Research based on data from the TNGO Interview Project, as well as independent analysis, suggests that US nonprofits are being evaluated by nonprofit watchdog agencies according to the wrong definition of organizational effectiveness. Rather than evaluating effectiveness based on goal attainment, and efficiency based on program cost-effectiveness, nonprofit watchdogs rely on speculative financial proxies that incorrectly substitute for effectiveness and efficiency. In a presentation delivered during the DMA Nonprofit Federation New York 2010 Conference, I explained why prominent nonprofit watchdogs are barking up the wrong tree and how nonprofits can help correct the discourse about nonprofit effectiveness by generating and disclosing higher quality data about results and cost-effectiveness. Through improved evaluation and disclosure practices on the part of nonprofits, the efforts of some watchdogs to improve their systems could meet with greater success. A draft of the white paper, “Reframing the Discussion About Nonprofit Effectiveness,” was distributed at the conference.
by George E. Mitchell