By Kevin Beerstecher
Does hedge fund experience really qualify analysts to judge domestic violence prevention organizations?
During a lecture delivered by Princeton’s Peter Singer at New York University this spring on the importance of increased giving, something interesting happened. One of panelists put forth the idea that many nonprofits are poorly run and have no demonstrable results, and thus do not merit donations.
But how did the panelist reach that conclusion? What statistics were analyzed? Unfortunately, much of the available analysis currently focuses on the finances of the nonprofits only, not on the quality, specifics, or difficulty of the work.
The nonprofit community deserves the effective evaluation that is crucial to helping donors make their decisions. But this information should be gathered by individuals or organizations with awareness of the communities being served and the services being provided.
Increasing childhood literacy may have a different cost structure than bottling Pepsi, and the analysts doing this work should be experienced in the fields they are evaluating. A mistrust of the nonprofit community, the process of giving, and faith that this work is effective is spreading as a counter current.
Imagine the impact of scandal involving an analytic firm with a checkered background. Without checks and balances into the backgrounds of the nonprofit analyst, this distrust can only grow. And without evaluation standards focusing on specific communities and their needs, analysis will only be flawed and misleading.