Practicing What We Champion

SMI and another independent organization, the DMPE Foundation, are in the process of estimating the SROIs on their activities as well as on DMPE’s giving.  The SROI on measuring SROIs on clients’ programs has been estimated to be high, generally 15:1 or above in several cases.  This is a principal reason why SMI, in championing the identification and funding of high SROI activities, is in the SROI measurement business.

At present, this SROI estimate should not be relied on.  It comes from the share of SROI increases our clients’ programs achieve due to SMI’s contributions.  Our estimates of these increases need refinements and audits for several significant SMI clients need to be or currently are being performed.

Transparency on Result Values, Costs, and Funding

SMI wants to ‘walk our talk’ and, as a public charity, be transparent regarding the key information items we suggest charities provide to both donors and larger society.  These items include:

  • Sufficiently detailed information about the charity’s work so that we or others can assess it on benefits-per-donation and needs-for-funds criteria
  • Projections of the likely results of funded programs, so that donors are aware of the bets they are making by supporting the charity
  • We place significant weight on ex post estimates of program cost-effectiveness derived from cost-effective monitoring and evaluation procedures and subjected to an independent benefits audit
  • Measures the charity intends to take to increase productivity and minimize major risks. The use of results guarantees and financial incentives to beneficiaries, program staff and the service supplier itself are some such measures we promote
  • Possible conflicts of interest (for instance, with funders, grantees or program beneficiaries)

Applying these principles to ourselves, we offer an overall evaluation of SMI and the bets donors make when giving to it.

SMI is a charity that should be watched with interest but not donated to until further evidence of the SROIs on its activities is obtained.  SMI anticipates that soon it will be able to make a compelling case that donations to its activities will have a high SROI for those in need.  Until that is done, SMI will not accept unsolicited donations.

Once SMI is in a position to accept donations for specific activities, it will agree to be held accountable to produce and report on marginal results from individual donations.  These activities will  include:

  • Performing SROI impact evaluations and conducting fully independent evaluations of other charities
  • Helping service suppliers prepare value-driven requests for funds
  • Offering productivity improvement consulting
  • Providing incentives to program officers to track and report on SROIs and to disadvantaged individuals themselves to pursue productive opportunities (e.g., high school graduation)
  • Expanding the College Opportunity Program to a larger scale
  • Administering and actively managing portfolios of donated funds

Activity-based costing will be provided for each of these activities once they begin in earnest over the next year or so.  Funders of these programs will be making an implied bet that SMI will produce high SROIs by measuring and attempting to increase SROIs on human assistance programs and by evaluating other charities.  SMI’s value-driven approach, in turn, will be adopted by other funders or service supplier organizations.

SMI anticipates that information it is gathering on the SROI on its activities will show this is a good bet.  As an organization, SMI is poised to deliver on it.  Dr. Colvin has a long history of success in these sorts of projects.  He has sufficient funding, vision, health, and staffing to produce high SROIs with high odds.  SMI’s costs are very low.  It relies on Dr. Colvin’s volunteered approximately 1/3 time inputs and donated office space. Staff members work for modest wages and additional staffing can be obtained as the need arises.

Risks, Risk Mitigation Plans and Possible Productivity Improvements

The main risk to SMI success is the continued performance of Dr. Colvin.  SMI has an agreement with the DMPE Foundation to ensure this risk will not affect SMI donors. 

SMI faces risks that its proposed approaches will not work successfully.  These risks are small.  SMI has extensive experience measuring and increasing cost-effectiveness of public and private programs.  Over the past 13 years, SMI and a related organization, the DMPE Foundation, have regularly identified and removed major risks and, at present, proven capacities are sufficient to provide high SROIs even in the unlikely circumstance that remaining risks cannot be managed successfully.

SMI is developing several additional risk mitigation products to couple with its core SROI measurement and productivity improvement services.  Some of these products under development include:

  • A portfolio of donated funds SMI will manage or advise to produce exceptional SROIs, which will be reported to donors
  • A guarantee of SROI results by select evaluated charities, possibly on a fee-for-service basis

SMI’s productivity should increase significantly within the next year.  SMI is working to develop off-the-shelf and template materials and find ways to streamline its SROI evaluations, which should lower by 50% SMI’s costs of offering many of its services

Costs, Funding Sources and Current Needs for Donations.

SMI’s main cost will be for salaries of employees who do SROI and related analysis in the future.  SMI plans to obtain funding from work that is central to its mission for government agencies, from donations, and from fee-for-service work it may do for some donors and, on an extremely limited basis, from some service suppliers.  SMI currently has no needs for donations.  Its reserves of around $60,000 are sufficient and wise for the multi-year sustained operations of around $20,000-$60,000 per year it expects to attain within the next two years.

Possible Conflicts of Interest

SMI’s work has, to date, been closely tied to the independent work of the DMPE Foundation. This Foundation is led by Dr. Colvin and his wife.  The DMPE Foundation has been active, as a funder, in all areas SMI is currently working in and, in terms of the SMI experience base, can be rightly considered the research predecessor to SMI, as well as a related organization.

The DMPE Foundation believes in the same principles SMI has expressed here and has adopted them for its own giving.  Information on DMPE Foundation’s SROIs and quantified objectives are available on request.  To date, SMI has earned small amounts of money from doing high value SROIs or strategic plans for Literacy New York, the Millennium Institute, and Razoo.  If it does ratings or evaluations of any of these organizations it will make note of the specifics of these past relationships.  It has been given funds by Dr. Colvin’s parents and a former business partner, among others.  Information on the DMPE Foundation’s Board of Directors and other related information is available from its Form 990 submissions or can be provided on request.