A friend just pointed me to this week’s cover story from the Christian Science Monitor: “Giving Back” featuring 8 social entrepreneurs from around the world. The one from the United States was F.K. Day, founder of the World Bicycle Relief. I got a chance to meet F.K. Day and his wife, Leah Missbach Day, in 2005, not long after they had started World Bicycle Relief. I was impressed with what they had done, and have been pleased to track the growth of World Bicycle Relief over the years.
Indeed, when I was trying to think of a creative example of money poorly spent by a non-profit, I took WBR, and conjured up a group that did the opposite: Sports Cars for Africa. Instead of World Bicycle Relief’s emphasis on using what you know (FK is an executive from bike company SRAM), appropriate technology, training local bike mechanics and even producing the bicycles locally, my hypothetical organization burned through their donations by giving recipients $100,000 sports cars. With low overhead, and high beneficiary satisfaction ratings, though, a casual observer might be gulled into making a gift to Sports Cars for Africa instead of World Bicycle Relief. I hope that you won’t be. Donate to World Bicycle Relief here. See more about the danger of tracking the wrong metrics here at my earlier blog post More on Metrics.
Today we’re looking at an organization that aims to improve life for African girls and give them the means to travel more easily to school or for household tasks like carrying water or firewood, while improving their self-esteem as well. This organization has amazing financial metrics: all of its work is performed by volunteers, and through industry connections and a generous group of founders and officers, they spend nothing on fund-raising. That is, all of the $10 million donated has gone directly to its programs and beneficiaries.
The program staff has established two performance metrics that they report faithfully:
- The amount of reduction in travel time for school and household tasks for the beneficiaries; and
- The satisfaction of the beneficiaries with the service
The ratings on both metrics are amazingly high. Couldn’t be better. Looks like a winning organization, worthy of your support, right?
Before you write that check, you should probably know that “Sports Cars for Africa” has used its $10 million to provide 100 lucky girls each with a $100,000 sports car. The girls do get to school very fast (Metric #1) and are highly satisfied with the organization (Metric #2). But perhaps not what you had in mind?
You’ve probably guessed that this is a fictitious example. But it’s good to keep in mind that as you evaluate organizations, you should look at the metrics they offer. Don’t blindly accept them. Do they make sense?
Organizations respond to the way they are being measured, and may make some strange decisions if the metrics aren’t properly aligned with the real mission of the organization.
If you want to invest in a real organization that has similar goals, but a more sensible approach to meeting them, World Bicycle Relief gives $134 bicycles, not $100,000 sports cars to community health care workers and other recipients identified by on-the-ground NGO partners. They have substantial expertise (founded by SRAM bicycle executives) and train bicycle mechanics to handle repairs locally. They strive to do as much in-country manufacturing and assembly as possible, further aiding the economy. And they do a good job of financial transparency.