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Free-conomics: Economists go pro bono

Economists are a notoriously self-interested bunch. But a British outfit called Pro Bono Economics is giving away its services. The group’s leader is Martin Brookes, a British economist at a hedge fund, who got the idea after a phone call.

"A big U.K. charity called Barnardo’s, which is a children’s charity, rang me up and said could they borrow an economist from me,” Brookes says. “Because they didn’t know where to find them and they couldn't afford to hire one even if they did know where to find them."

It struck Brookes that if a large, established charity was soliciting economists, others might well be in need. So along with a few friends he started Pro Bono Economics, a nonprofit that matches U.K. charities with economists willing to donate their time.

"For us," Brookes says, "the pitch of Pro Bono Economics is that economists are better with a spreadsheet than they are with a paintbrush. And you should marry them up, those economists up with a spreadsheet rather than give them a paintbrush to paint a hut."

So far, the experiment is showing promise. Pro Bono Economics has brought economic analysis to projects that have not had the advantage of such scrutiny -- although not all the scrutiny turns out to be positive.

"We've worked with a number of charities where the evidence has not been conclusive that they are having a big impact,” says Sue Holloway, the group’s director, "or it's shown that, at the moment, they're not making much change in the way they were expecting."

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I am a member of a similar group of statisticians in the US. We are called StatCom, or Statistics in the Community. It is composed of statistics graduate students who do pro bono statistical analysis for non-profit organizations. There are multiple installments at various statistics departments across the country. It is really a great opportunity for the students to gain experience consulting with a client and the client gets something in return as well. I am on the executive board of the Iowa State University StatCom. We have had projects with local libraries, food pantries, and public transit systems to name a few.

Providing outcome evaluations for not-for-profits is hardly new. In fact, such evaluations performed by independent professionals are required for most federally funded grants and many private grants to not-for-profits as well as most federal grants to state and local government agencies. I've spent a career doing so. Whether the findings are welcomed or ignored is quite another question. It depends entirely on the leadership of the organization. In most cases, it has been my experience that the leadership does not want to know what their organization's outcomes are. In some unusual cases, they welcome the informaion and make changes that improve their operations. What happens most often is the findings are simply ignored. What happens occassionally is a violent denial of the findings. After 44 years in this field, I have decided that most not-for-profit and government leadership is driven by deontological rather than practical considerations.

Agree. The sad thing is that nonprofs that embrace a performance/outcome-driven model find that it really does help their organization, both internally and in fundraising.

We have a local nonprofit service provider that was an early adopter of inviting an outside organization to evaluate its performance (a local university's economics department does the work.) They found that this data was immensely useful in two ways: First, it helped them identify inefficiencies in their program, which was the initial goal. But then, as the performance stats improved, the organization started incorporating the new stats into its pitches to state and national agencies to get funding for various projects - and were completely bowled over by the response, particularly from legislators, who were happy to write the organization's special projects into the state budget, at a time when most other service providers were looking at cuts.

One legislator said "Finally, somebody is making a business case for these services!" Two other similar service organizations locally picked up the trend - and the services of the university - but I think most similar groups in the state are still muttering darkly and wondering why these organizations get so much more than "their fair share" of funding.

This is a very interesting and important story. The amount of global donations is in the trillions of dollars ($1.5 and $2 trillion in annual revenues) according to Charity Navigator a US based watchdog of non profits. Kai and Stephen were asking out loud about US efforts to or starting a US based ProBono I think it's a smart idea.

One U.S. company is doing this already, Convergent Nonprofit Solutions (www.OutcomeDrivenConsulting.com) develops a Return on Investment analysis and Organizational Value Proposition for its nonprofit clients.

While it is important to tell the story with testimonials from clients and those being served, it is equally important to tell the story with data, using economic impact, ROI and efficiency metrics. As a professional fundraiser, I have found that 21st Century donors now consider themselves investors in the nonprofits they support. The ROI is about successful outcomes that change lives and conditions and strengthen communities, and the relative cost benefits associated with that success.

But let's not lose sight of the "warm fuzzies." While ranking organizations based on efficacy is a good idea, subjective metrics must also be included. Doing right is as important as doing well.

This is a piece about financial analysts but Kai Ryssdal and Stephen Dubner keep calling these financial analysts "economists". They're different professions, guys. Even if the charity you're reporting on can't keep it straight, you should not repeat the mistake.

We're definitely an organisation of economists! We are helping charities understand the effectiveness and impact of their interventions, not looking at their balance sheet. We have over 200 economists in our volunteer pool, from all areas of the profession and, though they may not be experts in the areas the charities deal with (e.g. homelessness, unemployment, mental health issues, criminal justice) they bring their economist's toolkit to address questions of measurement and impact.

This is a piece about financial analysts but Kai Ryssdal and Stephen Dubner keep calling these financial analysts "economists". They're different professions, guys. Even if the charity you're reporting on can't keep it straight, you should not repeat the mistake.

This is a piece about financial analysts but Kai Ryssdal and Stephen Dubner keep calling these financial analysts "economists". They're different professions, guys. Even if the charity you're reporting on can't keep it straight, you should not repeat the mistake.

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