To improve charitable work, share the lessons – and allow the right to fail

Posted on 07 Aug 2023

By Denis Moriarty

Tree Planting i Stock 184293841
Effectively growing the charity sector means properly measuring what works.

Australians give lots to charities and other not-for-profits (NFPs) – an estimated $13 billion-odd.

There's a worrying tendency these days for them to give less, though, and they could certainly give more, so Andrew Leigh, the Charities minister, has asked the Productivity Commission to look into Australian philanthropy and how it can be improved and updated. And that's a positive sign. But.

Professor Myles McGregor-Lowndes, the doyen of Australian NFP researchers, points out that we have been here before, more than once. He has found that there have been “over 15.5 million words on almost 50,000 pages … generated in total by government inquiries [into the not-for-profit sector]… The government produced nearly 3,000 pages of reports, and the sector made over 4,500 written formal responses generating about 29,000 pages.”

It isn't Mr Leigh's fault that the bureaucracy appears to have the memory of a goldfish, but it does suggest that the Productivity Commission should turn its attention to producing a report on how to make government reports more effective.

The profusion of government reports, though, and the frustrated idealism of all those participants, is only the tip of the fatberg. It's not just the reports, it's the reporting – the way the not-for-profit sector meshes with the government.

The way things are supposed to work in the billion-dollar government grantmaking business is that the government has something it wants done and puts it out to tender by NFPs. Each eligible NFPs writes in to say how they're going to do it, why they think that method will work, and why they’re the best-placed organisation to do it. The government makes its pick, and in the assigned budget it includes a sum – up to 10% – for evaluation.

The theory is that you start with a hypothesis – drum lessons help keep vulnerable kids in school, say – run the program, review the results, and see whether it works. If it works at all (I’m dubious, myself), you look at whether a few tweaks would make it work better next time.

It’s a virtuous circle – or at least it would be if it wasn’t for the fact that most evaluations are received and immediately filed (hat tip to Hitchhiker’s Guide to the Galaxy) in the bottom of a locked filing cabinet stuck in a disused toilet with a sign on the door saying ‘Beware of the Leopard’. There’s no chance to copy best practice, and no chance to learn from other people’s mistakes, because nobody knows about them.

What we need is for the Australian government to establish a Centre for Community Service Effectiveness to gather and disseminate evaluations, to provide guidance on impact evaluation, and to support analysis of the effectiveness of government funded services.

The Productivity Commission should be sympathetic to such a proposition, because it’s what the Commission itself suggested in its own 2010 report.

Denis Moriarty, group managing director, Our Community

Such a library isn't going to provide reliable formulas for program success – community interventions are more like history or sociology than they are like physics – but it would provide a context for productive self-review. In particular, it might enable us to learn from our mistakes.

Why didn’t it happen back in 2010? Perhaps because both the government and the NFPs it makes grants to have powerful incentives to conceal their mistakes. If we want to get round this, we’ll have to allow the right to fail.

NFPs have to be prepared to take risks – to do new things that they aren’t sure will work. They have to be able to experiment, and to learn from experience where the hazards are and where the consensus is mistaken.

If it's possible at all to overcome humanity's almost universal tendency to report all their geese as swans we can get a more reliable picture of the NFP ecology and how it works with governments. It should be a powerhouse of progressive reform.

This may not happen. We may be so addicted, as a nation, to the gotcha moment that we can’t suspend judgment long enough to learn. But it’s the right thing to do.

I am not taking any chances. We at Our Community invented a piece of technology 12 years ago called SmartyGrants which is now used by over 500 government and private agencies to track their grants. We have just added new functionality called the Outcomes Engine so people can track the outcomes of those grants – and we will soon start depositing those lessons and outcomes in our Centre for What Works. Eventually, frustration needs to be turned into action. Watch this space.

Denis Moriarty is group managing director of Our Community.

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