Clarity. It’s the biggest difference between corporations and non-profit organizations. Not the profit motive or market forces or greed. The key difference is clarity.
Success for a corporation is profitability over time, unambiguously displayed on the “bottom line” of the P&L statement. Success for a non-profit organization is achieving its mission and vision, or making a meaningful contribution towards that goal. Successful corporations have meaningful and inspiring mission statements, whose purpose is to help those corporations achieve greater profitability, greater success. Non-profit organizations pay close attention to their bottom line as well (revenues vs. expenses, the non-profit equivalent of P&L) because managing that bottom line is an essential element of achieving their mission and vision.
At precisely this point, we see the impact of clarity. Financial accounting is fiendishly complicated for a large transnational corporation. But profit is measured according to strict standards and verified by third parties with a vested interest in ensuring that the rules of accounting are rigorously and consistently applied. Profit is recorded in currency, and the profitability of one company can be compared to any other company in the world.
But how does one quantify social impact? The most complicated accounting scheme is orders of magnitude simpler than measuring social impact. And comparing across sectors? It is not even imaginable. How does one compare the worth of providing a quality education to 100 urban American youth with decreasing the size of the Texas-size island of trash drifting around the Pacific by 50% with teaching peacebuilding in South Sudan (which may or may not prevent a bloody civil war)? Generic units of social good (the non-profit equivalent of currency) are impossible. How then can we measure success?
Make no mistake, there are a powerful set of forces pushing for measurements of impact, both internal and external. Well-intentioned professionals, often forgoing more lucrative opportunities in order to make a difference, want to know that their work is making a difference in society. They want to understand that change so that they can make it deeper, broader, and more sustainable. Non-profits desire to allocate resources to provide the maximum benefit, while minimizing risk and uncertainty. Is addition to the internal forces, there are powerful external forces at work. Charitable donations function as a market, as do grants. Both current and prospective donors demand proof that their funds will be used effectively.
For a variety of good reasons, non-profits are attempting to measure their social impact just as their for-profit cousins measure profit. But the problem is much more difficult. Humans are unique and unpredictable. Give one man $10 and he buys food for his family. Give the same man $10 a week later and he goes on a daylong drinking spree. There are too many interdependencies, too many unintended consequences. The problems are numerous and well-documented. So a comprehensive measure of social impact is practically impossible. But non-profits can capture certain tangible, well-defined impacts, e.g., the increase in profit from improved agriculture techniques or the decrease in maternal mortality after the construction of a new hospital. Measuring these types of outcome is difficult, time consuming, and expensive, but it is possible.
The field of measuring social impact is still in its infancy. It is urgently needed, and vast resources are being invested in its development, but the difficulties are real and undeniable. “I have been struck again and again by how important measurement is to improving the human condition (Bill Gates 2013).” It is the pressing issue in development.
In this landscape, we find the non-profit dedicated to integral mission, the proposition that social and spiritual development can and should go hand in hand. All of the same forces are pushing IM organizations to measure their impact. The only difficulty is that their impact is not only social, but spiritual. If anything, there is even more urgency in measuring spiritual impact. After all, “For what is a man profited, if he shall gain the whole world, and lose his own soul?” Unfortunately, the difficulties surrounding spiritual impact are far greater than those around social impact. The next few posts will attempt to address the issues and possibilities inherent in attempting to measure spiritual impact.