The Tyranny of Metrics

by Jerry Z. Muller

For most charities, equating low overhead with higher productivity is not only deceptive but downright counterproductive. In order to be successful, charitable organizations need competent, trained staff. They need adequate computer and information systems. They need functional offices. And yes, the ability to keep raising funds. But the assumption that the effectiveness of charities is inversely proportional to their overhead expenses leads to underspending on overhead and the degradation of organizational capacities: instead of high-quality and well-trained staff, too many novices and too much staff turnover; computer systems that are out of date and inefficient; and as a result, less effectiveness in raising funds for ongoing activities or new programs. To make matters worse, the funders impose growing demands for reports, so that staff time devoted to documentation eats up an ever larger portion of the grant. In response, the leaders of charitable organizations often end up trying to game the figures: by reporting that the time of leading staff members is devoted almost entirely to programs, or that there is no spending on fundraising. That response is understandable. But it feeds the expectations of funders that low overhead is the measure they should be looking at to hold charities accountable.1 Thus the snake of accountability eats its own tail.