WASHINGTON: Social worker puts nonprofits to test

OPINION/ANALYSIS:

Few things are worse than having to give up the thing you love to do most that thing, that innate gift for which you are certain deep in your bones that you were born with special skill sets to do. Sometimes, however, that personal sacrifice is for the greater good.

For Steve Butz, that special talent was working one on one with troubled Maryland juveniles. But the former social worker, like many, set aside his personal desire to help one child at a time to develop a system that he hopes will serve many more.

“It very much tormented me to get out of doing what I loved doing,” Mr. Butz said. Even though he has helped more than 1,600 nonprofits improve their service delivery through his innovative technology that demonstrates their impact, he asked himself aloud, “Have I had a wider and deeper impact? I’m not entirely sure. I still wrestle with it.”

Mr. Butz is a founding member of the Working Group for Effective Social Investing (www.alleffective.org) and founder of Social Solutions, which provides software that lets nonprofits “track, measure and analyze their efforts as they relate to outcomes.”

“Foundations absolutely have to be held accountable,” Mr. Butz explained, because, in part, they enjoy considerable tax benefits.

All too often, however, nonprofits are “all about counting stuff and not measuring stuff,” he said.

Whether an organization serves 10 people or 20 people, how do you know which one “had a better impact on the people you touched?” he asked. “You have to measure what you’re doing.”

Mr. Butz’s statements come amid a brewing controversy in the nonprofit sector about just who should be the recipients of charitable giving in these recessionary times. A recent report by the National Committee for Responsive Philanthropy, “Criteria For Philanthropy at its Best”, noted by the Chronicle of Philanthropy, urged grant makers to give at least 50 percent of their funding to low-income or designated ethnic and marginalized groups.

Some funders and donors have balked, saying the committee’s charge is an attempt at “political correctness,” and others say their emphasis may end up hurting the people this group intends to serve.

Mr. Butz walks a center line on this distribution issue. “If there is a constriction of funds, it ought to be the organizations that can prove their impact that survive, and I really care about that,” he said. “When the winnowing takes place, I want the organizations that can show their impact to get the money.”

But, he added that “it’s hard for me to position myself against anything that calls for more accountability from foundations.”

Mr. Butz predicted that “eventually, regulation [of foundations] will come.”

The larger question is “whether or not they’re creating social value.”

Next month, leaders in the nonprofit sector in the Working Group for Effective Social Change, which Mr. Butz helped to establish last year, will meet “to develop a tool for individuals and organized funders to determine where their donations will be best spent.” Their goal is to “improve the flow of funds into the sector by creating a set of standards by which organizations will indicate their likeliness to generate social value.”

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