Welcome to the Charitable Measurement Initiative!

The Charitable Measurement Initiative is a collaboration of people and organizations that are deeply committed to the belief that social change organizations can mobilize significant new and better investment if they are able to implement a measurement reporting framework that credibly communicates their real impact to donors. The Initiative is directed by GiveIndia and calls on the resources of pilot program partners Keystone Accountability, Global Giving, and New Philanthropy Capital, as well as many other organizations committed to social welfare.

The process began when we decided to combine our previous experiences in humanitarian and charitable work with our current work as corporate lawyers. We sought to find a group in India that was looking to incorporate capital markets/securities concepts in reporting and analysis to create more valuable and transparent information.

Thankfully, we were put in touch with GiveIndia. Give discussed the idea of running a pilot program implementing the Keystone framework developed by Keystone Accountability to see if we could help organizations more clearly articulate the outcomes they wanted and better communicate their actual results to donors. This was exactly what we were hoping to do and gladly agreed to donate a year of time to making this work.

While we were in London, Give put us in touch with Keystone Accountability and New Philanthropy Capital. After many meetings throughout the spring and summer, we arrived at our joint creation – the Charitable Measurement Initiative – and a plan as to how we would seek to help NGOs in India become more transparent, responsive, and efficient, as well as help donors become more engaged and involved.

Friday, November 30, 2007

Recommendations from NGOs

Here are two suggestions we received from two of the NGOs we are working with:

In the maps, identify the percentage of the NGOs work that is devoted to the necessary outcomes.

The map needs to by more dynamic to capture all the activities that the NGO is doing or there is a fear that the donor will not understand the environment in which the NGO is acting and why it makes certain strategic decisions

Thursday, November 29, 2007

The Charity Commission Steal Money!

The Charity Commission in Mumbai takes a 2% fee on all donations to Mumbai groups. The fee is supposed to cover the cost of the Commission, but seeing as it isn’t staffed with qualified people, there isn’t a computer in their offices, and it generally does nothing, I think this is my new least favorite thing about Mumbai’s government. They have many millions (if not billons) of rupees collected that are just sitting there. They should, at the least, return some of this money.

Thankfully, the NGOs have gotten together and made serious efforts to get rid of this fee, and it should be gone soon. A good site for more information on this issue (and NGOs generally) is karmayog.com.

Wednesday, November 28, 2007

When Groups View the CMI as a Fundraising Effort

Usually when we meet with groups there is a mix of operational/strategic personnel and fundraising staff. On occasion, however, we have met with groups that are largely composed of fundraisers. And when half or more of the people we first meet are from the NGO’s fundraising staff it usually turns out that they never fully grasp that the Initiative is not a fundraising effort and rather is something to help them to refine their thinking, refine their efforts towards outcomes and aims, and that the fundraising aspect is a side part, largely to encourage donor engagement. It will be interesting to see if these organizations are engaged enough to make our efforts valuable to them and whether they will put in the significant effort that is necessary.

With those groups that seem dynamic and that we are most excited to work with, the fundraising aspect is at best a side part that they hope will occur but are willing to engage in the process to build capacity.

Monday, November 26, 2007

The NGOs Have to Do the work

We had a follow up meeting in which the NGO did not do much of the internal work we had asked them to do. The result, as we have seen before, is that they essentially asks us to re-run the workshop. While this is helpful and we definitely make progress, it usually results in us feeding the group ideas more than them thinking what they actually believe and are trying to achieve. It also seems to end up with the group taking some of our statements out of context and viewing them as suggestions as to ways they should expand what they are doing. These types of groups tend to see us as advisors or strategic planners – something we try to warn against – whereas the more dedicated groups don’t see us as such.

Sunday, November 25, 2007

Annual Reports Are Useless

Most of the annual reports of the organizations we have looked at offer very little material that is not available on the website. The information on the website is usually easier to access is more current. The annual report's only real benefit seems to be to consolidate information in one place and provide easier access to financials. However, for the better performing groups, the website provides all the same information, if not more, so the only advantage seems to be the financial information. But because financial disclosures are limited to the statutory minimum, they provide little depth as to actual expenditures, whether expenses were double counted, etc. problems we have already found. As such, I am bound to think that they are a total waste of time, more meant as marketing material without much meet. They are useful to get some information or a quick idea of what the organization does or wants to do, but one is better off going to the website. That is not to say that they are all bad.

A few prospective donors have said that they would like to see annual reports to make funding decisions. I think this is mostly from corporate practice and not because anyone actually finds a great deal of value in them.

To be more useful, it would be nice to get more information into the reports regarding strategic planning aims, progress against performance measures, beneficiary voice, and overall strategy. Essentially…less what they are doing and more what they hope to achieve and how they are progressing on that.

Thursday, November 22, 2007

Mumbai is in trouble!

Alex and I attended a conference with high level officials from Mumbai and London, including London Mayor Ken Livingston. We concluded that Mumbai leadership has an unrealistic view about what is happening here and has satisfied themselves by hiring advisers to support their belief that as long as Mumbai keeps on its current path, it will be the greatest city in the world.

There seems to be no plan on how to tackle the problems that are apparent to everyone. In fact, I don’t think they recognize half the problems that there are. And a lot of this, I think comes from a lack of thinking about what they want to ultimately achieve. This is in strong contrast to what the London officials had to say. They saw a financially robust city economy as their vision and made development happen to accommodate that.

Wednesday, November 21, 2007

Article on Giving

I read an article by Alex Hatton (“Guilt by Association,” Charity Times, Jan-Feb 2007. http://www.charitytimes.com/pages/ct_features/jan-feb07/text_features/ct_janfeb07_supfeature3_guilt_by_association.htm.) It is an interesting discussion of how its is significantly more expensive to secure new donors than existing donors and that guilt-based appeals discourage new donors. New donors require more information about how their money is being used and how it is making an impact. They also appreciate open discussions on aims and accomplishments and a focus on hope and progress instead of despair.

Monday, November 19, 2007

Social Exchanges

I’ve read a couple recent articles from Mohammed Yunnis, in which he is calling on the development of social stock exchanges. He supports both the creation of platforms for companies that are spending resources on charitable pursuits, as well as listing civil society organizations that do “good.”

Thankfully, people have created many such social investment exchanges. In addition to GiveIndia, there are several online social investment exchanges. These groups do a phenomenal job and work longer hours than many bankers and lawyers I know to help civil society organizations. So if you are inclined to give, these are all reliable.

1. Bring Light www.bringlight.com

2. CanadaHelps: www.canadahelps.org

3. Changing the Present : www.changingthepresent.org

4. Charity Aid Foundation: www.cafonline.org

5. Conexion Colombia: www.conexioncolombia.com

6. DonorEdge www.donoredge.org

7. DonorsChoose: www.donorschoose.org

8. Give2Asia: www.give2asia.org

9. Give India: www.giveindia.org

10. GlobalGiving: www.globalgiving.com

11. Greater Good South Africa: www.greatergoodsa.co.za

12. Help Argentina: www.helpargentina.org

13. Just Give: www.justgive.org

14. Just Giving: www.justgiving.com

15. Kiva: www.kiva.org

16. Microplace: www.microplace.com

17. Modest Needs: www.modestneeds.com

18. Network for Good: www.networkforgood.org

19. Social Investment Exchange: www.sasix.co.za

20. Social Stock Exchange: www.bovespasocial.com.br

Saturday, November 17, 2007

In case you didn't already distrust MPs...

It turns out that of the 425 MPs, 360 of them list social work as their primary occupation – just giving credence to the belief that many Indian NGOs are just channels to funnel political money or launder graft.

Of course, this is not true for most NGOs, but it is a concern that requires some diligence and gives support to the Credibility Alliance/GiveIndia idea that political affiliation needs to be examined thoroughly.

Thursday, November 15, 2007

Beneficiary Surveys as Enforcement Mechanism

One of the problems with viewing civil society as a marketplace is that it suggests that social exchanges are like stock exchanges and encourages discussion of returns. I thinking focusing on social returns is a good idea and is a good way of explaining what "new philanthropy" is seeking. The problem is that it isn't exactly like a market because there is no enforcement mechanism. There is no penalty if you aren't listening to voices (like your beneficiaries) and it is hard for donors to know whether an NGO is listening to its beneficiary. A third party monitor is impractical and expensive. What we are toying around with is trying to put beneficiary survey information into reports and then educating donors why this information is important. If donors hold NGOs responsible for having high beneficiary feedback "scores", then there is the possibility for cheap self-regulation.

Tuesday, November 13, 2007

Pros and Cons of Government Involvement for Sustainable Development

Indian law requires certain types of aid to pass through the government instead of private organizations. This is most apparent when one looks at UNICEF or World Bank funding, especially for education/child care. I’ve been struggling to determine whether this is a good thing or a bad thing.

On one hand you have a completely different model in Bangladesh. There the majority of funds pass through to private groups. The result is that private development organizations are extremely powerful in Bangladesh and do not have to be reliant on government as much. I’ve read conflicting stories on whether this lessens the sting of corruption, but one could see how it does.

Also, in a country where the government would not otherwise get involved and does not develop some sort of expertise, it is probably better to turn to private organizations.

But in India, where the government has taken the time to care about addressing social issues and has developed a certain amount of expertise (though many would dispute this), the partnership with government is probably very helpful – especially for sustainable development. Lots of the problems that India faces are not regional. They occur throughout the country. But most of the groups tend to focus on regional concerns and try to solve issues regionally before expanding outwards. In such a case, the government has an important role in sharing information and providing a platform to discuss issues. Also, where large scale problems are being tackled – education, trafficking, poverty – without government involvement it is virtually impossible to make large scale meaningful change.

What I need to find out now is what portion of aid is lost in overhead costs by going through the government and what benefit is gained by having the government involved. If the overall waste is large then I may rethink my position, but as it stands now, I think that it is probably a very good thing that the government is actively involved.

Monday, November 12, 2007

Wrong About Strategies vs. Prerequisites

After doing a few more workshops, I think that my initial position on the strategy vs. prerequisites distinction was wrong. It is important to make a distinction between the two because strategies will change. They may not be successful in bringing about the necessary outcome or may have to be changed for various other reasons (e.g., resources, time, change in law). So, if a group lists a strategy instead of a prerequisite, then the map of the theory of change risks having to be changed more frequently than necessary. While the map is supposed to be a “living” document and should change, it should strive to remain as consistent as possible so that all stakeholders understand the larger picture.

Thursday, November 8, 2007

Running an NGO is not your escape route from your current job...

What I am finding is that the best NGO leaders do tend to have some private/business experience before entering civil society. The difference between the good NGO leaders and the mediocre/bad ones, is that the good ones are extremely good. They were not just skilled bankers, financiers, etc., they were likely near the top of whatever organization they were at before. This makes sense – running an NGO is much harder than most private business. Not only does the NGO head have to be the organizations visionary and force it to stay consistent to its goals, he or she is often called on to give advice in everyday problems. As a result, he or she needs to manage macro and micro problems. He or she needs to be a macro-level manager, while providing micro-level input. And if the NGO is really successful, he or she will likely be called on by other NGOs to help solve their problems – which, given how much all of the NGOs need each other to tackle larger issues, means he or she can’t say no to any requests for help. If this wasn’t enough, often that NGO leader will be the only one in his or her organization that is even remotely capable to taking on this much responsibility. So, my point is that just because a person is a successful student or businessperson, does not mean he or she will be a successful NGO manager…to be one you probably need to have been an exceptional student and a phenomenal businessperson.

Wednesday, November 7, 2007

Business Schools in India

I’ve had several discussions with people writing articles on “new philanthropy’s” focus on bringing market ideas to NGOs and civil society in general. While I agree with many of those ideas – like transparency, disclosure of risks and key information, public reports – I am wary that emphasizing market concepts can thwart younger groups from going through the “inefficient” nascent stages of their development.

It is particularly important that people start voicing these types of concerns in India because the larger business culture is very strong here. The day that CAT (business school exam) was administered in India, it was the top story in all the papers and magazines and on TV. In fact, it was the top story for several days. That combined with this idolization of business icons, the prestige attached to conspicuous consumption, and generally all things market and growth oriented could be very dangerous. Not only are the problems I mentioned above a concern, but as NGOs do operate more like businesses and their public/annual reports more closely resemble capital market disclosures, there is a possibility that donors will grow to think that because they have significant business experience it will be valuable for them to opine about the day to day practices of the NGOs they support. While active interest is crucial, I think it is important to remember that the organizations will more often than not know what’s best.

I’ve heard some anecdotal evidence to support this but will track it during the donor-engagement stages to see if it is true – especially for Indian donors.

Monday, November 5, 2007

Cost of Living

The overall theme of our portfolio seems to slowly be coming together – education and care for those children that fall outside India’s prosperity bubble. While India is experiencing a booming economy, it is not filtering to everyone. It is exaggerating the disparity in income and makes the gap larger and larger. What is worse is that in the cities experiencing the most economic growth – Mumbai, Bangalore, Delhi, Chennai, Chandigarh, and Kolkata – the growth hurts those that don’t benefit even more. This was striking in Bangalore, where the IT boom has pushed housing, transportation, food, entertainment, and just about every other cost significantly up. While people making Western salaries and inflated Indian salaries can cope with this, the majority – who do not benefit from this boom at all – are left much worse off because now they have to pay much higher costs with the same salary they had years ago – before the boom. As a result, the fall further and further down the leader and are unlikely to come up – all of which exaggerates the disparity even more.

In our group of NGOs, we have several education and care charities for children who are not able to participate in the elite or better Indian private school. So we have groups trying to reform the public school, creating private schools for slum children, schooling and training disabled children, working with street children, providing care for the orphaned and abused. There are some more that fall outside this group but for the pilot this seems to be the unifying theme.

Friday, November 2, 2007

Audits in India

We have met with a couple of NGOs that have already gone through their own audits before meeting with us. As would be expected some are more useful than others. Most audits are hybrids, but roughly, there seem to be three general types of audits in India.

The first – and most common -- type of audit is a “Financial Audit”. It aims to see that resources are properly accounted for and are used accurately. If the NGO has a limited number of accounts, these generally tend to be good. But if the NGO has multiple accounts and multiple ledgers – as many tend to have – the audits are too superficial to be meaningful. There needs to be a more thorough effort in many of these audits to compare expenditures and revenues across the accounts to ensure that there are not abuses (such as debiting one expense several times or paying salaries multiple times).

The second type is an “Organizational Review” – it tends to summarize what the NGO does and then tries to categories that information into categories so that the NGO can best see how to proceed, use resources, and what activities to more actively pursue. The primary use of this model is that it helps give context to a complicated organization’s operations. It does little, however, to help the NGO reflect on why it is doing something or how it fits into its overall objectives.

The third type is the “Strategic Review.” This audit tries to capture a mission statement and then look at what the group does and project a three or five year plan. While some effort is made at trying to identify the overall outcome the NGO wishes to achieve, it is not usually captured in terms of what is generally achievable. It is often too lofty. As a result, the three and five year plans sound great but are more often over ambitious proclamations than real strategies. They also tend to focus on scaling up without true thought on whether this it is in the organization’s best interest (or if it is, then if scaling up is done in an appropriate time frame or scope) and on increasing fundraising. In fact, almost every one of these “Strategic Reviews” has a sizeable section on increased fundraising.

What I think is the benefit of our process is that it offers very little in terms of advice on what changes need to be made or how to make necessary changes. Instead, it works as an organizational tool by helping NGOs see exactly what they want to achieve and what they will have to do to reach that (practically achievable) result.

This is supplemented by the reporting template Alex and I are developing. The report forces NGOs to identify their main activities, how successful these activities are and the evidence for these results, their overall strategy are following. This helps the NGO see what activities might not fit into their overall goals and where to focus resources. Further, by making sure that the NGOs clarify the overall environment and context in which they are operating, they are forced to make sure there activities are practical. Additionally, we require NGOs to explain and examine their finances more clearly. This works in combination with the organizational reporting sections to make NGOs consider whether they are using resources adequately. Once the report is completed, the NGO not only has a roadmap of how to achieve results it wishes to achieve, but also can see whether its current activities are helping it to reach those results. While we function as a sounding board, we leave the ultimate decision on how to make necessary changes in practices or strategy to the NGO (which best understands how to solve the problem). By doing so, we also avoid some of the really ridiculous solutions we have seen proposed by some outside auditors.