Two recent articles point to the emergence of something I have been waiting for…philanthropic organizations recognizing and even publicizing when they fail.
In my years working in the non-profit sector, I developed an ever-expanding wish list of things I would change. At the top of the list was the donor-fueled perverse incentive structure. Under the guise of not wanting to upset donors non-profits consistently deny themselves the opportunity to innovate, expand, improve their outcomes, and, through that greatest market information mechanism, failure, come to know how they could have been better.
The recently launched website, Admitting Failure,
is making a go at tackling this seeming endemic problem. Their page says it all: “By hiding our failures, we are condemning ourselves to repeat them and we are stifling innovation. In doing so, we are condemning ourselves to continue under-performance in the development sector…Competition for financial support in the aid sector has resulted in a ‘worst practice’ – secrecy. This site and those who support it are attempting to correct that error, and create a best practice of openness, transparency and honesty. We’re all in this together. We’re on the same side in the fight against poverty, inequality and unnecessary suffering in too many forms. Let’s admit our failures to find greater successes.”
Another recent article from The Chronicle of Philanthropy details a number of organization who were chartered with self destruct buttons…essentially an organizational death date. How do incentives change when you know that you only have a limited number of years to make your impact? I could see it going a couple of ways. What do you all think?
All in all I think this is a healthy trend and I am encouraged by it. The economic system which allowed for $217.3 billion to be spent on specifically-charitable endeavors in 2009, is one that thrives on failure. It is about time those charity organizations get the message.
A closing thought:
We are all doubtless bound to contribute a certain portion of our income to the support of charitable and other useful public institutions. But it is a part of our duty also to apply our contributions in the most effectual way we can to secure this object. The question then is whether this will not be better done by each of us appropriating our whole contribution to the institutions within our reach, under our own eye, and over which we can exercise some useful control? Or would it be better that each should divide the sum he can spare among all the institutions of his State or the United States? Reason and the interest of these institutions themselves, certainly decide in favor of the former practice.
Thomas Jefferson
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