By Marie LeBlanc, Community Partnerships Coordinator
Within the nonprofit community, there’s a movement towards data-driven, quantitative measurement and analysis of impact. These conversations lead to the bigger question of how “impact” and nonprofit “success” are measured, particularly for those providing services that might not lend themselves to a numerical calculation. This week, that conversation reached a broader level, in terms of the way that we measure our economic success on a national scale. Federal Reserve Chairman Ben Bernanke remarked that Gross Domestic Product (GDP) — a fairly straight-forward measure of income and expenses — might not be the best and only way to measure economic well-being, suggesting that there are “better and more direct measures” to gauge how economic policies impact individuals.
Several alternative measures to GDP-based economic analysis have been offered in the past, such as the Genuine Progress Indicator, and more recently, the OECD and the Gross National Happiness index, pioneered by Bhutan. As Nonprofit Quarterly mentions, “the suggestion that there might be a better way to measure a nation’s wellbeing is nothing new to many in the nonprofit sector whose work and worth is often not measured in dollars and cents.”
The use of more subjective measures of economic progress (such as happiness, civic engagement, and community) presents an interesting new perspective on poverty and wealth — both in and among countries across the world. On one hand, such measures allow for a more holistic and broader picture of human development, beyond income. On the other, these classifications are just that — subjective, hard to define, and often based on cultural context.
Ultimately, the use of possible new indicators leaves me with quite a few questions: if the US were rated as strongly on health care and education services as income per capita, where would we rank on the global scale? Which social services would become priorities if we better understood and recognized the pockets of ‘underdevelopment’ within our own country? Perhaps the real answer is that each country across the world faces unique social, political, and economic challenges, and requires a more robust partnership between public, private, and nonprofit sectors to address those challenges. A measurement of economic development that accounts for those nuances could certainly be a step in the right direction.