Are we dropping the bag in the lost and found?

Sean Stannard-Stockton, author of the wonderful Tactical Philanthropy blog, made a characteristically insightful comment on my “Create your own reality” post.   It is in a similar vein as Nathaniel Whittemore’s comment here, so I feel like I haven’t been nearly clear enough in some recent posts.  So here goes.

Sean writes:

Sasha, it seems to me that you had a ton of tools at your disposal to find the mysterious Australian. What if instead your best bet was to just drop the bag off at a lost and found. That wouldn’t have made you feel as good because it was not just the act of trying to help that made you feel good, it was your success in helping.

That desire for success is what is driving “increasing donor demands for objective data.” Philanthropy isn’t just about trying to help, it is about actually helping.

15 years ago, you didn’t have all the technology tools you mentioned in the post available to help track the person down. That’s where we are today in philanthropy. We want to help, but we often don’t know how to do it effectively.

The passion behind philanthropy is not at odds with the technical, data driven discussions. The passion is driving those discussions.

Yes, yes and yes.  I totally agree.  So what am I getting at?

1. Yes, the passion is behind the discussions about data and creating measurement tools for the sector.  This is totally, completely necessary, which is why I’m hugely enthusiastic about the work that Acumen Fund is doing with the PULSE tool as well as other similar efforts in the sector.

2. My question is more about how people really make decisions when they allocate philanthropic dollars.  I’m skeptical not because of anything I think about philanthropy or the nonprofit sector (though measuring the changes we are trying to make is harder than in most sectors, I would argue).  I’m skeptical because I see other sectors that have much much better data, and I don’t see that data playing nearly as big a role as one would hope in driving decisions and dollars.   My front-and-center example? The mutual fund industry, in which individual investors make very irrational decisions, in which data on fees is available but somehow doesn’t seem to impact much at all, and in which intermediaries (salespeople) have a very big incentive to meet their own sales goals and divert people from making optimal decisions.

So yes, absolutely, let’s get better data and let’s start using it.  Let’s develop a common vocabulary and let’s put it front and center on all of our materials, so that the most effective organizations (no matter how small or obscure) rise to the top and attract more philanthropic capital.

But let’s also be realistic about the fact that there are many other incentives and actors, that brands matter, that personalities matter, that fundraisers will sell their own stories and that these stories may be much more powerful than the data.

My goal is to insert this into the conversation early, so that we don’t get surprised.  Our sector has a lot of catching up to do, but the data will only get us so far in terms of creating an “efficient philanthropic marketplace.”