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Aggregating information to inform donors

Several major components of a system to inform nonprofit donors’ investment decisions already exist:

GuideStar publishes a Web site that presents organizational and financial data from the IRS 990 forms of all 1.5 million nonprofits in the United States. GuideStar could providethe core of a system, especially if its database expanded to include non-financial information.

GuideStar’s database could be further structured by categorizing organizations and asking for program performance information by type of organization. This taxonomy could be based on research by the Urban Institute and the Center forWhat Works, which provides sets of key performance indicators for fourteen types of organizations—from affordable housing to prisoner reentry.

DonorEdge provides strategic, programmatic, organizational, and financial data about 2,500 nonprofits in the Kansas City area. DonorEdge was created by the Greater KansasCity Community Foundation (GKCCF) for individuals maintaining donor-advised funds there. GKCCF has made its software open source and has been active in sharing withothers; nine other community foundations across the country have now begun to implement the system. A visitor to the DonorEdge Web site will see five pages ofinformation on each organization:

  • General information page

    Mission statement, recent accomplishments, needs statements, background statement on the context of the organization’s work, CEOand Board Chair statements
  • Programs page

    (for each separate program): Description, budget, target population, program long-term success definition, program short-term successdefinition, program monitoring plans, examples or evidence of program success
  • Financials page

    Revenue by source for last three years, resource allocation for last three years, assets and liabilities, short- and long-term solvency ratios,financial comments from staff
  • Management and governance page

    List of board members with affiliations, board demographics, data on frequency of board meetings, board meetingattendance, board term limits, board structure, strategic plan timeline, risk management policies, staff and volunteer statistics, bios of key staff
  • Supporting documents page

    IRS 990 form, IRS letter of Determination of Tax Exempt Status

GlobalGiving is an international analogue to DonorEdge that provides information about particular projects in developing countries. Its lively interface offers donors a setof projects to invest in, ranging from planting nitrogen-fixing trees in central Kenya to providing vaccinations for children in Cambodia. Each entry includes basicinformation about the project’s goals, strategies, and its sponsoring organization’s financial health.

In addition to providing information to help donors make investment decisions, GlobalGiving, like DonorEdge, reduces the transaction costs of giving by allowing donors to contribute to projects online.

Keystone helps an organization gather information from its stakeholders to guide it as it formulates strategies, makes tactical decisions, and assesses results. GreatNonprofits captures the views of an organization’s volunteers. These relatively new ventures suggest possibilities for providing donors with a broad array of stakeholderinformation, giving the nonprofit marketplace the extraordinary openness that Web 2.0 has brought to other realms through such innovations as eBay, Wikipedia, and userreviews on sites maintained by Amazon and Zagat. Indeed, foundations themselves could be valuable sources of information available to other donors.

Many foundations have a wealth of data about grantees’ goals, strategies, and operations that is not available to others. Increasingly, this information, as well as grantees’reports, are stored electronically. The fact that a substantial majority of foundations currently use the same grants management software (GIFTS by MicroEDGE) may facilitate aggregating anddisseminating this information. This raises questions of confidentiality. But at least some foundation programs—the Hewlett Foundation’s Education Program, for example—require that most grantee materials be made publicly available.

New approaches to capturing and sharing information will surely emerge over the coming years, and the development of a comprehensive system will inevitably beincremental. On the whole this is fine, but there is one incremental step that carries significant potential for doing more harm than good: evaluating an organization basedon its administrative and fundraising costs without taking into account the social benefits it produces.

See Jessica Stannard-Friel, “Funders’ Guide to Rating Systems,” onPhilanthropy (2/25/05)

Such ratings erroneously imply that a donor can assess an organization’s administrative costs in isolation from its effectiveness. This is the equivalent of looking at only oneside of a corporation’s financial statements. No less than in the private sector, a nonprofit organization should seek not to minimize but to optimize its costs so as tocontribute net value to its mission. An organization may have low administrative costs and produce little of value. Indeed, some organizations with low costs may be underinvestingin back-office functions that not only serve their goals but provide public accountability. In the business sector, low investment ratios at certain stages of anorganization’s development would make investors nervous, not excited.

If we build it, will they come?

Some donors seem more interested in funding innovative programs with immediate visible impact than in achieving long-term, sustainable results. Some have lowexpectations of nonprofit organizations and treat an honorable mission as a substitute for impact. And doubtless some donors are motivated more by relationships and recognition than by achieving results. More fundamentally, personal philanthropy maysometimes be so profoundly emotional as to be invulnerable to rational analysis.

Therefore, as we move forward we will need to better understand the psychology of giving and to make connections between thoughtful, strategic giving and achievingoutcomes in a way that will motivate donors. But it is at least worth hypothesizing that many donors do not seek information to guide their decisionmaking only because theyare resigned to its unavailability. To help test that hypothesis, the Hewlett Foundation is supporting many of the projects mentioned above.

The results may well be critical to the success and sustainability of a nonprofit information marketplace and ultimately to the effectiveness of the nonprofit sectoritself. If someday we are all successful in providing donors with better information to make better philanthropic decisions, the beneficiaries will be high-performingnonprofit organizations and the people and communities they serve.

Questions & Answers

Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
Bharti
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
Daniel
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
Maciej
characteristics of micro business
Abigail
for teaching engĺish at school how nano technology help us
Anassong
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
NANO
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
s.
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
Tarell
what is the actual application of fullerenes nowadays?
Damian
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
Tarell
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
Virgil
is Bucky paper clear?
CYNTHIA
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
NANO
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Harper
Do you know which machine is used to that process?
s.
how to fabricate graphene ink ?
SUYASH Reply
for screen printed electrodes ?
SUYASH
What is lattice structure?
s. Reply
of graphene you mean?
Ebrahim
or in general
Ebrahim
in general
s.
Graphene has a hexagonal structure
tahir
On having this app for quite a bit time, Haven't realised there's a chat room in it.
Cied
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
China
Cied
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
Porter
many many of nanotubes
Porter
what is the k.e before it land
Yasmin
what is the function of carbon nanotubes?
Cesar
I'm interested in nanotube
Uday
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
what is nano technology
Sravani Reply
what is system testing?
AMJAD
how did you get the value of 2000N.What calculations are needed to arrive at it
Smarajit Reply
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Source:  OpenStax, William and flora hewlett foundation annual report 2006. OpenStax CNX. Aug 14, 2007 Download for free at http://cnx.org/content/col10448/1.1
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