Category Archives: Philanthropic Technology

What to Measure and Why in Philanthropy

I’m meeting with someone from Google.org next week to talk about what kind of information I think they should make available about nonprofits in Google Finance and other ways that Google.com’s mission statement to “organizing the world’s information” can be directed at the Third Sector.

In preparation, I’d like to spend some time speaking as a community about this issue. I encourage you to leave comments or email me your thoughts.

In response to the thread I started on the Google Finance Red Cross board about how effective they are, I got a comment from Leyla Farah of Cause + Effect public relations:

One item I’d offer: a measurement of “average cost of impact” - in other words, the organization’s total budget divided by the total number of people (or animals, or acres of land) it’s benefited within a specific time period. That metric would (1) force each organization to provide a definition of how it helps people (etc.) - and (2) force it to account for all the costs associated with providing that help.

While Phil Cubeta of Gift Hub scolded me for focusing on metrics:

Paradise Lost versus Gone with the Wind. What metrics do we use to determine which is better? Some subject matter requires judgment, taste, discernment, even wisdom. We have movie critics, book critics, educators to help us make more discriminating judgments. Before we cry ourselves hoarse over metrics, we have to ask whether philanthropy is more like art or more like business. The call for metrics can be a bullying move by the half educated to impose their MBA logic on a sector whose reason for being is that it stands in contrast to both government and business. As the old saying goes, “Do not attempt to cure what you do not understand.” Stressing metrics, Sean, is in terrible taste. You paint yourself as Barbarian.

Personally, I’d like to state that I don’t intend to stress metrics as being valuable unto themselves. However, I do think that all things in life can be judged, at least in each person’s personal view, as being bad, good, better and best (I’m sure there are some exceptions, but you get the point). I think it is critical that we find ways to judge nonprofits so that philanthropic dollars can flow to the organizations that do the most good in the world. To me, funding the best of what is available is far more important than trying to invent the next big thing. I think that information about nonprofits is what is needed and this is why I care about nonprofits being in the Google Finance portal.

As a professional investor in for-profit companies, I can tell you that there are very few (none) golden metrics that allow you to comprehensively judge one for-profit against others. Even very widely used metrics like “price to earnings ratios”, “dividend yields”, “profit margins”, and “earning growth rates”, have been show in practice to be very useful, but not in any way adequate to judging the superiority of one investment choice vs. another on their own.

In my Philanthropy Predictions for 2008 that I wrote for the Chronicle of Philanthropy, I made one reference to measurement:

A United Way-authored outcome-measurement template will be adopted by the sector as the standard format for nonprofit organizations to report on their effectiveness. The narrative-driven form will soon be available for download from the home pages of many nonprofits.

Note that I suggest a “narrative-driven form”. If you read analyst reports on for-profit investments, you’ll see a lot of numbers and metrics, but the heart of the report is a narrative about the company.

This brings me to an excellent comment from the thread mentioned above from an anonymous “young staffer”:

If I may carry the Paradise Lost vs. Gone with the Wind analogy a little further, I think it raises some interesting points.

The first is that there are plenty of potentially relevant metrics with which one could back up one’s a claim for each work’s superiority: their longevity in years, the number of universities that include them in introductory freshmen humanities courses (as a proxy measure of their centrality to our cultural canon), a RottenTomatoes.com-style survey of critics. I can even imagine poor grad students counting allusions to them in last year’s bestsellers.

Relying solely on any one of these potentially valid measures, however, would obviously leave you wide open to criticism for the flaws of your methodology and the limits of the analysis. To construct a strong argument for your preferred choice, one could use both the metrics and qualitative measures. Same goes for nonprofits - the measures are neither perfect nor complete, but that is not the same as nonexistent.

I think the other point is the difficulty of comparing apples and oranges. Let me reframe the question as “Paradise Lost” work of literature vs. “Gone with the Wind” work of film. Both are widely-considered seminal works in their mediums. It’s not hard to imagine metrics, like those above, that could easily distinguish each as a leader within its respective medium. It is much harder, however, to compare them very convincingly across mediums. An author and a film buff might reach very different conclusions about which one matters more in today’s culture. Their distinctive values and tastes will influence that decision.

The same, I think, is true for nonprofits. Too universal a measure like “average cost of impact” might not be helpful for identifying whether a great afterschool program in New York or a great community health program in Uganda is better. The costs and the measures of impact are on different scales. But metrics certainly might help you identify each within its field as the seminal nonprofit. From there, one’s values and tastes might be expected to guide your choice.

So there you have it, a good beginning to an important conversation. If there was a single webpage, like this one for the Red Cross, or this one for Cisco Systems, that contained all the information you would like to see when you wanted to examine a nonprofit for the first time and decide if you might want to support them, what information would you like there to be on the site?

Google.org owes me nothing and anything I tell them might be ignored. But on the other hand, I will deliver the message that we co-create over the next week in this discussion. Someone from one of the largest (and oldest) foundations has already asked me to pass on their offer of help to Google.org after reading my posts on the subject. I do think that any effort that you the reader put into this discussion will be heard by the powers that be at Google.org, even if they do not take action.

More Google Finance for Nonprofits

Someone at Google.org read my posts (here and here) about nonprofit information being available within Google Finance and invited me to meet with them early next month. If you have any thoughts you’d like me to share with them, shoot me an email or leave a comment.

Checking back on the Red Cross discussion I started on the Google Finance discussion board, I found a new reply. I commend the Red Cross employees who have taken a shot at my question of how they know if they are effective, but I’m a little shocked that so far the organization has be unable to provide even minor information related to whether they do a good job. “Hard Nose Philanthropy” is on the rise, nonprofits need to be able to answer a simple question like “Tell me how you know if you’re being effective”.

Does anyone know of any other discussions on Google Finance nonprofit discussion boards? Here’s the new reply from the Red Cross:

From: ike.pig@gmail.com - view profile Date: Wed, Dec 26 2007 7:36 am

Hello — this is Ike, and I am a regional communicator for the Red
Cross.  I stumbled across this over the holiday break.

I understand what you are talking about, with regards to our internal
measure of “effectiveness.”  Unfortunately, you’re asking us the
equivalent of choosing a favorite child.

Such a metric would be arbitrary, and could be easily fashioned to
highlight whichever line of service we wished to justify.  In doing
so, number-crunchers would ask the question “Why in heck is Red Cross
involved in things that AREN’T as high-payoff as _______?”  Just look
at the numbers.  Why be involved in disaster relief when blood
provides the higher “impact?”  Or vice versa?

We’re dealing with two different dynamics here.  As a large multi-
purpose humanitarian organization, we’ve got a tradition being
involved in a number of different activities.  Disaster, blood,
service to armed forces, preparedness, first aid/safety, and some of
the international initiatives Maura described.  Whether we like it or
not, there is a significant slice of America that expects the Red
Cross to play a role in each of those arenas.  Public expectation
drives part of our mission.  In some circumstances, we have made a
promise to be there (like immediate disaster relief).  In others, we
end up getting involved because people think that’s what we’re
supposed to do, and no one else is stepping up (like the Safe and Well
website partnership.)

The second dynamic is our volunteers.  Some only have an interest in
disaster.  Some only want to teach first aid classes.  Some want to
volunteer to drive needed units of blood from the storage centers to
the hospitals.  As a volunteer-led group, we’d alienate so many people
who are truly volunteering their time to make it all work.

Are you really asking us to pick the one most effective line of
service, and do that to the exclusion of the rest?  Because applying a
universal metric to all the lines of service is an invitation to
starting feeding some and starving others.  That would be akin to
comparing the costs of helping 10 families in an apartment fire versus
10 single-home families spread out on different nights.  Yes, one is
more “cost-effective.”  That doesn’t mean it’s time to abandon the
rest.

I think the key element you are dancing around here is the way we
handle donations.  If someone wants to donate just to local fires in
their local chapter jurisdiction, we can assure that happens.  If
someone wants to donate just to Services to Armed Forces, their wishes
are respected and followed through.  We look at the business model of
each of those lines differently, asking first “Are we meeting this
mission?” and “Can we meet it more efficiently another way?”

From: sstannard-stock@ensemblecapital.com - view profile Date: Thurs, Dec 27 2007 8:28 am

Thanks so much for jumping into the conversation. I’m not asking you
to choose anything. I’m just asking how the Red Cross tracks whether
you’re doing a good job.

For example, at my firm, Ensemble Capital Management we look at hard
numbers like revenue growth, assets under management and assets per
client. We also look at softer measures like visibility in the media
and online, depth of relationships with referral sources, and client
satisfaction. You can put good numbers on the first set, but not on
the second.

All I’m asking the Red Cross is how do you know if you are doing a
good job? What do you track? And how do you compare yourself? For
instance, what if I asked you why my money could do more good by
donating it to you than donating it to another similar organization or
even to FEMA? If an investor or prospective client asked me why I
thought that Ensemble was a better investment or firm to hire than our
competitors, I could speak to the issue for hours, citing both hard
data and soft qualities. I’m just asking the Red Cross the same
question.

The Futures of Philanthropy, Fundraising, and Advertising

This entry to the One Post Challenge comes from Peter Deitz. Peter writes a blog called About Micro-Philanthropy and is the founder of Social Actions, a community website that aggregates person-to-person fundraising campaigns and helps people to start their own. Deitz also works as a consultant to nonprofits and philanthropists interested in leveraging the power of social networks.

By Peter Deitz

The Futures of Philanthropy, Fundraising, and Advertising

The futures of philanthropy, fundraising, and advertising are looking remarkably similar. In all three fields, technology innovators are turning to real people to do the hard work of moving money.

Foundations are asking non-specialists to “crowd source” their grant recipients. Development teams are using “wired fundraisers” to increase online donations. Companies are relying on “fansumers” to promote their latest products.

The online marketing guru Seth Godin first reported on this trend in a series of e-books entitled Flipping the Funnel. In three versions of the same e-book, Godin addresses companies, nonprofits, and politicians. He instructs them on how individuals can be empowered to sell products, raise money, and recruit votes respectively.

Godin could easily have written a fourth version of Flipping the Funnel, one tailored to the needs of foundations and private philanthropists. The hypothetical e-book would have emphasized the important role that non-wealthy and non-specialist individuals can play in awarding grants and redistributing wealth.

Flipping the Funnel for Foundations and Private Philanthropists would have noted that:

  • Real people are often excellent judges of innovation and long-term impact;
  • If provided with the right incentives, individuals may back their grant recommendations with donations of their own, resulting in larger grants and more grantees;
  • People who are involved in grant-making are more likely to recognize a philanthropist for his or her contribution to the field.

Today, only a handful of nonprofits are effectively using wired fundraisers to raise money. Companies experimenting with fansumerism are drawing criticism for their attack on consumer privacy. And only a handful of foundations and private philanthropists are actually crowd-sourcing grant-making.

And yet, the innovators in these fields are continuing to experiment with new technologies that enable person-to-person communications and discernment. Overtime, the pioneers who balance privacy and fraud concerns with the opportunity for greater sales, donations, and grants will reap rewards for their early adoption.

Compared to fundraisers and advertisers, philanthropists have been the least exuberant in their embrace of the peer-to-peer economy. The sector needs leadership and technology innovation so that more wealth can be moved, and more effectively.

This post will hopefully serve as a starting point for discussing the trend as it pertains to philanthropy. Lessons from person-to-person fundraising and advertising will no doubt inform the discussion and provoke more innovation.

I look forward to exchanging ideas with the Tactical Philanthropy community and the larger world of emerging philanthropy bloggers.

Creating a Generation of Digital Natives

This entry to the One Post Challenge comes from Daniel Ben-Horin. Daniel is the founder of CompuMentor/TechSoup, which puts on the NetSquared conference. Daniel has been named to the Nonprofit Times Power and Influence Top 50 a number of times.

By Daniel Ben-Horin

The bone I am gnawing on is about connecting these dots:

* There is something intrinsic in ‘knowing technology’ that makes the person with knowledge want to pass it on. So there is an almost infinite pool of ‘desire to help’ in the technological world (and I do mean ‘world’)

* The technologies associated with Web 2 make it easier and easier for communities to self-organize (although it is still by no means a slam dunk to do so, even with the new tools;  some level of external catalyzation and some level of structure are essential to successful, sustainable efforts, viz the relationship between Jimmy Wales and his staff and the larger Wikipedia community.)

* Financial resources are available for big web-based projects invoking large communities; the chance to be associated with the next Wikipedia or to be perceived as a leader in the climate change arena is very attractive to corporate sponsors. Likewise, some foundations see the potential.

* Absent a coherent effort to link the three dots above, there will be insufficient technological intellectual capital to train and support on new technologies in the developing world. This is an absolutely classic and pervasive issue. The digital divide has been ‘traditionally’ considered a matter of hardware and software, but it is as much or more a matter of training and support.  Projects like the xo (formerly ‘hundred dollar laptop’;  this is a good piece on that issue) offer a lot of promise for abetting a generation of digital natives (in the techie not colonialist sense of the word!) but in the short term, and in the longer as well, it is essential to create a way for these digital natives to get assistance along their learning curve, and also to create a way for the full demographic spectrum to learn to use these tools. And to do it soon.

Wiserearth seem to have a piece of this puzzle. The Impact Alliance might have an interesting piece or Oneworld.net,Techfinder, a project CompuMentor and NTEN developed has a piece (but only a piece).

I remember once hearing Ethan Zuckerman of Global Voices talk about human rights bloggers, who often operate clandestinely, which it makes it all the harder for them to secure technology assistance. I think about Bill Lester, of Engender Health, telling me about an internet outage in South Africa and the very specific skills it takes to just understand how to talk to the ISP there. I think about ngos around the world working against extreme odds with the barest-boned of patchwork IT structures and so little access to help.

And I think about all the people who can help, want to help and, with current tools, can help remotely.

A project to build a largely self-organizing database of technology experts/helpers/mentors and to enable those people to create beneficial interactions with organizations that need help would need project planning and development resources would need, I think, at least two skilled staff for the first year– one a very technically savvy Web 2 savant who could figure out how to create the necessary interfaces among existing resources and build new ones as needed; the second a more development oriented person who could articulate the social possibilities and build the relationships.

What do you think?

Blogs Aren’t For Everyone

This entry to the One Post Challenge comes from an anonymous writer named “S”. S works in communications at a large California-based foundation and has worked in the philanthropy sector for more than a decade.

By “S”

You know what? Blogs aren’t for everyone. I get so tired of hearing how important it is to start a conversation online and care for it and feed it and make it go. Blogging can be a great tool, but has anyone thought about the fact the blogging may not be the greatest thing to ever come to philanthropy? How is posting a blog and receiving comments really a conversation? I post, you post, I post…

Paul Brest needs a blog. Really? What for? Let’s step back and think about this for a moment. Paul Brest needs a blog why? So that his completely scrubbed words can help philanthropy make its mark on the world? Let’s be real. Not only is Paul Brest too busy to have a blog, but the honest truth is, people don’t crave news about philanthropies, they just don’t. I work for a foundation and we share about our work only as much as we want to. Other than that, no go.

This blogging community in philanthropy is tiny. The only people who regularly comment on others’ posts are the bloggers themselves. When you need to ask people to Digg it or to StumbleUpon it, what are you doing? Skewing the result of what normal people might do. People aren’t Digg-ing it or StumblingUpon it because it’s not what is on their agenda.

Philanthropy is a great thing and helping out all kinds of people is a great thing. But foundations get so wrapped up in trying to tell everyone about their work and how great they are. Who cares about what the general public thinks? We are important and we are doing great work. We are so convinced that we need to get out there with our message.

The foundation I work for has spent nearly four decades doing good work. And before the Internet and blogging and Digg and StumbleUpon and other avenues online, we have been able to get the word out as necessary.

I am not against an online conversation or building the interest around philanthropy. We just need to think about it and not assume that everyone should be interested. They have their lives, too.

Foundations Should Be More Like Public Companies

This entry to the One Post Challenge comes from Dahna Goldstein. Dahna is the Founder of PhilanTech, provider of the PhilanTrack online grants management system for foundations and nonprofits.  Prior to starting PhilanTech, Dahna worked for venture philanthropies and as a producer of interactive eLearning programs.  She is a member of the board of the I Do Foundation.

By Dahna Goldstein

Thank you for issuing this challenge.  I’ve been thinking about these issues for a while, and haven’t been able to make the time to write frequently enough to warrant my own blog.  This challenge provided just the push I needed to start writing.

Foundations should be more like public companies.  Now before you start arguing that foundations aren’t and shouldn’t be like public companies at all, and before you quickly point to Enron to make your point, let me say two things: (1) the point of the One Post Challenge is to encourage conversation, and (2) I’m going to amend my statement slightly – foundations should be more like good public companies.

If you’re still reading, you either like a good fight, or perhaps you think there might be something to this comparison.

In the interests of time and blog post length, I’m going to limit my comparison to three areas: public disclosure, customer service, and shareholder vs. stakeholder responsibility.

Public disclosure: Public companies are required to make not only quarterly and annual disclosures to the SEC, but also to report any material information.  If they disclose good news, they are rewarded for it (generally in the form of an up tick in stock price).  If they disclose bad news, they are frequently judged by how well they react to and resolve issues.

Where’s the parallel, you ask? Well, it’s not perfect, but it’s something like this: foundations are required to file 990 PFs with the IRS, but they should disclose more material information – and disclose it more broadly.  What made a project or grant successful?  What elements of the foundation’s grantmaking or of the grantee’s program are replicable and could be reproduced with similar success in another community, for example?  Equally, if not more, important is sharing failures.  Some foundations (notably the Irvine and Hewlett Foundations) have begun to do that, and they should be applauded for those efforts.  They should also be emulated.  By sharing failures and the causes of those failures with the philanthropic community, foundations can help ensure that bad projects, bad initiatives, and (dare I say it?) bad nonprofits aren’t repeatedly funded only to generate the same bad results.  On the flip side, they can help magnify the impact of good projects, good initiatives, and good nonprofits.

Customer service: A good company has good customer service.  It’s really that simple.  Companies need customers.  A company with bad customer service loses customers as soon as there is a substitute product available.  You might argue that foundations don’t have customers.  That perception is a fundamental problem with philanthropy in this country.  Foundations are seen – by both the foundation and the nonprofit – as sources of funding, not as service providers.  Yes, nonprofits need foundations.  But foundations need nonprofits, too.  Funding nonprofits (or, more broadly, funding philanthropic and charitable activities) is foundations’ raison d’etre.  It is in exchange for that obligation that foundations, charitable trusts, etc. are entitled to be tax exempt organizations.  Foundations need nonprofits – and need happy nonprofits – just as much as corporations need happy customers.  Grants are a product of philanthropy, and nonprofits are the customers.  I don’t know too many nonprofits that would switch to another foundation because of bad customer service, but that doesn’t entitle foundations to deliver bad customer service.  Some foundations have started to be more responsive to their customer base, as is evidenced in things like the Center for Effective Philanthropy’s Grantee Perception Reports.  More foundations need to get on this bandwagon.

Shareholder vs. stakeholder responsibility: Companies have faced significant pressure in recent years to be accountable not only to their shareholders (by maximizing shareholder value) but also to their stakeholders – including their employees and the communities in which they operate (by acting in socially- and environmentally-responsible ways).  Many in the philanthropic sector would no doubt agree that corporations should be socially and environmentally responsible.  But what does this have to do with foundations?  Like public companies, foundations have “shareholders” – their donors (living or not) and their boards of trustees.  But they also have stakeholders – members of the communities in which they operate, and society at large.  Foundations have a duty to be responsible actors in society, and that has to go beyond simply making grants.  This responsibility is heightened when one considers the tremendous public trust that is invested in the success of foundations by virtue of their tax exempt status.  Foundations should contribute to growing the field, to building on past successes and failures, to sharing those successes and failures so that others can learn from them, build upon them, and ensure that the public trust is honored.  Foundations collect vast amounts of information about how pressing social issues are being tackled – most foundation grants over $10,000 require the grantee to at least submit a year-end report.  Those reports, if used well – and if shared with others – could provide significant insights into what is working and what isn’t in addressing social issues.  Sharing that information could not only help funders to learn from other funders (from their successes and their failures), but could also help nonprofits learn from other nonprofits.  Who else is addressing a similar issue?  What is working for them?  What isn’t?  What lessons can be learned and applied to the problems a given nonprofit is facing and to the social issues it is trying to address?  By not sharing candid, detailed feedback about funded programs and grantmaking initiatives, foundations are violating their stakeholder responsibility.  Good public companies are now acknowledging that maximizing stakeholder value should be pursued alongside maximizing shareholder value.  Foundations should, too.

So what do you think?  Should foundations be more like good public companies?  If you don’t buy the comparison, why not?  If you do, are there other areas in which you think foundations should be more like good public companies?

A Shout-Out to Youth!

This entry to the One Post Challenge comes from Jamie Kong. Jamie is the Program Coordinator for YouthChoose, a DonorsChoose.org Youth Philanthropy Program.  DonorsChoose.org is a nonprofit website that connects individual donors with teachers requesting materials and experiences their students need to thrive in the classroom.  When donors entrust large donations to the YouthChoose program, youth in the program have the opportunity to reflect on their own educational experiences and decide together how these funds can have the greatest impact on public school classrooms through the DonorsChoose.org website.  In this way, YouthChoose offers young people, who are often the beneficiaries of philanthropy, the chance to become philanthropists themselves.

Jamie Kong

A shout-out for youth.  They are the next generation of philanthropists.  It’s young people who are on MySpace, Facebook, Friendster, Xanga, and are the segment of the population that is the most comfortable with blogging.  And it’s young people who will direct the future of philanthropy.  So, wouldn’t it be great if we could connect youth with the conversation that is happening here?

Reading the “$500 for Your Nonprofit” post got me thinking.  The beauty of this post is that it opened the conversation to everyone and gave everyone a chance to participate—even without a new idea to introduce.  It invited people who may not have their own conversation starter to join the discussion.

So, I would like to start a post for youth philanthropy.  If are a young person, share the issues you care about or your experiences with philanthropy. If you work with youth, share any ideas to increase youth engagement in philanthropy.  And if you don’t belong to either of these groups, share how your experiences as a young person informed your decisions about philanthropy today.  The sharing of experiences can be as catalytic as the sharing of ideas.

When Technology Trumps Philanthropy

When Technology Trumps Philanthropy

This entry to the One Post Challenge is from Valerie, an Alumni Relations Associate at a major university.

By Valerie.

Gone are the days of keeping track of donors on 3 x 5 cards and marking return envelopes on the side with a red swipe of the marker to know that it is the “ABC” appeal (although I heard someone say nary a year ago that they did that!).  Computers are here, we have databases, printers, the web and the ability to track, analyze and reach people in ways that were not possible a decade or more ago.

Yet, I find that with all this technology, if the IT department is left in the driver’s seat, it can hinder marketing efforts rather than help them.  What is “convenient” or makes sense technologically is not always best for Development or - more importantly - the donor.

Two examples have happened recently that illustrate this constant struggle.

In every online marketing class I have taken, it has been emphasized that the donor must be engaged to, well, DONATE first before asking them all sorts of superfluous questions such as “How did you hear about us?” “When did you graduate?” “Does your company have a matching gift program?” and so on.  Therefore, when I redesigned the online giving form for simplicity, I asked the donor for their amount and credit card information first.  Once this has been entered, they are much less likely to disengage - they will fill out the entire form.  (I also reduced the number of overall questions from the previous form.)

Scrolling endlessly is also a no-no, so page 1 is money - amount, credit card - & fund designation, page 2 (next) is donor name, & contact information (next) and page 3 is extras that few people fill out, such as matching, tribute, etc. (submit).

I’ve been informed by the IT department that our particular software doesn’t like placing the credit card information on page 1, so they’d prefer to move it to page 3.  It CAN be on page 1, but it’s DIFFICULT to do, so they’d prefer that each of my online donor forms just have it on page 3.

I’ve explained my reasons, but have been told that “the programming/software makes it difficult…”

Likewise, a different IT person doesn’t care for my requests for multiple redirects (which goes to these many forms).

So that I can track responses to multiple appeals, I have asked for redirects such as

www.company.org/donate
www.company.org/contribute
www.company.org/scholarship
www.company.org/stock
www.company.org/alumni
www.company.org/future

I have been told that this “has to stop” because “it’s creating too many folders” on the website.  The alternative I was given is that I could have as many redirects as I want…under one folder: the “Donate” folder, which would give me the following options:

www.company.org/donate/(appeal1)
www.company.org/donate/(appeal2)
www.company.org/donate/(appeal3)
www.company.org/donate/(appeal4)
www.company.org/donate/(appeal5)

When I tried in vain to explain that it has to be “marketable and memorable” to the donor and can’t go on and on, I was informed that “We can’t have this many folders on the website.”

So, accommodating the software’s preferences appears to trump the donor’s preferences?  This is how we came up with voicemail that says, “If you want ________, press eighteen…”

Guidestar for Sale

The first entry in the One Post Challenge comes from Rob Johnston:

Rob Johnston has more than twenty years experience working for and with nonprofit organizations. He served as executive director of the Helene & Grant Wilson Center for Social Entrepreneurship at Pace University, and for twelve years he worked for the Peter F. Drucker Foundation for Nonprofit Management and its successor the Leader to Leader Institute, where he served as president from 2001 to 2003 and led its program development and publications programs from 1991 to 2001. Johnston worked as editor of the Foundation Center’s Philanthropy News Digest, and has developed the database backends on Web sites for businesses and nonprofits operating in the United States, Europe, and Central America.

Rob writes an occasionally updated (non-philanthropy) blog.

Send in your entry for the One Post Challenge and see your ideas appear here. Remember to drop your comments on each post. Most importantly, encourage your peers who are not hooked in to the online conversation to use this opportunity to join in through reading the posts, commenting and submitting their own post to the challenge.

Guidestar For Sale — Or Why It Should Be

By Rob Johnston

Guidestar, the indispensable resource of information on United States nonprofit organizations and foundations, should be acquired by a company with Internet interests and be made into a true hub of nonprofit information and community. An acquisition by Google, Yahoo, Amazon, IAC, or News Corporation, for example, could bring real Internet and community smarts and produce a site that is more useful to donors, nonprofit organizations, foundations, interested citizens, scholars, and anyone seeking to know more about the vital social sector.

The inspiration for this proposal came from a careful comparison of the current offerings of Guidestar and the Internet Movie Database (IMDB). As it became clear that Guidestar could be improved by the adoption of many of the approaches of IMDB, it occurred to me that it might also benefit from a similar corporate structure.

To any movie-loving, Internet geek who is also interested in nonprofits, it’s natural to wish that Guidestar would be more like the Internet Movie Database (IMDB). Though these two Web sites have very different audiences, their purpose has some similarities and Guidestar could benefit by adopting even more similarities in how they create and share information.

First, a bit of my history. In the early 1990s I was an eager Internet pioneer. After using CompuServe in the late 1980s (and getting the Metropolitan Museum of Art to list a small number of products on the CompuServe “Electronic Mall” in 1987-88), I was an early subscriber to The Pipeline, a text-based Internet service in New York City (founded by author James Gleick). I also subscribed to Wired Magazine (which started publishing in 1993) and would eagerly look forward to its “Net Surf” column which would list two pages of finds on the Internet including news groups, public information, and ftp sites. These resources would occasionally give up their secrets to my inexpert explorations.

A few years later, the World Wide Web and Netscape’s browser changed the way we used the Internet. One of the first useful sites I found was the Cardiff Internet Movie Database, which was based at a university in Wales. From what I have since learned, the IMDB grew out the activities of an Usenet newsgroup and a number of lists assembled by users. Like many community sites celebrated today (e.g. the online encyclopedia wikipedia.org) IMDB was created by the collaboration of movie fans from around the world. Discovering and using it led me to a few insights. One, my wife and I would not have to buy copies of the annual encyclopedias of movies (or the Microsoft Cinemania CD-ROM) in order to plan our video rentals or efforts to watch the work of a particular director or actor. Two, I learned about the power of the Web to allow disparate people to contribute to a common collection and create a resource valuable to thousands more. I remember using IMDB as a practical, understandable example to explain the usefulness of the Internet and the Web.

In 1994 Philanthropic Research, Inc. was founded and shortly thereafter began to do business as “Guidestar.” The mission of the nonprofit is “to revolutionize philanthropy and nonprofit practice with information.” Its Web site also notes: “GuideStar was created to support charitable entities through the free flow of information in a public forum, to enable supporters and nonprofit managers to research and benchmark organizations’ missions, programs, and performance.” [Guidestar FAQ.]

Though Guidestar allows nonprofits to register and post information about their mission, governing boards, goals and accomplishments, I see it primarily as a powerful front end for the IRS 990 tax returns of the nation’s nonprofit organizations and foundations. The 990 form is the only public form that is required of all nonprofits (with budgets greater than $25,000 and excepting some religious institutions) so it is valuable for anyone trying to learn about individual organizations or compare a number of them.

On first glance, the similarity of Guidestar, which chronicles American nonprofit organizations, and IMDB, which chronicles movies worldwide, might not be obvious. On the other hand, both aim to present a collection of information about one set of entities that have many “moving parts.” From my use of both sites, and my participation as an active nonprofit executive and user of the Internet I propose that Guidestar could make its offerings more effective by being more like the IMDB. Following are areas where Guidestar could make the biggest improvements.

Open the Database to the Web

Guidestar should make its basic pages of information open to all visitors, without registration. It should also open these pages to search engines and their “spiders.” The result of this would be that more information on nonprofits would be available to more people, and combined with the point on community participation, Guidestar could become the definitive source for nonprofit information. For example, if I wrote a story or a blog posting about the American Red Cross or Sequoia Community Initiatives I could link to the organizations’ pages on Guidestar. IMDB follows this practice. Its entries on movies, actors, directors, etc. are open to all visitors and Web spiders. As a result, when people write about movies they include a link to the IMDB entry for related information. And because the information is open to search engines, when people use Web search engines to search for movies they get IMDB information at the top of the results. You can see from the results below what a difference this open access makes to the availability of information on search engines.

Where does the site appear in a Google search for material it covers?

We chose a set of topics we expected the IMDB and Guidestar to be able to provide information on and conducted the searches on Google. Below are listed the rankings of the site in question for each search topic.

Search for top five movies on the American Film Institute’s list of 100 Greatest Films.

Movie Ranking of IMDB in Google results
1. Citizen Kane (1941) 2
2. Casablanca (1942) 2
3. The Godfather (1972) 2
4. Gone With the Wind (1939) 2
5. Lawrence of Arabia (1962) 2

Search for top five nonprofits in the Chronicle of Philanthropy annual Philanthropy 400 survey, October 2006

Organization Ranking of Guidestar in Google results
1. The United Way of America >50
2. The Salvation Army 50
3. AmeriCares Foundation 4
4. American Red Cross >50
5. American Cancer Society >50

[Note: In order to provide links to the Guidestar pages for the sites listed above, I had to use JustGive.org, one of partner sites that uses Guidestar's information. If I linked to the Guidestar page and you were not a member who was logged in, you'd get a login page and no information. Here's the Guidestar link for United Way of America. By coincidence, the one organization that has a good result in the Google search, the AmeriCares Foundation, shows up there with a JustGive link. It's a small demonstration of the usefulness of an open database.]

The comparison of these two sets of searches makes clear the advantages that Guidestar could gain if its information were widely available. Today, the likelihood that a searcher at Google will find a Guidestar listing is pretty slim. On the other hand, a Google searcher will almost always find the IMDB page for a movie in the first 5 listings. (It’s clear that the newest movie in our first search is more than 35 years old. To see if the IMDB position held for most recent movies, we searched for the top five movies by sales for the most recent weekend, 1-3 June 2007. IMDB was found on the 3rd listing for three of the top five and on the 4th listing for the other two. See below.)

Movie Ranking of IMDB in Google results
1. Pirates of the Caribbean-3 (2007) 4
2. Knocked Up (2007) 3
3. Shrek the Third (2007) 3
4. Mr. Brooks (2007) 3
5. Spider-Man 3 (2007) 4

Relax the Login Restrictions

Currently, a visitor to Guidestar cannot get any specific information about a nonprofit organization without registering and logging in. There is no charge for this basic information, and the registration process is not too onerous. On the other hand, it is hard to understand that Guidestar gains more than it loses with this requirement. I have been registered to Guidestar for several years and I do not recall receiving email from them as a result of my registration. I respect this discretion and the respect for my email choices, at the same time I wonder why they require my registration when they seem to do so little with it?

I propose that Guidestar make its basic information available to all visitors (people and machines, as mentioned above) without a registration requirement. See the IMDB and how much it offers to any visitor. Guidestar can then continue to require registration for its higher levels of membership, and also for the participation I describe in the next section.

Invite Community Contributions

As a movie fan living in New York City I have had the chance to see lots of films in limited release, old films presented at nonprofit repertory houses, and to attend film festivals hosted by Lincoln Center, the Museum of Modern Art, and the Tribeca Film Festival. As an amateur of film I have found some errors and missing information on the IMDB and I have submitted corrections. Those items are now part of the site and available to all who visit. Guidestar should do the same and allow people add information or comments about a nonprofit. Today it allows only nonprofit representatives to maintain information about their organizations. It could expand the quality and quantity of the information in its listings if they allowed others to post information on the organizations they know. This would have to be administered with some central review, and requirements (for sources) set, but the net effect would be a strong site.

If Guidestar chose to, it could greatly expand the information that its users contribute. For example, it could track grants made by foundations, or accomplishments of organizations in the field. With an more open system, the wisdom of the wider nonprofit community could be tapped.

Consider Selling Out

In 1998 the IMDB was acquired by Amazon.com. In the process, the volunteer-run site became professionalized and people were hired into full-time roles to build and expand the site. Guidestar has been working to build a sustainable organization and shift its funding from contributions to earned income. Its 2006 financial reports [PDF] show that it has made progress in that effort.

Today Guidestar has a professional staff and has established rigorous methods for capturing information from the Internal Revenue Service and making it useful for specialized audiences. With more financial support and a new approach to making its information accessible, it could become the essential hub for things nonprofit. If it does not take a number of these suggested steps it may find itself left behind as the availability of digital tax filing information grows.

Take the opportunity, Google, to acquire a valuable operation collecting and making information available. Open it up to the world and expand the usefulness and reach of that information. Or, Yahoo, build on the database and establish nonprofit communities around the Guidestar core. Or, Fidelity Charitable Gift Fund, acquire this resource and build a giving platform around it. This is underexploited asset, a gem waiting to be uncovered. Open it up and build on it now when both the need for effective nonprofits and the growing possibilities for charitable giving are so strong.

Stanford Social Innovation Review Blog

I joined the blogging team at Stanford Social Innovation Review yesterday. They’ve put together a group including Britt Bravo, Albert Ruesga, Lucy Bernholz, Peter Manzo, Perla Ni, Jeff Brooks and Paul Shoemaker. I’m honored to be a part of such an all-star team.

I saw SSIR managing editor Eric Nee at a recent event and we discussed the idea of whether philanthropy blogs should have some sort of common platform (as the Huffington Post has done for a segment of political bloggers). I have mixed feelings about this. In a way, Eric has already built this at SSIR. Would you as a reader like to have a single website where you could find a cast of philanthropy bloggers who posted regularly and interacted?

Here’s my recent SSIR post. You can find it on their site here.

Paul Brest Needs a Blog

Recently I have had the pleasure of talking with two major foundations about why I believe blogging is important to philanthropy and why foundations in particular need to begin blogging. So why should foundations blog? It seems to me that the imperative is not for them to embrace technology so much as it is for foundations to join and begin to drive the online philanthropy conversation.

In the most recent Hewlett Foundation annual report, Paul Brest wrote a fascinating essay titled, “Creating an Online Information Marketplace for Giving”. In the essay, he talks about the lack of impact data available to donors and contrasts the state of affairs to the vast amount of information available to investors in the for-profit world. The need for an information marketplace, where data on nonprofit impact and social investment opportunities flows freely, is critical to the creation of “efficient markets” in philanthropy. But it is not enough.

Marketplaces are not just a collection of transactions. They are a swarm of interpersonal interaction between people. Real people with opinions and beliefs, who haggle with each other and trade “market information” as much or more than they trade products and services. There once was a time when financial markets were physical locations. Where people knew each other by sight and gathered to engage in trade. Today, financial markets are virtual, but no less human. Philanthropy is making this same transition as we head full tilt towards a fast moving global stream of social investments benefiting high-impact social enterprises with both nonprofit and for-profit status. This transition does not just require data; it requires conversation.

Philanthropy needs a robust, cross-disciplinary conversation for a philanthropic marketplace to thrive. That conversation must include funders. What makes the concept of Web 2.0 special is the two-way communication aspect. Information does not just flow from a centralized location to the masses, it also flows back to the center and bypasses the hierarchical structure altogether. As we seek to build the “online information marketplace” that Brest suggests, we must also build an “online conversation”. Blogs are one vehicle for facilitating that conversation and currently the best. But it is the two-way flow of information that blogs encourage that is important, not blogs themselves. For instance, blogs that are one-way mechanisms to pump information out, but not let any in, are not part of the conversation. The only way to learn is to listen and the only way to improve is to learn.

As this philanthropic marketplace emerges, foundation communication efforts will need to move away from disseminating information out from the foundation to managing the flow of information into and out of the foundation. I think it is no coincidence that foundation communication employees were early readers of my blog and regularly leave comments and send me emails.

Conversations are key to the next leg of growth in philanthropy and blogs are the best existing platform for this conversation. My blog, Tactical Philanthropy, has already played host to the ideas of Jed Emerson, Charles Collier, Tracy Gary, Peter Karoff, Clara Miller, Daniel Ben-Horin, Paul Shoemaker, Bill Schambra, Jim Canales, Nancy Roob, and Phil Buchanan among many others. Blogs are not a cutting-edge technology anymore. But they are where the conversation is emerging. So join the conversation. Launch a blog or simply begin reading and interacting with the ones already in place.

Tactical Philanthropy Redesign

I’m in the process of redesigning Tactical Philanthropy. Some of the changes will be cosmetic, some will make navigation easier, but I am also thinking about new features to add.

What would you like to see? Some of the ideas under consideration right now include:

  • Tag streams of interesting news articles, philanthropy research, opinion pieces and websites.
  • An educational database of philanthropic tools.
  • A Tactical Philanthropy Reddit that would allow readers to submit links of interest and have those links rated by other readers (such as the one in place at the blog Joel on Software).
  • A stream of interesting posts from other philanthropy blogs.
  • A “Comment of the Moment” highlighting an interesting reader comment.
  • A Question & Answer widget that would allow readers to submit questions about philanthropic tactics. The goal would be to answer specific questions and create a searchable FAQ database.

What do you think of these ideas? Are there features you see on other blogs that you’d like to see here? Any unique ideas? Leave a comment or send me an email.

Online Philanthropy

The Wall Street Journal has an article today titled, “A New Generation Reinvents Philanthropy”:

Young donors and volunteers, snubbing traditional appeals such as direct mail and phone calls, are satisfying their philanthropic urges on the Internet. They’re increasingly turning to blogs and social-networking Web sites, such as MySpace and Facebook, to spread the word about — and raise funds for — their favorite nonprofits and causes. They’re sending Web-based fund-raising pitches to their friends and families, encouraging them, in turn, to forward the appeals to their own contacts.

At the same time, a growing number of charities — ranging from start-ups to established names such as the Salvation Army — are launching profiles on popular social-networking sites, hoping that young people will link up to the pages. Some are also encouraging bloggers to mention the causes on their sites, raising thousands of dollars in small donations from readers.

Innovations in online philanthropy is often attributed to “young people”, but I think it is probably more useful to think of the “young people” as early adopters rather than the phenomenon being linked to youth. There once was a time not too long ago when you saw stories about how “young people are embracing email” or “young people are flocking to online banking” or “young people are spending more time online”. All of those were true statements, but today, while there is still a correlation between age and use of email, online banking or time spent on line, these technologies are moving up the age demographic as the “young people” age and the technologies move out of “early adopter” stage.

It is easy to dismiss online philanthropy as something that is only relevant to young people (ie. donors without much money or clout in philanthropy). I mean can you imagine a 60-year-old major donor adding a charity to her “friends” profile on MySpace? But the key is to recognize that as the phenomenon matures, secondary adopters (the traditional movers and shakers in philanthropy) will not start doing the same things with the technology that the young early adopters did, they will use the technology in ways that suite them. But one way or another they will start using the technology. Remember, many grandmothers have a cell phone, use email, and view online photo albums. Five years ago, that wasn’t true. Five years from now, might major donors be gravitating to nonprofits that have an effective web presence (and no, I don’t mean a static website)? I think so.

Philanthropy Conversation Goes Digital

Here’s the story so far…

In the March 31 issue of the Chronicle of Philanthropy, Robert Egger authored the article, “Charities Must Challenge Politicians” which suggested that nonprofits must get more involved in politics.

On June 4, a live online chat session was held between Egger and the public.

The June 28 Chronicle of Philanthropy issue included a rebuttal by Pablo Eisenberg, which encouraged charities to remain nonpolitical.

On August 9, Egger and Eisenberg met at the Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal for a live debate. A full podcast of the debate is available here and the transcript can be found here.

On Aug 10, Egger posted a video on his blog calling the debate “crazy” “cool”.

On Aug 13, The Chronicle of Philanthropy posted the audio, transcript, and links to the original articles and said, “We hope this conversation will continue. Please share your thoughts on the issues raised at this session by clicking on the comment box below.”

On Aug 15, Hudson uploads highlight clips to YouTube:

Robert Egger on…
ending the “charity trap” and the laws that maintain it
more problems with charity, the Nonprofit Congress as a way to overcome them through unity and political action
.. getting a nonprofit page in the business section of newspapers across the country

Pablo Eisenberg on…
the importance of “nonprofitness,” leadership
nonprofits should first challenge foundations, corporate donors, not get into politics
the need for more young people in the sector, and opportunities for them to be politically active.

All of this is great. But there’s a problem. How many people are going to listen to a 2-hour podcast? I’d like to think everyone who cares about these issues will, but the fact is that people live busy lives. But there is a solution. With my prompting, Hudson has posted the entire video record of the event (Part 1 and Part 2). So here’s my call to the nptech community and/or anyone with some chops in the social media arena. You’ve got the full raw material of the video. Who wants to edit this thing down to a video that lots of people will take the time to watch? If you want to see more information coming out of “philanthropy establishment”, then you’ve got to actually use it once you get it.

You can and your thoughts on whether nonprofits should be involved with politics by commenting on the Chronicle of Philanthropy forum or by commenting on this post.

Video Games and Philanthropy

The idea of video games being used in the philanthropy sector isn’t a speculative concept. Right now Changemakers is working with the Robert Wood Johnson Foundation to find, “creative solutions that merge computer and video games with health and health care.” They are hosting a competition to find the best ideas. Go check out the nine game concepts that have already been submitted and offer your own.

Karma Tycoon: Philanthropy Video Game

Some people think of video games as junk food. I think that they are just early in their maturation process. When movies first came out, they were all trash. The idea of “film” as art took a long time to evolve. Same with novels.

Karma Tycoon is a new video game that tries to teach you how to be a philanthropist. From the Wall Street Journal:

The moody graphics and pulsing soundtrack of Karma Tycoon convey the look of your typical video game. Absent, however, are the M-16s, camouflage humvees and vampires that fill the screens of most of its competition. Karma Tycoon is all about another type of thrill-seeking: youth philanthropy.

Confused? Karma Tycoon is a joint venture between the Web-based youth volunteerism organization Do Something and corporate partner JPMorgan Chase. Their goal: to teach middle- and high-school kids about "fiscal responsibility and social entrepreneurship." Players are encouraged to support charitable causes, such as community centers and senior citizen homes. The greater the effect these initiatives have, the more a player’s "karma" increases. Along the way, players learn the mechanics of philanthropy, from soliciting grant applications to dolling out loans and reviewing the success of their projects. "We want to convert the time kids spend playing video games into time they spend learning how to help their communities through philanthropy," Nancy Lublin, CEO of Do Something, told me. "Karma Tycoon is like a vitamin in a Twinkee."

The game intrigues me. I think that video games hold a lot of promise as training modules for many aspects of life. But there is something about Karma Tycoon that doesn’t seem quite right to me. So I emailed my friend Dave Cerra, a video game producer at Lucas Arts, and asked his opinion. I share his email in its entirety below. As philanthropy begins to use social media tools and technology of all kinds let’s remember Dave’s comments.

I think (Karma Tycoon) a great idea and I want to play it. What I find interesting here is the way that Nancy Lublin, the CEO, talks about what they’re working on.

There’s been a lot of press about different uses of the tech behind gaming lately. To me, the use of the language is always so telling in the sense that we don’t fully understand what gaming is, so we don’t know how to talk about it. The CEO here says that she wants to “convert the time kids spend playing video games into time they spend learning how to help their communities.” My emphasis there, of course.

It’s my position that, so long as designers and developers who want to evolve the medium move forward from this position, they are doomed to fail. They are undermining the very thing that is attractive to interactive and storytelling experiences! It’s partly a framing issue, but it’s also a development issue because now all of the goals have to do with “learning” and “teaching” as opposed to, for example, “experiencing” and “affecting.” The road to hell is paved with the best of intentions and all that.

“Karma Tycoon is like a vitamin in a Twinkie,” says the CEO. It’s clear from her metaphor that she actually views gaming in a hostile light, something that is intrinsically bad that’s being used here as a Trojan horse.

This CEO would probably stick to her guns and tell me I was harping on semantics. I would then argue that cognitive linguistics continues to show how deeply our use of language affects our perception of reality, and that so long as we design from an intention of “tell” versus “show”, it will continue to color the user’s experience and they will continue to reject the content in favor of what we currently call “games.” This will happen for the same reasons that people reject attending psychology lectures on the effects of the Vietnam War in favor of watching “Apocalypse Now.” It’s not that the former doesn’t have enormous value, and there’s certainly a place for it. This is also not to say that Coppola’s film has the same functional intent as a lecture on the psychological effects of the Vietnam War. The power of film as a medium is to affect us emotionally. The same is true of games. Now drop the words “film” and “games” and replace them with “story” and we start to get to the heart of the matter.

This is Marshall McLuhan 101: the medium is the message. If media are extensions of ourselves, and if each different medium produces a different “massage” or effect on the psyche, then trying to force one medium to conform to another misses the point entirely.

Again, I haven’t played the game so I don’t know how it feels. Besides, I’m just riffing on my own professional agenda. I think it’s great that people are doing things like Karma Tycoon. I wonder about the depth of the game: a truly entertaining and “true” experience would allow you to subvert your community as well, rather than just telling one side of the story in order to enforce an agenda. There’s another group that has a strategy/decision game on the Israel/Palestine conflict that sounds incredible – you get to choose which side you’ll lead, and the goal is to achieve peace. You then try to get both sides to “100 points” (I guess that equates to peace) but doing one thing to raise points on one side will reduce them on the other. Tricky tricky … that’s interesting design, and that’s using the interactive medium.

Then there’s the other side of the equation from the designed experience: the production reality. Making ‘games’ isn’t cheap. Consumers are very savvy and they want slick, polished experiences. It’s really cool to see people like Lublin begin to figure out new models to get these endeavors funded. It’s a shame that she seems to view the medium she’s using as something that’s basically a waste of time, but perhaps her group’s projects will help us all learn how to apply it in new and different ways.