Measure What Counts

by Hal M. Lewis

The weeks following Passover, known in the Jewish calendar as sefirah (from the Hebrew for enumeration), highlight the importance of counting and measurement in Jewish tradition. It is perhaps not without coincidence, then, that many Jewish nonprofit organizations use this time of year to set their annual budgets and to review their fiscal projections.

Over the past decade, exacerbated particularly by the events of recent years, the Jewish community has placed increased emphasis on metrics as part of the management of their institutions and agencies. A growing insistence on deliverables, outcomes, and fiscal accountability dominates the landscape of contemporary Jewish not-for-profits. Today’s organizational executives need to know how to interpret complex financial spreadsheets, understand sophisticated investment strategies, and be conversant with the intricacies of deferred giving vehicles if they wish to be taken seriously by a growing number of donors and trustees who demand a competitive rate of return for their outlay of time and treasure.

I describe this dynamic as the BLAB syndrome. BLAB is an acronym for Be Like A Business. Its popularity is widespread, and growing, across the Jewish world. Advocates insist that 21st-century Jewish organizations adopt corporate metrics because, as they would have us believe, “the trouble with most nonprofits is that they don’t function like businesses.” So, we have come to measure everything from campaign achievements to returns on our endowments to overhead as a percentage of our annual operating budgets. We track membership numbers, intermarriage rates, and student enrollments. We monitor demographics, attitudinal shifts, population figures, connections, and affiliations. We have become like businesses, consumed by raising our profitability and our profile.

As the CEO of an institution committed to training nonprofit professionals on the graduate level, I embrace this emphasis on professionalism and sophistication. Our institution is dedicated to the proposition that nonprofit organizational leaders can, and indeed must, be as savvy and proficient as counterparts in the corporate arena.

What is troubling is what lies below the surface of the BLAB syndrome, the insistence that nonprofits need to behave like for-profit businesses.

Peter Drucker, the dean of leadership studies in America, understood that nonprofits are different – that to be successful they do not need to emulate the for- profit world. Rather, they need to assert unabashedly their own unique and distinct place in the constellation of American enterprise. According to Drucker, “The bottom line of every social sector, nonprofit organization is changing lives.” That is to say, while for-profit institutions aggressively pursue profit and market penetration, returns on investment and increased efficiencies, non-profit organizations seek to transform the human condition.

Those who work in Jewish communal organizations – whether as lay leaders or professionals – are klei kodesh – sacred vessels for the transformation of the Jewish world and beyond. Unless nonprofits learn to focus on what makes them different from, not the same as, the business world they will fall short of projections, and end up as nothing more than cheap imitations, awkwardly trying to be something they are not.

In the Jerusalem Talmud, Rabbi Jeremiah taught that, “One who is occupied with communal needs is as one who is occupied with the study of Torah.” The work of Jewish communal agencies is holy work. Our organizations are under no obligation to adopt the language and the mindset of the for-profit arena, when they possess a mission and a lexicon of their own. We have heard that “nonprofits need to be run like businesses BLAB, BLAB, BLAB,” for so long we have begun to believe it. The job of Jewish communal enterprises is to change hearts, minds, and lives. And that is very different from the work of even the most successful for-profit venture.

The problem with the BLAB syndrome is not the emphasis on metrics, but with being unclear about what needs to be measured. For nonprofits, impact is the ultimate metric.

During this season of sefirah, as many begin to think about next year’s budget, organizational leaders would be well advised to focus on what really counts. Rather than embracing the misleading metrics of the for-profit world – size of budget, revenue increases, brand-name awareness, and low overhead – the time has come to redefine what it means to be successful as a Jewish organization. Distinguishing between the metrics of the corporate world and those that can be used to gauge our own accomplishments demands that we focus with clarity and single-mindedness on our bottom lines – that measure impact – the lives we change and the transformations we effect.

Dr. Hal M. Lewis is the President and CEO of the Spertus Institute of Jewish Studies in Chicago and the author of several books on Jewish leadership.

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Comments

  1. I agree that non-profits should focus on impact as their primary goal. Supporters of non-profits also believe in accountability. How do you suggest that Jewish (or other non-profit) organizations demonstrate impact?

  2. You are correct. Supporters have a right to hold nonprofits accountable, and also an important role to play in doing so. The question you raise requires an extended conversation. Nonetheless, I would summarize the key components of demonstrating impact as follows:

    Before we can demonstrate impact we must be willing to articulate what we expect our direct and indirect impacts will be, without ambiguity or obfuscation. This is more than a mission statement. It must include a willingness to go on the record with staff, donors, and our communities regarding what we hope to accomplish, and what we cannot reasonably expect to achieve, given current realities.

    A second step towards demonstrating impact involves establishing and communicating the results we are prepared to hold ourselves accountable for within a given time frame, and which we expect others to do as well. These need to be measurable against a set of criteria that are aligned with our organization’s core purposes, which have been thoughtfully developed, debated and disseminated.

    A clear presentation of what programs, projects, infrastructure, etc., are required to effectuate those results must also be part of the process of demonstrating impact. Beyond programmatics, this must include financial projections, a determination of funding sources and related matters.

    In addition, a culture of organizational transparency, a willingness to measure and monitor results, and an ongoing commitment to learn from and share successes and shortfalls with stakeholders are also important components of demonstrating impact.

    Obviously, there is much more to say. Hopefully this is just the beginning of an ongoing dialogue.

  3. Megan Topper says:

    Dr. Lewis – great article!

    I’m in complete agreement that non-profits should be measuring impact over metrics, but must ask this question:

    How does a non-profit focus on impact when the institution is concerned with the bottom line – financial security?

    I’m anticipating that you might suggest that in the long-term an impactful organization will find itself secure. Is that the case? If not, how do you recommend that we go down the path of focus on impact over metrics?

  4. Thanks for your comment. I do not believe that the goal should be to “focus on impact over metrics,” as you suggest. Metrics matter, and I am in favor of nonprofit management and governance teams incorporating them into their work. Nor should we accept the notion, as seems to implied in the opening of your question, that financial security and high impact are mutually exclusive.

    As I suggest in response to an earlier comment, organizational stakeholders need to develop a set of clearly articulated statements, aligned with the organization’s core purpose, that delineate those measurable results the organization expects to hold itself accountable for. As part of the process of determining how those results are effectuated in real terms (i.e. programs, services, etc.), attention must be given to fiscal matters, funding sources, financial viability, and the like. Here Pirke Avot’s oft-cited wisdom about the inter-relationship between kemach (sustenance] and Torah (impact) has much to teach us. (See Avot 3:21.) By definition, high impact, sustainable organizations must be financially secure.

    Your question is important because it provides the opportunity to clarify this issue. I am not arguing against metrics. What I resist is the wholesale application of metrics that have nothing to do with our work, often having been imposed by outsiders who think we should be run like for-profit enterprises (BLAB), and which actually serve to derail us from focusing on the impact we can have.

  5. Dr. Lewis-
    Interesting take. I have a few questions that as a community member you will answer as you have other responses.

    1. Can you outline how you measure the impact of your own institution?
    2. These days, can’t BLAB be a solution to many org’s financial straights?
    3. Even measuring impact, aren’t organizations responsible to the community for a baseline Return on Investment?

  6. I am afraid that I do not understand what you mean when you write, “I have a few questions that as a community member you will answer as you have other responses.” Nevertheless, without repeating what I have stated to others, I will try to address your three questions as best I can in the paragraphs below.

    While one institution’s mission and stated impact (including my own) may be different from another’s, the processes for measuring impact involve the steps I have outlined in the two prior responses.

    The thrust of my article is that the BLAB syndrome is, in fact, not a “solution to many organization’s financial straights.” In my view, a blanket attempt to apply corporate metrics – that focus on sales revenues, stock values, and the like – to social sector organizations is bad business. The notion that one size fits all; that successful strategies in the corporate world automatically translate into similar successes in the nonprofit arena is simply not a thoughtful or productive approach. Having said that, I do not believe that NPOs should get a pass or should be any less well managed than the best for-profit entity. I am suggesting that merely invoking the “Be Like A Business” mantra and forcing nonprofits to ape the business world will not accomplish that goal.

    I do, in fact, believe that donors and other stakeholders are entitled to a well run, financially viable, effective organization that executes successfully against its stated goals, and delivers in accordance with the results it promises. If this is what you mean by a “baseline Return on Investment,” we are in complete agreement.

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