Tree

Last month, Guidestar and the Foundation Center announced a strategic partnership between the two leading sources of data on nonprofits and foundations. The purpose, according to the press release, is “to build the capacity and effectiveness of the social sector…[by] leverag(ing) the organizations’ unique strengths and complementary missions to support the field in new and innovative ways.” The buzzwords of “partnership,” “alliance,” “capacity,” “effectiveness,” and “innovative” are pretty common to everyone’s new business plan, but in this case, with Guidestar’s Jacob Harold and the Foundation Center’s Brad Smith driving the dynamic, there might be something happening worth watching and using.

If you live on data about the nonprofit sector, as we do at Nonprofit Quarterly, you spend a good chunk of your time at the Foundation Center and Guidestar websites, sometimes trucking back and forth between the two to put together the fullest possible picture of individual nonprofits or nonprofit subsectors. Even as Guidestar and the Foundation Center have evolved and made their databases more accessible and navigable—though, in many cases, for a price—the data picture of the nonprofit sector has been one of fragments stitched together primarily through the diligence of the researcher, often with significant gaps or data filled in by the use of substitute measures that are only guesses as to the real nonprofit dynamic. This partnership between the two organizations has the potential, as Harold explains to Nonprofit Quarterly, of “bringing some order to…the information architecture [that] can help define the community; it is about having clarity about what we mean by ‘we’ in the nonprofit sector.”

Why not simply merge, and have one of these data inventories absorb the other and become one large organization? In contrast to the scalability juggernaut that has captured the attention of much of the sector, Smith tells NPQ that the route to bigger impact isn’t through a bigger organization, but networking.

Ultimately, according to Harold, this bilateral partnership could evolve into a multilateral relationship with other entities that chew and interpret nonprofit data, but at the moment, there is a natural reason for these two to come together in an alliance. According to Smith, “no one knows more about the care, feeding, and handling of [Form] 990s” than Guidestar and the Foundation Center. The bulk of 990s, Smith says, are not submitted digitally, and even if government plans do proceed for requiring the digitization of 990s, it won’t happen for several years. With their decades of experience, the two organizations know what they’re getting in the 990s they receive from the IRS, and how to make sense of the data.

 

Medium Data Defining the Field

The term of the moment is “big data,” but Harold defines a “medium data” challenge that has to be mastered before delving into the search for meaning in massive databases. Earlier this year, in a piece for the Harvard Business Review, Harold wrote, “For nonprofits, medium data is a humbler but essential prerequisite: structured information about who you are, what you’re trying to do, and what’s happening.”

What does it mean to be a nonprofit? What kinds of common information help define the nonprofit sector without falling into the trap of magically thinking that some quantitative factors will be able to replace experience and intuition in identifying nonprofits worthy of support and promotion? That’s where Smith and Harold seem to have their feet planted pretty firmly in reality. Both have enough practical experience, particularly as grantmakers—Harold at the Hewlett Foundation and Smith at the Ford Foundation and the Oak Foundation—that they don’t seem to have gone overly giddy about the magic of numbers as substitutes for judgment and common sense in nonprofit decision-making.

 

Elements of a Strategic Alliance

The strategic partnership between the two data behemoths actually builds on past interactions and collaborations, turning those ad hoc interactions into a more systematic working relationship. What does a strategic partnership between two well-respected and generally successful entities actually mean? Partly, the answer is in organizational synergies. For example, Harold reports that the two organizations plan to align their processes for digitizing Form 990 data. It may not be a big thing, but as is well known, the IRS makes 990s available to Guidestar, the Foundation Center, and other entities as pictures or images. It takes costly effort on the part of data miners like these organizations to pull out information for searchability and interpretation. By working together, this is a strategic alliance that might at a minimum meet an important threshold of cost savings, reducing some of the duplication that occurs between the two organizations handling 990s right now.

A second element may be the broader question of open data, which is, as Harold says, “very much the way the world is going.” By a strategic alignment, the two entities have the ability to work together to open up coordinated pieces of their data infrastructure, and find ways of paying for the data at the same time—in Harold’s words, “how do we advance our missions while keeping our organizations alive,