Here is an outcome measure you would love to have. Would this be better than a low overhead ratio?

How would you like to share this with potential donors instead of describing your low overhead ratio?

Let’s say you are a child sponsorship organization.

Here’s your message:

Children sponsored in our program are

27 to 40 percent more likely to complete secondary school, and 50 to 80 percent more likely to complete a university education

than children in their village who were not in the sponsorship program.

Furthermore, when children sponsored in our program grow up, they are

14–18 percent more likely to obtain a salaried job, and 35 percent more likely to obtain a white-collar job.

In addition, many of the sponsored children

become teachers as adults instead of remaining jobless or working in menial agricultural labor.

Now there’s nothing wrong with menial labor, you tell your potential donor. However, our goal is to help people break out of the poverty cycle.

The skeptic thinks, “yeah, sure – and just how do you support those comments?”

With that opening, you explain that an outside developmental economist, who is a professor at the University of San Francisco, did an independent longitudinal study in six different countries with a sample size of 10,144 children who were sponsored in the program and are now adults. Those stats are his results.

And then you give the potential donor a link to the published academic paper with an invitation to read the results directly.

Wouldn’t that be better than talking about your 8% or 2% or 11% overhead ratio?

Yeah, I think so.

Who is that researcher?

Dr. Bruce Wydick, professor of economics and international studies.

Who is the organization?

Compassion International.

Where can you read more?

Check out Want to Change the World? Sponsor a Child at Christianity Today. The current edition arrived in the mail yesterday.

The study

The professor had a grad student do an initial study with data from one country on outcomes between when a child entered the program and now.

All the researchers on the study were amazed at the results.

The second round of the study went much deeper – five more countries for a total sample size of 10,144 children.

The researchers compared results to other unsponsored children in the same village and even the same families. They did all the statistical work expected.  They analyzed the data every way they could.

They found causal relationships, not just correlations. The results were statistically significant. If you can handle stats, you know that is a big deal. If you don’t, take my word for it – that is huge news.

Essentially, they were able to prove that child sponsor works.

Isn’t that cool?

That is great news, not just for Compassion. It’s great news for all child sponsorship programs. And for all charities who are trying to change the world.

What this shows

This is one model of how to go beyond overhead ratios.

This is a solid example of how to apply rigorous statistical analysis in order to quantify the outcomes of a specific organization.

I have two clients that have done something vaguely comparable, one on a very small scale and the other at a large scale. Obviously I have not been able to talk about those. But the Compassion study is published, so let’s talk!

This type of research is hard. It takes time. It requires people who can perform serious statistical analysis that can withstand academic review. But it can be done.

It can be done.

Other child sponsorship programs could do this kind of analysis. So could pregnancy help centers, homeless shelters, abuse shelters, substance recovery agencies, church planters, financial counselors, literacy trainers, and advocacy organizations. This list goes on and on.

Where to find the full paper

The CT article says

The academic paper containing the full methodology and results of our study appears in the current issue of the Journal of Political Economy.

Would someone like to track down the article? Please provide a link and any hints on getting the article (i.e. registration, paywall, etc).

I think there may be a few readers of this blog who will want to get the CT article & the JPE article and circulate them widely in their organization.

What do you think about the article?

Would something like this be a better story to tell than your overhead ratio?

What would it look like in other sectors?

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