Few are likely to see the merger of the Foundation Center and GuideStar, announced this morning, as a surprise. After all, it has been more than a decade since the two started getting to know each other in a way that acknowledged their linked purposes, and a full seven years since their merger discussions began. But, to be sure, it is a momentous occasion.
For those unfamiliar with the purposes and histories of these important players in infrastructure of nonprofits and philanthropy, here are rundowns of each, taken from this morning’s press release.
About Foundation Center
Foundation Center was established in 1956, in the wake of McCarthy-era hearings on foundation activity, as a public information service on philanthropy. Foundation Center began by gathering documents on 7,000 American foundations for public inspection and publishing annual print directories starting in 1960. The mission evolved to encompass strengthening the social sector by advancing knowledge about philanthropy not only in the United States, but around the world. With information on more than 13 million grants and 155,000 grantmakers, Foundation Center maintains the world’s largest database on global grantmaking. Foundation Center information and services aids nonprofits in increasing organizational capacity and raising the funds to fulfill their missions, while enabling foundations to collaborate more effectively and allocate resources more efficiently.
Founded in 1994, GuideStar has helped drive the nonprofit transparency revolution. GuideStar released the first-ever searchable electronic database of nonprofits in 1996. Over the years, GuideStar expanded the database to include all tax-exempt organizations registered with IRS; the database currently comprises profiles of 2.7 million organizations. Populated with data from the IRS, nonprofits, and partners, these profiles are available through the GuideStar website and more than 200 other websites and applications, including Facebook, Amazon, Google, and Fidelity Charitable. In 2018, more than 10 million people used GuideStar data to make decisions about nonprofits and the work they do.
The fact that these two organizations, so critical to our individual and collective ability to make sense of the sector, took around a decade to finalize their merger does not mean that they were twiddling their thumbs. Along the way, they took the time they needed to take stock of the redundancies shared by the two organizations. (See, for example, the agenda of this strategic partnership that they entered into back in 2013). They agreed to each build on their complementary capacities, meanwhile providing them to one another so they could grow to the scale a combined entity would need. Thus, the two organizations have developed purposefully over years in ways that would eventually fit nicely together as one. This is nothing if not understated brilliance and gives them the opportunity to hit the ground running in a data environment that’s changing quickly.
Now, on to those merger deal-breakers like names and leadership, which often indicate whether one partner has simply subsumed the other. In this case, neither organization’s name will survive, and both CEOs will be incorporated into the structure of the new organization, which now goes by the inspired name of “Candid.” (As in, “a Candid Assessment of this” or “a Candid Report on that.”) The respective boards have also unified under co-chairs.
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Brad Smith, who has been the CEO of the Foundation Center, will be the Candid President, while Jacob Harold of GuideStar will move into the position of Candid Executive Vice President and guide the strategic process from there. That’s likely to be a massive job, combining 30 different business systems and melding their tech, data, and organizational processes and cultures. As Harold observes, it will “require taking advantage of every opportunity to learn and work together.”
Harold says that in the new data environment, more capacity is needed to keep up. The merger’s ethos will keep “users front and center” in their work, and other shared values will grow from that. Smith says the move “addresses unnecessary fragmentations in the data infrastructure of the sector.” With that, it also exhibits an extraordinary level of patience and care.
However, does it mean good things for the sector? Some worry about the establishment of a de facto monopoly, in that the combined entity will have a budget of close to $40 million, dwarfing all counterparts, and could develop a transactional culture that sees it as too expensive to keep the data accessible to a good part of the sector. Thus, the new organization’s willingness and ability to function as a platform, collaborating generously with others, will be key, as will pricing structures.
According to the press release, new initiatives to be developed in coming years include:
- weaving together databases to enable much more inclusive search results;
- enabling results-driven analysis based upon improved program data;
- expanding and accelerating the adoption of data standards across the field;
- driving a common profile—and, eventually, a common grant application and reporting framework—by providing a consistent data framework, a next-generation distribution system, and place-based campaigns;
- providing people working in the social sector with opportunities to develop skills to help them succeed;
- creating social functionality, including “give lists” and deeper integration into social media platforms;
- developing a technology and knowledge-driven marketplace for RFPs;
- creating a fundraising planning tool for nonprofits; and
- directly integrating data and analysis into the tools that nonprofits, foundations, and their partners use every day.
One reason why this process has gone so well might be the long-term funder support it’s had. Among those funders, the ones who pay attention to nonprofit and philanthropic infrastructure, you’ll find the Bill and Melinda Gates Foundation, William and Flora Hewlett Foundation, Fidelity Charitable Trustees Initiative, and the Charles Stewart Mott Foundation. But, Harold and Smith recall, it was the Lodestar Foundation, known for its interest in mergers and collaborations, who first put money in all those years ago toward a consultant who determined it was “not yet time.” That money can now be considered well spent toward purpose.
For now, the websites of GuideStar and Foundation Center can be reached through their usual addresses. You can visit Candid’s new page at candid.org.