Sean’s Note: As someone who cares deeply about the field of philanthropy, I’ve long tracked the activities of the Hewlett Foundation’s philanthropy program. In recent years, the Gates Foundation has focused more time and attention on their own philanthropy program under the leadership of Darin McKeever. I’ve asked Darin for an overview of his program’s activity. Rather than our typical "guest post" format, this is an in-depth program update by him. Read Part I here.
By Darin McKeever
In Part I, I described some of the thinking that went into the new strategy for the Charitable Sector Support portfolio. Today, I wanted to share a bit more about what we’ve done, what we’re learning, and what projects are still in progress.
Policy Advocacy & Research
In this initiative, we seek to foster a supportive policy environment for charitable activity by strengthening the sector’s advocacy capabilities and by stimulating the development of more timely and research-based policy proposals.
Some of the highlights of our work in this area include:
- We worked with ARNOVA to convene a symposium on “Public Policy Issues for Nonprofits.” Co-funded by the C.S. Mott and Kresge Foundations, the meeting of researchers, association leaders, and practitioners produced a set of timely research topics for the field and helped us to refine our research-related grantmaking.
- We funded the Urban Institute and the National Council of Nonprofits to conduct the first comprehensive, 50-state survey of government-nonprofit contracting relationships and analysis of problems in the individual states. Responding to reports by nonprofits that late payments and other contracting problems were weakening service delivery systems and threatening the viability of organizations, the study and related outreach have already spurred efforts to improve contracting and collaboration at the local, state, and federal levels.
- We also just announced a grant to the Urban Institute’s nonpartisan Tax Policy Center and Center on Nonprofits and Philanthropy to produce briefs, estimates, and additional research and convenings on various tax policy proposals and their effects on charities and charitable giving.
Data, Standards, and Tools for Collaboration & Measuring Impact
In this initiative, we seek to bolster the charitable community’s general capabilities to distinguish between higher impact and lesser impact uses of resources.
How? For example…
- With the Foundation Center and others, we are working to improve the timeliness, specificity, and accuracy of foundation grantmaking data. We think advances in this area, such as creating or refining voluntary standards for coding and reporting, could ease and accelerate the transfer of knowledge in the sector and ultimately streamline both grantmaking and grantseeking.
- We are also co-funding the Aspen Institute’s Nonprofit Data Project – a group looking at ways to improve the government’s collection and dissemination of data on the nonprofit sector. We believe modest improvements to the way Form 990 returns are filed and digitized could collectively save millions of dollars, reduce errors, improve charitable oversight, and make available more robust information for research and analysis.
- We have also started to consider ways to encourage the further development of tools that make use of social media and mapping technology to support collaboration, knowledge sharing, and impact measurement (e.g., TechSoup Global’s NGOsource, Foundation Center’s Philanthropy/Insight, and the Foundation Registry i3).
Behavioral Research on Charitable Giving
In this initiative, we are funding research on whether higher-quality and more accessible information can drive more money to the strongest nonprofits and increase the amount of funding directed to issues of inequity.
Currently, our chief project is an effort called Money for Good II. In May 2010, a Hope Consulting report called “Money for Good” found that most individual donors say they are satisfied with and loyal to the charities they support and rarely research the organizations they give to. Of those that do research, few do so for the purpose of identifying high-performing organizations, although there appear to be opportunities for shifting donor opinions with the right mix of data and presentation.
Led by GuideStar and Hope Consulting with additional funding from the Hewlett Foundation and Liquidnet for Good, the follow-on work we are funding focuses on how a broader range of users – including individuals, foundation program officers, and donor advisors – research charities and what specific types of information, packaging, and channels are most likely to shift current behavior toward giving to higher-performing nonprofits.
Summing It Up & Inviting Feedback
In these first 18 months or so, we’ve learned a considerable amount and, I hope, started to make some important contributions to the field.
I would be interested to hear from Tactical Philanthropy’s readers. What most excites you? What questions does this raise for you? What have we missed? I value and appreciate your comments.
Thanks for the update Darin! The “tools for collaboration” area sounds especially interesting to me. There as been a lot of talk in philanthropy encouraging nonprofits to collaborate and, in some instances, consolidate. But good data points on various NPO’s needs & assets (broadly speaking) would help encourage more collaboration. You mentioned in Part 2 role social media can play–seems like more could be done there, seeing how it can be a platform for collaboration.
Have you by chance read “Where Good Ideas Come From” by Steven Johnson. His book is a good read, especially on value of open & collaborative approach to innovation. Seems applicable to your work.
David – Good to see your comment here. I haven’t read Steven Johnson’s book, but I have seen his TED talk and that book is on my shelf. Maybe time to take that book down!
I also agree with your point about the connection between the availability of information on nonprofit needs and assets and the incentives for collaboration. I wouldn’t want to overstate the connection, as economics, culture, leadership are significant drivers. But I do appreciate how you suggested that it may not be just performance and impact date that would be useful to be more readily available – that more information about the various assets and needs nonprofits have could also be important.
Thanks again for weighing in!
All the best,
Thanks for inviting response from a broad audience—exactly the right thing to do.
In a stable environment, the pattern of strategizing and grantmaking described in the blog would be eminently respectable–identifying most-influential institutions, and supporting them.
But philanthropy today is highly unstable–actually in the midst of a classic paradigm-shift—i.e. thorough transformation at every level—first identified hypothetically in two articles in Foundation News (2000), and since confirmed by accelerating innovative developments—including the emergence of the Gates Foundation itself and more recently the Gates-Buffett Giving Pledge.
In such an environment, finding the most promising innovations contributing to an emerging new paradigm cannot be done by asking the traditional establishment, which is behind the curve. In a paradigm-shift it is by definition no longer in control of the agenda, not equipped to be appreciatively aware of what is happening around them.
Perhaps the most successful recent initiative to increase charitable giving occurred in Massachusetts, which in only four years, 1997-2000, suddenly doubled its giving, from $2 billion to $4 billion. During those years, nationwide income increased by 39%, giving by 62%; in MA, income also increased by 39%, but giving went up 97.7%, far ahead of the second-place state (ca. 80%). It was accomplished by the top two income groups specifically targeted, whose share of giving increased in those four years from 51% to 74%. This surge was interrupted but only paused in 2001, with the onset of economic recession and September 11th; it resumed in 2004-5.
Second, it has become customary to refer to “philanthropy” as “nonprofits.” This convention is now factually challenged by new detailed research, also in Massachusetts, which has found that only about 10% of “nonprofits” are actually philanthropic—”private initiatives, for public good, focused on quality of life, and fundraising from the general public”. If the numbers we all use exaggerate our subject by a factor of 10, we need a recount. If the infrastructure we want to strengthen is only one-tenth the size we have imagined, that is a game-changer for strategists.
Third, this is especially true when technology is enabling unprecedented data-gathering and analysis. Impeding that progress, however, is another prohibitive impediment to systematic research: the lack of a systematic taxonomy of philanthropic fields. There are innumerable “folksonomies”—mere lists, including the so-called NTEE (the so-called “National Taxonomy of Exempt Entities”), which is not a taxonomy because it is not systematic—its basic fields bear no logical relation to each other, and each is not logically developed. Fortunately, a new (and first) systematic taxonomy has now been proposed—www.philanthropicdirectory.org—inviting comments for collaborative refinement. Philanthropy is on the verge of becoming systematic for the first time.
The Massachusetts Philanthropic Directory is a new system combining these factors, and designed to increase charitable giving. The system will be extended nationwide over the next two years.
All these developments, and the thinking behind them, are detailed in a Catalogue Publication, Philanthropy Reconsidered (2008). Darin McKeever’s much broader inquiry is in this paradigm-shift environment clearly the best way strategically to proceed.
Thanks for the kind comments and suggestions, George. I’ll have to pick up your publication and read in more detail about the developments you mentioned and watch for the progress of the Massachusetts Philanthropic Directory.
I am curious about the relationship between the philanthropic directory’s taxonomy and other taxonomies (NTEE or otherwise). I think the good news of the last few years is that there seems to be an increase in the discussions about the potential value of systematic coding and high-quality data on giving and grantmaking. The challenge, in my view, is that it has spurred a variety efforts to develop different lenses/taxonomies through which to analyze the flow of charitable funds.
How one goes about developing and promoting these taxonomies may be just as important then as the specific terminology put forward. And given larger dynamics and incentives in the field, it may be challenging to have a single taxonomy – so how each competing standard maps to others may be important to consider.
Again, thanks for weighing in with your comments. I’ll definitely be checking out Philanthropy Reconsidered.
All the best,
I’m most exicted by your work on behavioural approaches to giving. As a former fundraiser, I have long been intrigued by the role of the donor in the philanthropic equation – how their paradigms and patterns deeply impact how the sector works. I think that changing donor attitudes represents one of the biggest opportunities for improving sector performance.
The Money for Good results showing that few people seem to value making investments in high-performing nonprofits is extremely disturbing. How is this possible? How can they value giving, but not value having their giving make an actual difference? This is the question that keeps me up at night. I am passionate about finding a way to change this, and look forward to seeing what you are able to learn about it.
I’m sure you’re familiar with the work of Dan Pallotta in this field. His theory on the Puritan roots of giving that cares more about self-sacrifice than accomplishing results is very enlightening, and may be helpful to keep in mind.
Best of luck!
Thanks for your comment, Nadine. I’m also very excited about the Money for Good research – but perhaps equally sobered by the initial findings.
We’ve been funding some follow-on work to understand in a deeper way exactly what kinds of information donors, advisors, and professional grantmakers do use to make or recommend giving decisions, how that might vary by gift or grantee (e.g., interest area, first or repeat gifts), and if there are any latent needs that remain unmet. We’re pairing survey research with real-time market tests on various online giving platforms – and definitely stay tuned for the results.
All the best,
A fascinating set of articles and comments!
As a psychologist, it appears to me that you missed the point. If people don’t care about non-profits’ performance, perhaps you should turn your attention onto what they do care about.
I give to the local food bank on a regular basis – and I have never checked into their performance (they report how many meals they have given out in every letter they send me). Like most people, my decision is an emotional one, not a rational one. I give to help feed the hungry child with the sad face and empty plate that I see in the photos they send me. Giving money to feed a hungry child provides me with the satisfaction I am seeking – and fills me with positive feelings that no statistical report on performance could ever provide me with.
Your search for systems to understand (and change?) the patterns of giving reminds me of the 2009 healthcare debate that was focused on systems, costs, performance, payments and money flows – but never mentioned healing. As a practitioner I know that people don’t go to a provider because of performance – although they sometimes go because of cost. Primarily they select the practitioner who offers them hope for healing their illness, symptoms or pain – again an emotional decision.
Another thought: I know there has been quite a lot of research done by psychologists on motivation and behavior, including motivation and behaviors related to charitable giving. (They study everything!) I didn’t see any mention of a review of the psychological literature, both national and international, on this subject. You are missing the scientific research performed that may provide you with the answers you are seeking. This is the same problem that the fundraising and non-profit professional organizations here in Colorado complain about – because they don’t journey beyond the limited resources of their local groups.
I suggest expanding your search beyond the philanthropy field. Think of it this way: It’s not just a journey, it’s an adventure!
I would like you to know I appreciate all the work you have been doing – and I would be glad to do whatever I can to help you.
Neil E. Rand, PhD
The Healing Center of The Rocky Mountains
A Section 501(c)(3) and Section 170 Charity
Colorado Springs, CO