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Three ideas to improve the “Philanthropic Ecosystem”


We know the need is there. What will it take to increase charitable giving? Giving USA recently reported that donations surpassed $300 billion for 2009, an amazingly generous amount given the state of the economy this past year. But in this, the wealthiest country in the world, shouldn’t we be doing better? Are there things that can be done to increase incentives and reduce barriers to increase donations?

A couple of weeks ago, I attended a workshop called “Markets for Giving” hosted by LiquidNet for Good and Global Giving. Present were representatives of more than 25 online sites that engage donors and volunteers and a number of important funders and intermediaries. The purpose of the workshop was to explore how we can increase giving and overall impact by working more closely together. There was a general consensus that the online “philanthropic ecosystem” is fragmented, with little coordination and too much duplication of efforts.

Jacob Harold, program officer at the Hewlett Foundation (and a GuideStar board member), submitted a provocative paper in advance of the workshop where he argued that the “many websites that facilitate philanthropy need to begin thinking of themselves as a single community with a common purpose.” Today, he pointed out, “consumer awareness is fractured across too many brands”—he estimates there are at least 47 giving platforms, 7 social investing sites, and 8 sites encouraging volunteering. Among his proposed solutions are cross-platform interoperability, acquisitions, and institutional collaboration.

The assembled group spent the better part of a day in facilitated discussions exploring potential solutions. Among the enthusiasm and good ideas, three struck me as critically important for GuideStar:

  1. There was widespread agreement that a lack of globally adopted, simple, and clearly understood metrics for judging nonprofits is holding back charitable giving. I was surprised at how strongly everyone felt about this. One emerging solution, we hope, is the GuideStar Exchange, where we collect more than 200 fields of data that give a very good picture of a nonprofit’s activities. Our colleagues at DonorEdge go even deeper in data collection. But what the participants at this workshop argued for was something simple and easy. Simple and easy that is also comprehensive and meaningful is a challenging task. We want to do it right and do no harm. Current examples that focus on simple and easy metrics are using overhead as the way to judge nonprofits—a metric that is not only wrong but harmful. I’m determined to have GuideStar find the right balance.
  2. Second, the group recognized that data are important not only for donors but for nonprofits as well to help them become more efficient and effective. This is a goal we share at GuideStar and we think is a critical way to improve sector impact.
  3. Finally, the group agreed that coordination, collaboration, even consolidation were essential for progress. Coordination and collaboration are important parts of GuideStar’s strategy. On the content side, we added GreatNonprofits to our site last year; this year we’ve added Philanthropedia, GiveWell, and Root Cause, with more content providers to come. On the distribution side, we have partnerships with more than 25 organizations, and GuideStar data are used by more than 7 million people on these sites. We are by no means content with these numbers and are ambitiously talking with many other organizations.

Improving the giving ecosystem is a complicated subject. Solutions are likely to come from many directions. Stay tuned for more developments.

Bob.jpgThe preceding is a guest post Bob Ottenhoff,  Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.

Topics: Nonprofit Leadership and Practice Charity Donating