This is a guest post by Bob Ottenhoff, CEO of GuideStar. GuideStar recently announced they have acquired innovative startups Social Actions and Philanthropedia. We asked Bob to share the strategic rationale behind these deals.
By Bob Ottenhoff
Over the years, GuideStar has taken on the monumental task of providing transparency into the nonprofit sector, with care to maintain a sense of neutrality, providing tools and data users can access to guide their decisions.
Now, we come to yet another crossroads in our history. Late last year we adopted a new strategic plan with an ambitious long term vision that embraces a world where:
- Information that supports quality decision-making flows through the sector at low cost for providers and users,
- Nonprofits know their performance, have tools to improve their performance, and are able to share their data freely and widely with donors at low cost
- Donors are positioned to target their giving to the organizations that best fit their giving preferences – impact or passion-driven
- Best fit nonprofits benefit from easier assessment of performance with higher donations from purposeful donors
- The marketplace shifts toward purposeful giving (vs. responsive), and the cost of fundraising and grantmaking decline
GuideStar’s acquisition of Philanthropedia and Social Actions combines entrepreneurial talent, new technologies and adds deeper, wider and better data to our information stream. We are excited about being able to achieve efficiencies and scale faster by engaging the talent and platforms already created by both these entities.
For some time, we have been looking for a way to utilize the in-depth analysis conducted by private foundations. Philanthropedia uses a sophisticated process and network to tap into the “wisdom of experts” to analyze the effectiveness of nonprofits working in a particular cause area. We currently capture some of this information and display it via our TakeAction platform. This year they have added nine more cause-areas, have approximately 200 organizations in the top tier recommended category, 1,400+ organizations with reviews from several experts and a new “start-up” category with profiles and an expert comment on why these 25 or so start-ups have high potential. Their 2011 goals include adding ten additional cause areas.
We plan to use GuideStar’s data and processing assets to enhance Philanthropedia’s research platform and to scale Philanthropedia’s mission. Their crowd-sourcing of experts, coupled with the Great Nonprofit reviews (“crowd-sourcing of users”) we have invested in at GuideStar over the last two years, will give us a comprehensive compilation of third-party nonprofit reviews. Philanthropedia is led by co-founder Deyan Vitanov, with a fulltime staff of two and a part-time staff of two overseas product development engineers. We’re looking to apply their entrepreneurial spirit and energy into major roles in building GuideStar Labs, developing GuideStar’s TakeAction as our online laboratory and strengthening our data sources and content partnerships.
As for Social Actions, we see GuideStar’s future tied to what Peter Dietz said in his blog recently: “The stewards of databases are no longer just asked to open up their datasets, but to make them available in such a way that they link with other data repositories by design.” This linkage is key to integrating data in a way that makes sense to different user groups. We have engaged Peter and Christine Egger to help us take their Social Actions concept to the next level. We built TakeAction with open source technology, for all the same reasons Social Actions built their platform on this same commonly accepted, scalable and rapid application technology. As a first step, we will integrate Social Actions into our TakeAction micro site and use it as part of our GuideStar Lab for testing out new tools and services.
Social Actions also provides a new layer of social innovators to our growing data network. We envision leveraging the online communities and resources that Social Actions brings, by weaving in their action-oriented resources into a user’s decision-making process. We believe development and adoption of a standard protocol that will simplify cross-platform communication among transaction providers will have huge strategic implications to the sector. We’ll also use Social Actions Open Action XML API and semantic web technology to expand our data sharing services.
Powered by these new acquisitions, we’ll be one step closer to turning data into information and knowledge and making GuideStar information widely distributed through a range of partners to all purposeful donors.