With characteristic cogency, Sean Stannard-Stockton's guest post raises a crucial question about strategic philanthropy's requirement of an evidence-based theory of change. Sean says that this is an error because the social world is too dynamic and complex for philanthropists and the nonprofit organizations they support to base social interventions on evidence.
Let me begin with a point of vehement agreement--the value of building great organizations--and then turn to our major point of disagreement. I believe that a great nonprofit organization is ultimately only as good as its theory of change.
On the rocky seas of social change, Sean says, "our best hope is to build sea faring vessels with great crews." But the best vessels with the best crew can't get to their destination without charts that accurately depict their route, and that's just what a theory of change is for an organization trying to have social impact in improving people's lives.
I agree that social systems are incredibly complex, and that philanthropy based on social science is usually much less certain that philanthropy based on the natural sciences. That said, there is considerable knowledge about what works and what doesn't work in particular contexts. For example, there is strong evidence--based on the outcomes of KIPP charter schools and some conventional public schools as well--that longer school years and school days have a significant positive effect on the education of disadvantaged kids. (The What Works Clearing House has descriptions of other effective educational interventions.) On the flip side, there is strong evidence that that the D.A.R.E. program did not reduce drug abuse and that abstinence-only programs do not reduce teen pregnancy.
KIPP academies are great organizations both because they have great leaders and because they are implementing a sound theory of change. The best-led D.A.R.E. or abstinence-only programs cannot be great because they are ineffective.
But isn't the jury still out on many other social interventions designed to improve people's lives? Sure--just as the jury was out for decades on one of the most complex issues of natural science ever faced by humankind, the causes of global warming. In these deeply uncertain circumstances, philanthropy and nonprofit management can only make bets and observe the outcomes.
In such uncertain circumstances, Sean wisely suggests, a smart philanthropist should invest in a portfolio of organizations. But sooner or later some of these organizations, like KIPP, will get to their destination, while abstinence only programs will crash on the shoals or disappear into the sea. It is by observing the outcomes of strategies that a field can construct, refine, or reject a theory of change. It is perfectly sensible for a philanthropist to focus his or her (inevitably) limited resources on well-managed organizations that are implementing successful theories of change or testing ones that remain plausible.
For these reasons, I don't understand Sean's analogy between following a sound theory of change and investing based on "big picture, 'macro calls' on the market" rather than identifying great or under-recognized organizations. Plausible theories of change are seldom global, but rather apply to quite particular interventions. In the nonprofit a sector, a great organization is typically one that is either acting on a good theory of change or evaluating one to see if it works.