The PSV Blog

Current Ways of Measuring Good are Broken

The decisions we make depend on what we measure, how good our measurements are, and how well our measures are understood. If our measurements are flawed, decisions will be distorted. Currently, the metrics on which we base assessments of organizations and programs designed to create social progress are broken. Problems include:

Using outputs as a proxy for outcomes. We track what’s easy to count (the number of people participating), when we should be counting what matters (the changes that are a result of the participation).

Focusing on savings rather than impact. Reducing the amount of time kids spend in foster care has traditionally been measured by savings from stipends paid to foster care parents. However, the far bigger value is the impact on children who spend two weeks rather than two years in temporary, often changing, homes. From increased graduation rates to lower addiction and incarceration rates, there are specific measurable savings from swiftly putting children in a permanent, safe family environment.

Rewarding compliance rather than performance. For example, Charity Navigator, the U.S.’s largest evaluator of charities, rates nonprofits by percent of budget spent on mission versus non-mission costs. This has nothing to do with how effective a nonprofit is, but rather how compliant it is in budgeting. It squashes innovation. Everyone loses.

Failing to account for what would have occurred anyway and overlooking negative impacts. For example, with global warming at a crisis point, ignoring the cost of carbon emissions in measures of social capital provides a false picture of health.

Favoring bright and shiny over effective. Currently, organizations good at promoting themselves attract the most funding, rather than organizations doing the most good. This empowers the biggest marketing departments to make questionable claims about how their organizations are making the world a better place, while denying funding for those that genuinely have good intentions.

Viewing impact through the lens of the funders, when it should be viewed through the prism of the beneficiaries. Similarly, we focus on contributions to participants rather than contributions from participants, measuring the gains program participants receive from contributions without recognizing the gain participants generate for society.

Starting with a bias. We are driven by sympathy, rather than research-backed strategy. Or we assume support of an organization designed to do good automatically results in positive social change. But good intentions don’t always produce meaningful change.

No Context. Until now, there’s been no normative data for benchmarking. So even if you were able to demonstrate that $3 in social capital was created for every $1 invested in Program A, the question remains about how this compares to other initiatives in the same category or market.

We blindly repeat what hasn’t worked because we lack the learnings to apply the next time around.

ProSocial Valuation shifts thinking, helping clients discover the power of their opportunity. Knowing the value of the social capital you create is critical to garnering resources.

The ProSocial Valuation is powered by evidence-backed research on what works, and provides like-for-like comparisons across initiatives. For the first time, decisions on what to fund, where to volunteer and which programs deserve advocacy can be made rationally by determining what’s creating the most social capital for each dollar invested.

Until we start valuing social capital as a known asset with the same gravitas as traditional financial assets, the creators of social good will not reach their potential.