Good point. It looks like there are a couple metrics being established which measure the effectiveness of the program in terms of making the CKWs less poor, but I don't see anything that would measure the income of the farmers using the CKWs' services. "% of farmers who have adopted 1 or more techniques in the last quarter" seems like an attempt in this direction, but it doesn't really get at the ultimate outcome they're aiming for.

Good points on the usefulness and limitations of audits.

Grameen Foundation's Community Knowledge Worker program in Uganda is doing some pretty impressive real-time data tracking using Salesforce: http://grameenfoundation.force.com/ckw/apex/Dashb.... Probably easier to follow if you first check out the CKW website: http://www.grameenfoundation.applab.org/ckw/secti....

Should we really care about Franklin? As compassionate people, of course. As evaluators, I'm not sure.

Franklin seems to me to be a statistical outlier. From the story you relate, it sounds unrealistic to have been able to know what was really going on with him. Unless we have reason to believe that Franklin is not an outlier, that there is a statistically significant group like him that appear by current measurements to be successful but in reality are not, I don't know that there is a reason to change the focus of our attention. Presumably, for every outlier in Franklin's direction, there may be someone on the other end of the spectrum, perhaps someone who was incarcerated, experienced homelessness, did not graduate college, and yet eventually started his own business and became an engaged member of his community.

Maybe it is possible to do better evaluation and find ways to better understand the reality of folks like Franklin. But is chasing these outliers really where our time is best spent? It is possible to care about individual outcomes without letting a small subsample distract from the larger picture of a program or system's success or failure.

Thanks for raising this issue, David. One company that's doing some interesting stuff to extend the benefits of newer communications technology further down the economic chain is Movirtu (http://www.movirtu.com/). The idea is to give a person the benefits of a mobile phone number without having to actually own a phone. I'm still not sure how helpful this will be to many people but it seems like it has some potential to extend access and enable other services/organizations to connect with certain harder to reach segments.

That's an interesting perspective, Arnie. First, due to the difficulty of measuring outcomes at all, let alone with such a high degree of accuracy, it would be hard to state definitively two nonprofits both have IDENTICAL outcomes. Second, I'm not sure "stealing" is a fair or helpful way of thinking of the factors that might be at play here. Perhaps the nonprofit with higher overhead does not have access to suppliers at lower costs or is serving a population that is more difficult to reach. Would you say that organization is "stealing"? Or would you say the donor, who may not have been aware of the other organization to whom his/her money could have been given, was "stealing"?

"Rightfully" again gets into the territory of absolute moral judgement, which I think is the main cause of the problem those who object to higher compensation have with this issue. But then, you are talking about biblical sources, so it's to be expected in this case. There is certainly much wisdom to be had from both books you cite, but I find that applying absolutes to this discussion, whatever their source, tends to not be very helpful on this issue.

Chris, you make a great point about the anecdotal evidence from your experience, which probably makes the case much more succinctly than the abstract/theoretical back-and-forth that Gayle and I have been having in the comments. All of us in the social sector have experienced talented friends and colleagues leaving the sector or not entering it in the first place due to the low compensation. Does anyone truly believe the loss of talent and knowledge due to their absence from the social sector is in the best interest of the missions we hope to achieve?

The 80/20 model or any arbitrary "acceptable" overhead ratio is deeply flawed. Please see these columns by Dan Pallotta as a starting point about why using overhead as a measure of efficiency or effectiveness is so misleading: http://blogs.hbr.org/pallotta/2009/06/efficiency-... and http://blogs.hbr.org/pallotta/2009/12/charity-nav.... The latter piece actually praises Ken Berger and Charity Navigator for moving away from this problematic practice.

I'm not talking exclusively about formal structures for collaboration either. I agree that deep collaboration, of the type you describe, does usually have a large informal component and is hard/impossible to implement in a top-down fashion. That said, I do not think it is as hard as you imply to pinpoint individuals or group of individuals who should (not necessarily "deserve," but "should" in order to have all the pieces in place) be compensated at different levels, both higher and lower. In fact, if this weren't possible, everybody who worked at an organization would receive identical compensation. So clearly what we're talking about here is your objection to the potential degree of disparity in compensation levels, not that whether some people have already been identified as more valuable to the functioning of the whole than others.

What do you believe constitutes "vastly" or "wickedly" higher salaries? Your desire to have everyone stop asking "how much can I get" and start asking "how much do I really need" is noble but missing the point. I agree with you that humanity in general needs to shift towards this thinking if we are going to survive the mounting environmental and economic challenges facing our planet and our global economy. But while we wait for that to happen, we sacrifice the meaningful impact that could have been created by the people who did not get engaged in the interim because of self-righteous accusations that there is something wrong with their character for seeking higher compensation than watchdogs like yourself have deemed "sufficient". Let's not let our own personal judgments stand in the way of meeting more important goals. And if you really don't think that higher salaries would attract more capable individuals into the sector, try cutting current salaries by 20% or 50% and see how the talent pool dries up. Assuming you do agree that that would cost the sector significant amounts of talent, the only reason not to believe raising salaries wouldn't increase the talent pool is if you think that we have somehow already managed to hit on the exact compensation point beyond which increasing salary yields no further marginal return in talent.

The AFP case against using a percentage formula to compensate fundraisers is interesting and warrants a separate discussion (thanks for the link, by the way). However, in brief, I think the application of cumulative impact here is less a matter of ethics and more of it being a poor decision for nonprofits to enter into a contract with a fundraiser without taking into account such cumulative impact effects when committing to compensation. The only way I see this particular point potentially being an ethical issue is that nonprofit leaders may frequently fail to take it into account, so making an outright prohibition on percentage-based compensation is the easiest way to prevent less scrupulous fundraisers from taking advantage of cumulative impact effects to extract compensation disproportionate to their value from less sophisticated nonprofits.

Gayle, I agree that all the scenarios you mention positively would be good and all the ones you mention negatively would be bad. However, I believe that your assumptions about what drives these scenarios are faulty.

I, too, would be worried about a doctor getting direct kickbacks, etc, etc, but these are issues of ethics and the doctor in question not acting in his patients' best interests, which can happen in either a for-profit or nonprofit hospital. The doctor's salary also has no bearing on whether or not he acts ethically. There is always the potential for conflicts of interest to arise in any profession, but just because someone determines his or her own personal income needs are higher than someone else's, it does not follow that he or she is more likely to behave unethically.

In the case of a university, the president is usually hired by the board of directors with fundraising being among the top (usually, the top) priorities for that position. So yes, higher compensation for someone who can bring in more money certainly makes sense in that situation. Whether that money is then spent on nicer dorms and sports facilities or providing more financial aid and better instruction for students is another issue entirely. There's no reason a university president couldn't be paid for performance based on graduation rates or research advances, but until the stakeholders in the community speak up and make understood that they consider those to be higher priorities, it's not going to happen. And if that does happen, I'm sure a president who has the skills to build a university that generates research that leads to cures for more diseases will command higher compensation than one who lacks those skills.

I am not suggesting that offering higher salaries will magically attract white knights to the nonprofit sector who can save the world. However, I am confident that it would bring in at least some individuals who do have valuable contributions to make, and shaking our heads and saying that they are not welcome to help if they require some arbitrarily declared "excessive" pay, is not acting in the best interest of the people we are trying to help. If the compensation required to bring them in ends up taking money away from other areas and their talents do not enable the organization to produce better outcomes, then obviously that shouldn't be done. But if I a nonprofit I support spends a little more to bring in someone who can help the organization be more successful at accomplishing the mission it is pursuing, it makes me more confident in continuing to support them, not less.

And yes, there are many benefits to a collaborative model. But as I'm sure you are well aware, deeply collaborative models are rare and difficult to build. Under-compensating people at any level makes effective collaborations much more difficult to sustain. I suggest that people be compensated in whatever form is necessary to get the best team together to be successful, whether that compensation takes the form of health care, gifts, developmental opportunities, public recognition, "psychic income", or, yes, direct monetary payment. Everyone brings something different to the table and everyone wants to get something different from it. Let's not let our personal judgments as to which forms of compensation are more humble or righteous get in the way of doing what it takes to assemble an organization with the best person in each role.

Thanks for the comment, Raha. I think whether or not market-driven approaches distribute products/services in a just manner is a separate issue. Universal access is not necessarily an implicit goal of market-driven solutions, though I would argue that it is an aspirational goal for many nonprofit organizations. My argument is more that if what we really want is to reach that goal of universal access to life-saving solutions (or even move closer to it), we shouldn't get distracted by how money is spent to get us there, only that the end result is what we want. Again, as donors/philanthropists/do-gooders, all we should really care about is the outcome, not whether or not someone is making a buck helping produce that outcome.

As for your separate note on pharmaceutical companies and how to create incentives for them to develop drugs to address diseases like malaria, there's a lot of great innovation going on in that space right now, with the most prominent being something called an Advance Market Commitment (AMC). A pilot AMC of $1.5 billion was launched by the Gates Foundation in 2007 to develop a late-stage pneumococcal vaccine. You can read more about that effort and other innovative incentive mechanisms here: http://www.ghtcoalition.org/files/GHTC_Incentive_...