Nonprofits Aren't Great at Listening. A Group of 7 Funders Wants to Change That

Half the time I call my bank, I'm told: "You've been selected to take a short survey at the end of this call!" I've never stayed on the line for such a survey, but presumably other people do, providing my bank with lots of data on how well they're doing with customer service. 

Corporations of all kinds have long been vacuuming up feedback from customers and clients, while businesses of every size are reviewed on sites like Yelp and TripAdvisor whether they like it or not. Public schools and universities are also increasingly collecting feedback from students, and using it to improve teaching. 

Meanwhile, though, most nonprofits have lagged behind in soliciting feedback from the people they serve. And by not tapping into this rich vein of user data, nonprofits are missing chances to improve their effectiveness.

It's not just nonprofits that could benefit from this kind of information, it's also funders, many of whom are hungry to get a better fix on how their grant dollars affect life on the ground. 

Oh, sure, funders do site visits. They parachute into a school or clinic for a few hours to see what's going on. But these visits tend to be carefully choreographed, with grantee staff doing much of the talking and limited testimonials from the "ultimate intended beneficiaries." 

Anyway, hearing episodically from the folks who've also been called the "end users" of philanthropic dollars is not the same as having systematic feedback from these people, or knowing how to use that data to improve grantmaking. 

Enter the Fund for Shared Insight, a new collaborative effort by seven foundations. The fund aims to help nonprofits do a better job of soliciting feedback from the people they seek to help and use that feedback to become more effective. As well, the collaborative will back research on the insights that can be gained from better "feedback loops" and work to foster more transparency and learning among nonprofits and foundations.

The fund is co-chaired by Fay Twersky at the Hewlett Foundation and Hilary Pennington at the Ford Foundation. The other foundations that have kicked in funds so far are Packard, the JPB Foundation, Liquidnet, the Rita Allen Foundation, and the W.K. Kellogg Foundation.

Twersky, who leads Hewlett's Effective Philanthropy Group, told me that she's been gratified by the strong interest among funders in this effort—strong enough that the Fund for Shared Insight plans to award $5-million to $6-million in grants a year over the next three years. That money will start moving out the door after the fund has sorted through a first round of proposals, which are due by October 15.

The fund's grantmaking will seek to advance three different goals.

The first is improving the practice of feedback loops. The fund is interested not just in the best ways to solicit and collect feedback, but how best to really listen to, and learn from, such feedback. 

A second goal is researching ways to use feedback to assess now well nonprofits are doing in real time and course correct to improve performance. A big hope here is that feedback can produce near-term insights about effectiveness that nonprofits and funders typically don't now get until later, when the findings of assessments dribble in. 

A third goal is to increase the sharing of such feedback broadly with the social sector, and especially among funders.

The fund is set to operate for three years, at which point the funders will take stock of what they've learned and decide whether this is money well spent.

This is cool stuff and a potentially game-changing effort that paves the way to a more responsive and nimble social sector. But it's also easy to imagine the effort being a dud, with many nonprofits feeling like they don't have the capacity to collect feedback and analyze it. Others may fear receiving negative feedback that could imperil their funding or image. 

How many organizations really want to poll the people who know them best about how well they're doing and then let their funders anywhere near the results? Hah, good question, and I'm sure the reflex of some nonprofits will be to avoid any such thing. 

Corporations are obsessed with this kind of data because they face fierce competition and relentless bottom-line pressures. If Chase's customer service sucks, I might switch over to Bank of America. But a typical nonprofit doesn't have that kind of gun to its head: The hungry client isn't going to head off to another food pantry that's better operated. 

Ironically, the nonprofits that are already innovative and keen on doing a better job are those most likely to embrace new feedback tools, while the laggards may be happy to hear no evil. 

Looking ahead, we could imagine a day where funders compel nonprofits to solicit, analyze, and publicize feedback as a condition of receiving grants. Before that can happen, though, the social sector needs better information about how to get and use feedback. 

So maybe the Fund for Shared Insight is only Act One in what could be a longer drama of funders pushing nonprofits to join the Age of Feedback. And before you make that crack about insular funders calling the kettle black, keep in mind that many funders have moved in the right direction through Grantee Perception Reports conducted by the Center for Effective Philanthropy. 

Fay Twersky says she's not sure what to expect from this experimental work, beyond a great deal of learning over the next three years. 

But she is sure of one thing. Having the social sector do a better job of listening to the "people who matter most" is the "right thing to do, no matter what."