Tight Budgets + Big Data = More Moneyball

March 27, 2014

Leap of Reason Update: March 2014

In the opening chapter of Working Hard—and Working Well (which just hit its one-year anniversary), David Hunter traces the beginning of performance management in the federal government to the 1993 U.S. Program Results Act (GPRA). This blissfully short legislation (just 12 pages!) was the first systematic effort to shift the government’s focus from “what was done with public funds” to “what was accomplished.”

When President George W. Bush took office, he added momentum to this shift. Conventional wisdom has it that President Bush, a proud member of the faith-based community, would be the ultimate skunk at the garden party of the “reality-based community.” But he was the country’s first MBA President, and his Office of Management and Budget (OMB) started asking tough, MBA-like questions about what programs work—and what can be done to improve programs that don’t.

Unfortunately, the pioneering efforts of Presidents Clinton, Bush, and Obama have not yet produced a major change in how the federal government allocates taxpayer dollars. According to former White House officials Peter Orszag and John Bridgeland, “Less than one in every hundred dollars of government spending is backed by even the most basic evidence that the money is being spent wisely.”

And yet we’re now starting to believe the lumbering Ship of State might actually turn.

Exhibit One: Take a look at the just-released Economic Report of the President, which dedicates an entire chapter to “Evaluation as a Tool for Improving Federal Programs.” We were encouraged to learn how many federal agencies are moving to use rigorous evidence to increase the effectiveness of programs. We’ve been tracking developments in early-adopter agencies like the Departments of Education and Health and Human Services. But we didn’t know, for example, that the Department of Housing and Urban Development is revamping its funding for family homelessness based on rigorous experiments designed to identify which approaches work best.

Exhibit Two: The President’s FY2015 budget proposal includes the biggest investments to date in the “what works” approach. Although they represent only small figures when compared with the budget, they have the potential to send strong, catalytic signals. For example, the proposal calls for nearly $400 million for federal innovation funds that support results-driven solutions, including the Social Innovation Fund and i3. It would offer up to $382 million for Pay for Success efforts across various agencies, which create powerful incentives for nonprofits to achieve specific outcomes. And at the Department of Labor, one percent of all program funds would be set aside for comprehensive evaluations, which might sound modest but represents a serious commitment to rigorous evaluation.

We’re not suggesting that President Obama or anyone else should perform a “Mission Accomplished” carrier landing. Far from it. But we are saying that the realities of tight budgets and big data are converging to produce legitimate interest in “Moneyball government.”

 

And here are some brief updates from around the Leap of Reason community:

  • Youth Villages just received good results from the first phase of a randomized controlled trial of its program to help young adults struggling to make the transition from foster care to independent adulthood—a program powerfully depicted in this new video. The study, conducted by the highly respected firm MDRC, shows that the program is being implemented well throughout the Youth Villages sites in Tennessee. The next phase of trial is designed to assess the impact of the program. Results from that study will come out in 2015.
  • Each of us just made a modest contribution to support the Solutions Journalism Network’s new efforts to find and report on people and organizations that are successfully improving healthcare around the country. “The increasing availability of health data presents a major opportunity to help communities understand how to improve health outcomes,” says SJN co-founder David Bornstein. “When journalists get access to such data, however, they most often use it to highlight problems, risks, shortcomings, or scandals. This is only half the story. Our approach is to help journalists surface and assess health data indicating outcomes that are better than expected—positive deviants—which can inform stories about successful public health strategies.”
  • Several items of note surfaced this month from the Edna McConnell Clark Foundation, clearly one of the very best examples of a funder investing in its grantees’ performance. EMCF President and CEO Nancy Roob authored “More Resources, More Co-Investors, More Impact” in SSIR, briefly laying out some of the key lessons from its “growth capital aggregation,” which involved putting its own skin in the game to help 16 strong grantees secure a staggering $370 million in capital for growth. For those who want more detail about elements of EMCF’s formula, check out A Midpoint Report on the True North Fund, evaluator Melinda Tuan’s report on the progress and challenges of the first nine grantees in EMCF’s Social Innovation Fund-supported portfolio. And if you prefer video to articles and reports, then please see Nancy’s eloquent speech at the December After the Leap conference in full-length or highlight form.
  • We can safely predict that Assessing the Education Data Movement won’t knock Twelve Years a Slave out of the top slot on the New York Times bestseller list. But learning scientist Philip Piety’s book is a great read for anyone who wants to understand the tremendous promise of data for improving educational outcomes—and the many ways in which the data movement has so far failed to live up to this promise. A key insight, which applies not just in education but in many parts of the nonprofit and business sectors, is that data collection and use only become valuable once they are truly integrated within an organization’s processes and, potentially more important, into its cultural DNA. And the act of discussing metrics and data can help to shape that cultural DNA. When different parts of an organization have their own data silos, working together is less likely than when they are sharing information and each other’s perspectives.
  • Making Strategy Count in the Health and Human Services Sector is also a long shot for bestseller status. However, this new volume from the Alliance for Children & Families contains great insights from leading human services organizations that have become more data-driven, agile, and innovative in pursuing their missions. The book is a fitting tribute to the late Peter Goldberg, a leader we both admired greatly. Peter was the Alliance’s former CEO, and he cared deeply about helping human service organizations achieve more impact for those they serve.
  • Have you downloaded our new report, Just in Time: The Beyond-the-Hype Potential of E-Learning? Next on the docket: we’re going to use what we learned in this report and turn our attention to how e-learning, done well, could help nonprofits develop talent within the workplace and improve or even re-invent the delivery of service. More specifically, we hope to work with nonprofit leaders to develop a framework of certifications and associated course models to provide answers to these questions:
    • What does it mean to be a high-performing organization?
    • Why is high performance important?
    • What are the key organizational and programmatic pillars that must be in place for an organization to achieve high performance?

    Let us know what you think about the Just in Time report, and please share any thoughts for how certifications could be used to prepare individuals with organizational roles that can help drive high performance, such as quality assurance; data analytics, evaluation, accountability, and performance management. We’re also seeking examples of courses and workshops tailored to these types of roles and that are either being conducted online or could provide content for online learning. Please send your feedback to info@leapofreason.org.

 

Events for Raising Performance:

 

Mario and Lowell

Mario Morino is Chairman of the Morino Institute, Co-Founder and Founding Chair of Venture Philanthropy Partners, and author of the lead essay in Leap of Reason. Lowell Weiss is president of Cascade Philanthropy Advisors, co-editor of Leap of Reason, and advisor to the Leap of Reason initiative.

Download complimentary copies of Leap of Reason and Working Hard—and Working Well. Check out our suite of materials for strategic planning sessions, performance-management projects, professional development, board meetings, or graduate/undergrad classes. And encourage colleagues and stakeholders to sign up for monthly updates to help power their leap.

 

Quotes From Leaders Like You

“You’re taking someone else’s money to get into somebody else’s life to try to make a difference. You better be showing you can make a difference!”
Molly BaldwinExecutive DirectorRoca, Inc.
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