The Charitable Measurement Initiative: Concerns about Unrestricted Funding

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.

Saturday, February 2, 2008

Concerns about Unrestricted Funding

Another concern that we have heard several times is that unrestricted funds often lead to misuse, especially duplicate allocations (where more than one donor is given reports of the same project). We have heard stories of where this has happened with some of the most reputed large NGOs.

In its most innocent form, it is done so that funds earmarked for one project are used temporarily for another and later when additional funds come in, they original project will be completed. This happens most often when an NGO has definite income coming to it, but because of some problem with a project, is forced to scramble a little. The more serious form is outright fraud.

We do not approve of either of these forms. What we want is open discussion and some element of unrestricted funding that allows for discussion as to what needs to done to solve social problems with flexibility to cope with problems that pop up.

Like we mentioned in our last post, we are seeing a strong tension between unrestricted funds and honest usage and reporting. Based on what we are hearing, at least initially, there will have to be some form of restriction.