Winter2007/2008



	Knowledge Letter, Winter 2007/2008
	Friends of the Bridgespan Group, How much is good data worth? If you were to pose that question to the leaders of the organizations featured in this issue of Strategies for Social Impact, the answer would probably be, “It’s priceless.” And they’d be likely to say that even when—or maybe especially when—gathering the data was no small task. That was certainly the case at Our Piece of the Pie^®, where the agency’s senior leadership took on the challenge of developing performance dashboards from three high quality but incompatible special-purpose information systems. Their reward: the ability to allocate resources more effectively at every level, from day-to-day staff schedules to major strategic decisions about which RFPs to pursue. Similarly, robust data about the health of all the state’s residents gave The California Endowment’s board and staff confidence that they were targeting the foundation’s dollars where they were most needed and could do the most good. Data is also the best way to test assumptions and challenge conventional wisdom. Consider “More Bang for the Buck,” which demonstrates that nonprofits really can maintain the quality of their outcomes while reducing the cost. Or “In Search of Sustainable Funding,” which disproves the proposition that putting all your eggs in one basket—relying on one dominant source of funding—is always a bad idea. As always, we invite your comments and welcome your suggestions at feedback@bridgespan.org. Nan Stone The Bridgespan Group			IN THIS ISSUE Bridgespan Perspective In Search of Sustainable Funding: Is Diversity of Sources Really the Answer? Bridgespan Case Studies Our Piece of the Pie^®: From Data to Decision-Making The California Endowment: Sharpening a Foundation’s Grantmaking without Limiting its Mission Data Point More Bang for the Buck: Reducing Costs While Maintaining Quality From Bridgestar.org CFO Fitness Quiz: Are You Tough Enough for the Caring Sector? Whether you are considering becoming a nonprofit chief financial officer or are hiring one, the questions in this CFO Fitness Quiz can help inform your decision. Note: A free registration with Bridgestar is required to view this article. Subscribe to Strategies for Social Impact



		BRIDGESPAN PERSPECTIVE

		In Search of Sustainable Funding: Is Diversity of Sources Really the Answer? By William Foster, Ben Dixon, and Matt Hochstetler
		Beyond high-level, broad-strokes data, there’s not a lot of information available about trends or patterns in funding for nonprofit organizations. As a result, philanthropists and nonprofit leaders have little choice but to make assumptions about funding, such as “having a variety of sources makes for a healthier organization.” A preliminary study of a small number of youth-services and environmental-advocacy organizations suggests this assumption may be true to some extent but incomplete. The study identified a distinct pattern—a “U-shaped curve”—characterized by fewer funding sources at the smallest and largest ends of the spectrum, with a greater mix of funding sources for mid-sized organizations. More generally, it found clear differences in the typical funding mix of organizations depending on their size. Patterns such as these could provide important guideposts for nonprofits that want to build robust economic models.


		BRIDGESPAN CASE STUDIES

		Our Piece of the Pie^®: From Data to Decision-Making (PDF) Alexander J. Cortez and Lianna Vetter
		Data should be a source of strategic value. Too often, it's a source of incomplete or misleading information. That was the case at Our Piece of the Pie^® (OPP), a Hartford, Connecticut-based youth-serving organization. OPP was already collecting much of the data it needed. The problem was that the various streams of data—beneficiary, financial, and operational—were kept in different systems. As a result, OPP’s leaders did not have a way to consider it together to get a comprehensive view of the organization. For example, lacking the ability to integrate a program’s financials with its beneficiary data, OPP was unable to tell if certain groups of beneficiaries were more expensive to serve than others. As a result, it was hard to predict how changes in the organization’s mix of participants (such as a shift towards higher-need youth) would affect its financial position. What they needed was a way to join the data—a system that would make it easy for staff to collect and analyze it. OPP leaders from different parts of the organization had to be able to see the data that was most relevant to them. Then they needed to learn to use that data to drive their programmatic, cost-management, growth, and fund development decisions. This case study illustrates how OPP’s leadership team took control of its data and learned to use it in making better decisions.


		The California Endowment: Sharpening a Foundation’s Grantmaking without Limiting its Mission (PDF) Jehan Velji and Amy Saxton
		The California Endowment (TCE) was created in 1996 with a broad charge: to improve the health of all California residents and also to improve access to healthcare for underserved populations in the state. To that end TCE has invested in thousands of organizations as well as in research, convenings, and advocacy work. As a growing body of experience has provided TCE leaders with a deeper understanding of health issues in California, they have used discrete planning efforts to focus their work more sharply. Most recently, in 2006, they set out to develop a 10-year strategic plan, asking themselves: How can we stay true to the broad values of our mission and at the same time be increasingly purposeful about our activities to ensure the greatest possible impact? And how can we measure that impact more effectively so that the difference the foundation makes is demonstrable? The result: TCE’s leaders have become more explicit about the foundation’s intended outcomes and also about the way in which they expect their efforts to effect change. They’ve also increased the foundation’s ability to connect the dots between the specific objectives of a given grant and its effect on the larger issue of health.


		DATA POINT

Click on chart to enlarge		More Bang for the Buck: Reducing Costs While Maintaining Quality Are there nonprofits that have been able to reduce their costs while maintaining or even improving their outcomes? If so, how did they do it? To begin to answer these questions, we undertook a small-scale research project, whose results are forthcoming in the spring 2008 issue of the Stanford Social Innovation Review. We focused on single-program, direct-service nonprofits in the fields of youth development and education. Within this group, we first identified nonprofits with a reputation for achieving results and managing costs. For each of three high-potential organizations, we collected and analyzed a minimum of five years worth of cost, output, and outcome data. We also conducted detailed interviews with each organization’s executive director, chief financial officer, director of research and evaluation, and other key individuals. Our findings: Such gains can happen. But they don’t just happen. Jumpstart, Teach For America, and Year Up all succeeded in reducing the cost to deliver a given outcome (see accompanying chart). They did so by standardizing best practices, investing in essential people and processes, managing costs, and measuring progress. Doing these things can be especially challenging for nonprofits because of the nature of their work and the sector’s prevailing funding practices. Nevertheless, these three organizations all found ways to overcome the obstacles and multiply their impact.

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