02/22/2013 10:19 am ET Updated Apr 24, 2013

Scorecards and What We Value

In his State of the Union address, President Obama called for government-provided student financial aid to somehow be tied to the particular value of education at each college or university. This presents a challenge not only to higher education institutions, but to every nonprofit organization. Who gets to define and measure the value of any charitable program? Who gets to stipulate their purposes and assess the performance and the outcomes they deliver?

Although such data are not readily available, we know that the White House believes that how well a particular college or university's graduates do in the job market and how much money they make ought to be an essential part of its just-announced "College Scorecard." We also know that Sen. Marco Rubio (R-FL), who gave the rebuttal to the president's State of the Union, feels even more strongly about the idea and joined with Sen. Wyden (D-OR) to push "The Student Right to Know Before You Go Act" which requires colleges and universities to provide exactly such information.

Given the state of the economy and people's concerns, that makes a lot of sense practically and politically. But should that be the principal measure of the value of higher education? When did we decide that the value of an associate's, bachelor's, master's, or doctoral degree should be quantified and measured as vocational education?

Certainly those who want a nonprofit service should have the option of selecting the organizations they want to use and to make that choice based on their own criteria and good performance data. And donors, as well as volunteers, ought to have similar opportunities in allocating their support, although hopefully they would have a more expansive view than individual service users.

On the other hand, government and organized philanthropy have the obligation to operate with the broadest possible perspective, to understand and appreciate the institutional role, the fundamental societal purposes of charities, and to assess their value accordingly. For foundations and government to delimit themselves to the immediate concerns of a service user is for them to act like a customer who sees nonprofit outcomes as commodities, and to fail in their responsibilities to the larger society.

The purpose and function of higher education, reflected in many colleges' and universities' mission statements, is to do more than to develop the intellect and skills needed for economic success. Part of their role is to build character and moral judgment, to teach civics and engage people in community life, to turn out good citizens active in democracy, to help develop the aware and caring people we want as neighbors. Schooling is about more than vocational education even when it's preparation for elite professions.

Higher education also is supposed to play an essential role in realizing the American Dream; it is essential to our notions of meritocracy and upward mobility. It is the mechanism through which people are to do better than their parents, to climb out of poverty. Yet, as the New York Times noted some years ago, "At the most selective private universities across the country, more fathers [sic] of freshmen are doctors than are hourly workers, teachers, clergy members, farmers or members of the military - combined."

As President Obama suggested in his 2012 State of the Union address, colleges and universities are failing in their societal role of addressing economic inequity. Indeed, according to a College Board study, students with high college-entrance exam scores from low-income families are less likely to complete college than those with lower scores from more affluent families. The Education Trust also found that only five of some twelve hundred institutions of higher education in the U.S. were doing a good job of serving low-income students who matriculated.

Does the proposed Congressional and White House scoring even begin to reflect whether and how well each college or university is advancing economic equity in society? Shouldn't it credit extraordinary accomplishment in building character and morality or inculcating community participation and democratic agency. Quite likely, neither is to be part of those equations.

And similar inadequacies in fully reflecting an organization's purposes and functions can be seen across the entire nonprofit sector. In the rush to outcome evaluation, to assessment and accountability, to pay-for-performance schema, vital elements of charities' mission are omitted - sometimes by nonprofit organizations themselves. Yet, charitable groups quite often seek to do more than provide services as if they were consumable goods.

Nonprofits work to avert problems before they require remedial intervention and to build individual capacity and community vitality so that fewer services are needed. They contribute to a strengthening of civil society and democracy, to increasing civic good and social capital. They strive to inform better policy development and public program implementation resulting in a better quality of life for all of us.

But these things do not often get acknowledged, specified and measured in assessing the value of nonprofit services. And because they do not, they increasingly are ignored by organizations and institutions, as well as by those who are keeping score.

That must change. Unless the full range of nonprofit purposes is included in assessing the value of charitable programs, all but the most fundamental functions will be discounted and marginalized. Everything from higher education through medical research, from daycare and recreation to culture and the arts, will become a basic economic calculus: will the produced, usually individual, commodity be worth the cost? The broader social benefit, the common good, will fade from thought and practice.

We will lose societal impact when we calculate the value of outcomes. Everything will become an individual equation. And as a society, we tend to make such economic calculations on a very short timeframe; we turn away from the long-term investments that will truly benefit the common good in favor of a narrowly-defined short-term individual payout.

Which brings me back to where I started. How do we assess the value of a higher education? How do we, for instance, assign value to a meritocratic success, to the splendid wonder of someone finally pulling himself or herself out of poverty compared to another graduate who benefited from unlimited resources and powerful economic and social networks?

Beyond the actual income for an individual, what is the worth to the larger society of a strong, evidence-based belief in the validity and legitimacy of the American Dream? Doesn't that benefit all of us?

If we care about such things - as especially foundations and government must - we need to accord them value. We must make sure that any nonprofit scorecard goes beyond individual benefit to include measures of broad social benefit. If we fail to build that into our calculus, we will lose the common good and see the world only through the lens of individual profit. How poorer that would make us all.


Mark Rosenman is an emeritus professor at the Union Institute & University, and directs Caring to Change, an initiative that seeks to improve how foundations serve the public.

Versions of this piece also appear in The Chronicle of Philanthropy and PhilanTopic.