The Dells Find Patience Is Key When Trying to Measure Social Progress

Michael S. Dell hopes lessons he learned from a business crisis more than a decade ago could help the foundation

that he and his wife, Susan, created make charities more effective in the future.

In 1993, the Dell computer company was in deep trouble: A new product failed to meet sales expectations, a rival company started a price war, and Dell’s chief financial officer resigned over questionable foreign-exchange trading. The company’s stock fell 72 percent in six months, and many wondered whether the company would survive.

With help from older and more experienced business executives, Mr. Dell transformed the way he ran his company.

“We were making decisions based on emotions and opinions,” rather than facts and hard data, Mr. Dell says, looking back on the experience in his autobiography. “We needed a complete and rapid adjustment in mind-set.”

Today, the company insists on measuring everything it does, an approach that has enabled Mr. Dell to seize small advantages to reach the top of the personal-computer industry.

Pete Winstead, an Austin lawyer and longtime friend of the Dells, says data helped Mr. Dell realize more quickly than his rivals the benefits of keeping as little inventory on hand as possible in an industry where prices of components fell almost daily.

“That little break was a competitive advantage that he just drove a train through,” says Mr. Winstead.

Charity Metrics

The foundation is hoping for similar breakthroughs for its grant recipients. “We fundamentally believe that everything can be measured in some way, shape, or form,” says Janet Mountain, the fund’s executive director.

Yet translating measurements to the charity world has proven more challenging than the Dells expected.

“This is one of the most difficult questions in the nonprofit world,” says Timothy L. Seiler, director of the Fund Raising School at Indiana University at Indianapolis.

“There are very few metrics that can be universally applied,”he says. “So many variables complicate the issue: size of the organization, mission of the organization, reputation, type of work, staff, board, types of support — government, earned income, philanthropy.”

One of the foundation’s first major efforts, a program designed to get more poor children in Texas covered by state or federal insurance programs, has run into several obstacles.

In 2000 nearly a quarter of children in the state lacked health insurance, according to federal statistics, giving the state the worst record in the nation. Yet the Dell foundation saw that many parents whose children were eligible for free or inexpensive health insurance weren’t applying for it.

The foundation gave money to test approaches to getting the word out to parents, and found that information distributed through the public schools was more effective than going through churches or other places. Through a program called Insure-a-Kid, the cities of Austin, Dallas, and Houston are among the locations where schoolchildren bring home a packet of information every year on how to get health insurance.

However, efforts to figure out how well the program works have been frustrating.

Neither the state nor most of its 254 counties keep records on their uninsured. The only comprehensive records are kept by the federal government based on imperfect census data — and those are only released every other year.

What’s more, as eligibility requirements for government-run health-care programs keep changing, people go on and off the rolls in response, making it even harder to tell what impact educational efforts have had.

“We don’t track where referrals come from or what kind of impact Insure-a-Kid might have had on our enrollment numbers and participation, though we certainly recognize that they are one of the larger groups working to get kids enrolled” in the state Children’s Health Insurance Program, says Jennifer Paris, a spokeswoman for the Texas Health and Human Services Commission.

Meanwhile, as of 2004, the most recent year available, more than one-fifth of Texas children — 1.35 million kids — were still uninsured, placing Texas, which had moved up slightly in the state rankings, at the bottom once again.

“It’s been a difficult thing for us and the foundation,” says Kit Abney Spelce, director of Insure-a-Kid.

Rather than give up on the program, the foundation and charity officials have retooled it. Insure-a-Kid now collects its own data, using commercial software, on the families it refers to health-insurance programs that serve the needy, although the program is too new to have results yet, Ms. Abney Spelce says.

Getting the Facts

The foundation has learned to insist on getting data upfront. It invested time and money to ensure that it would have the information it needed for an effort to stem the high rate of turnover among new schoolteachers in Austin.

National and state data showed that more than 50 percent of new math and science teachers left the classroom for other work within five years. The University of Texas at Austin wanted to create a program that would encourage Austin’s teachers to remain longer than the average. But Austin schools didn’t track how long their teachers stayed — which would make it impossible to show whether efforts to keep teachers on the job made a difference.

The foundation gave the University of Texas $503,000 for the program, directing it to spend some of the money to first determine how much turnover there really was.

Finding out wasn’t easy. Karen L. Ostlund, who was teaching education courses at the University of Texas at Austin, looked at every directory for Austin’s 17 high schools and 22 middle schools from 1999 through 2004 to see whether names changed from year to year. Then she visited each school to confirm her results.

Ms. Ostlund found that in the schools with large numbers of children who were recent immigrants or who came from low-income families, 130 teachers — 40 percent of those hired — were leaving within a year.

To try to counter that trend, the UTeach/Dell Center for New Teacher Success at the University of Texas at Austin opened its doors in the spring of 2004, offering sample lesson plans, strategies for how to manage a classroom, courses to acquaint teachers with new developments in math and science, help from experienced teachers willing to make classroom visits, and other support.

The approach is starting to pay off. Turnover at low-income schools declined to 17 percent for the 74 teachers who enrolled at the Dell Center, but remained at 40 percent for teachers who did not.

“Dell really pushed us in a good direction,” says Ms. Ostlund, who now heads the center. “The National Science Foundation never asked us for data like this.” (The university’s UTeach math and science teacher-training program has received a grant from the National Science Foundation.)

‘Takes Time’

The contrast between the speed with which results are obtained in business and the relative slowness with which they are realized in philanthropy has been a surprise, Mrs. Dell says.

“One thing Michael and I have learned is patience,” she says. “We have always required that organizations and programs show their progress. However, measuring that progress takes time — sometimes years — to show the full results and impact.”

The Dell’s family friend, Mr. Winstead, who has served as chairman of central Texas’s United Way Capital Area, says he believes some programs will prove impossible to measure in numbers.

“Sometimes you can’t look at nonprofits the way you do a business,” he says. “Sometimes you just need to give to a charity and pray they make it and hope.”