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I’ve talked before about our new Quick View summary on our nonprofit reports, and today I want to focus on the section dealing with legitimacy. Check out my video here: http://youtu.be/PSVCRXPR43I. You can find more about the Quick View and our overhaul of the nonprofit reports here: http://www2.guidestar.org/rxa/news/news-releases/2012/1-26-12-new-nonprofit-reports.aspx. We love hearing from all of you about our new format, so keep the comments coming!  In my last blog post, I talked about the current controversy surrounding Three Cups of Tea author Greg Mortenson and his organization, the Central Asia Institute (CAI). Is this a classic case of a charismatic founder engaging in hyperbole and not paying attention to the details of the organization or is there something worse going on? How do we as donors make judgments about nonprofit organizations? We at GuideStar believe that donors come to the giving process with a distinct set of values, opinions, and priorities on what constitutes a good charity. Our goal is to present as well rounded a picture of an organization as possible. I went back today and looked at every piece of information GuideStar had on CAI and here is what I learned:
6 . The CAI was awarded the GuideStar Exchange Seal, our way of recognizing commitment to transparency and accountability in July 2010, BUT we took it away in 2011, because the organization did not comply with our requirement that audited financial documents be less than 12 months old. All in all, pretty thorough documentation on an organization. It would be tough to detect any operational problems from this extensive list. By far the biggest gap I see from the Mortensen story is a serious analysis of program goals and impact – not on finances. I always urge donors to start by asking three big questions:
This undertaking is pretty difficult at the moment though. There is no one central place where a donor can find information on how a charity is doing. A donor might find that out from the charity itself, but not easily. Each charity is different, with different goals and objectives, different impacts and a standard way of measuring how charities are meeting their own goals is a real challenge. A new approach we are launching with partners Independent Sector and BBB/Wise Giving Alliance is called Charting Impact. We are asking nonprofits to address five important questions that measure an organizations impact, trying to help donors focus on what really matters. Asking CAI to fill out the Charting Impact questionnaire may have helped the organization identify some of its weaknesses and may have given donors new insight. Reprinted Blog Post from: http://www.tacticalphilanthropy.com ______________________________________________________________________________________ Over the years, GuideStar has taken on the monumental task of providing transparency into the nonprofit sector, with care to maintain a sense of neutrality, providing tools and data users can access to guide their decisions. Now, we come to yet another crossroads in our history. Late last year we adopted a new strategic plan with an ambitious long term vision that embraces a world where:
GuideStar’s acquisition of Philanthropedia and Social Actions combines entrepreneurial talent, new technologies and adds deeper, wider and better data to our information stream. We are excited about being able to achieve efficiencies and scale faster by engaging the talent and platforms already created by both these entities. For some time, we have been looking for a way to utilize the in-depth analysis conducted by private foundations. Philanthropedia uses a sophisticated process and network to tap into the “wisdom of experts ” to analyze the effectiveness of nonprofits working in a particular cause area. We currently capture some of this information and display it via our TakeAction platform. This year they have added nine more cause-areas, have approximately 200 organizations in the top tier recommended category, 1,400+ organizations with reviews from several experts and a new “start-up” category with profiles and an expert comment on why these 25 or so start-ups have high potential. Their 2011 goals include adding ten additional cause areas. We plan to use GuideStar’s data and processing assets to enhance Philanthropedia’s research platform and to scale Philanthropedia’s mission. Their crowd-sourcing of experts, coupled with the Great Nonprofit reviews (“crowd-sourcing of users ”) we have invested in at GuideStar over the last two years, will give us a comprehensive compilation of third-party nonprofit reviews. Philanthropedia is led by co-founder Deyan Vitanov, with a fulltime staff of two and a part-time staff of two overseas product development engineers. We’re looking to apply their entrepreneurial spirit and energy into major roles in building GuideStar Labs, developing GuideStar’s TakeAction as our online laboratory and strengthening our data sources and content partnerships. As for Social Actions, we see GuideStar’s future tied to what Peter Dietz said in his blog recently: “The stewards of databases are no longer just asked to open up their datasets, but to make them available in such a way that they link with other data repositories by design.” This linkage is key to integrating data in a way that makes sense to different user groups. We have engaged Peter and Christine Egger to help us take their Social Actions concept to the next level. We built TakeAction with open source technology, for all the same reasons Social Actions built their platform on this same commonly accepted, scalable and rapid application technology. As a first step, we will integrate Social Actions into our TakeAction micro site and use it as part of our GuideStar Lab for testing out new tools and services. Social Actions also provides a new layer of social innovators to our growing data network. We envision leveraging the online communities and resources that Social Actions brings, by weaving in their action-oriented resources into a user’s decision-making process. We believe development and adoption of a standard protocol that will simplify cross-platform communication among transaction providers will have huge strategic implications to the sector. We’ll also use Social Actions Open Action XML API and semantic web technology to expand our data sharing services. Powered by these new acquisitions, we’ll be one step closer to turning data into information and knowledge and making GuideStar information widely distributed through a range of partners to all purposeful donors. Over the years, GuideStar has undertaken the monumental task of providing transparency into the nonprofit sector, with care to maintain a sense of neutrality, providing tools and data users can access to guide their decisions. Now, we come to yet another crossroads in our history. Late last year we adopted a new strategic plan with an ambitious long term vision that embraces a world where:
GuideStar’s acquisition of Philanthropedia and Social Actions combines entrepreneurial talent, new technologies and adds deeper, wider and better data to our information stream. We are excited about being able to achieve efficiencies and scale faster by engaging the talent and platforms already created by both these entities. For some time, we have been looking for a way to utilize the in-depth analysis conducted by private foundations. Philanthropedia uses a sophisticated process and network to tap into the “wisdom of experts ” to analyze the effectiveness of nonprofits working in a particular cause area. We currently capture some of this information and display it via our TakeAction platform. This year they have added nine more cause-areas, have approximately 200 organizations in the top tier recommended category, 1,400+ organizations with reviews from several experts and a new “start-up” category with profiles and an expert comment on why these 25 or so start-ups have high potential. Their 2011 goals include adding ten additional cause areas. We plan to use GuideStar’s data and processing assets to enhance Philanthropedia’s research platform and to scale Philanthropedia’s mission. Their crowd-sourcing of experts, coupled with the Great Nonprofit reviews (“crowd-sourcing of users ”) we have invested in at GuideStar over the last two years, will give us a comprehensive compilation of third-party nonprofit reviews. Philanthropedia is led by co-founder Deyan Vitanov, with a fulltime staff of two and a part-time staff of two overseas product development engineers. We’re looking to apply their entrepreneurial spirit and energy into major roles in building GuideStar Labs, developing GuideStar’s TakeAction as our online laboratory and strengthening our data sources and content partnerships. As for Social Actions, we see GuideStar’s future tied to what Peter Dietz said in his blog recently: “The stewards of databases are no longer just asked to open up their datasets, but to make them available in such a way that they link with other data repositories by design.” This linkage is key to integrating data in a way that makes sense to different user groups. We have engaged Peter and Christine Egger to help us take their Social Actions concept to the next level. We built TakeAction with open source technology, for all the same reasons Social Actions built their platform on this same commonly accepted, scalable and rapid application technology. As a first step, we will integrate Social Actions into our TakeAction micro site and use it as part of our GuideStar Lab for testing out new tools and services. Social Actions also provides a new layer of social innovators to our growing data network. We envision leveraging the online communities and resources that Social Actions brings, by weaving in their action-oriented resources into a user’s decision-making process. We believe development and adoption of a standard protocol that will simplify cross-platform communication among transaction providers will have huge strategic implications to the sector. We’ll also use Social Actions Open Action XML API and semantic web technology to expand our data sharing services. Powered by these new acquisitions, we envision a world where GuideStar offers tools and services that help turn data into information and knowledge and GuideStar information is widely distributed through a range of partners to all purposeful donors. It’s time for executives of high performing organizations to begin thinking about what the new economic normal will mean for them. Too many nonprofits are operating off of business models created in the 1960’s. Those models had several components that are no longer sustainable. For starters, after non-stop growth in total donations, the nonprofit sector experienced a significant dip in 2009 (Giving USA) and I wouldn’t be surprised if we saw a further decline in 2010. At the very least, growth will be much slower in the years ahead than it has been in previous decades. At the same time, investment income has declined to historically low levels affecting foundation endowments and organizational endowments alike. Finally, there is the nonprofit sector’s traditional dependence on government grants and contracts, for nearly a third of total revenue. This is a source already in decline and likely to plummet before it stabilizes. Here in Washington the federal budget news gets crazier every day. We are now operating the federal government in increments of several weeks at a time. Forgot about long range plans and strategy – a month is now an eternity. And the fight is about our current fiscal year, the one ending September 30! Still to come are debates over next year’s budget and all the big structural issues. Our government budget problems are way too big for anyone or organization to think they won’t be adversely affected in some way. At least that’s the way I hope it happens -spreading the pain around to everyone -not just to those without PACS and lobbyists. This includes nonprofits. For starters, we should expect some changes in the tax deductibility standards. Expect many government service fees to nonprofits to continue to be under stress or eliminated altogether. Tim Delaney, President of the National Council of Nonprofits, has an excellent paper published in the Nonprofit Quarterly http://www.councilofnonprofits.org/news/national-council-news/tim-delaney-state-threats-nonprofits, detailing the pounding nonprofits are taking from government. He reports that governments are abusing contract relationships with nonprofits by not paying full cost of work, changing contracts in mid-stream, paying late or not at all, adding unnecessary complexities, and adding new fees. He’s been urging nonprofits to fight back – with lobbying, advocacy, and the tough tactics applied in the business world, and not take it any more. But in a recent presentation at the Bradley Center, Gene Steurle, a wise veteran tax analyst, who has an excellent blog called The Government We Deserve, reminded us that currently the federal government is spending $31, 000 for every American each year and bringing in only $19,000 in revenue – not counting various tax deductions and loopholes. This is a path he suggests that will undermine our country’s security and not something we can avoid any longer. In 2009, for the first time in American history, he said, every dollar in the federal budget was committed before the fiscal year even began – thereby required elected officials to cut the budget or add to the deficit if they wanted to add any additional spending. Our only way out of this mess he suggested is to raise taxes, cut spending, and limit deductions and loop holes. Nonprofits are going to need to share in this sacrifice. We’re about to enter a period of a “giant re-set” – a phrase first used by the National Governor’s Association. What should leaders of high performing organization’s be doing?
I’m excited to report about GuideStar’s acquisition of two innovative nonprofit organizations. Read more about the acquisition here in our press release that was published today. I want to focus my blog today on the people part about this news. Philanthropedia is led by the dynamic Deyan Vitanov and his two colleagues Erinn Andrews and Dawn Kwan. They’ve done a tremendous job building Philanthropedia into a creative and scalable method for unlocking the knowledge of content experts. Their thought partners have been co-founder and board chair Howard Bornstein and his colleagues. Peter Dietz and Christine Egger have performed an equally impressive feat taking Social Actions from concept into a major force with 60 API partners in a few short years. You can read more about the process Social Actions went through to select GuideStar as its partners here on Peter’s blog. I’m expecting the addition of these talented entrepreneurs to GuideStar’s equally talented team to create new sparks of creativity and innovation. Stay tuned for further amazing new developments!
Although we wouldn’t presume to have the answer to Sigmund Freud’s famous question, we do applaud the approach We think it’s important that nonprofits make that emotional connection for donors. But in a crowded marketplace, with multiple nonprofits working towards the same mission and providing similar programs, we also believe it’s the high-performing nonprofits that, in fact, deserve these generation donations. And that’s a distinction that we have to make. In fact, many donors who are solely motivated by strong personal interests─religion, education, health and friend─will probably continue to be the vast bulk of donors. But even here data can play a role: one person told me he gives to the same organizations every year, but uses GuideStar to make sure everything is still okay. And it must be said: sometimes it is the most passionate donors who seek data. In our experience, an increasing numbers of donors who are determined to solve a problem or make a difference are the ones most likely to want to know about the results of the organizations they support. If a person’s goal is to, say, provide low income housing or end malaria, these passionate donors want to make sure the organizations to which they send their hard earned money actually know how to make a difference. During the Haiti earthquake crisis we were flooded with phone calls from people not about whether to make a contribution, but which organizations had the capabilities and experience to actually deliver. Passion often demands data. Above all else, we know that we need to understand better what drives charitable giving in order to understand better how to drive that giving to high performing nonprofits. We recently partnered with Hope Consulting to conduct and market test research on this topic to better understand and inform the philanthropic sector on the behaviors, motivations, and needs of individual donors, foundations, and those who advise them. We hope to use the findings of this research to help shape our core offerings of nonprofit data and information to the world. As President Obama recently remarked at the Millennium Development Goals Summit in New York, New York, “Guided by the evidence, we will invest in programs that work; we’ll end those that don’t. We need to be big-hearted but also hard-headed in our approach to development.” In other words, the job of providing data to donors is tough, but somebody’s got to do it. Earlier this month the Seattle Foundation announced a new website that gathers information about local nonprofits in Seattle and King County. You can read more about it here on Seattle Times and Chronicle of Philanthropy. I see the Seattle Foundation’s decision to invest $1.45 million dollars to build their solution as further market confirmation of several key trends:
We’re thrilled at this announcement. It is another confirmation of many of the activities our community foundation partners already have underway with GuideStar’s DonorEdge. Consider these:
- Because of GuideStar’s technology infrastructure, DonorEdge is scalable and cost effective for varying sizes of community foundations. - Our cooperative funding model provides for annual software updates and new features informed by the DELC to stay ahead of the curve. The news from Seattle is another important step for the re-shaping of community foundations. I’d be interested in your thoughts. Please share this with your networks via the ShareThis button below and leave a message in the comment section below.  GuideStar's summer 2010 interns join Deyan Vitanov of Philanthropedia (second from left) and Bob Ottenhoff (second from right) on a bicycle tour of the nation's capital. Click the image to view it full size. What kind of nonprofit data does a donor or decision maker need in today’s world? When GuideStar started collecting data over 10 years ago, the answer was simple: almost anything would help! Today the world of nonprofit data is a much different place. Thanks to our pioneering efforts, the IRS Form 990 is widely accessible. And thanks to the Internet, some information is available on almost every nonprofit. Now the focus is on the quality of the data, and user expectations are increasingly moving from basic transparency to issues such as the capabilities and effectiveness of organizations. In response last year GuideStar launched the GuideStar Exchange, an effort to collect detailed and high-quality data from nonprofits. Organizations that complete key data fields are awarded the GuideStar Exchange Seal—an important badge of distinction that signifies the organization’s commitment to transparency and accountability. This summer, GuideStar is fortunate to have a team of very talented and energetic interns to assist nonprofits with the GuideStar Exchange update process. You may be contacted by one of them in the very near future. If so, remember that they are there to help your organization attain the GuideStar Exchange Seal, which represents your organization’s commitment to transparency. Learn more about obtaining the seal for your organization  The interns at the base of the Washington Monument; the Lincoln Memorial and Reflecting Pool are in the background Our summer 2010 intern team includes: Darrel Philpott, intern supervisor—2010 graduate of the College of William & Mary I’d like to thank Karen Rayzor for her excellent work selecting the interns, training them, and providing them with the best experience possible. And lest you think we keep our interns locked up in a conference room all day, here are a few pictures from our recent sightseeing tour around Washington, D.C.
 The Lincoln Memorial, Reflecting Pool, Bob Ottenhoff, and Deyan Vitanov  In front of the U.S. Capitol
Have you seen TakeAction@GuideStar yet? It’s our new initiative to give donors a new way to find nonprofits on GuideStar and more information about those organizations. We soft-launched it a couple of weeks ago, and the hard launch was this week.
I was delighted to see Sean Stannard-Stockton’s comments about TakeAction@GuideStar in his blog, Tactical Philanthropy. It was gratifying to read that Sean views TakeAction@GuideStar as "one more step towards helping donors make smart decisions about their giving." But I would have been pleased by his post even if Sean had criticized our efforts. We invite everyone to give us his or her opinion on TakeAction@GuideStar. It’s easy to give us your feedback; just click the [+] on the lower portion of any TakeAction page and complete the form that pops up. Your comments will guide the future development of TakeAction@GuideStar. Tell us what you like and dislike, what works and doesn’t work for you, the causes and partners that interest you—anything you’d like to share or think we should consider. We very much want to hear from you. |
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