Philanthropic Sector Needs Robust Information Marketplace, Report Argues
Resource type: News
Philanthropy News Digest |
Participants in the philanthropic world — from foundations and wealthy donors to the nonprofits that seek their support — should do more to create a robust marketplace of information about charitable activity if they hope to increase their social impact, a new report from the William and Flora Hewlett Foundation argues.
Created in collaboration with McKinsey & Company, the report, The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy (68 pages, PDF), sought to answer two questions: What do donors need to make smart decisions about giving, and how can the philanthropic world ensure that the strongest, most effective nonprofits get the resources they need? In response, the report argues that the philanthropic community should work to improve the supply of accurate, credible information about how well nonprofits are run, including their impact and goal-tracking; encourage donor demand for such information; and strengthen organizations that vet and advise charities and connect them to donors.
According to the report, individuals, foundations, and businesses in the United States distribute more than $300 billion annually to more than a million nonprofits despite knowing little about the effectiveness of the organizations to which they donate. Compounding the problem, donors are sometimes motivated to give by factors other than impact, including a desire to contribute to a noble cause and/or to please friends.
“The stakes for increasing the effectiveness of philanthropy are very high,” said Jacob Harold, program officer of Hewlett’s philanthropy program and a co-author of the report. “We’re not going to solve complex problems like climate change or AIDS unless we’re much more serious as a sector about getting resources where they can have the most impact.”
To encourage discussion about issues raised in the report, the foundation has launched a new Web site, www.givingmarketplaces.org.
“ Toward A Robust Marketplace for Philanthropy.” William and Flora Hewlett Foundation Press Release 1/30/09.