January 23, 2008
How Foundations Can Help Individual Donors
Why do foundations do so little to distribute the knowledge they gain from their grant making so that individual donors can benefit, asks Sean Stannard-Stockton on the blog Tactical Philanthropy.
“The point I’m making is not that foundations have some sort of obligation to fund nonprofit information for public use, but that doing so is in their best interest,” Mr. Stannard-Stockton writes. If foundations support efforts to provide individual donors with the information to make strategic decisions then “it seems to me that foundations can achieve huge returns on their grant dollars by enabling the public to gain access to the same kinds of information that they themselves use.”
In a podcast interview, Mr. Stannard-Stockton struck up a conversation with Phil Buchanan, executive director of the Center for Effective Philanthropy, about this topic.
Mr. Buchanan cited an article featured by The Chronicle of Philanthropy on the organization Great Nonprofits as a good example of “a place where people can go and offer their perspective on nonprofits that they’ve either been served by or volunteered with.”
However, he notes that the challenges in measuring performance are myriad because the nonprofit world does not “lend [itself] to easy assessment and, of course, there’s no universal measure” of success.“ Still, Mr. Buchanan said that certain foundations “deserve some credit for having provided support to some of the organizations that are working on this issue” while others could do much more.
Perla Ni, founder of Great Nonprofits, chimed in to the comments section following the podcast to give her take on why only a few foundations, such as Kellogg and Hewlett, that “support initiatives to create better information about nonprofits.”
She writes that, quite simply, “foundations don’t feel the pain of insufficient information” as individual donors often do. Foundations must realize that helping individuals gain access to both “hard” and “soft” information “can have a huge payoff when they attract greater individual giving.”
What do you think? Should foundations do more to help individuals decide where to give? Would such efforts help or harm small or risky nonprofit causes? Click on the comments link below this post to share your thoughts.
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I guess I am a little confused by this expectation that Foundations should provide information to individual donors (full disclosure: I am a staff member at a community based foundation).
While I understand the argument that we can achieve our mission more effectively by wider involvement and broader financial support, and the reality is that our staff often make these connections informally, I am unclear why Foundation staff are viewed as a best resource to assist individual donors in their decision making.
Perhaps my confusion is around the decision making process itself. In my organization we select projects to support using a number of criteria. Certainly we look carefully at the budget, staffing, governance, outcomes, sustainability and all the standard issue “is this the best organization/project” kind of questions.
And I suppose there is an argument to be made that this is the type of information that, widely available, could truly benefit donors and their recipients. I would propose however that organizations like Charity Navigator, Great Nonprofits, et al. are simply better equipped. As an organization we fight to stay on mission all the time; developing mechanisms to effectively communicate with various audiences of donors is time consuming, and it appears the gap is being filled by the market place.
But a significant filter is also: Does this organization/project exhibit the values of our organization. We believe that work done in community which expresses our values is most effective. Our organization has invested a great deal of time in articulating these values and they are certainly not shared by every Foundation even in the close vicinity.
Given this filter, what value is my Foundation’s advice on projects unless there is some overlap in the values of our organization and any given donor?
— Suzy Jan 23, 10:43 AM #
Suzy,
All good points on why foundations are not sharing the information they have about nonprofits.
My point was that, with a few exceptions, foundations don’t fund initiatives that aim to help individual donors make better giving and volunteering decisions. And I think this is a lost opportunity since foundations are in a position to help strengthen the nonprofit sector and help nonprofits grow their revenues from public support.
There’s a lot of people who are not giving as much to nonprofits as they would like because they don’t have enough information on charities or they don’t have enough confidence in the information that is available. According to an NYU study, 78% of Americans think that nonprofits are mismanaged.
This perception hurts each and every nonprofit that tries to raise money or attract volunteers.
How do we dispel that perception? What kinds of information about nonprofits will inspire individual donors and make them feel confident that their money/time is going to make a difference? Those are the questions that we at GreatNonprofits.org are trying to answer.
Perla Ni
CEO, GreatNonprofits
— Perla Ni Jan 23, 03:51 PM #
Suzy, thanks for sharing your thoughts. I certainly do not think that foundation staff members should be spending their time individually consulting with donors. I do believe that they should make the research they generate generally available. I often hear the idea that since foundations fund their own mission, that the research might not be relevant to other donors. But since we know that most nonprofits have many donors we also know that many donors share similar missions and values.
For instance, as a parent of two young children in California I am interested in improving education in the state. The Hewlett Foundation also has this mission. Our beliefs may not match up exactly, but it would certainly be helpful to me if I could view all of the grants that Hewlett had made to education in California and read any research they had performed during the grantmaking process.
— Sean Stannard-Stockton Jan 24, 09:27 AM #
Perla,
Thank you for the clarification. I think there is an interesting conversation to be had (or likely has been had) about this lack of confidence and what contributions the very nature of the media make to it (i.e. if it bleeds it leads/good news is boring). And certainly, Foundations are in a position to support distribution of good information.
As you know however, not every foundation has the goal of supporting the overall nonprofit sector. Certainly, support of nonprofits that forward our mission makes great sense, and helping them in a more general way than sporadic grants seems spot on in terms of long term impact and efficiency. But it is not the goal of my organization to generally support the health of the sector nationally. Many nonprofits have nothing to do with the mission of my organization, and while I wish them well, investing in them or in the field generally just isn’t first on the list for limited resources.
Sean,
To your point about accessing information concerning grants and grant research. Certainly many grantmakers have information about their grants available (online generally or in annual reports, press releases, etc) albeit brief and perhaps not connected with the outcomes as you would like.
But in terms of the research, I am drawn to the practicality of the process. You do, as I do, research on entities. However, your primary focus is on packaging what you research so that it is easy to use, clear, appealing, balanced, etc. for your clients. I don’t suspect you would ever provide your clients with the raw data without providing context, outlining your though processes and generally making it information worth paying for. That, however, is not what I get paid to do, at least not for consumption of the general public. Would you suggest that I share the raw research data which may contain information that, out of context, just isn’t helpful or even accurate? I am unclear how this helps the case of nonprofits or donors for that matter.
— Suzy Jan 25, 10:48 AM #