Performance and accountability are the subject of substantial discussion these days throughout the nonprofit sector. Government agencies, private funders and non-profit leaders themselves are increasingly focused on taking steps to ensure that we fund programs "that work" and stop funding those "that don't". Last week, I wrote about Social Impact Bonds, a new approach for doing this about which I have serious concerns. Today that I want to share an idea that I think has great promise.
Obviousely, no one can disagree with the view that we should "fund what works." But this statement simply begs the question of what we are trying to achieve. While this may seem easy to determine, in fact it is often not. Most non-profit organizations and programs have multiple stakeholders, each of whom have their own set of goals – goals that are sometimes in conflict, and are almost always different in terms of emphasis, time frame and priority. Balancing the interests of these different stakeholders is one of the key challenges of being a leader in the nonprofit sector.
At the same time, it is precisely this balancing act that I believe drives innovation and ultimately better, and more sustainable, long-term outcomes. Simply put, this complexity mirrors the complexity of the real world so it produces solutions that will work in the real world. Communities and people are complicated. There are no silver bullets or simple solutions to deeply rooted, complex social challenges, and success looks differently to different people. Equally important, all activities and interventions have multiple impacts and externalities – positive and negative – and they all have short term and long term impacts. This is especially true in the community development field where we are trying to have an impact on individuals and families as well as the broader community. I believe that having multiple stakeholders at the table helps to ensure that all of these impacts are considered, and that negotiating these competing interests results in more balanced, creative and effective solutions.
MACDC hopes to promote this framework through our campaign to enact the Community Development Partnership Act. This bill, co-sponsored by Rep. Linda Dorcena Forry and Senator Sal DiDomenico and 46 other legislators, (and modeled after similar programs in other states) would use tax credits to leverage private donations to genuine and authentic community based development organizations, i.e. CDCs. Rather than creating static, rigid, or one-dimensional outcome metrics for the program, the CDPA will use three levels of accountability to ensure the program’s success while maintaining local flexibility and driving innovation.
- - First, and foremost, community members would have a voice because only those organizations with meaningful community representation on their board of directors would be eligible to compete for the tax credits. This helps to ensure that programs and activities funded are relevant and appropriate to the particular local community.
- - Second, state government will have oversight because they will review each application and determine which groups receive an allocation of tax credits. Those applications will specify how the CDC will evaluate and measure success. The state will then collect data and reports to measure progress and outcomes.
- - Third, the CDCs will need to convince private sector donors – corporate and individual – to make donations with the tax credit creating an incentive, but no guarantee, that funds will be provided.
We believe that having three levels of accountability increases the likelihood that the CDPA will be successful as compared to a program that is designed to simply meet the needs of a specific funder or stakeholder. To be successful, CDCs will need to innovate, partner, measure, learn, and adapt. CDCs that don’t will surely lose the support of at least one of their key stakeholder groups – if not all of them – and fall out of the program.
Performance and ensure accountability are core values for MACDC. Look for future blog posts about other ways that MACDC, its members and our partners are seeking to advance those values. And, please, share your own!