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Outcome Based Giving

December 7, 2008

One of the items on The Foundation Center’s commentary page is an interview with Paul Brest, President, William and Flora Hewlett Foundation, entitled Smart Philanthropy in Tough Times. He and Hal Harvey, a former Hewlett Foundation colleague, have written a book called Money Well Spent – A Strategic Plan for Smart Philanthropy.

One of the goals of the book is to encourage philanthropists and would-be philanthropists to adopt strategies that are outcome and solution-focused. According to the interview, the book lays out a framework that has a number of elements, including the need for clearly defined goals and a theory of change, the importance of tracking outcomes and making mid-course corrections, and publicly stating and sharing your findings as well as failures. In fact, on the discussion board of the website that supports the book, there is reference to “calculating the expected return of philanthropic investments.” It does not lead to any content, but it does seem to be a concept support by Brest and Harvey.

The idea of seeking a “return on investment” in giving is not a new one. As mentioned in the interview, it is a concept that often receives a lot of resistance from those in the not for profit world. I generally think the idea of a solutions-based strategy is valuable. The current ROI models, however, are not adequately equipped to capture not for profit sector success. So, in my opinion, until someone develops a model that is tailored enough to measure outcomes but accommodating enough to measure solutions across a very, very broad spectrum, qualitative and not quantitative tools will have to rule the day.

What do you think? I would love to hear from those of you who believe an “ROI” model can be applied to giving, as well as from those who are vehemently against it. Anyone out there who has used an ROI paradigm when giving? Was it successful?

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