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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

where we get a research paper on Nano chemistry....?
Maira Reply
nanopartical of organic/inorganic / physical chemistry , pdf / thesis / review
what are the products of Nano chemistry?
Maira Reply
There are lots of products of nano chemistry... Like nano coatings.....carbon fiber.. And lots of others..
Even nanotechnology is pretty much all about chemistry... Its the chemistry on quantum or atomic level
no nanotechnology is also a part of physics and maths it requires angle formulas and some pressure regarding concepts
Preparation and Applications of Nanomaterial for Drug Delivery
Hafiz Reply
Application of nanotechnology in medicine
what is variations in raman spectra for nanomaterials
Jyoti Reply
I only see partial conversation and what's the question here!
Crow Reply
what about nanotechnology for water purification
RAW Reply
please someone correct me if I'm wrong but I think one can use nanoparticles, specially silver nanoparticles for water treatment.
yes that's correct
I think
Nasa has use it in the 60's, copper as water purification in the moon travel.
nanocopper obvius
what is the stm
Brian Reply
is there industrial application of fullrenes. What is the method to prepare fullrene on large scale.?
industrial application...? mmm I think on the medical side as drug carrier, but you should go deeper on your research, I may be wrong
How we are making nano material?
what is a peer
What is meant by 'nano scale'?
What is STMs full form?
scanning tunneling microscope
how nano science is used for hydrophobicity
Do u think that Graphene and Fullrene fiber can be used to make Air Plane body structure the lightest and strongest. Rafiq
what is differents between GO and RGO?
what is simplest way to understand the applications of nano robots used to detect the cancer affected cell of human body.? How this robot is carried to required site of body cell.? what will be the carrier material and how can be detected that correct delivery of drug is done Rafiq
analytical skills graphene is prepared to kill any type viruses .
Any one who tell me about Preparation and application of Nanomaterial for drug Delivery
what is Nano technology ?
Bob Reply
write examples of Nano molecule?
The nanotechnology is as new science, to scale nanometric
nanotechnology is the study, desing, synthesis, manipulation and application of materials and functional systems through control of matter at nanoscale
Is there any normative that regulates the use of silver nanoparticles?
Damian Reply
what king of growth are you checking .?
What fields keep nano created devices from performing or assimulating ? Magnetic fields ? Are do they assimilate ?
Stoney Reply
why we need to study biomolecules, molecular biology in nanotechnology?
Adin Reply
yes I'm doing my masters in nanotechnology, we are being studying all these domains as well..
what school?
biomolecules are e building blocks of every organics and inorganic materials.
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit 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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