Outcome Accountability: How Far Are We Willing to Go?

George E. MitchellCity University of New York (CCNY)

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?

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

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?

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?

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

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.

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?

Conclusion

• Email: gmitchell@ccny.cuny.edu• Transnational NGO Initiative at Syracuse

University: http://www.maxwell.syr.edu/moynihan_tngo.aspx