Presenters: Greg Ulrich, Director of Advisory Services, Hope Consulting; Bob Ottenhoff, former President and CEO, GuideStar USA; Lindsay Nichols, Communications Director, GuideStar USA (moderator)
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GuideStar Webinar (08/06/12) - Money for Good II: Findings and Implications for Foundations
1. HOPE
CONSULTING
M ONEY FOR G OOD II
DRIVING DOLLARS TO THE
HIGHEST - PERFORMING
NONPROFITS
Findings and
Implications for
Foundations
2012
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d
2. The lynchpin of an effective social sector
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 1
3. Agenda
① Context & Objectives
② What We Found
③ Foundations as a Solution
④ Upside for Foundations
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 2
4. Context
Our goal is to make the philanthropic sector more effective
Over the last year, we have completed research on what donors, foundations,
and advisors want when it comes to making decisions on nonprofits to support,
and what will lead them to be more engaged funders of the sector
• Supported by the Gates Foundation, Hewlett Foundation, and Liquidnet for Good
We have done this by:
• Examining existing research
• 7 focus groups
• Survey completed by 5000+ individuals, 875 advisors, 725 foundation grant-makers
• Market tests on four distinct platforms within the industry
This document distills those findings for foundations. We hope this will lead to:
• Benefits to foundations: better, consistent information, more informed decisions
• Benefits to their grantees: better information, strategic clarity, fundraising support
• Benefits to the philanthropic sector overall: free flow of high quality information
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 3
5. Our Objectives
Our Overall Objectives Today We Want to Answer 2 Questions
Our overriding goal is to help create a 1. Is there an opportunity to shift
more effective philanthropic sector behaviors if more information on
nonprofits is made available in a
consumable fashion?
While that involves many facets, the
areas where we are focused is on how
to make grant-making and charitable 2. What are the tangible actions
giving more effective foundations can take that can
improve the effectiveness of their
organization, their grantees, and
And to make grant-making and giving the philanthropic sector overall?
more effective, we need to make it
more informed than it is today
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 4
6. Agenda
① Context & Objectives
② What We Found
③ Foundations as a Solution
④ Upside for Foundations
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 5
7. The Challenge: We want more informed giving, but donors
and nonprofits show limited demand for information
Donors Are Not Informed Nonprofits Don’t See Value
1. Give to a variety of organizations 1. Gathering info seen as a burden
• Time consuming to collect
2. Rarely research • Difficult to collect
• Painful to format for the varied asks
3. Spend limited time researching
2. Tangible benefits are not apparent,
(when they do)
such as an increase in donations or
operational efficiencies
4. Don’t “shop” or compare to find
highest performing nonprofits
3. Lack internal capacity to utilize
information (even if they had it)
What do we know about donors’ wants and needs…
…. And the solutions that will meet their needs as well as those of nonprofits?
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 6
8. What Can Be Done: There is a chance to influence behaviors
through better quality information, distributed effectively
UNMET NEEDS MET NEEDS
Info
Important
Full picture of the nonprofit
Financials
Legitimacy
Effectiveness Info on
• Financials
Cause
What
Basic info on
Org
• Legitimacy
INFORMATION
NO NEEDS
Not Important
• Basic information
do they want? • Cause
Endorsements
Info
Comp.
Info
• Effectiveness à the unmet need Performance
Weak
Performance
Strong
0% 20% 40% 60%
Transparent, clear, comprehensive Detailed 100-point rating 44%
How do they
Easily searchable website 14%
• Like Consumer Reports 4-star rating grading
Seal of approval that
10%
8%
want it • Info portal like GuideStar 4-star rating grading
One page summary, written
8%
6%
PRESENTED? • Self reported like Charting Impact Seal of approval that signals
Email alert that highlights
4%
4%
• NOT simple ratings
4-star rating summarizing 1%
Summary of popularity (e.g., 1%
Tomorrow’s preference is:
0% 10% 20% 30% 40%
Nonprofit's website 28%
Friend or family 25%
Where do they • NPO info / evaluation orgs Nonprofit solicitation
Beneficiary
Internet search
16%
15%
21%
want to GET THE • Consumer brands Site visit
Presentation/event
Someone at the
14%
13%
13%
Media report 11%
INFORMATION? But Today they go to:
Community 10%
3rd party nonprofit 9%
Expert 6%
• Nonprofit itself
Grant proposal or 4%
Advisor 2%
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 7
9. The Opportunity: $15,000,000,000
Nonprofits receive $300B annually from donations and grants
Based on our research, we believe that there is an opportunity
to shift ~5% of that – or $15B – through better information
This implies a wonderful opportunity to shift more money to the
best nonprofits
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 8
10. Agenda
① Context & Objectives
② What We Found
③ Foundations as a Solution
④ Upside for Foundations
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 9
11. How foundations fit in
Foundations play a critical role
• Influential and a catalyst
• Can take actions in their own interest while helping NPOs, donors, sector
In our research we saw foundations willing to make changes. Here we
provide suggestions on what foundations can do that will be the greatest
help to all parties
We feel these actions will lead to better information, and thus
• Better funding
• Better interventions
• A more effective sector
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 10
12. Three suggestions for foundations
1. Encourage and promote better information. Request standardized and new
information from grantees that is useful for nonprofits, donors, and foundations
A. Standard information on nonprofit strategy/activities (Charting Impact)
B. Standard core information on nonprofits (GuideStar Exchange)
C. Beneficiary insights (Great Nonprofits)
2. Help grantees use information productively. Help grantees connect better with
their funders, and use information to inform decision-making
A. Share insights of what donors needs, behaviors (More Money for More Good)
3. Support effective philanthropy. Invest in increasing the supply and use of high
quality, timely, accurate information on the social sector
A. Join in the Markets for Good community, come October (Markets for Good)
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 11
13. Promote Charting Impact
Clarity for NPO and Funders Why? Because it benefits:
Five powerful questions that encourage Foundations: can compare how
strategic thinking and promote a nonprofits describe their organization
common vehicle for sharing information and programming, consistently
across nonprofits
Integrate Charting Impact into your
application or reporting processes Sector: fills important gap in the
• In lieu of other elements nonprofit knowledge base
Help grantees understand how Funders: donors and others want:
utilizing Charting Impact can build • This type of information
organizational capacity • This type of format
• Self reported OK
Publish your own Charting Impact
Report Nonprofits: process helps nonprofits
sharpen their mission and strategy
• “Charting Impact helped us get to the
essence of what we do.”
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 12
14. Incorporate GuideStar Exchange
Single Source for Core NPO Data Why? Because it benefits:
An electronic means for nonprofits to Foundations: get simple and easy
share a wealth of core data, reducing access to core information on wide
redundancy and leading to scale range of nonprofits
Encourage nonprofit to complete Sector: enhances information on
GuideStar Exchange profile organizations
Allow a link from GS Exchange Funders: donors and others want:
• This type of information
Report as an acceptable substitute
• This type of format
for information in grant applications • From a trusted third party
and reports
Nonprofits: allow them to report
information in one place. Less
redundancy
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 13
15. Feedback via Great Nonprofits
Feedback & Impact Why? Because it benefits:
Mechanism to collect feedback from Foundations: provides direct line of
beneficiaries and other stakeholders: sight into impact grantees are having
“Yelp for nonprofits” on those they serve
Encourage grantees to get feedback Sector: beneficiary feedback a key
from beneficiaries via GreatNonprofits missing piece of nonprofit information
• Data is a substitute / complement to
impact data – useful in grant reports
• Use information to vet nonprofits Funders: donors and others want
applying for funding (e.g. nonprofits Information on effectiveness. This
need to have reviews to be considered) provides vivid and compelling content
Encourage grantees to act on what Nonprofits: can understand how
they hear from the beneficiaries beneficiaries use services, and design/
improve solutions they will use. Need
constituent voice for effective design!
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 14
16. Share “More Money for More Good” with grantees
The Guide Includes:
Info: In-depth findings on how individual donors,
advisors, and grant-makers use information today,
and are likely to use information tomorrow
st
late Augu Insights: How nonprofits can increase fundraising
g in
C omin and help create a more effective sector
Applications: Case studies of organizations that use
information to drive donor engagement
MONEY
Tips: 10 tips to help nonprofits collect better
MORE
information, communicate their story, and connect
R:0 with donors
FOR MORE
GOOD
G: 201
B: 11 Document will soon be available at
www.guidestar.org/moneyforgood
Questions? Email Lindsay at lnichols@guidestar.org
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 15
17. Sign up for the upcoming “Markets for Good” website
Without data that is standardized and easy to analyse, change in the
social sector will remain a slow process.
This website is intended to engage audiences in a real debate about
how we can create this active “information marketplace.”
~~~~~~
The website will be launched in early October, 2012
Contact Greg at greg@hopeconsulting.us to be informed of launch
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 16
18. Agenda
① Context & Objectives
② What We Found
③ Foundations as a Solution
④ Upside for Foundations
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 17
19. This can build efficiency for foundations and others in the system
I can manage my
I can make more informed
organization better because I I have a voice am receiving
funding decisions based on
have better information on better services!
better information
programs and impact.
☑ Greater supply and use of information
$ More informed giving and programmatic decisions
♥ More impact
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 18
20. Thank you for your time
For more information, please:
download: http://bit.ly/MFGFoundationsToolkit - toolkit for foundations
visit: www.guidestar.org/moneyforgood - more information, infographics, etc.
email: Greg Ulrich at greg@hopeconsulting.com - project lead
email: Lindsay Nichols at lnichols@guidestar.org - GuideStar lead
Also, please let Greg or Lindsay know to be updated on launch of:
More Money for More Good guidebook: lnichols@guidestar.org
Markets for Good website: greg@hopeconsulting.us
www.guidestar.org | www.hopeconsulting.us
Twitter: @GuideStarUSA | http://www.facebook.com/GuideStarUSA | Google+: GuideStar | http://pinterest.com/guidestar/
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 19
21. Appendix
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 20
22. APPENDIX
Overview of the Money for Good research
Money for Good I Money for Good II
• Surveyed 4,000 affluent Americans1 • Partnered with GuideStar
• Created a baseline of Americans’ giving • Surveyed 6,500+ individual donors,
and impact investing behaviors and advisors, and grant-makers2
preferences
• Goal of determining the opportunity to
• Analyzed: increase funding to high performing
- What donors want nonprofits, and what various
- How donors research organizations can do to support that
- Whether donors are willing to change how
they give (increase or shift giving to new
organizations) • Established these groups’ current
research behaviors and unmet needs
• Found that donors say that how well a around:
nonprofit performs is important, but few - Information
- Format
actively try to fund the highest
- Channel/source
performing nonprofits
1. Nationwide survey of Americans with HH income of $80K+, with over-sample of Americans with HH income of $300K+.
2. Nationwide survey of 5,075 donors, 875 donor advisors, and 795 institutionally-affiliated grant-makers
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 21
23. APPENDIX
Research Behaviors: Individual donors rarely research, while
for advisors and foundations, research is the norm
A CTION R ESEARCH C OMPARE
Went to any source of Self described as Researched to
information before doing ‘research’ compare nonprofits
donating before donating
Individual
69% 33% 6%
Donors
Advisors 97% 80% 27%
Foundations 98% 89% 38%
Note: Individual donor behavior varies significantly based on their familiarity with
the nonprofit, what sector the nonprofit is in, and the type of donor
Note: Conducted at the donation, not respondent level
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 22
24. APPENDIX
Information: Donors want a full picture of a nonprofit – and
better information on effectiveness – than they have today
Donor’s Information Needs
UNMET NEEDS MET NEEDS Donors look for info on:
Info
Important
- Financials
Important
Financials
- Legitimacy
Info
Legitimacy - Cause
Effectiveness - Organization
Info on Cause
Basic info on Org
- Effectiveness
Donors don’t find info on:
- Effectiveness
NO NEEDS
Donors say they don’t
care as much about:
Not Important
- Endorsements
Endorsements - Information
comparing nonprofits
Info
Comp. Info
Performance Performance
Weak Strong
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 23
25. APPENDIX
Presentation: Donors want information presented in a format
that provides them with the ‘full picture’
Individual Donors Advisors Foundations
0% 25% 50% 75% 0% 25% 50% 75% 0% 25% 50% 75%
Detailed Rating (like Detailed Rating (like Detailed Rating (like
56% 58% 59%
Consumer Reports) Consumer Reports) Consumer Reports)
Website Information Website Information Website Information
51% 51% 56%
Portal Portal Portal
Report on Nonprofit Report on Nonprofit Report on Nonprofit
39% 45% 47%
(Simple Overview) (Simple Overview) (Simple Overview)
Seal of Approval 26% Seal of Approval 32% Simple Grade 19%
Simple Grade 26% Simple Grade 23% Seal of Approval 19%
Popularity 7% Popularity 15% Popularity 5%
MFGII. Q: “Information could be provided in different ways. Which of the following are most appealing?” %’s reflect % of respondents rating choice as a 5
or 6 on 1-6 scale. Note: Images were provided for each of these categories
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 24
26. APPENDIX
Today’s Source: Today, the nonprofit itself is the donor’s
leading source of information
Sources Donors Use Today (check all that apply)
0% 10% 20% 30% 40%
Nonprofit's website 28%
Friend or family member 25%
Nonprofit solicitation 21%
Beneficiary 16%
Internet search 15%
Site visit 14%
Presentation/event 13%
Someone at the nonprofit 13%
Media report 11%
Community foundation/funder 10%
3rd party nonprofit portal (ex. GuideStar) 9%
Expert 6%
Grant proposal or annual report 4%
Advisor 2% Sources provided by the
nonprofit
Source: MFGII
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 25
27. APPENDIX
Tomorrow’s Preference: But donors would prefer to use third-
party portals or organizations
Sources Donors Would Prefer to Use
0% 25% 50% 75% 100%
Nonprofit evaluation org (ex. GuideStar) 53%
Evaluation org (e.g., Consumer Reports) 48%
Certification org (ex. BBB) 47%
Family and Friends 39%
Nonprofit itself 32%
Leading foundations 28%
People involved with org. 28%
Media 24%
Expert panel 18%
Government agency 18%
Local community foundation 16%
Leading university 12%
General public 10%
MFGII. Q: “Who would you trust to provide the information that you are looking for?”. %’s reflect % of respondents rating source as a 5 or 6 on 1-6 scale
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 26
28. APPENDIX
About GuideStar
GuideStar’s
Mission
To revolutionize philanthropy and
nonprofit practice by providing
information that:
• advances transparency,
• enables users to make better
decisions, and
• encourages charitable giving.
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 27
29. APPENDIX
About Hope Consulting
W HAT W E D O W HO W E A RE H OW W E ’ RE U NIQUE
Customer insights and Experienced consultants Deep Customer
strategy consulting from top-tier strategy Insights Capabilities
firms Comprehensive discovery
Identify opportunities for predictive approaches
clients to drive growth Supported by specialists quantification of
and social impact with deep expertise in market opportunity
brand, technology, and
Focus on: industry Strategy Expertise
• Global health
• Financial services Powerful Analytics
• Impact investing
• Philanthropic Experience on the
effectiveness Ground
(50+ countries)
H O P E C O N S U LT I N G a n d G U I D E S TA R U S A #M o n e y f o r G o o d 28