Good nonprofits track and verify the number and kind of participants who achieve a gain—whether it’s landing a job, reading on grade level, or rehoming a displaced family. Great nonprofits track and support the number of participants who sustain that gain.
In a few areas, like workforce development, the challenge of staying power is well known. Simply put, it costs more to help someone sustain employment than to get the job. Habitual behavior is another area where we understand the challenge. How many of us lose 20 pounds and then see the weight return within a year? Mark Twain put it nicely: “Quitting smoking is not difficult. I have done it hundreds of times.”
One way to look at the value of sustained gain is the concept of cost per gain. Divide the cost of the program not by those who participate… but by those who achieve the intended results. For example, if a program costs $100,000 and includes 1,000 participants, the cost per person served is $100. If only 100 of the participants get to the defined result, however, the cost per gain is $1,000.
This logic is helpful to both nonprofits and philanthropy in shifting away from the high counts at the level of “serving” or “reaching” persons that many foundations have traditionally supported. A program that mentors 400 persons has historically been seen as more valuable than one that, for the same money, mentors 100. But hey. Not so fast. If you don’t mentor with the intensity and duration needed, the touch is not sufficient to make a difference. I actually experienced that mentoring example—and found that the nonprofit starting with 100 dramatically outperformed the one starting with 400.
Now let’s dig deeper. Assume a service that gets people to food security by getting them enough food at a cost of $4,800 for a year. If the money for food supply stops, food security ends. The cost is an annual cost per gain.
Consider a different program that gets people to food security by growing a garden, getting more sustained income, or some other step with staying power. In that case, the gain may well continue after the program costs end. If food security lasts for three years after a program ends, the annual cost per gain for four years drops to $1,200. The return on charitable investment is four times higher.
This logic suggests another insight: that the smartest investments is for steps to help participants sustain gains. Consider a high school program for students at risk for dropout. My clients and friends in the college access business point to the sad reality that, for many reasons, at risk populations can experience college drop out rates that are as high as high school drop outs.
Schools like Green Tech Charter High School in Albany, NY have discovered that a reasonable added cost to track and support its students through the first two years of college has the highest possible leverage of all education dollars. The major funds to achieve a high school education are leveraged by much lower costs to make graduation pay off in a path to success.
I have developed descriptions of cost per gain drivers and tools from work with Leslie Clements and the Humana Foundation. Holler if you want to see them.
Have a great week, everyone! – Hal
