GuideStar Webinar (08/06/12) - Money for Good II: Findings and Implications for Foundations

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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. 1. HOPECONSULTING M ONEY FOR G OOD II DRIVING DOLLARS TO THE HIGHEST - PERFORMING NONPROFITS Findings and Implications for Foundations 2012H 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. 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. 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. 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. 5. Our Objectives Our Overall Objectives Today We Want to Answer 2 QuestionsOur overriding goal is to help create a 1.  Is there an opportunity to shiftmore effective philanthropic sector behaviors if more information on nonprofits is made available in a consumable fashion?While that involves many facets, theareas where we are focused is on howto make grant-making and charitable 2.  What are the tangible actionsgiving more effective foundations can take that can improve the effectiveness of their organization, their grantees, andAnd to make grant-making and giving the philanthropic sector overall?more effective, we need to make itmore 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. 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. 7. The Challenge: We want more informed giving, but donorsand nonprofits show limited demand for information Donors Are Not Informed Nonprofits Don’t See Value1.  Give to a variety of organizations 1.  Gathering info seen as a burden •  Time consuming to collect2.  Rarely research •  Difficult to collect •  Painful to format for the varied asks3.  Spend limited time researching 2.  Tangible benefits are not apparent, (when they do) such as an increase in donations or operational efficiencies4.  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. 8. What Can Be Done: There is a chance to influence behaviorsthrough 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% Nonprofits 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. 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. 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. 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. 12. Three suggestions for foundations1.  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. 13. Promote Charting Impact Clarity for NPO and Funders Why? Because it benefits:Five powerful questions that encourage   Foundations: can compare howstrategic thinking and promote a nonprofits describe their organizationcommon 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. 14. Incorporate GuideStar Exchange Single Source for Core NPO Data Why? Because it benefits:An electronic means for nonprofits to   Foundations: get simple and easyshare a wealth of core data, reducing access to core information on wideredundancy 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. 15. Feedback via Great Nonprofits Feedback & Impact Why? Because it benefits:Mechanism to collect feedback from   Foundations: provides direct line ofbeneficiaries 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. 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 connectR:0 with donors FOR MORE GOODG: 201B: 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. 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. 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. 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. 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.usTwitter: @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. 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. 22. APPENDIXOverview 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 nonprofits1. 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. 23. APPENDIXResearch Behaviors: Individual donors rarely research, whilefor 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 donorNote: 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. 24. APPENDIXInformation: Donors want a full picture of a nonprofit – andbetter information on effectiveness – than they have today Donor’s Information Needs UNMET NEEDS MET NEEDS Donors look for info on: InfoImportant -  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 nonprofitsInfo 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. 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 PortalReport 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 5or 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. 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% Nonprofits 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 nonprofitSource: 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. 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. 28. APPENDIXAbout 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. 29. APPENDIXAbout 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

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