Dialogue about the Hewlett Foundation’s Nonprofit Marketplace Initiative

The following is a (slightly edited) response from GuideStar president and CEO Jacob Harold to the  blog post by GiveWell co-founder Holden Karnofsky. In his blog post, Karnofsky reflects on the William and Flora Hewlett Foundation’s Nonprofit Marketplace Initiative (NMI) – specifically Karnofsky experience with it, his opinion of its strengths & weaknesses, and his take on its conclusion.

Holden Karnofsky

Holden Karnofsky

Harold, who formerly led grantmaking for the Hewlett Foundation’s Philanthropy Program and oversaw $30 million in grants that aimed to build a 21st-century infrastructure for smart giving – including grants to GiveWell – gives his perspective on the NMI and GuideStar’s role in continuing the work at the core of that ambitious initiative.

In the spirit of transparency and collaboration, Karnofsky sent his blog post to Harold ahead of time in order for Harold to review and comment. Thus, this post and the post on GiveWell’s blog are being published simultaneously.

Jacob Harold

Jacob Harold

In a sense, I think my view always came down to one number: 600,000,000.  That’s the number of websites in the world (more or less). Putting content up on one of the world’s 600,000,000 websites (www.givewell.org) does not in my mind qualify as a distribution strategy.  Without one GiveWell will always remain marginal, an island serving a small (though influential) community. That is, you will offer quality without quantity.

The dream (as yet unfulfilled) of the NMI was to address both quantity and quality by taking a “systems view” and consider how various individual efforts contributed to a larger system and connect them together. I think it’s fair to say that NMI

  1. significantly strengthened many key organizations (including GiveWell);
  2. helped build a community among those players; and
  3. created many critical technical pieces to weave that system together (BRIDGE, Charting Impact, etc.); but
  4. has so far failed to turn that community into a high-functioning, interconnected system and, thus;
  5. not yet fully achieved its goals.

If I’m honest, I think the fundamental flaw was this: NMI was absolutely predicated on having a core technical infrastructure that would weave together the many sources of data/content and the many channels to reach donors. The truth is that key organizations in the field—GuideStar included—were not yet ready to play that complex role.

That’s changed.  GuideStar (and key colleague organizations like Foundation Center) are now starting to pull this system together at scale.  The data are already starting to indicate very real quantity: the users of Charity Navigator, BBB Wise Giving Alliance, and GuideStar total more than 15 million; GuideStar’s data was used on other platforms (e.g. Fidelity & Amazon) 22 million times last year through APIs and tens of millions more through other mechanisms. That is, we have in fact already reached part of the NMI goal: >10% market penetration. But we have yet to reach the “quality” part of the goal.

And a note that while the NMI originally was focused just on individual donors, the truth is that after a few years we realized that the other consumers of that information—beneficiaries, researchers, government officials, nonprofit executives, etc.—could be just as important to social impact as donors. I think we may have erred in not articulating that shift more explicitly.

Now, in a sense I’ve bet my career that GuideStar can soon play the role I hoped it would play those years ago. Time will tell, but I am quite sure that parts of the NMI will live on—as a contributor to GiveWell’s growth and, I’ll hope, to the belated realization of a decent information system in philanthropy.

There are rich and important conversations happening in the broader “Effective Altruism” community that GiveWell helped to launch.  But that community remains small and at times can, by my judgment, be disconnected from the on-the-ground realities of social change. So I very much hope that as GiveWell evolves it will continue to engage a big and broad community about how to maximize impact from society’s scarce resources.

To read Holden Karnofsky’s post on the GiveWell blog, please visit http://blog.givewell.org/2014/08/05/thoughts-on-the-end-of-hewletts-nonprofit-marketplace-initiative.

2 responses to “Dialogue about the Hewlett Foundation’s Nonprofit Marketplace Initiative

  1. Kudos to Holden, Jacob, and Lindsay who, through their thoughtful reflections on the Hewlett Foundation’s Nonprofit Marketplace Initiative, are walking the talk on openness and shared learning.

    As a disclosure, my organization, Liquidnet, informally partnered with the Hewlett Foundation on different aspects of the NMI work and have entered into a formal partnership with them (and others) on their new efforts to increase the two-way openness in foundations. Liquidnet helped launch Markets for Good, which began as a forum for collaboration between online giving platforms (like GlobalGiving and Network for Good) and information providers (like GuideStar and GiveWell) and has become a broader conversation (in partnership with the Bill & Melinda Gates Foundation) about how the social sector can better generate, share, and use data and information to improve decision making, so that information might drive social impact.

    I actually agree with each of them on separate points:
    • I agree with Holden’s point that the NMI was a smart use of philanthropic resources and the way the strategy was wound down was open, fair, and thoughtful.
    • I agree with Lindsay’s point that it was probably unrealistic for the NMI to set the specific goal of influencing 10% of individual donations in the US by 2015. Perhaps the NMI should have been explicit in changing its own benchmark(s) for success as the strategy evolved and the Hewlett Foundation learned more during the course of its work.
    • I agree with Jacob’s point that the consumers of information on nonprofit performance are not *only* individual donors; beneficiaries, nonprofit managers, and others (e.g. researchers, policy makers, journalists, etc.) need access to high quality data and information in order to inform their own decision making.

    I remain a big fan of GiveWell’s work and appreciate the influence they are having on a committed and growing community of donors, who value their thoughtful, thorough, and transparent analysis.

    At the same time, I am very hopeful about Jacob’s efforts at GuideStar and the efforts of other organizations which play a critical role in the social sector’s “information infrastructure”. We may well be on our way to producing a system that reaches scale in *both* the quantity and the quality of information – and ultimately insight – provided to a broad audience. Time will tell, but through APIs and partnerships with “mainstream” platforms like Fidelity’s, Amazon, and other “private sector” distribution channels, we are indeed working towards getting the right information (high quality data on social issues, proven interventions, the capacity & performance of organizations, resource flows, outcomes, etc.) into the right hands (beneficiaries/constituents, donor of all sizes, nonprofit managers, policy makers, investors, etc.) to better inform decision making in the social sector.

    Now let’s all agree to continue the work – and the open dialogue! – about how we might “maximize impact from society’s scarce resources” (in Jacob’s eloquent words).


  2. Jacob, of course you and I have discussed the Nonprofit Marketplace Initiative several times in-person, but this is a great opportunity to continue the conversation in an open forum.

    You raise the point that while NMI originally focused just on individual donors (and building an information infrastructure to support more data-driven giving), over time you began to think of a much broader set of social sector actors that might benefit from a robust information infrastructure. Indeed, the role you played through grantmaking and sector leadership in building and weaving together that infrastructure is one of the clear successes of NMI and likely to continue in the sector.

    Considering the needs of many more stakeholders and developing a robust information infrastructure are both important and laudable goals – but neither were the overarching goals of the strategy. When it came time to decide what to do based on the original strategy and independent evaluation, we knew that we needed to end the work aimed at influencing 10% of donations with high-quality nonprofit performance data – that goal simply wasn’t being achieved.

    In considering what to do next, we could have kept the NMI name/brand and shifted our primary goal to be, for example, continuing to build the information architecture for one or more difference target audiences in the social sector. Had we done this, we would have set up new goals and yardsticks by which to measure progress (to Brian’s specific point to me/Hewlett above).

    Our highest priority in pursuing a new or revised strategy was to do grantmaking in collaboration with other funders who are also committed to strengthening the philanthropic sector, so that goal drove our strategic planning process which included meetings with over thirty funders from across the country. The outcome of that process is that we have helped launch a new collective funding effort with six other core funders (including Brian/Liquidnet as he noted) focused on increasing foundation openness – including what foundations share and how they listen to one another, grantees and the ultimate intended beneficiaries of our work. More to come on that in September when it goes live!

    Jacob, in your work on the original NMI strategy and on the information infrastructure work that has emerged from it, you have helped achieve many successes for our sector – and also helped us learn from the aspects that didn’t unfold as we had hoped they would. Thank you for your vision and leadership.


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