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Aggregating information to inform donors

Several major components of a system to inform nonprofit donors’ investment decisions already exist:

GuideStar publishes a Web site that presents organizational and financial data from the IRS 990 forms of all 1.5 million nonprofits in the United States. GuideStar could providethe core of a system, especially if its database expanded to include non-financial information.

GuideStar’s database could be further structured by categorizing organizations and asking for program performance information by type of organization. This taxonomy could be based on research by the Urban Institute and the Center forWhat Works, which provides sets of key performance indicators for fourteen types of organizations—from affordable housing to prisoner reentry.

DonorEdge provides strategic, programmatic, organizational, and financial data about 2,500 nonprofits in the Kansas City area. DonorEdge was created by the Greater KansasCity Community Foundation (GKCCF) for individuals maintaining donor-advised funds there. GKCCF has made its software open source and has been active in sharing withothers; nine other community foundations across the country have now begun to implement the system. A visitor to the DonorEdge Web site will see five pages ofinformation on each organization:

  • General information page

    Mission statement, recent accomplishments, needs statements, background statement on the context of the organization’s work, CEOand Board Chair statements
  • Programs page

    (for each separate program): Description, budget, target population, program long-term success definition, program short-term successdefinition, program monitoring plans, examples or evidence of program success
  • Financials page

    Revenue by source for last three years, resource allocation for last three years, assets and liabilities, short- and long-term solvency ratios,financial comments from staff
  • Management and governance page

    List of board members with affiliations, board demographics, data on frequency of board meetings, board meetingattendance, board term limits, board structure, strategic plan timeline, risk management policies, staff and volunteer statistics, bios of key staff
  • Supporting documents page

    IRS 990 form, IRS letter of Determination of Tax Exempt Status

GlobalGiving is an international analogue to DonorEdge that provides information about particular projects in developing countries. Its lively interface offers donors a setof projects to invest in, ranging from planting nitrogen-fixing trees in central Kenya to providing vaccinations for children in Cambodia. Each entry includes basicinformation about the project’s goals, strategies, and its sponsoring organization’s financial health.

In addition to providing information to help donors make investment decisions, GlobalGiving, like DonorEdge, reduces the transaction costs of giving by allowing donors to contribute to projects online.

Keystone helps an organization gather information from its stakeholders to guide it as it formulates strategies, makes tactical decisions, and assesses results. GreatNonprofits captures the views of an organization’s volunteers. These relatively new ventures suggest possibilities for providing donors with a broad array of stakeholderinformation, giving the nonprofit marketplace the extraordinary openness that Web 2.0 has brought to other realms through such innovations as eBay, Wikipedia, and userreviews on sites maintained by Amazon and Zagat. Indeed, foundations themselves could be valuable sources of information available to other donors.

Many foundations have a wealth of data about grantees’ goals, strategies, and operations that is not available to others. Increasingly, this information, as well as grantees’reports, are stored electronically. The fact that a substantial majority of foundations currently use the same grants management software (GIFTS by MicroEDGE) may facilitate aggregating anddisseminating this information. This raises questions of confidentiality. But at least some foundation programs—the Hewlett Foundation’s Education Program, for example—require that most grantee materials be made publicly available.

New approaches to capturing and sharing information will surely emerge over the coming years, and the development of a comprehensive system will inevitably beincremental. On the whole this is fine, but there is one incremental step that carries significant potential for doing more harm than good: evaluating an organization basedon its administrative and fundraising costs without taking into account the social benefits it produces.

See Jessica Stannard-Friel, “Funders’ Guide to Rating Systems,” onPhilanthropy (2/25/05)

Such ratings erroneously imply that a donor can assess an organization’s administrative costs in isolation from its effectiveness. This is the equivalent of looking at only oneside of a corporation’s financial statements. No less than in the private sector, a nonprofit organization should seek not to minimize but to optimize its costs so as tocontribute net value to its mission. An organization may have low administrative costs and produce little of value. Indeed, some organizations with low costs may be underinvestingin back-office functions that not only serve their goals but provide public accountability. In the business sector, low investment ratios at certain stages of anorganization’s development would make investors nervous, not excited.

If we build it, will they come?

Some donors seem more interested in funding innovative programs with immediate visible impact than in achieving long-term, sustainable results. Some have lowexpectations of nonprofit organizations and treat an honorable mission as a substitute for impact. And doubtless some donors are motivated more by relationships and recognition than by achieving results. More fundamentally, personal philanthropy maysometimes be so profoundly emotional as to be invulnerable to rational analysis.

Therefore, as we move forward we will need to better understand the psychology of giving and to make connections between thoughtful, strategic giving and achievingoutcomes in a way that will motivate donors. But it is at least worth hypothesizing that many donors do not seek information to guide their decisionmaking only because theyare resigned to its unavailability. To help test that hypothesis, the Hewlett Foundation is supporting many of the projects mentioned above.

The results may well be critical to the success and sustainability of a nonprofit information marketplace and ultimately to the effectiveness of the nonprofit sectoritself. If someday we are all successful in providing donors with better information to make better philanthropic decisions, the beneficiaries will be high-performingnonprofit organizations and the people and communities they serve.

Questions & Answers

what is math number
Tric Reply
x-2y+3z=-3 2x-y+z=7 -x+3y-z=6
Sidiki Reply
Need help solving this problem (2/7)^-2
Simone Reply
what is the coefficient of -4×
Mehri Reply
the operation * is x * y =x + y/ 1+(x × y) show if the operation is commutative if x × y is not equal to -1
Alfred Reply
An investment account was opened with an initial deposit of $9,600 and earns 7.4% interest, compounded continuously. How much will the account be worth after 15 years?
Kala Reply
lim x to infinity e^1-e^-1/log(1+x)
given eccentricity and a point find the equiation
Moses Reply
12, 17, 22.... 25th term
Alexandra Reply
12, 17, 22.... 25th term
College algebra is really hard?
Shirleen Reply
Absolutely, for me. My problems with math started in First grade...involving a nun Sister Anastasia, bad vision, talking & getting expelled from Catholic school. When it comes to math I just can't focus and all I can hear is our family silverware banging and clanging on the pink Formica table.
I'm 13 and I understand it great
I am 1 year old but I can do it! 1+1=2 proof very hard for me though.
Not really they are just easy concepts which can be understood if you have great basics. I am 14 I understood them easily.
find the 15th term of the geometric sequince whose first is 18 and last term of 387
Jerwin Reply
I know this work
The given of f(x=x-2. then what is the value of this f(3) 5f(x+1)
virgelyn Reply
hmm well what is the answer
If f(x) = x-2 then, f(3) when 5f(x+1) 5((3-2)+1) 5(1+1) 5(2) 10
how do they get the third part x = (32)5/4
kinnecy Reply
make 5/4 into a mixed number, make that a decimal, and then multiply 32 by the decimal 5/4 turns out to be
can someone help me with some logarithmic and exponential equations.
Jeffrey Reply
sure. what is your question?
okay, so you have 6 raised to the power of 2. what is that part of your answer
I don't understand what the A with approx sign and the boxed x mean
it think it's written 20/(X-6)^2 so it's 20 divided by X-6 squared
I'm not sure why it wrote it the other way
I got X =-6
ok. so take the square root of both sides, now you have plus or minus the square root of 20= x-6
oops. ignore that.
so you not have an equal sign anywhere in the original equation?
is it a question of log
I rally confuse this number And equations too I need exactly help
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Commplementary angles
Idrissa Reply
im all ears I need to learn
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salut. from Algeria
A soccer field is a rectangle 130 meters wide and 110 meters long. The coach asks players to run from one corner to the other corner diagonally across. What is that distance, to the nearest tenths place.
Kimberly Reply
Jeannette has $5 and $10 bills in her wallet. The number of fives is three more than six times the number of tens. Let t represent the number of tens. Write an expression for the number of fives.
August Reply
What is the expressiin for seven less than four times the number of nickels
Leonardo Reply
How do i figure this problem out.
how do you translate this in Algebraic Expressions
linda Reply
why surface tension is zero at critical temperature
I think if critical temperature denote high temperature then a liquid stats boils that time the water stats to evaporate so some moles of h2o to up and due to high temp the bonding break they have low density so it can be a reason
Need to simplify the expresin. 3/7 (x+y)-1/7 (x-1)=
Crystal Reply
. After 3 months on a diet, Lisa had lost 12% of her original weight. She lost 21 pounds. What was Lisa's original weight?
Chris Reply
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Source:  OpenStax, William and flora hewlett foundation annual report 2006. OpenStax CNX. Aug 14, 2007 Download for free at http://cnx.org/content/col10448/1.1
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