With Charity for All by Ken Stern, part 2

 

Often, as donors, we make a donation and then don't think about a charity - and what it does with our money - until we hear from it again. Donors should care about what happens after we donate, and Stern ably shows why. We should care because if we don’t care, then charities won’t care. They’ll continue to raise money, but may become bloated and unresponsive, like the Red Cross after Hurricane Katrina. Or they’ll keep on doing the same thing. What Stern could have addressed better is the reasons for the inertia. One reason is structural: restricted funding streams make it very difficult for charities to function differently, or respond to emerging needs. Our system is extremely inefficient, and Stern reminds us that it results in economic costs (for all our generosity a lot of people in the US live in poverty), increased competition for charitable dollars and confusion on the part of the public. But it’s also because charities are often ineffective at measurement.

Measurement, if done well, is exacting, difficult, time-consuming, and expensive. It may tell the managers of a charity something they do not want to know, as in the DARE example. Success means different things in different contexts, and coming up with a definition forces managers to grapple with existential questions: what does it mean to say that a charity, NPR for example, is successful? What about the Metropolitan Opera?

Most of all, though, measurement is expensive. Studies that follow many people for many years, like the High Scope Perry Preschool Studies of the long-term effects of early childhood education, are labor-intensive. It takes staff long hours to track down individuals, collect and analyze information, and explain to managers, boards and funders what a study means. And once it’s done, the analysis is not static. If you reach your goals, you have to reset them. If you don’t, you have to figure out why you did not, and whether you have set the correct goals in the first place.

Not many charities can afford the investment in staff, follow-up, and data analysis a good study requires, but a few do. Moreover, though Stern does not discuss it, many foundation and government funders have been demanding outcome measures as part of their contracting process over the last decade. Unfortunately, because a funder can require outcome measures only for the program – or part of a program – it is funding, the result can be fragmentation, of efforts, and of understanding. And when a charity is providing similar but not identical information to another funder opportunities for manipulating the reports may be irresistible. Better accountability efforts by funders and board members are also necessary.

Stern, as befits the former CEO of NPR, tells a good story. He reveals a series of structural issues around the charitable sector: low barriers to entry into the charitable field mean that almost any cause or event, like a college town beer festival, can become a charity. Often executive salaries are high, though they are usually lower than those of executives managing comparably-sized private businesses. And “crooks gravitate to crises,” Stern says. After the Haiti earthquake, scam artists sent out hundreds of fake appeals on Facebook, Twitter, and by e-mail. Stern reports that the FBI estimated that more than 2300 fake charity sites solicited donations after Hurricane Katrina. Lately a disturbing trend that Stern calls celanthropy – celebrities setting up charities – has arisen.

Stern doesn’t really distinguish between charities that provide social services from charities, like colleges, that can be said to serve donors. Their operations are very different, even if their tax status is similar. Stern doesn’t fully piece his arguments together. If charities had some kind of normal life cycle the way private businesses do, for example, government agencies might have the time to focus on the egregious cases. While Stern describes failed efforts to write sunset provisions into the charities laws in the 1970s, he never fully circles back to make the point.

Instead, Stern concludes that as governments retreat from supporting arts and social services donors have to be willing to invest more in charities, not less, and to invest differently. He identifies several private (and charitable) programs that create and enlarge effective charities by providing multi-year grants and consulting services, urges that their work be expanded. This kind of social entrepreneurship very rare in US, and by itself is probably not enough.

Stern’s point would be considerably stronger if he had addressed the many new ways government is providing and funding social services, and recognized the promise these developments hold for the charitable sector. To give just one example, last year the federal Center for Medicare and Medicaid Innovation offered a competitive grant seeking innovative service and payment models for health care. Huge amounts of data are now being collected about social services (even the foster care system in New York City has automated, on-line records). Jim Manzi, in his book “Uncontrolled,” (Basic Books 2012) (my review is here) suggests establishing an agency, akin to the NIH, that can oversee and fund the design and interpretation of randomized social policy experiments, harnessing the power of big data for social services.

Stern also could have engaged usefully with the new funding models social entrepreneurs have developed. Social impact bonds, in which a government contracts with a private bond issuer to pay for services based on outcomes or achieving performance targets, have been used in the UK and are starting to be used in the US. The bonds raise enough money for a rigorous program evaluation – and payment depends on success. Once results become available, effective programs can be ramped up quickly, while ineffective ones can be stopped. Health impact bonds function similarly, by providing preventive health care services. In his book “The Non Nonprofit” (Jossey-Bass Books, 2012) (my review is here) Steve Rothschild describes how his Minnesota charity used data to show a return on government and foundation investments, creating economic value from social benefit. Rothschild has now expanded the concept into something he calls Human Capital Performance Bonds, which operate like social impact bonds except that a government entity issues the bonds.

We have different kinds of charities in the US – large arts organizations, family foundations, tiny programs run out of church basements. They enjoy different funding mixes, ranging from almost entirely government funding to entirely private funding. “With Charity for All” raises some important issues about charities, their effectiveness, and our unique blend of public and private funding. It also includes some useful suggestions. But without a more analytical look at how different kinds of charities operate we, like the charities Stern describes, are going to continue doing what we’ve always done.

This is the second part of a two-part review. You can read the first part here. Yesterday, I briefly posted an incorrect version of Stern's name. I regret the error and have corrected it.

"With Charity for All" by Ken Stern - Part I

 

Yellow wristbands. Lists of donors in a program or report, categorized by donation amount. Names on buildings, stadiums, or rooms. Charity is large and public in the United States. In his timely book “With Charity for All” Ken Stern, formerly the CEO and COO of NPR, reports that 1.4 million foundations, philanthropies, and charities exist to accept our donations. Charities, also known as not-for-profit corporations, dominate education, health care, the arts (including museums and orchestras), environmental groups and social services.

Charity has been part of American life since the Pilgrims landed. Stern estimates that the sector adds up to 10% of the US economy today. Stern reports that in 2011, we gave nearly $300 billion to charity, with the largest share going to religious and educational institutions. Charities employ 13 million people (an additional 61 million people volunteer) and rake in $1.5 trillion in revenues each year, including approximately $500 billion in government grants that pay for services. And that’s before we think about the tax expenditure – what it costs the federal and state governments in taxes it foregoes when you and I deduct our gifts from our income when we calculate our taxes. But what are we getting for our large investment? What should we be getting? A third question, how can we tell, is implicit in the first two. Stern does a good job of explaining the context and importance of these questions. He could have gone farther in answering them.

Stern vividly describes the development and broad reach of charities in our country. Giving expanded from the religious to the private sector when the 19^th century robber barons, having made their fortunes, made substantial gifts to their communities: libraries, universities, museums, cultural institutions. Endowments seem to have kept the institutions operating for half a century. In the second half of the 20^th century we enacted tax policies that encouraged giving, and governments transferred funding and operational responsibilities for social services to private entities. The number of charities took off.  Unfortunately, the amount of government oversight did not. In recent years, Stern tells us, the IRS has granted 99.5% of the applications for charitable status under the Internal Revenue Code, which allows donors to deduct contributions. Most state Attorneys General require at least registration for charities to operate within a state, though it’s unclear how much other monitoring goes on.

Stern also addresses the challenging question of why we give. He describes the impulse to donate as a complex mixture of altruism and the possibility of obtaining personal benefits (remember those wristbands). Stern reports finding no study that explains donor behavior. The one thing that’s clear is that we respond to stories.

[The donor] would hear a story of need, often through the media or through her network of friends and associates, and a check could follow within hours. This method of giving is in fact the norm for many donors: reactive to news and events, and responsive to individual stories and needs. It reflects the intimate and individualistic nature of giving in this country. . .

As a result, he says charities hone their narratives, not their services. “Charities know that they are rewarded not for finding cost-effective solutions to problems – nor solutions to problems at all – but for finding ways to personalize, humanize, and convey needs.”

Stern’s conclusion that charities focus on stories may be true for fundraising, but it is not true for management. For years, as Stern acknowledges, charities have been measuring their services. Accrediting agencies want to see a robust measurement program, including outcome measures, as do many funders, both foundation and government. It’s just we donors who often ignore the results. Stern uses the DARE anti-drug program as a prime example. Developed in the 1980s, DARE brings police officers into classrooms to educate middle and high school students about the dangers of drugs. Despite many studies that show DARE does not work, the program is still going strong – perhaps because it provides funding for several thousand police officers. DARE dismisses the research studies in favor of anecdotal evidence, but Stern exaggerates when he concludes that the entire sector suffers from a “medieval aversion to scientific scrutiny and accountability.”

Deciding what to measure can be a hurdle. It’s tempting to use measures that are easy and accessible. Test scores for elementary and middle school students come to mind. They are certainly a good measure of each child’s achievement at a particular point in time. There is even substantial evidence that SAT scores, especially in combination with grades, can predict a student’s first year college grades. But they are not the best measure of a teacher’s effectiveness, only an easily available one.

Unfortunately, measuring the wrong thing can result in misallocated resources. Stern’s example here, prevention of waterborne diseases in developing countries, is instructive. Water-borne diseases are endemic throughout the developing world, and digging a well feels like the obvious solution. Donating to support new wells is an understandable impulse, and Stern shows that the apparent simplicity of the solution increases the appeal. But, he asks, if the solution is so easy, why are waterborne diseases still occurring? Because each well requires a pump, and each requires maintenance. Stern points out that water charities don’t have the expertise, or the intent, to deal with the long-term problem of maintenance. In any case we donors don’t want to hear about it. We feel good when we give, and we don’t often care about what happens next.

This is the first part of a two-part review. 

Sharing information

I've been thinking a lot over the last couple of days about the importance of sharing information - mostly in the context of measuring services, something not-for-profits should get better at doing. But towards the end of the day I picked up this morning's paper, and came across this article, in which the NY Times reports about the increasing safety of commercial airline flight. Why? There are two reasons cited: one is an improvement in engineering.

Planes and engines have become more reliable. Advanced navigation and warning technology has sharply reduced once-common accidents like midair collisions or crashes into mountains in poor visibility.

But the other is a change in attitude: airlines are sharing information about near-misses, and a prevention mindset has taken hold:

[A]irlines and pilot groups have stepped up efforts to share safety concerns through a series of voluntary programs. Airlines agreed to participate after obtaining assurances that the information would not be used to discipline them.

An F.A.A. Web-based system, created in 2007, now includes information from 44 carriers. The result is widely viewed as successful, spawning an attitude that allows hazards to be identified before accidents occur.

The F.A.A. and airlines now systematically study data from flight recorders to analyze common problems, like finding the best angle of approach and speed to land at airports with tricky wind conditions.

Managers are often afraid of what they're going to reveal to regulators or competitors if they share their data. But information that's not available means that, well, no one can learn from it. It's hopeful news and a good piece of reporting. 

"God's Hotel" by Victoria Sweet

Update, August 20, 2012: For an insight into which direction Big Medicine may be moving, see Atul Gawande's article "Big Med" in last week's New Yorker. (As of this writing it's not behind a pay wall but that may change.)

I am a person who believes in using numbers to understand and manage programs, and who regularly asserts with some confidence that anything can be measured. And that those measurements can be put to work constructively. So it was with an increasing sense of discomfiture that I read Victoria Sweet's wonderful memoir, "God's Hotel." Sweet, a doctor and medical historian, worked at Laguna Honda Hospital as it made a difficult transition from hospital to modern health care facility. When Sweet first started working there Laguna Honda was one of the very few descendants remaining in the United States of 18th and 19th century almshouses that provided care for the chronically disabled. It had open wards and lots of nursing care, almost no computers, and very few departments - doctors, not techs or specialists, read the x-rays they had ordered. By the time she ends her book, several investigations, lawsuits, and one Ph.D. later, it had become a modern facility with private rooms and many administrative staff including utilization managers, but fewer nurses. What happened at Laguna Honda is only one small ripple of a much larger wave social changes playing out in the country, but seeing the jolting as doctors and patients moved from backwater to modern medical center is instructive.

Sweet pairs the story of the hospital's move forward into her own explorations back in time, into the world of premodern medicine, or medicine as it had been practiced for most of history through the end of the 19th century. Her particular focus was Hildegard of Bingen, a 12th century mystic and author of various medical texts. Working at Laguna Honda, Sweet learns the virtues of caring for the whole person, the body, and also what she thinks of as the anima, the force that animates the body (in the premodern sense). "Even when there is nothing to do for a patient, there is something to do," she says. Her example is a new pair of glasses. Along the way, Sweet explores the history and development of hospitals, from medieval monastery hospices for the poor through de-institutionalization to our modern tertiary care centers. Sweet argues that the old system had some virtues that have been lost in the transition.

And what are those virtues? Things that we all think we need more of: time, peace and quiet in which to heal, good food, and, well, sex. Medieval thinkers tried to keep the humors in the body in balance, and as she learns more, Sweet expands the metaphor. If you think of the body as a plant, the immediate environment is the garden, and the garden and plant contribute to each other's equilibrium. After finishing her doctoral work, Sweet celebrated by following the medieval pilgrimage route from Le Puy to Santiago de Compostela. Along the way, Sweet thought about her often difficult patients. Her lessons are several: hospitals are open to those in need. As a doctor, she provided care. Following the pilgrimage route, Sweet became the stranger experiencing hospitality. This will come in useful, as eventually everyone, including doctors and hospital visitors, will become a patient.

Sweet brings her garden metaphor into work with her. Laguna Honda provided care for the indigent, the homeless, people with complex triple diagnoses of mental illness, drug addiction, and the complex medical problem that had landed them in the hospital. Often, patients had no home to go to. Sometimes they had partners or street friends who took advantage of them; they smoked and drank illicitly even at Laguna Honda. These were not model patients; they were not easy ones. But the hospital allowed doctors lots of time, time to sit and reflect, to spend time with each patient, which Sweet explains often gave her the time to find a diagnosis lurking among all the information in the chart. Time also gave patients time to heal. But time is the one thing that modern medicine doesn't allow, at least time in the hospital: it's too expensive. Unfortunately, and this is where things become uncomfortable for the analyst, time was one of the first things to be eliminated. Face-to-face contact was another victim, replaced by paperwork: forms, procedures, policies.

And forms, procedures, and policies all have their place, as does aggregating data about individuals. The changes were hard on everyone; as Sweet puts it, "the practice of medicine had become the delivery of health care." It's hard to argue with that conclusion. But I think there is some place for worrying about outcomes. There's a difference between counting units of service for their own sake, and counting something  -- the output -- as it contributes toward an outcome you are seeking. It's possible that at least some of the work Sweet describes was about outputs, without outcomes. Second, there's no use in developing outcome measures without thinking about the context in which the work is taking place. Some of the patients discharged under the new managed utilization regime returned, sicker than before. Others were never heard of again.

Everyone who has ever been a patient, or known one, should read this book. At the moment, administrators are in control of hospitals, but perhaps the pendulum will swing again. Taking the long view, I will give Sweet the last word:

It was true that medicine and nursing and administration had always been at odds . . . but then I remembered what Florence Nightingale had written about the struggle between medicine and nursing and administration. That struggle was irresolvable and should not be resolved, she said, because it was in the patients' best interest. If medicine ever won control of the hospital, too much would be practiced on the patient; if administration, too little; if nursing, medical progress would be curtailed in the interest of the spiritual and emotional care of the patient.

There's a nice slideshow of images from the old Laguna Honda hospital here.

Image above via http://jsri.jp/English/ojo/2008/sanfran/zenhospice.html

Self quantifiers

Here's a roundup of work some people are doing collecting data about themselves and blogging about it. I'm not entirely sure self-quantifying is the best idea as I can see several data-related problems (how do you really figure out many calories you've consumed? What if you decide to ignore that second handful of potato chips?) I'm not going to address the personality issues, but fortunately, someone on Brooke Gladstone's "On the Media" segment about the phenomenon stated that some people see self-quantifying as narcissism. Practitioners see it as self-improvement. Another  person on Gladstone's show said, "Data plus information compiled and organized turns into knowledge. It makes self-improvement inevitable. And I like that."

There's something of a trend becoming evident. Last month, The Atlantic published an article "The Measured Man," about the astrophysicist/computer scientist Larry Smarr's efforts to record and then exploit the data about his bodily functions. (He goes pretty far, perhaps farther than most.)

There are lots of blogs about this issue. A useful one is called "My Year of Data." It's useful because the blogger, Chris Volinsky is a statistician and because he recognizes how measuring what he's doing may change it. And he has made his data available publicly, so you can download and analyze it too.

For a how-to, you can check out the Quantified Self blog. 

And that screenshot up at the top? That's the work of Nicholas Felton, a designer. It's beautiful data visualization, and he has posted several years of it, each different.