Do non-profits trust normal people? And should they?

Today I am just posing a question: Non-profits seem sceptical towards outcome-based indicators of how effective different initiatives and projects are. Is this because they are afraid of what "ordinary people" would think and do if they had this information? And if so, could such a worry be rational?

Personally, I hope (and want to believe) that outcome-based indicators would make the connection between giving and accomplishing stronger, that people would not just give in order to "do a good deed" but also start giving to "have an impact on malnutrition" or "reduce malaria" etc. But other people might believe that the consequences would be different. Two possible worries that immediately come to mind:

• Myopic funding: The more concrete, short-term and certain a program was according to its outcome indicator, the more funding it might receive. This might make it easy to get funding for vaccines and malaria nets, but hard to get funding for investments and development in health infrastructure, education, human rights work with women, etc.
• Over-focused funding: Some measures may catch the public's interest far more than others ("go viral"), and this might lead to large shares of funds going to these areas - not because the need is the largest or the impact the greatest, but simply because the indicator is catchy in some way

Put differently - if non-profits developed and published indicators of effectiveness, this could lead to people asking for highly specific giving options ("I want to fund projects with a high payoff per dollar on under-five-mortality"). This could lead to both increased bureaucracy (in terms of tracking and documenting how streams of income from specific donors ends up in specific project and what their specific payoff turns out to be in the end), as well as a reduced ability to plan strategically in terms of what an organization wants to adress. The "scare scenario" might be that Red Cross etc. simply post a long list of projects with associated payoffs in terms of various indicators, and that the "capricious whims of the public" are allowed to determine what the organization does - based on whatever info or whatever beliefs about the world they have.

One way of trying to grasp the problem is to realize that we are talking about (at least) three different types of information that are important:

1. State of the world: What are the problems facing the world (malnutrition, excess mortality, human right abuses, illiteracy, poverty, pollution, etc) and how severe are they?
   
2. Action alternatives: What are the programs or projects or strategies we have developed to tackle these problems, and what would the cost and impact associated with these be?
3. Personal judgment: How do we weight and judge the different problems the world faces up against each other, and how do we choose between action alternatives? In economist language: What are our preferences?

Now a simple scenario: You have been working in a large non-profit for years. You've worked within different parts of the organization, you've studied and read and analyzed and in time developed a reasonably good grasp of what the major issues are, what you feel their relative importance is and how effective and useful different programs and approaches are. And you feel that these are difficult judgments, based on deep and hard-to-acquire understanding of the field. Next, someone comes to the organization and says that they want transparent indicators for each type of outcome, so as to be able to evaluate and judge their effectiveness prior to making a decision about donating funds.

Would you be worried about a "reductionist" or "oversimplified" interpretation of indicators? Would you be afraid that important but unsexy long term factors might be neglected?

And even if you personally don't see the problem - how can we answer this fear and develop indicators that don't have excessive (largely unintended) negative consequences?