Outcome Accountability: How Far Are We Willing to Go?

1. Outcome Accountability: How Far Are We Willing to Go? George E. Mitchell City University of New York (CCNY)

2. Outcome Accountability • When asked to define organizational effectiveness: • Leaders say their organizations are effective when they can show that they are accomplishing what they promised to accomplish • This definition of organizational effectiveness I have taken to calling ‘outcome accountability’ • So what happens if we take this concept of outcome accountability seriously at a systemic level?

3. The Challenge • We want to construct a system to: • Encourage more efficient social investment • Help match social investors with appropriate social investments • Reward more effective organizations • Promote learning within and across organizations • However, we face constraints: • Limited financial and human resources • First-mover ambiguity (social investment intermediaries, designation agencies, IRS, NPOs?) • WE SIMPLY DON’T HAVE THE RIGHT DATA

4. From Overhead to Outcomes • Accountability systems driven by data availability • Accountability 1.0: Financial benchmarking (Form 990, financial statements) • Accountability 2.0: Financial benchmarking and transparency (Form 990, financial statements, websites) • Accountability 3.0: Outcome accountability (???) • How could we get to an accountability system that would truly allocate capital based on organizational effectiveness?

5. Outcome Accountability • If we want a mechanism to efficiently allocate capital in the nonprofit sector we need to know: • What specific goals an NPO is trying to accomplish • What progress an NPO is making toward each goal • How an NPO is allocating its resources across its goals • Where do we find this information? • Websites? • Annual reports? • Forms 990?

6. Consider Part III of the Form 990 What would be needed: An NPO states its annual goals at year-start and its annual accomplishments at year-end An NPO allocates all of its annual spending across all of its annual goals An NPO is able to provide reasonable evidence of its annual progress toward each annual goal

7. Outcome Accountability • Implies a measure of organizational effectiveness (or evaluator confidence) • Think of it as a budget-weighted measure of promise-keeping • Unique to each NPO yet comparable across NPOs • More importantly, in equilibrium we achieve the desired information disclosure • Organizational and programmatic effectiveness • Programmatic cost-effectiveness and efficiency • Benefits: efficiency, matching, learning, etc.

8. The Problems of Information Generation and Disclosure • The underlying problem is the lack of meaningful, consistent evaluation across the NPO sector • The proximate problem is the lack of a standard disclosure format for outcome accountability • Regardless of the details, if NPOs do not articulate their goals and report their achievements and related costs we will never know whether NPOs are effective, efficient or cost-effective and resource allocation will largely remain systemically arbitrary • How far are we willing to go for a more accountable and efficient nonprofit sector?

9. Conclusion • Email: gmitchell@ccny.cuny.edu • Transnational NGO Initiative at Syracuse University: http://www.maxwell.syr.edu/moynihan_tngo.aspx