Philanthropedia Blog

Archive for November, 2009

A Closer Look at Experts Part II: How do we find our experts and what information do we collect?

November 30th, 2009

Last week, I outlined who our experts are and why we value them in an attempt to answer some questions from thoughtful leaders like Richard Marker from Wise Philanthropy. Since then, someone from the Nonprofit Law Blog has written about Philanthropedia and posed some additional good questions about our experts. I’d like to thank these bloggers for their great questions and in this post, I’d like to explain how we find our experts and what kind of information we collect from them.

Finding Experts

We aim to build a group of qualified experts with a balanced representation of professionals from many different fields, with diverse geographical representation, and with diverse areas of expertise. To find these experts, we do a variety of things such as research thought leaders in the space, look for program officers at foundations who specialize in this area, research universities who have faculty focused on these issues, identify journalists who write extensively about the topic, look for executive directors or heads of nonprofits working in the space, etc.

Some examples of our climate change experts include Michael Fischer, Executive Director of the Consultative Group on Biological Diversity, Mark Spalding, President of The Ocean Foundation, Sally Benson, Director  of the Global Climate and Energy Project at Stanford University, Luis Davila,
Program Director of the Environmental Grantmakers Association, and Kimery Wiltshire, Chief Executive Officer and President of Exloco. You can read more expert bios here.

We try to identify as many qualified experts as possible to invite them to join the network. When experts fill out our survey, we collect information to confirm the strength and diversity of our expert network. For example, we ask experts how many years they have been working in their field, what professional affiliations and/or academic background they have in the field, what their professional title is and who their employer is, and, we ask them to self-rank their level of expertise.

Surveying Experts

We believe experts will each have their own idea about what makes a nonprofit effective. Therefore, rather than ask the experts to identify nonprofits who fit a certain pre-established set of criteria, we ask experts what top 3 criteria they use to judge nonprofit effectiveness. We then ask them, in the case of climate change, to identify top nonprofits which fit their criteria working at the national level, as well as top start-up nonprofits in the space. We think it’s important to identify not only the well established strong nonprofits, but also the nonprofits which have high potential to be innovative and successful. Note: we do not allow nonprofit executives to list the nonprofit they work for and we do not compensate the experts for participating in this research.

What’s particularly interesting about this research is that it captures the perspectives of different kinds of professionals working in the same sector. We were curious to find what top 3 criteria nonprofit executives would cite compared to say, foundation professionals in our climate change research. In fact, both sets of climate change experts cited the same first criterion; however the other 2 were completely different. We found that both sets of climate change professionals believed that it was most important that the organization be able to produce measurable results that go toward fulfilling their mission.

However, climate change foundation professionals then believed these two criteria were next most important:

  • the organization has a high quality strategic vision, mission, and/or theory of change
  • the organization has high quality staff/personnel

Interestingly, climate change nonprofit executives said their next two criteria were quite different:

  • the organization is able to manage their finances well
  • the organization is able to build communities of action—a criterion that is rather social cause-specific because of the number of grassroots organizations working in the sector

These results point to the very reason why we think it’s important to include the perspectives of many different kinds of experts. We don’t believe that the criteria foundation professionals use are any more valuable than the criteria nonprofit executives use.

In a second survey, we want to learn more about the strengths and areas for improvement for each of the top, most-mentioned, nonprofits. We share this information with donors on our website as part of an organization profile. Additionally, because we aim to help donors make smarter donation decisions, we want to learn how experts would allocate funding across these top organizations. This information then is turned into the expert mutual fund to which donors can contribute.

A major challenge we face is being able to collect candid opinions about strong nonprofits. Most of our experts do not want their name associated with a particular “vote” or quote about a nonprofit. However, the majority are willing to be identified as having participated. Therefore, we’ve struck a balance where we keep the votes and quotes anonymous, but share the biography information of those experts who are willing to be identified.

There are certainly areas for improvement in our own methodology and we’re actively working to improve each part of our process. However, we firmly believe there is value in capturing this kind of information and making it available to the public—a resource that has never before existed.

A Closer Look at Experts Part I: Who are our experts and why do we value them?

November 23rd, 2009

In my guest post on Tactical Philanthropy, I outlined how Philanthropedia is trying to create good information that is actionable for donors and available at scale across a number of social causes. However, I only barely touched upon why we think experts working in the sector are well suited to evaluate nonprofits. In light of the great questions Richard Marker posed about Philanthropedia in his blog post this weekend, I’d like to go into more detail about who our experts are and why we value them. And in a future post, I’ll cover exactly how we find these experts and what kind of information we collect from them.

First, a recap on who our experts are: they are funders, nonprofit executives, academics, researchers, policy makers, and many others who have been working in a particular sector for a long period of time, generally ten or more years to constitute deep expertise.[i] As our colleague, Richard Marker, noted in his blog post this weekend, expertise in a field is valuable and we’re trying to capture that knowledge through our work. However, Richard also importantly noted that younger innovators also have a valuable perspective to share. We couldn’t agree more, which is why our minimum years of expertise are 2 for experts. In our climate change research, for example, our experts had anywhere from 2 to 40 years of experience.

Next, we think it’s important to understand why we think experts are better proxies for nonprofit evaluation. Experts are like doctors or admission officers at selective universities. When a doctor meets with a patient to diagnose a problem, she takes into consideration not only the patient’s height, weight, and blood pressure, but also the patient’s past history, description of ailments, and even perhaps body language. Having worked with the patient in the past, the doctor can make a diagnosis based on a variety of factors.

In the example of the admission officer at the selective university, the applicant is not admitted based on SAT score or GPA alone, but on a variety of factors including personal statement, letters of recommendation, opportunities at the high school, and family context. In both of these examples, the doctor and admission officer follow well-thought-out guidelines, but do not rely on a formula or an equation to produce a diagnosis or an admission decision. Instead, the patient and applicant are given a holistic review.

We believe that in the nonprofit sector, the funders, nonprofit executives, academics, researchers, and policy makers are best suited to evaluate nonprofit effectiveness for two reasons. First, these experts have access to unique and nonpublic data about the nonprofits, just as the doctors and admission officers do in their respective fields. Too often, this information remains private, though it could potentially be valuable to the nonprofits, donors, and policy makers, as Paul Brest and Hal Harvey argue in Money Well Spent (specifically referring to the knowledge foundation professionals gather). As I explained earlier in the guest post, the first challenge is capturing this knowledge and then the challenge becomes disseminating it in a meaningful, useful way. The “value of knowledge can be multiplied many times over if there are good systems in place for disseminating it.”[ii]

Second, because of their expertise in the field, we believe these experts use advanced mental models to consider the many factors that go into measuring nonprofit effectiveness. Our core assumption is that expert judgment is a good proxy for evaluation when an equation alone cannot predict an outcome.[iii] “[T]he input assumptions, the range of applicability of the model, and the interpretation of the output are all subject to intuitive intervention by an individual who can bring the appropriate expertise to bear on the application of the model.”[iv]

We think that each professional brings a different, yet valuable perspective to judge nonprofit performance. “Foundations in the United States have spent significant time and money on their performance measurement systems, and are probably as close a parallel in the nonprofit sector to the kind of for-profit financial analysts that work for investment banks.” (source) Nonprofit executives, on the other hand, having spent years in the “trenches” know the intricacies of balancing competing interests, allocating resources, and working with multiple constituencies. Therefore, these professionals bring a valuable and unique perspective when evaluating nonprofit success. Academics, researchers, and policy analysts provide yet another important view rooted in research, longitudinal measurement, and scholarly interdisciplinary study.

We don’t believe that one of these perspectives is necessarily more correct or accurate than another—all add value and represent well-informed views of the nonprofit world. While admittedly this is still an imperfect measure of effectiveness, we believe that by bringing together the perspectives of these diverse groups of professionals, we can meaningfully capture the aggregated beliefs of a group of well-informed people and understand which organizations they currently think are impactful. And, as I explained in the guest post on Tactical Philanthropy, experts are only a starting point.

[i] Herbert Simon & Kevin Gilmartin, “A simulation of memory for chess positions,” Cognitive Psychology 5 (1973): 29-46.

[ii] Paul Brest and Hal Harvey, “Money Well Spent: A Strategic Plan for Smart Philanthropy,” (New York: Bloomberg Press, 2008), 90.

[iii] Olaf Helmer, “Analysis of the Future: The Delphi Method,” The Rand Corporation, March 1967, 4.

[iv] Olaf Helmer, “Analysis of the Future: The Delphi Method,” The Rand Corporation, March 1967, 4.

Charitable Gift Card: Think Giving Season this Holiday Season

November 20th, 2009

‘Tis the season for being thankful and giving back. With the economy in a recession, we at Philanthropedia think it’s more important than ever for individuals to think strategically about making their nonprofit contributions go farther. Just this week, Philanthropedia launched a charitable gift card so that in the spirit of giving, donors can support a social cause and give a gift at the same time. We see three main benefits to these gift cards:

  1. You can give back to society by making a strategic donation
  2. You get the tax benefit of giving a charitable contribution
  3. You are able to give a unique gift to someone you care about

Because gift cards can be purchased for as little as $5, they make great stocking stuffers, gifts for coworkers, or any friends and family members. Even $5 can make a difference because we combine it with all of the other donations coming through our site to support some of the strongest nonprofits. By pooling our resources to support these great nonprofits, we can make a bigger impact within an entire sector.

As you make your holiday list and check it twice, we encourage you to consider combining your charitable giving for the year with your annual gift giving to friends and family. Let’s support nonprofits through the recession by thinking giving season rather than traditional holiday season this year.

Our Guest Post on Tactical Philanthropy: Providing donors with better information—actionable and scalable—all in one place.

November 18th, 2009

Clearly, people care. If we look at charitable contributions in 2008, we see that individuals donated more than $250 billion to nonprofits. I assume donors weren’t forced to give away that money—they wanted to. But what goes through their minds as they decide where to write that check? And especially for newer, younger donors, with more than a million registered nonprofits out there, where does one even begin?

Last week, I posted a blog entry introducing Philanthropedia’s idea about a Foundation for Everyone. Philanthropedia is an online resource and tool for individual donors. We ask nonprofit experts (with an average of 10 years of experience) to identify strong nonprofits and allocate money across the organizations. On the basis of these recommendations, we create an Expert Mutual Fund that helps donors support an entire sector rather than just one nonprofit.

Now, we’d like to share more about our perspective and explain how we hope to help donors as they make donation decisions.

At Philanthropedia, we see 3 factors shaping the problem donors face: Individuals lack good information that is actionable and available at scale, across multiple social causes.

What does it mean to have “good information at scale?” In general, we think the nonprofit marketplace has very little good information about nonprofit success. And, in contrast to capital markets, measuring nonprofit impact is extremely challenging because it’s difficult to quantify. Some independent organizations have attempted to solve this problem by rating, ranking, and scoring nonprofits according to various metrics.

As Lowell, Trelstad, and Meehan explain in The Ratings Game, at one end of this spectrum, organizations examine only a few metrics, a model which is highly scalable and inexpensive. Charity Navigator, for example, evaluates nonprofits primarily according to financial metrics such as fundraising efficiency ratios—which many have criticized as being too narrow a measure to assess nonprofit effectiveness. To their credit, Charity Navigator recently announced their plans to add additional dimensions of evaluation to their rating system. We think this is a great move in the right direction.

At the other end of the spectrum, organizations weigh a variety of measures, a model which is more comprehensive and likely more accurate. Employees at the BBB Wise Giving Alliance, for example, evaluate a nonprofit’s “financial efficiency and stability, governance and oversight, performance measurement, and the quality and accuracy of the organization’s fundraising and informational materials.” (source)

Unfortunately, there are limitations to both forms of nonprofit evaluation. On the one hand, relying on financial data from only one year “tells you about the [nonprofit’s] use of resources, not about the program effectiveness.” (source) And on the other hand, conducting in-depth research is much more time-intensive, costly, and therefore limited to a smaller number of organizations.

What does it mean for information to be “actionable?” The next challenge is how to share the information in a way so individuals can make a decision about where to give. Examples of actionable information are: presenting the donor with a donation strategy, with suggestions about the meaning behind different evaluations, or with ratings to help donors compare organizations. Charity Navigator, for example, uses an easy to understand 4-star rating system, while other organizations choose to provide anywhere from basic facts about nonprofits to comprehensive reports. To someone outside the nonprofit world, presenting information as facts or reports without further recommendations can be difficult to act on.

Philanthropedia’s solution. Therefore, given the unavailability of good information (at scale), we, at Philanthropedia, believe that nonprofit professionals—experts—in the sector are the next best option to evaluate nonprofits. Foundation professionals, academics, and nonprofit executives have access to non-public data, and, because they’ve been working in the sector for a long time (on average our experts have ~10 years of experience) they have advanced mental models for how to weigh the many factors one ought to consider. For us, “good information” about nonprofits will combine both objective facts and subjective assessments to allow for a more holistic review of nonprofit performance. And, this method is inexpensive and scalable (even though we’re not at scale quite yet) because we enlist the help of experts and can concurrently run our research in 2-month cycles. Many thanks to the 261 experts who have already contributed to this work.

While relying on experts to measure nonprofit effectiveness is still imperfect, we believe we can meaningfully capture the aggregated beliefs of a group of well-informed people and understand which organizations they currently think are impactful. And, experts are only a starting point. We then supplement the top-nonprofit profiles with information from Charity Navigator (for financial metrics), GreatNonprofits (for beneficiary voice), and eventually GuideStar (for tax 990 forms). We believe it’s important to bring together and make public multiple measures of nonprofit performance.

Finally, to make this information actionable, we present our research to donors in the form of an Expert Mutual Fund. We ask our experts to allocate 100 monetary points across the top organizations. The result is an easy-to-understand donation strategy that allows donors to support an entire social cause rather than just one organization. Because no one organization will have the solution to the problems within that sector, we believe a diversified giving strategy is a great way to support a social cause.

While there is still a lot of room for improvement, we hope we can move one step closer to providing donors with good information about a number of social causes and make it easier for them to take action to support some of the strongest nonprofits out there—all in one place!

We invite your feedback, suggestions, and comments and look forward to hearing from you.

The Foundation for Everyone: A new approach to online giving

November 11th, 2009

At this time of year as we enter the “giving season,” you might find yourself asking the question: I want to give back, but will it really make a difference if I donate $100 this year to one charity? Wealthy individuals invest in Donor Advised Funds through Community Foundations, but what about the rest of us? What resources do we have to help our money go to the right places and to go farther?

Imagine a Foundation—with the knowledge of experts, with a portfolio of great nonprofits, and with a donation strategy so simple and smart that even $100 can make a difference.

Philanthropedia is the Foundation for Everyone. Yet, rather than have one program officer run the show, we build robust expert networks to identify top nonprofits. And, just as a Foundation has a portfolio of nonprofits they support in a social cause, so do we.

Our experts identify these strong nonprofits and allocate 100 monetary points across the organizations. The result is an Expert Mutual Fund—an easy and powerful new giving strategy. Think of it: because there is no one solution to a problem in a given sector, by donating to a group of nonprofits you can invest in an entire sector, rather than just one organization.

Through Philanthropedia, the Foundation for Everyone, you can feel confident that your money, no matter what the amount, is going to support some of the strongest nonprofits out there. This holiday season, we urge you to take charge and make your donation go farther: come together to give better with Philanthropedia!

Philanthropedia is a registered 501(c)3 organization. All of your donations are 100% tax-deductible.