partners, could be a potential problem. Donors, as socially responsible consumers, require charity watchdog's services to assess performance metrics on marketing outcomes. However, comparing different non-profits, which work for unique purposes and in different countries, is wrought with problems. The case highlights this issue.
