Societal Justice Index

The determination of performance quality is a vexing issue in the study of third sector/nonprofit/civil society organizations. Organizations in this sector vary widely in their auspices, purposes, sources of support, and quality of performance. In addition, variation in organizational productivity may not relate directly to the level of financial support provided by donors for the support of organizational activity.

In an effort to determine the relationship between donor support and organizational effectiveness, a study was conducted of nonprofit organizations within the civil society of Hungary. A 3% sample was identified and surveyed, representing 850 nonprofit organizations. Organizations predominantly supported by national and local government funding were eliminated from the sample.

Two dimensions were identified for analysis in the study: 1) the level of financial support available to the organization, and 2) the demonstrated capacity of the organization to conduct its activity in concordance with accepted ethical and professional norms. These dimensions yielded four categories of organization for identification and analysis:

1. Well funded organizations demonstrating high levels of ethical and professional activity
2. Poorly funded organizations demonstrating high levels of ethical and professional activity;
3. Well funded organizations demonstrating inadequate levels of ethical and professional activity; and
4. Poorly funded organizations demonstrating inadequate levels of ethical and professional activity.

The major conclusions of the research indicate: 1) Quality of organizational performance does not necessarily assure adequacy in levels of support; 2) Donors often provide support to organizations that do not demonstrate acceptable capacity in their ethical and professional activity.

The principal implication of the study involves the potential of alerting potential donors to the desirability of supporting organizations that can be identified objectively as high capacity and effective in their practice. An index indicating unfunded organizational capacity is suggested as a tool to be provided to prospective founders. This index might serve as a vital bridge between the needs of prospective founders and high-capacity third sector organizations seeking the financial support to extend the impact of their work. The Social Innovation Foundation is identified as the bridging nonprofit organization capable of maintaining the index and communicating broadly with potential donors within Hungarian society.

We published this booklet on the Societal Justice Index with the hope of generating a fruitful professional debate and to contribute to the easier meeting of the huge civil potential of the sector and the growing interest of the sponsors.

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