Leading Indicators and Outcome Oriented Philanthropy
Outcome-oriented philanthropy, the focus on achieving tangible strategic results as a result of philanthropic contributions, has become a dominant topic in the mission-driven arena. Outcomes, outcomes, outcomes..... This renewed focus on results is laudable. But we have to be careful not to focus on outcomes at the exclusion of all else.
Outcomes take time, what should we look at in the meanwhile? Paul Brest's article in this spring Stanford Social Innovation Review called "A Decade of Outcome-Oriented Philanthropy" got me thinking as did a recent lunch with a friend who is struggling with an impatient board of a small foundation. I have spent the past twenty years of my career persuading people of the importance of strategic measures and bringing to life the old adage "what gets measured gets done". And yet, I have concerns. Measures are important....I would even say essential. But outcome measures are not a sufficient point of focus – they are only the end of the story. If foundations and non-profit organizations are really going to manage their strategy they need to have insight into the cause and effect linkages that lead to those outcomes.
For instance, if a foundation is dedicated to improving learning readiness for low income students entering school at age five. By definition it will take years to see an impact from their efforts. Surely it does not make sense to wait that many years to see results. Instead, it might make sense to measure the number of day care centers or families participating, or the number of outreach efforts funded, or some other leading indicator that reveals progress toward the outcome. Is process/effort a sufficient indicator? Of course it's not. But it is a valuable proxy in the short term, in fact, without process or effort it can be assured that outcomes are not around the corner.
Additionally, I am concerned that focus on outcomes measures will devolve into a hammer or threshold that will inhibit if not completely stifle the innovation and experimentation that has traditionally been the role of philanthropy. As a society we have funded philanthropic efforts to experiment and explore new solutions to previously intractable problems. Then, once methods are somewhat proven they are picked up by government and other organizations to be implemented on a more systemic basis. If we become solely focused on outcome results from our philanthropic endeavors we will deprive ourselves of the benefits of creative problem solving to seemingly insurmountable social problems.
My hope is that foundations, funders and other philanthropists will continue to expect performance results – but not all outcome results. We need to be patient and willing to accept leading performance indicators which will provide information to accelerate learning and hopefully accelerate outcome results.
June 2021
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