When Ken Berger arrived as CEO of Charity Navigator, he heard the same message about the organization from many nonprofit leaders.
“You guys are doing more harm than good,” Berger said, paraphrasing the consensus. “You’re focusing on measuring finance, not outcomes. Six months in, I said, ‘You’re right.’”
But gravitating toward a system that placed more emphasis on outcomes yielded the same level of complaints.
“It’s too expensive, too complicated, we’re too unique, we can’t possibly measure outcomes,” Berger said, continuing his synopsis.
Now, just months after departing Charity Navigator on abrupt but amicable terms, Berger has joined a company that he believes is at the forefront of solving that problem for the “little guys” of the nonprofit world. He is the new managing director of Algorhythm, a New York-based firm that specializes in predictive analytics and big data.
The news certainly caught Youth Services Insider’s eye. Berger is a big name in the nonprofit world, having spent seven years at the helm of America’s best known charity evaluator.
Algorhythm had come to YSI’s attention with its research work in Florida, where the firm helped establish that predictive analytics produced superior placement decisions for juvenile offenders when compared to Florida’s existing risk assessment.
The appropriate role of predictive analytics in juvenile justice and child welfare decision-making is a matter of some debate at the moment. But outcomes measurement, not risk assessments, is the focal point of Algorhythm’s services.
The company is building “iLearning” tools for various corners of human services. Clients set desired outcome measurements, then Algorhythm conducts pre- and post-analyses using its predictive tools to provide organizations with insight on how they did on the stated outcomes.
It is a subscription model, where clients pay an annual membership fee to maintain and update their information. The first iLearning tool was built for the youth development field, and information about it is available now on the website.
Berger says he has been pushing nonprofits toward the company for two years now.
“I came to the conclusion a while ago that they had cracked the code. They had an affordable, scalable tool for small and midsize charities,” he said. “Still to this day you don’t see anyone else doing this” for nonprofits.
What, we asked Berger, makes Algorhythm stand apart? The iLearning tools, in his mind, will address common problems for nonprofits in regard to outcomes measurement.
The first is cost. Other measurement tools “cost millions, they come in and do a snapshot look, so the usefulness going forward” is questionable, according to Berger. Nonprofits can tap into Algorhythm’s services for as little as $1,000, he said.
The second problem is complexity. “A lot of smaller nonprofits are scared” of further measurement, said Berger. “They are already required to do all this reporting” for government and foundation funders. Algorhythm’s predictive tool means very little time and effort on the part of the client, he said.
And more frequently than ever, these two problems are meeting at a difficult crossroads for nonprofits. Funders are asking for outcomes more frequently than ever, Berger notes, and they aren’t ponying up extra money to generate the information.
And that is the confluence that will really drive demand for Algorhythm and any other firm offering similar products. If the number of funders demanding outcomes continues to grow, vendors of affordable measurement will thrive.
We’re going to fully acknowledge here that this writeup comes off a little like Algorhythm paid us to do it. They did not, nor are they a current advertiser with The Chronicle. But in our opinion, it’s significant that one of the fiercest advocates for transparency and accountability in charity work is this bought in on a model.
“There are two possible roads ahead,” Berger said of nonprofit accountability. “There is one where we find the tools we’re talking about to meet demands of funders. The other road is full of jargoneering, shapeshifting kabuki dances, and the same old meaningless measures of activities.”
Note: This column was updated on Sept. 5 to address a transposed quote in the second paragraph.