About Bob Bob serves as President and CEO of GuideStar and serves on the boards of Vision TV, Grameen Foundation USA, and the AAFRC Trust for Philanthropy. More...
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Posted By Bob Ottenhoff on January 30th, 2012, in these categories: Charting Impact | Nonprofit Practice It’s no secret that GuideStar has long been at the forefront of the discussion on nonprofit transparency and accountability, and now we’re taking a hard look at the issue of nonprofit impact. We partnered with Independent Sector and BBB Wise Giving Alliance on the Charting Impact initiative, which I’ve blogged about before.
And now, two sections of our new Quick View summary at the top of our nonprofit reports can help people determine a nonprofit’s impact. Check out my video about on our YouTube page: http://youtu.be/rLahr7qBShw.
How do you measure nonprofit impact?
Posted By Lindsay Nichols on December 21st, 2011, in these categories: Money for GoodThe following is a follow-up to the questions submitted during the December 16 webinar on driving more dollars to high-performing nonprofits with Bob Ottenhoff, president and CEO of GuideStar, and Greg Ulrich, director of advisory services at Hope Consulting. To view or hear a live recording of the presentation, please click here. Q: Effectiveness data of course requires metrics. Were there any survey comments from responders on ideas for metrics?
Greg: Effectiveness requires us to understand how well organizations are performing relative to their mission and objectives. Donors do not appear to have strong perspectives
as to WHAT specific information they are looking for. They are open to facts from the organization as well as reviews from beneficiaries and experts (though not from the public, other donors, celebrities, etc). For nonprofits, we believe that it is most important to start to change the conversation to the impact you are having, and to start showcasing the information you do have. The perfect need not be the enemy of the good.
Bob: I am often asked how nonprofits can measure their effectiveness. As I have blogged about before, I often ask nonprofits to gauge their progress by answering three simple questions:
- What do you do?
- How do you do it? What are your programs and activities?
- And how are you doing? Is your organization having success in achieving its goals?
There are a variety of ways to include metrics in the answers to those questions, whether it’s seeking expert reviews from Philanthropedia, or reviews from being who have interacted with your nonprofit via Great Nonprofits, or the success measures you include in your Charting Impact report. Whatever the choice is, including specific measurements as well as anecdotal evidence is the best way of painting the entire picture of nonprofit effectiveness.
Q: Can you break out the motivation data for donors who make the decision to give to NEW causes?
Greg: Thank you for the question. Donors do have different behaviors for new vs. repeat donations. For instance, when asked if they would research a donation, 35% said they would research for a repeat donation, whereas 87% said they would research for a first-time donation (note: as these figures are asking about projected behavior, they are both overstated a bit, but give a sense of the relative difference in their desire to learn more about an organization). However, while the stated interest in research differs for new vs. repeat donations, we still find that when donors research they are doing it primarily to validate an organization, and they have the same general preferences for information, format and source, regardless of whether its for a first-time or repeat donation.
Bob: Money for Good II tells us that most of our giving is generated by requests– by friends and colleagues, by the person ringing the bell outside of their local big box store, by a neighbor who is running a marathon and needs a sponsor. While much of this is worth supporting – the act of giving is the act of caring – we can encourage donors to care about new causes if we shifted our focus to purposeful giving. The fact is that knowledge is power, and we can get more money to those nonprofits that are really making the most difference in their various focus areas, rather than just those with the biggest fundraising mechanisms. Research is a donor’s best bet to making sure his charitable gift is going to a high-performing nonprofit.
Posted By Bob Ottenhoff on December 16th, 2011, in these categories: Nonprofit PracticeThis past Monday I hosted a webinar with Mario Morino, co-founder and chairman of Venture Philanthropy Partners and chairman of the Morino Institute. His career spans more than 40 years as entrepreneur, technologist, and civic and business leader. He also has a long history of civic engagement and philanthropy in the National Capital Region and more recently in Northeast Ohio. Mario recently released a book called Leap of Reason. You can listen to the webinar or see the slides here. After the webinar, I had a chance to follow up with Mario.
1. Why did you write the book Leap of Reason?
I decided to write the book, which is available for free, as a way of encouraging every nonprofit board to have some hard, rock-the-boat conversations about this era of scarcity and how to prepare for a very different fiscal reality.
We’ve gotten some very nice responses to the book—and there are now more than 25,000 copies in circulation. One colleague had a blunt take on why there’s so much interest: “The book is ok. The timing is great.” I think he’s probably right. Nonprofit leaders know their world around them is changing, and their funding is under pressure like never before. This book offers practical advice on how to manage with more rigor and discipline in this very difficult era.
2. So much charitable giving comes from the heart—a call for help in time of need or for causes that evoke passion. Do you expect all charitable giving to be focused on outcomes?
No, I don’t. Part of my giving is from the heart or from a sense of obligation to a friend or colleague. And I don’t lose any sleep over that. My plea is for foundations and donors and governments to give an increasing share of their gifts based on reason, while never losing their strong sense of passion.
3. In the book you say, “Technology is not the decisive factor in whether organizations make the transition to managing to outcomes and raise their impact. Far more important is the mindset of the leaders who put these systems in place.” Please describe that mindset and culture. Can you give some examples of where you’ve seen it in action?
Since the book’s release, I’ve had the honor of visiting a series of stellar organizations around the country that have this mindset and culture, including the Strive Partnership, Youth Villages, Roca, and Congreso. The leaders of all of these organizations have embraced rigorous information collection and use not because it’s “important,” not because it’s a trend or a good marketing tool, and not because a funder or investor said they had to. They do it because they believe it to be integral to ensuring material, measurable, and
sustainable good for those they serve.
Good leaders in any sector—nonprofit, for-profit, or public—who have a performance mindset want to augment good intentions and intuition with the best data they can get their hands on. They can’t sleep at night when they don’t know whether they’re on course to achieve the results they seek. They’re obsessed with finding ways of doing what they do even better.
4. What is one take-away that a nonprofit leader can do today to start managing to outcomes?
I’m happy to answer the question, but I don’t want anyone to think that managing to outcomes can be accomplished quickly with a simple, 10-step process. Managing to outcomes is a quantum leap for most organizations and involves significant culture change. It is not about implementing a cookie-cutter set of best practices.
That said, I would encourage people to look at the “Ideas Into Action” section of the book, which begins on page 63. That section provides a set of questions that boards and leadership teams should ask themselves to gauge their readiness and capacity for doing the hard work of making significant culture change.
5. GuideStar’s goal is to encourage information- and data-driven decision making from donors, nonprofit organizations, advisors to the sector, etc. What data or other information should we be asking nonprofits to supply us that we can share with the public?
I’m a long-time fan of GuideStar and was pleased to see the Charting Impact initiative you’re engaged in with Independent Sector and BBB/Wise Giving Alliance. But I think we need to do more to help you make performance data—not just operational and financial data—available on the nonprofits you profile. In a changing world in which funders increasingly ask to see outcomes and impact information, the nonprofits that voluntarily share it would have a strong comparative advantage. The organizations that were not
inclined to provide it would stand out for their lack of an outcomes culture and transparency. And voluntary reporting of outcomes information need not be highly sophisticated to be valuable.
6. GuideStar also wants to drive the most money to high-performing nonprofits since they are making the most difference. How does managing to outcomes ensure that a nonprofit is high-performing?
I believe that high performance requires nonprofits to:
- gain clarity on what change they are trying to create;
- gain specificity on how they will accomplish that change;
- determine what information (quantitative and qualitative) will be most helpful for gauging whether they are on course to achieve that change;
- collect and use this information to plan, make important decisions, track, course-correct, and improve; and
- combine all of the above with good judgment and keen discernment.
These are the core elements of managing to outcomes.
It’s possible that there are organizations that are not doing these things and yet are making a real difference for those they serve. In my experience, these practices are truly prerequisites for high performance and impact. At an absolute minimum, it is difficult to imagine an organization demonstrating to funders and other stakeholders that it is a high performer without engaging in these core elements of managing to outcomes.
Posted By Bob Ottenhoff on October 20th, 2011, in these categories: GuideStar | Human Resources | Nonprofit PracticeI was recently the keynote speaker at the Nonprofit Human Resources Conference at the Gaylord Conference Center.
Due to the recession, the job of the nonprofit human resources director is tougher than ever. Today’s financial environment is causing anxiety and uncertainty. This is a time for lots of communication about the state of the organization, particularly revenue issues and prospects for the future. There is considerable talk about transparency to the outside world and to stakeholders, but transparency within an organization is just as important and is often overlooked.
In my talk I urged the human resources directors to embrace adaptability—something I’ve come to believe is one of the keys to effective leadership. When revenues are crashing and the future is gloomy, this is not the time to stubbornly hold on to the ways things have always been done. In fact, it can be a liberating experience to start saying “no more” and to start exploring brand new approaches.
In most nonprofit organizations, personnel costs are roughly 50 percent or more of total expenses. That’s a lot of money. But we often don’t think about carefully nurturing our people resources the same way we do with managing financial resources or IT resources.
Last year at GuideStar we developed a Human Capital Strategy with the tremendous help of Sal Giambanco of the Omidyar Network.
We started by confirming our mission, strategy and goals, and reviewing our desired impacts.
This led to a discussion of the organizational impact of our work and our business strategy. How were we going to accomplish what we said we wanted to do? What are our services? What is our business model?
And then finally, we reviewed what kind of talent we needed to attract, engage and retain in order to deliver on these mission and business promises. Here’s a graphical depiction:
 Image courtesy of Omidyar Network An organization’s business strategy is driven by numerous dynamic factors:
– external market factors that create demand and shape the competitive environment for products and services
– organizational factors include core competencies, products, structure and composition of the management team, the cultural and political environment within the organization
– people factors include leadership and management competencies, the ability of the organization to develop and retain
talent
An organization’s Human Capital strategy – that is, the people side of business design is centered on the selection, deployment, motivation, and management of people and is ultimately one of the most important key drivers of business success. Jim Collins terms this “do we have the right people on the bus?”
Remember this: almost any significant changes in market dynamics or business design will require changes
in a firm’s Human Capital strategy.
Finally, the HR function delivers a range of consulting and program administrative services based on the organization’s needs.
HR’s service delivery strategy must be:
– responsive to the organization’s business strategy
– explicitly aligned to support the implementation of the organization’s human capital strategy
– should be “owned” by the CEO or COO
What is your human capital strategy?
Posted By Bob Ottenhoff on March 7th, 2011, in these categories: GuideStarI went back and re-read the book The Starfish and the Spider by Ori Brafman and Rod A. Beckstrom this week. It’s a great read for anyone who runs an organization, particularly a membership organization, or works primarily in the internet world. Since the book was written, social networks have soared in popularity, helping to topple dictatorships and transforming politics.
The book’s title comes from the make up of starfish and spiders. Starfish don’t have a head or a central body but operate as a decentralized network. Major organs are replicated through each and every arm. If you cut an arm off, it grows another one, or in some species regenerates into a whole new starfish. The spider on the other hand has eight legs and a central body. If you chop of its head, it dies. If it loses a leg or two, it’s in trouble. The authors use the spider as an example of traditional “command and control” organizations: armies, governments and I would add, many nonprofit organizations. Starfish, on the other hand, are represented by things like the internet, e-Bay, Alcoholics Anonymous, and Wikipedia – essentially where no one person or organization is in control.
Where the book really gets interesting is when the authors introduce the concept of a “hybrid organization” - ones where central organizations introduce elements of decentralization by giving their customers a role. At e-Bay policing of the site was primarily turned over to its users; at Amazon and Netflix, users are encouraged to review books and movies. At Intuit, the maker of highly sophisticated and complicated Quicken and Turbo Tax software, a way for users to help one another on line was introduced called TaxAlmanac.org – without any mention of brand or products. As Intuit explains it, “the collective knowledge of the entire tax professional community is far more powerful any handful of experts.” At IBM, there is support for Linux – the open source operating system – and at the same time IBM-designed hardware and software that is Linux-compatible.
So where is the sweet spot for nonprofit organizations? The nonprofit community suffered for many years from poor management, inconsistent delivery of services and insufficient capacity. In the last decade or so, the nonprofit community has made great progress in running better organizations, improving both capabilities and capacities, and the way we measure both output and outcome. But in this effort to professionalize, have we failed to grasp the power of the starfish system? Many of us have contact with lots of donors, volunteers and service recipients. How can we use the network effect to create communities? How can we use the power of chaos as incubators of creative and innovative ideas? Decentralized networks can seem messy and a step backwards. But harnessing their power may be our best chance to introduce new energy and vitality into our organizations.
Posted By Bob Ottenhoff on January 18th, 2011, in these categories: Disaster Relief | GuideStarThere have been lots of interesting reports on Haiti these past few days as we mark the one year anniversary of the devastating earthquake that killed over 200,000 people and left over a million people homeless.
 Source: Global Development Blog-Views from the Center Pledges and contributions from the public have so far totaled about $1.5 billion and government agencies have pledged close to $3 billion. That seems like a lot, but other disasters have generated even larger contributions. Whatever the amount, there’s a lot of frustration today about the pace of progress. Is it justified? I offer four points to think about:
1. There is a difference between crisis relief and rebuilding. When a disaster occurs, there is an immediate problem: rushing medical attention, food, water, and shelter to the victims. Donors respond unusually well to vivid television reports of these emergencies and donations tend to spike. But once the crisis has been addressed, the tedious cleaning up and rebuilding begins. It is a hard slog and it is not televised. Complaints that donations are not being spent fast enough are mixing expectations about the emergency relief versus the complicated rebuilding efforts. It’s hard for donors to distinguish between the two activities because nonprofits raise money based on the emergency at hand.
2. Donors do not always think in the longer term. The Disaster Emergency Committee reports that before the earthquake hit:
- More than 70% of people in Haiti were living on less than $US2 per day
- 86% of people in Port au Prince were living in slum conditions – mostly tightly-packed, poorly-built, concrete buildings.
- 80% of education in Haiti was provided in often poor-quality private schools, the state system generally provided better education but provided far too few places.
- Half of people in Port-au-Prince had no access to latrines and only one-third has access to tap water.
In other words, the crisis in Haiti began long before the earthquake. But this wasn’t televised either and it’s hard to raise money for long-term efforts.
3. Capabilities matter. Increasingly donors are demanding more than just good intentions. They want results. Disaster aid organizations are going to need to prove that they know what they are doing and have the organization, logistical capabilities, and personnel to get things done, done well, and done quickly. By the way, for you believers in judging nonprofits by overhead ratios: these might be considered the elements of overhead, but it is often the difference between mere aspiration and actual accomplishment.
4. International aid organizations need to work together better. According to the Disaster Accountability Project, 196 organizations solicited donations for work in Haiti. Sometimes they seem to be tripping over one another. The multiplicity of organizations is made more difficult because of the weak and disorganized Haitian government. Here are a few organizations to keep an eye on:
Posted By Bob Ottenhoff on December 30th, 2010, in these categories: Economy | Fundraising | Government | GuideStar | Nonprofit PracticeI spent some time yesterday preparing for an upcoming radio interview on nonprofit trends for 2011 with Lindsay Nichols of the GuideStar team. We identified three big issues that we think we will influence much of what goes on in the nonprofit sector in the year ahead:
- The economy: GuideStar released a report in late November that suggests that the free fall from the Great Recession is over, but the recovery is still uneven – with
 the speed and extent of the recovery depending on the geographic location, size, and type of the organization. Meanwhile, demand for nonprofit services, particularly vital social services, continues to increase.
- State and federal government financial issues: I recently wrote a blog about how nonprofits are being affected by drastic budget cutbacks in government budgets. Since then there have been a number of frightening reports predicting we could see a number of government bankruptcies this year. With government being the largest source of nonprofit revenue, this situation could get a whole lot worse before it gets better.
- Technology: No surprise to those working in the nonprofit sector: technology continues to change, modify and transform how we raise and donate charitable contributions. Network for Good recently published a new study about just how vital online and mobile giving has been to the nonprofit sector lately, with particular success seen after disasters such as Haiti or 9/11. At the same time, Apple has denied nonprofits to accept donations via their apps, which is causing some major discussion in the field. I recently blogged about this topic as well: http://ceo.guidestar.org/2010/12/15/apple-has-it-partly-right-nonprofits-should-be-vetted/.
Aside from these three major environmental trends, there are two other issues slowly evolving that could end up having a huge impact on the sector in 2011:
- IRS tax-exempt status revocations: As a result of the Pension Protection Act of 2006, there are about 400,000 nonprofits in danger of losing their tax-exempt status because they have failed to file annual returns with the Internal Revenue Service (IRS) for fiscal years 2007, 2008, and 2009. GuideStar has distributed multiple press releases about it, the latest in October. This will be a HUGE game-changer in 2011.
- Tax implications: Bloomberg Businessweek recently interviewed Dan Moore, GuideStar’s Vice President of Nonprofit Programs, as part of a story on how estate tax changes may affect charitable giving. In addition, when President Obama and Congress begin tackling the federal government deficit next month, look for the charitable deduction to be up for serious debate. Both of these two tax issues could have a major impact on how and when people donate to charity.
It will, as always, be an interesting year!
Posted By Bob Ottenhoff on December 7th, 2010, in these categories: Charting Impact | Donors | GuideStar | Nonprofit Practice It’s that time of the year when we’re being flooded with phone calls from reporters asking about holiday giving and how donors can spend wisely. Part of this activity is driven by skepticism – donors are increasingly wary of nonprofits and how they spend their money. Many of the calls are motivated by a genuine concern for making a difference and a desire to direct hard earned contributions to where it will do the most good.
Still a third reason for these reporter calls is caused by the nonprofit sector itself. Unfortunately too many nonprofit organizations continue to define themselves in terms of their overhead ratios – a short-sighted approach to evaluation. They promote the so-called overhead ratios on their websites or otherwise publicize ratings they have received from watch dog organizations about overhead ratios. How many mailings have you received this season from organizations promising that none of your contribution will go to overhead? As long as we define nonprofit organizations in terms of expense boxes, we are painting ourselves into this corner.
Here at GuideStar we tend to take the long view about these questions.
Over ten years ago GuideStar led the movement to promote transparency and accountability among the philanthropic sector. Today stakeholders can view the available IRS Form 990s on GuideStar. Nearly 7,500 organizations will earn the prestigious GuideStar Exchange Seal this year signifying their commitment to transparency. Donors expect an organization to freely provide information about their programs and finances and are suspicious when they aren’t readily available.
We urge reporters researching what donors should do before giving to start by looking at the mission of the organization and asking three simple questions:
- What do they do?
- How do they do it? What are their programs and activities?
- And how are they doing? Is the organization having success in achieving its goals?
Currently we have a major test underway with our partners Independent Sector and the BBB/Wise Giving Alliance called Charting Impact. The project is designed to help nonprofits better communicate with the public about how to evaluate nonprofit performance by answering five easy questions:
1. What is your organization aiming to accomplish?
2. What are your strategies for making this happen?
3. What are your organization’s capabilities for doing this?
4. How will your organization know if you are making progress?
5. What have and haven’t you accomplished so far?
The Money For Good study performed last year by Hope Consulting found that donors are very interested in learning about nonprofit organization performance but infrequently actually use data to make decisions. At GuideStar we see that as a challenge to learn more about donor needs and to lead the next wave in making better decisions.
A few weeks ago, I had the pleasure of renewing a high school friendship with Jonathan Bradford. I thought his work with a nonprofit organization in Grand Rapids, Michigan, was so fascinating that I wanted to share it with you. Not only is he making great progress against formidable odds, his story reflects the challenges many nonprofits face today.
Bob: What does ICCF do?
Jonathan: The Inner City Christian Federation (ICCF) is a not-for-profit housing development and housing service corporation. Our chief products fall into two primary categories: The finance and production of affordable rental or owner-occupied units and the provision of housing counseling and education services that enable people to realize housing success thereby go on to pursue broader life goals. A bit more detail:
- Real Estate Development – ICCF has developed about 515 units of housing, nearly all of it single family detached. We arrange the financing using various combinations of financing from local banks and investors or loan/grant programs available from all levels of government. We then construct the building(s) most often ourselves because we are a state-licensed residential building contractor. For larger multi-unit projects we may go out to larger commercial contractors. We are also a U.S. Department of Housing and Urban Development (HUD) and Michigan State Housing Development Authority (MSHDA) certified property manager, so we also provide property management of our rental units.
- Housing Counseling and Education – Whether for our own residents who are in or going in one of our properties, or for clients referred by one of several other non-profits or local banks, we provide a broad array of learning opportunities around topics related to home maintenance and home management. For example these include classes on plumbing repair, furnace maintenance, or landscaping on the one side and family budgeting, and insurance/tax matters and parenting on the other. We also operate a five unit emergency shelter for homeless families. This is a building that we designed and constructed about 21 years ago to provide 30 day crisis intervention shelter for families. Because it is not a dormitory model and has instead five fully furnished and equipped efficiency apartments, it was the first shelter in Michigan that was designed to enable adolescent and adult males to stay with their families. Until five years ago, a common demand profile would run at 50 to 75 cases per year and many of them would be in some way related to the borrower having too much debt (i.e., over-leveraged). In the most recently completed fiscal year we saw about 780 families and roughly 80 percent of them were at risk of losing their houses because of economic interruption: loss of employment, overtime pay, bonuses, or more rarely divorce or death of bread winner.
Bob: I understand you have a for profit subsidiary. How does that work?
Jonathan: Yes, in 2003 we launched a mortgage brokerage called Providence Home Mortgage (PHM). Using our own capital or that which was lent to us at very advantageous rates, we started PHM as an antidote to proliferation of predatory lenders in our community. PHM is just a broker. That means we are doing the leg work for larger lender/servicer companies who in turn represent larger investors. We are to larger lenders what a local Chevy dealer is to GM. In our nearly seven years of operations, we have had three strong years, two marginal years and two bad years; overall we have not broken even yet. Clearly a large part of the reason for that is the housing finance crisis of the last 3+ years. We are rather proud of the fact that we have been able to weather this storm thus far.
Bob: How important is government revenue to you and what has happened to it the last few years?
Jonathan: At any given time we have at least 10 different “purchase of service” contracts going with the City of Grand Rapids, Kent County, the State of Michigan, or the Federal Government (mostly HUD). Most years these contracts will comprise about 45 percent of our revenue. So you see it is very important.
Over the last five years it is safe to say our government contract revenue has increased a good 30 percent. Nearly all of this is related to the foreclosure crisis. We receive funding from two different sources for foreclosure counseling and three sources for the acquisition, rehab, and resale of formerly foreclosed houses.
Bob: What do you see as your biggest challenge in the next few years?
Jonathan: There are at least two. The first and biggest challenge is to stabilize philanthropic revenue thereby enabling us to continue to attract and retain top talent. The world of housing is so volatile and constantly challenging right now such that this will continue to be a daunting task. The second challenge is much more nebulous: As is the case in many cities, there is a significant “back to the city” movement in Grand Rapids. In broad urban planning conceptual terms, this is most welcome because economic diversity is key to long term urban health. Indeed, ICCF wishes to be a part of this effort, but we are committed to doing so in a manner that ensures the interests of current residents are protected while also creating genuine value and attractiveness that will benefit all.
Bob: How do you measure success?
Jonathan: In the fact that ICCF places as much emphasis on high quality real estate development as on services that empower our residents toward new levels of independence and accomplishment success measurement comes in two forms. In real estate we must accomplish the construction or reconstruction of the building(s) in a manner that the market accepts, i.e., it is sold or rented with minimal delay at a price that covers our costs net of grants and/or tax credit equity, etc. True success also demands that we design and construct the building(s) in a manner that is truly respectful of both the resident and the neighbor or passer-by. This in turn requires care in aesthetic design, energy efficiency, and construction quality. Success in services to our residents and clients is fundamentally about their realization of goals that we have helped them set. It could be to retain the house they already have, or acquire a better house at a lesser cost than their current arrangement. It could also be the gaining of skills that will help them better maintain and retain their house or quite simply live for a short time in a place more safe than a the basement of an abandoned house or under a bridge.
 Jonathan Bradford in front of ICCF's headquarters
Bob: In this picture you are standing in front of a pretty fancy building. Is there a story here?
Jonathan: There are actually several stories here. The building is the former D.A. Blodgett Home for Children which as of September 2007 became ICCF’s home. It was built in 1908 as an orphanage. In 1948, when foster care had replaced institutions for the care of children, the building was given to a private physical rehabilitation facility called Mary Free Bed Hospital. Because of the polio epidemic in the 40’s and 50’s they needed more space. They actually removed the entire facade of the building and grafted four different ugly utilitarian additions on the front of the original building nearly obscuring its extraordinary neo-classical Italianate beauty.
When Mary Free Bed left the building for a new facility in 1976 it was home to a few small businesses for 12 years or so. In 1988 it was abandoned and in the early 1990’s was briefly considered as a site for a charter school. After being left to rot for 16 years the City of GR issued demolition orders in mid-2004. We acquired it late that year and persuaded the city to give us a year to raise the funds and put a historic rehab project together. We started demolition of the 1950’s additions in January 2005. After a total recreation of the original facade and a historically considerate adaptation of the interior into offices and classrooms we moved in just in time for the big housing implosion of the fall of 2007.
Although we wouldn’t presume to have the answer to Sigmund Freud’s famous question, we do applaud the approach that Cynthia Gibson and Bill Dietel take in their provocative article “What Do Donors Want?,” in a recent issue of Nonprofit Quarterly. At GuideStar, we have long known that the majority of donors give according to their hearts. They look for nonprofits that align with their own sets of values, and they look for the nonprofits themselves to prove that they are worthy of the donations. That’s what makes the nonprofit sector so interesting – there’s something for everyone.
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.
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