The charitable world should create a centralized online “philanthropy exchange” that nonprofits, individual donors and funding organizations can use to share financial data and conduct the business of finding and giving away charitable resources.
In the foundation’s new annual report, Brest says donors would benefit from an online marketplace that provided information comparable to the resources readily available to private investors.
Brest’s idea is on the money: When it comes to online data critical to making decisions, the commercial world makes effective use of technology to make data available and to transact business.
Individual charitable organizations have made effective use of online technology to publish specialized data on nonprofit finances, programs and needs.
But the charitable world as a whole has failed to rally behind creation of institutions like the U.S. Securities and Exchange Commission and New York Stock Exchange to serve as a central source of comprehensive charitable data or provide a universal marketplace to handle charitable transactions.
Websites such as GuideStar feature financial data on nonprofits organizations, but those data are far from comprehensive and can be badly out of date.
Some community foundations have created spaces on their websites where donors can find information nonprofits post on their finances and needs, but that information can be spotty and reflect the needs only of a small set of local groups.
Other organizations like DonorsChoose and AidMatrix operate online charitable exchanges that let donors make contributions to address needs posted by teachers or relief organizations, but those sites target only specific kinds of causes.
On the demand side of the charitable world, 14 regional associations of grantmakers have spurred development of a common application form,” and some also use a corresponding “common grant report” form.
But as is only too painful to many nonprofit grantwriters, the job of seeking grants from multiple foundations can be a major headache, requiring hours of work filling out separate applications that all ask for the same information.
In a complex and fragmented world with no shortage of urgent social needs, the work of raising money and giving it away can and should be a lot easier and more efficient.
Organized philanthropy needs to invest now in the creation of a comprehensive “philanthropy exchange,” possibly consisting of a network of regional, state and local exchanges, that will provide the financial and operating data nonprofits and givers alike need to make smart decisions and transact business effectively.