Talent Development's $90 Billion Puzzle: What's the Right Metric?

A $90 Billion Question: Measuring What Matters In Talent Development In 2008, Rip Rapson, CEO of the Kresge Foundation, faced an impossible question. With hundreds of millions of philanthropic dollars at his disposal, he struggled to find an effective way to address the devastating impact of the financial crisis on Detroit. Traditional charity, which focused on counting recipients, seemed woefully inadequate in the face of a city with 100,000 vacant and abandoned parcels. Rapson's response would help spark a revolution in how America's foundations measure success. Each year, nearly $90 billion of philanthropic capital flows into education and workforce development, with a significant portion aimed at addressing the skills gap and promoting economic transformation. However, the traditional approach to measuring success in these areas has been criticized for its lack of rigor and focus on feel-good metrics. This has led to a growing recognition of the need for more robust and data-driven approaches to evaluating the impact of philanthropic investments. One of the key drivers of this shift is the increasing recognition of the importance of data-driven decision-making in philanthropy. Foundations are now seeking to move beyond simplistic metrics, such as the number of people served or the amount of money spent, and instead focus on more nuanced and outcome-based measures. This includes tracking metrics such as the number of jobs created, the average salary increase for participants, and the percentage of graduates who find employment in their field. The Kresge Foundation, under Rapson's leadership, was at the forefront of this shift. In 2008, the foundation launched a major initiative to revitalize Detroit's economy, which included a focus on workforce development and education. Rather than simply writing checks and counting recipients, the foundation worked with local stakeholders to develop a comprehensive strategy that included data-driven metrics and regular evaluations. The results were striking, with significant increases in employment and average salary for participants. The success of the Kresge Foundation's initiative has inspired a new generation of philanthropic leaders to adopt a more data-driven approach to measuring success. Three major foundations - the Kresge Foundation, the Ford Foundation, and the Rockefeller Foundation - have now abandoned traditional metrics in favor of hard data on economic transformation. This shift is expected to have significant implications for the philanthropic sector as a whole, as foundations seek to maximize the impact of their investments and drive meaningful change in their communities. The market impact of this shift is already being felt. As foundations increasingly prioritize data-driven decision-making, there is a growing demand for more sophisticated evaluation and measurement tools. This has created opportunities for companies that specialize in data analytics and evaluation, as well as for researchers and experts in the field of philanthropy and education. The future outlook for the philanthropic sector is likely to be shaped by the growing recognition of the importance of data-driven decision-making. As foundations continue to prioritize outcome-based metrics and regular evaluations, there is likely to be a greater emphasis on collaboration and knowledge-sharing between foundations, as well as between foundations and other stakeholders, including government agencies and the private sector. This could lead to more effective and sustainable solutions to complex social problems, and a greater focus on driving meaningful change in communities across the United States. In conclusion, the shift towards data-driven decision-making in philanthropy is a significant development with far-reaching implications for the sector as a whole. As foundations continue to prioritize outcome-based metrics and regular evaluations, there is likely to be a greater emphasis on collaboration and knowledge-sharing, as well as a greater focus on driving meaningful change in communities across the United States.