For example in our research on Climate Change we found that for foundation professionals, the following three criteria were most important when considering nonprofit effectiveness in their sector: 1. the organization is able to produce measurable results that go toward fulfilling their mission, 2. the organization has a high quality strategic vision, mission, and/or theory of change, 3. the organization has high quality staff/personnel. Interestingly, nonprofit executives said their top criterion was the same as foundation professionals. However, their next two criteria were quite different: the organization is able to manage their finances well and the organization is able to build communities of action—a criterion that is rather social cause-specific because of the number of grassroots organizations working in the sector. To us, these answers paint a picture that may include outputs but also include many different measures of success.

Your last question is also an important one. You’re correct that years alone do not necessarily guarantee an experts’ ability to identify a strong nonprofit to fund. However, we do generally think that the longer a professional has been working in the sector, the more likely they are to have seen organizations succeed as well as fail. And over time, they will learn from these experiences which will in turn influence their perspective. In the example of Climate Change, our experts had anywhere from 2 to 40 years of experience working in the sector. So, there is a representation from newer professionals as well as even more senior practitioners. Ultimately, we agree that experts are an imperfect measure, however we still believe there’s value in capturing their perspective and believe there’s value in collecting the opinions of a cross-section of nonprofit professionals—something we haven’t seen before. Perhaps most importantly, we want this information to be available to the public and not limited to foundations or donor circles for high-net-worth individuals.

Thank you for posing these key questions—they are fundamental to what we do!

Your approach assumes that your experts are not among the many nonprofit executives and funders who continue to equate budget size, numbers of clients served, community awareness, etc to “success”. Tactical Philanthropy readers know that these elements are outputs, not outcomes, and are poorly correlated to effectiveness. What confidence do I have that your experts approach their recommendations any differently than the vast majority of those in my grantmaking community?

I might also add that the tenure figures used to prove their expertise do not move me. Since the average tenure of your experts is 10yrs, does that suggest a greater ability to recommend an organization worthy of investment? I could make a compelling argument that the inverse is more true.

Thoughts?

The key success indicators have been determined through research on program models and results. The goal is to be able to watch actual problematic statistics in a specific location change over a 5-year period, such as the number of child-headed households in a Swaziland province drop from 23% to 14% compared to neighboring provinces without such drop.

However, such customized service can only be given to contracted wealthy clients. So when we are asked by financial advisors how a smaller donor can get expert advice for their charitable giving, we don’t have an easy answer. The Expert Mutual Funds could prove to be an answer to that question. Great idea.

Our target donor is someone who is interested in giving more strategically and has a social cause they care about, but doesn’t necessarily have a long giving history with a particular organization. These donors want high quality information they can trust but probably don’t have a lot of time to sort and sift through various nonprofits. They also want an easy system to manage their donations. Likely, they are not the high-net-worth individuals (with more than $1 million in assets) who have access to information from community foundations or elite donor circles. We think the work GreatNonprofits is doing is essential for serving all donors well, no matter their background. Therefore, we’re working closely with them to provide both kinds of perspectives to the public for free.

Your question around measuring success is an excellent one. A main goal of ours is to direct more dollars to really strong nonprofits in the sector. Therefore, one measure of success will be based on being able to provide donations to these top nonprofits. More importantly, however, (though more difficult to measure) we hope to change the way donors think about charitable giving. We really believe in supporting an entire social cause, rather than just one nonprofit. Therefore, another measure of success for us is to see how many of our donors donate to the mutual funds versus donate to a single or handful of top nonprofits. Of course, a donor could donate directly to these organizations (which is also fantastic), however that is impractical if one is really interested in giving via mutual fund. Therefore, because we really believe in the mutual fund idea, we’re most interested in measuring donations through our site to the expert funds. And, of course, there are many other measures as well, but I’ll stop there for now.

Thanks again for your great questions and interest in our work!
Erinn

I wonder if it is the same for GreatNonprofits – do they measure success by the number of donations through their website?

If it isn’t donations through your website, how will you know if sharing this information online brings value to the consumer – in this case the donor?

By the way, I think the information on both sites is incredibly valuable. I just wonder how you measure success…

Thanks!

In your post, you reference GreatNonprofits as providing the beneficiary voice. My understanding of GreatNonprofits is they allow anyone – donor, volunteer, beneficiary, etc – to provide feedback and ratings of any nonprofit organization in the country.

I see Philanthropedia as Consumer Reports (with the addition of an investment fund) and I see GreatNonprofits as Amazon.com.

Given that each site is intending to inform potential donors about the quality of nonprofit organizations, I wonder who is the potential donor for each site – in other words, who is the Philanthropedia target donor – age, income, social/psycho/demographics – and how does that differ from GreatNonprofits’ target donor?