From accountability to impact

Barry Gaberman

This August, the Center on Philanthropy at Indiana University devoted its Fourth Annual National Philanthropy Summit to assessment. The sixth EFC Summer Academy in September will be on ‘Impact-driven Philanthropy’.

The December issue of Alliance special feature will focus on effectiveness and impact. Finally, the 2008 ‘Philanthropy Summit’ of the Council on Foundations has impact as one of its three themes. If transparency and accountability were the watchwords of the late 20th century for philanthropy in both Europe and North America, if not globally, then the mantra for the first part of the new millennium seems to be assessment, effectiveness and impact.

This is not because of either the sophistication or the power of the assessment methodology; in fact, some of the early attempts at assessment have been embarrassingly sophomoric. It is, I believe, because of the resource-scarce situation most societies face. As governments search for new revenue streams, the asset base of organized philanthropy, sheltered by its preferential tax treatment, may become an easy target as the few genuine abuses in the philanthropic slice of the civil society sector are blown out of proportion by a press eager to sell copy and a self-serving political elite eager to score points.

That is what transparency and accountability processes aimed to ameliorate. The search for new revenue adds a layer of difficulty. It suggests that without proven impact beyond anecdotal snippets, there may be little rationale for continued preferential tax treatment. The only way I see for organized philanthropy to protect itself is to fully embrace the new mantra of assessment, effectiveness and impact. This means supporting it so that it grows in maturity and methodological sophistication; it also means cooperating with its practitioners by giving them access to our work. I believe when measured we will not be found wanting – and if we are, it is fair to question tax privileges when they bring only marginal public benefit.

Having placed my bet on assessment, there are a few things that concern me. First, when we talk about assessment, we must recognize that we are essentially restricting ourselves to the small piece of the organized philanthropy pie that we lump under the heading of strategic philanthropy. This tends to mean institutions with significant financial resources, staff capacity and board diversity. In the US, that would be 3,000 or 4,000 of the 70,000 plus foundations, and I suspect it is not much different in Europe.

It is too easy and too simplistic to conclude that the vast majority of foundations are not strategic and therefore not worth assessing. And it would be a tragedy to conclude that they don’t deserve preferential tax treatment. Our problem is we have not developed a language to describe them. By suggesting they are ‘not strategic’, we relegate them to a lower rung of the philanthropic food chain. In fact, they may do more in their localities to build social capital than all the strategic philanthropies put together. But social capital is very difficult to assess.

A second, related concern is that assessment pushes us towards what we can count rather than what counts and underestimates the value of qualitative research. An in-depth case study can be very insightful in the same way that a good story can blow quantitative data away. We need to be vigilant that what we choose to count matters, that we give qualitative data its due, and that we do not shy away from grappling with the big concepts that defy quantification.

Finally, and a variant of the last point, is the concern that in seeking to determine impact we will concentrate on the instrumental functions of organized philanthropy and the civil society organizations it supports and lose sight of the fact that these institutions effectively form a fifth estate. The instrumental function of providing services – educating us throughout our lives, doing policy analysis, engaging in advocacy, supporting artistic expression – is very important. But in complex societies it is also important to guard against a concentration and abuse of power. The traditional separation of powers into executive, legislative and judicial functions is not enough – even given the existence of a fourth estate in the form of an independent press. The institutions of civil society constitute a fifth estate, if you will, that helps to guard against an abuse of power. We must be careful that any attempt at assessment doesn’t diminish that role.

Barry D Gaberman can be contacted at bgaberman@gmail.com


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