Melissa Berman, the president of Rockefeller Philanthropy Advisors, recently wrote a white paper titled Data, data, everywhere; and not a way to think. In this paper, she describes the difference between philanthrocapitalism and philanertainment, and the insufficient role that data usually plays in nonprofit outcomes.

She discusses the difference between and among data, information, knowledge, and wisdom, and then talks about confusing data with wisdom. This is a very interesting article, and I would strongly recommend it if you are thinking about how to measure your own impact with our without the Balanced Scorecard. Ms. Berman explains that one of the issues in the nonprofit field is the lack of resources to "gather data, information and knowledge to build the wisdom to answer questions about whether a particular [nonprofit] is the optimal choice, given certain investment goals." She also explains the issue of a "lack of infrastructure" to capture measures independently. Thus sometimes the quality of the measure can be suspect. From the tone of the article, one might get discouraged about the effectiveness of using a metrics-driven management system, like the Balanced Scorecard.

If the imprecise nature of measurement is invalidating your Balanced Scorecard, then you are using the BSC in the wrong way. A Balanced Scorecard should be objective focused, and measures do provide information about whether you are making progress, but the point is not just the information. The purpose of the Balanced Scorecard is to allow leadership teams to have informed management discussions and to allow them to make decisions about their strategy. So the question is not "Is this data perfect?" The question should be "how does the information we have inform the decisions we need to make about the strategic direction of our organization?" Thus you can use imperfect measures and still make effective decisions about your strategy. Of course you should always attempt to refine and improve your measures, but don't let that slow you down from executing your strategy.

Oh, if you are still reading this because you think I am going to explain philanertainment, then according to Ms. Berman, it is when donors give solely because it makes them feel good about themselves. Thus their philanthropy is self-entertainment for the giver.