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Decline in Giving to Human Services Means Nonprofits Must Improve

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About a month ago Giving USA released a report on charitable giving in 2010. The report found that on the whole charitable giving increased modestly in 2010 relative to the prior year.

While most in philanthropic circles received the report with guarded optimism, the report had decidedly bad news for organizations in the human services field. From 2009 to 2010, giving to human service organizations actually decreased 5.6%. So while those concerned with philanthropy might have seen some silver lining, or perhaps downright good news in the numbers, from where I sit the findings were all bad.

You see, I'm not in the charitable sector, I'm in the ending poverty business. And while demand for social services has logically increased during a prolonged, hopefully not structural loss of American economic prowess, charitable giving to poverty focused organizations has dipped in tandem.

The funding environment is not going to improve any time soon, and if our economy does suffer a structural shift, it might not ever. Human services has never been the sexy cause of affluent philanthropists, who tend to favor health, arts, and higher education. Indeed, charitable giving in human services is largely driven by middle and lower-class households. Rounding out human services is government funding -- a lot of it. Of course, that funding is being cut back substantially as governments slash budgets to stave off default.

The stark funding reality in the face of higher demand leaves only one choice. And no, that choice doesn't have anything to do with $3 dollar Twitter challenges and a hollow promise of social media fundraising success.

We need to get real, and getting real means doubling down on achieving social impact. The only way to do more with less is to get more efficient. Efficiency, of course, cannot be discerned without reliable ways of measuring if what we do actually works.

Housing First, which advocates placing chronically homeless persons into housing rather than trying to treat them while living in the streets, caught on as a solution because it demonstrably houses hurting people while simultaneously decreasing the social cost of homelessness.

This is the kind of innovation we need to pursue, one that is driven by facts and inherently measurable. Sense we can measure the effectiveness of Housing First, we can regularly monitor whether the strategy actually makes social and economic sense. Discerning both the social and fiscal impact of any program must be a prerequisite, especially as funding gets increasingly more difficult to come by.

Ultimately, the changing economic landscape necessitates a shift in the way the social sector operates. I'm afraid the over-emphasis on online fundraising and corporate media challenges only serves to distract from the stark truth; it's time we hunker down on identifying what works, and cutting what doesn't.

Of course, if we are to focus our efforts only on solutions that work, we'll need better ways of measuring success.

Measurement though, I've come to learn, has less to do with a solid set of equations and more to do with an organization's culture. Historically, our sector has a culture of emphasizing increasing revenues over monitoring impact. In the current funding environment, that strategy no longer cuts it.

If our ultimate goal is to end poverty, we have to face the fact that growing the funding pot is not presently a strategy we can pursue. Instead, we will have to do more with less. In order to do that, we have to focus on what works, seriously evaluate our own efforts, and have the courage of our convictions to put the needs of suffering people above the monetary ambitions of our interventions of choice.