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Collecting Expert Opinion about
                High-Impact Nonprofits:
Review of Philanthropedia’s Methodology


                     Whitepaper Summary Deck
                                 March 5, 2010


                                     Philanthropedia
                    http://www.myPhilanthropedia.org
The Purpose of the Whitepaper

       With this whitepaper, we present our methodology as
        a novel way to identify high-impact nonprofits by
        relying on expert recommendations.

       We propose that this methodology produces high
        quality information about high-impact nonprofits at
        low cost.

       This deck summarizes the main takeaways of the full
        whitepaper.

    1                      Philanthropedia Whitepaper    3/5/2010
The Case for Using Experts to Evaluate
                    Nonprofits
    Philanthropy is primarily concerned with distributing limited monetary
    resources to charities doing the best work at solving social problems.

    Problem: That is why one of the core problems that the sector faces is how
    to identify these high-impact nonprofits.

    Solution: We believe that the best solution will have two characteristics: high
    quality information about nonprofits at low cost.


      Quality: relates to how closely the         Cost: the combination of resources
      measures used to evaluate a                 needed to perform the evaluation of a
      nonprofit are correlated with impact        nonprofit including money, people, and
      per dollar invested and the                 time. Therefore a good solution is one
      nonprofit’s capacity to absorb more         where there is a quick, scalable, low
      resources.                                  cost way to evaluate many nonprofits
                                                  across multiple social causes.



2                                 Philanthropedia Whitepaper                      3/5/2010
The Case for Using Experts to Evaluate
                  Nonprofits

                                         Existing solutions have
                                          made progress on
                                          cost/quality dimensions but
                                          none have been able to offer
                                          the combination of both high
                                          quality and low cost.

                                         The Philanthropedia
                                          approach of surveying
                                          experts allows us to get high
                                          quality information about
                                          nonprofits at low cost.



3                Philanthropedia Whitepaper                   3/5/2010
The Case for Using Experts to Evaluate
                  Nonprofits

High quality solution:                              Low cost solution:
   Can collect information about high-impact
    nonprofits from variety of experts                 Surveys are conducted online so they are
    (foundation professionals, nonprofit                easy and inexpensive to administer
    senior staff, researchers, etc.)

                                                       Surveys take experts ~40 minutes to
   Experts are uniquely qualified to assess
    nonprofits because they have access to a            complete in total
    lot of nonpublic data and have advanced
    mental models for evaluating nonprofit
    impact                                             Experts are not paid for their participation

   We collect strengths and areas for                 One trained person can conduct 4 social
    improvement for each high-impact
    nonprofit                                           cause research projects concurrently
                                                        over the course of 2-3 months
   We only recommend nonprofits where
    there is high agreement among experts              We intend to refresh the research every
    that the recommended nonprofit is
    among the highest impact nonprofits in              1-2 years (lower cost associated with
    the sector                                          refresh rate)




4                                    Philanthropedia Whitepaper                                3/5/2010
Philanthropedia’s Methodology

                                                       Our expert criteria:
The Philanthropedia 6-step
                                                       -   Minimum 2 years of experience
 approach: survey diverse and                          -   Relevant work experience as
                                                           evidenced by current and past job
 representative groups of social                           titles and employers
 cause experts to identify high-impact                 -   Minimum expert self-rating on
                                                           Philanthropedia-developed scale
 nonprofits

   Step 1: research and define social                 Our goal is to create an
    cause                                              expert network that:
                                                       -   is a representative sample of
   Step 2: identify and recruit experts                   foundation professionals, nonprofit
                                                           senior staff, researchers, and other
   Step 3: run survey to identify high-                   experts
                                                       -   is geographically representative
    impact nonprofits                                  -   produces high-quality of responses




    5                     Philanthropedia Whitepaper                               3/5/2010
Philanthropedia’s Methodology

       Step 4: analyze survey data                          We collect the following data
       Step 5: run a second survey to determine             for each top nonprofit:
        agreement among experts about high-                  •   Number of expert votes
                                                             •   Agreement among expert network
        impact nonprofits, strengths and areas for               that nonprofit is most effective
        improvement for nonprofits, and ask                  •   % allocation as part a social cause
                                                                 fund
        experts to allocate funding across                   •   Strengths and areas of
        nonprofits                                               improvement

       Step 6: compile results and publish list of
        high-impact nonprofits for the social cause

Conclusion: surveying experts allows us to
  compile expert reviews and
  recommendations about high-impact
  nonprofits in a social cause at low cost

    6                           Philanthropedia Whitepaper                              3/5/2010
Results and Data Analysis
    To date, we have researched four social causes to test and develop our methodology:
    education, climate change, microfinance, and homelessness in the Bay Area.

    To demonstrate this approach, we share the climate change results:

        Building a diverse and                                 Top high-impact nonprofits
    representative expert network                               recommended by experts
     Expert Network Statistics                Name of Organization                             # Expert Votes
     # of experts invited         773         Natural Resources Defense Council, Inc.                48
     # of experts participating   139         Environmental Defense Action Fund                      35
     Average years of                         World Resources Institute                              32
                                  12.94
     experience                               Union of Concerned Scientists, Inc.                    27
     % Foundation professionals   19%         Sierra Club                                            19
     % Researchers                12%         National Wildlife Federation                           15
     % Nonprofit professionals    47%         Pew Center on Global Climate Change                    13
     % Other                      22%         Alliance for Climate Protection                        11
     # of nonprofits                          World Wildlife Fund, Inc.                              10
                                   15
     recommended                              League of Conservation Voters Inc.                     9
     East coast experts           41%         ICLEI Local Governments for Sustainability USA         8
     Midwest experts               9%         Nature Conservancy, Inc.                               8
     South experts                 4%         Energy Action Coalition                                7
     Northwest experts             6%         Greenpeace, Inc.                                       7
     West coast experts           30%         1Sky                                                   7
     International and other      10%


7                                         Philanthropedia Whitepaper                                      3/5/2010
Results and Data Analysis

    To determine how much our final results are influenced by each expert type, we ran
    correlations between the combined top nonprofit list and the lists recommended by
    each expert type. While nonprofit senior staff had the most influence on the final list
    due to their larger representation in the sample size, all three expert types had a high
    degree of agreement about which nonprofits are most effective.

                                                                     Nonprofit senior    Researcher
    Climate Change Top National Organizations       Funder ranking
                                                                      staff ranking       ranking
    Correlation with final ranking (# of votes)         0.83               0.94             0.86



    In order to determine what factors might influence the final ranking of nonprofits, we
    ran correlations with these external factors. We found that none of these external
    factors (as seen by the low correlations) influenced the final nonprofit rankings in
    any significant way. Therefore, compiling expert opinion adds unique value when
    identifying high-impact nonprofits.
                                                               Brand awareness             Size (# of
                                                    Revenue
    Climate Change Top National Organizations                    (# of Google     Age     employees
                                                     (2007)
                                                                  mentions)                in 2007)
    Correlation with final ranking (# of votes)      -0.14           0.01         0.26       -0.10


8                                             Philanthropedia Whitepaper                                3/5/2010
Areas for Improvement

    Even with our encouraging early results, we believe that our
    methodology still has room for improvement.

    We have identified several areas where we intend to make
    changes: in the way we sample experts, state questions in our
    surveys, and share results.

     Our goal is to improve:

        Research quality in terms of expert responses and ability to
         identify high-impact nonprofits
        The clarity of language used in order to better communicate
         our goals
        Our transparency by sharing more information publicly so
         that we can continue to build trust in the community

9                           Philanthropedia Whitepaper             3/5/2010
Conclusion

    We hope this whitepaper sheds some light on the
     Philanthropedia approach of collecting expert opinion about
     high-impact nonprofits.

    We are excited about the unique advantages that our
     methodology offers in terms of quality and cost, which is why
     we are investing in further improvements.

    We thank the experts who made this research possible, our
     advisors and funders who provided valuable feedback and
     resources, and our team for all their dedication and work.

    We invite feedback and discussion about this paper and our
     work at http://www.myphilanthropedia.org/whitepaper


    10                     Philanthropedia Whitepaper         3/5/2010
Contact Information


               Philanthropedia
             2121 Sand Hill Road
            Menlo Park, CA 94025
                650-234-4768
       feedback@myphilanthropedia.org


     Website: http://myphilanthropedia.org
     Blog: http://blog.myphilanthropedia.org
           Twitter: @Philanthropedia




11             Philanthropedia Whitepaper      3/5/2010

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Philanthropedia Whitepaper Summary Deck Final

  • 1. Collecting Expert Opinion about High-Impact Nonprofits: Review of Philanthropedia’s Methodology Whitepaper Summary Deck March 5, 2010 Philanthropedia http://www.myPhilanthropedia.org
  • 2. The Purpose of the Whitepaper  With this whitepaper, we present our methodology as a novel way to identify high-impact nonprofits by relying on expert recommendations.  We propose that this methodology produces high quality information about high-impact nonprofits at low cost.  This deck summarizes the main takeaways of the full whitepaper. 1 Philanthropedia Whitepaper 3/5/2010
  • 3. The Case for Using Experts to Evaluate Nonprofits Philanthropy is primarily concerned with distributing limited monetary resources to charities doing the best work at solving social problems. Problem: That is why one of the core problems that the sector faces is how to identify these high-impact nonprofits. Solution: We believe that the best solution will have two characteristics: high quality information about nonprofits at low cost. Quality: relates to how closely the Cost: the combination of resources measures used to evaluate a needed to perform the evaluation of a nonprofit are correlated with impact nonprofit including money, people, and per dollar invested and the time. Therefore a good solution is one nonprofit’s capacity to absorb more where there is a quick, scalable, low resources. cost way to evaluate many nonprofits across multiple social causes. 2 Philanthropedia Whitepaper 3/5/2010
  • 4. The Case for Using Experts to Evaluate Nonprofits  Existing solutions have made progress on cost/quality dimensions but none have been able to offer the combination of both high quality and low cost.  The Philanthropedia approach of surveying experts allows us to get high quality information about nonprofits at low cost. 3 Philanthropedia Whitepaper 3/5/2010
  • 5. The Case for Using Experts to Evaluate Nonprofits High quality solution: Low cost solution:  Can collect information about high-impact nonprofits from variety of experts  Surveys are conducted online so they are (foundation professionals, nonprofit easy and inexpensive to administer senior staff, researchers, etc.)  Surveys take experts ~40 minutes to  Experts are uniquely qualified to assess nonprofits because they have access to a complete in total lot of nonpublic data and have advanced mental models for evaluating nonprofit impact  Experts are not paid for their participation  We collect strengths and areas for  One trained person can conduct 4 social improvement for each high-impact nonprofit cause research projects concurrently over the course of 2-3 months  We only recommend nonprofits where there is high agreement among experts  We intend to refresh the research every that the recommended nonprofit is among the highest impact nonprofits in 1-2 years (lower cost associated with the sector refresh rate) 4 Philanthropedia Whitepaper 3/5/2010
  • 6. Philanthropedia’s Methodology Our expert criteria: The Philanthropedia 6-step - Minimum 2 years of experience approach: survey diverse and - Relevant work experience as evidenced by current and past job representative groups of social titles and employers cause experts to identify high-impact - Minimum expert self-rating on Philanthropedia-developed scale nonprofits  Step 1: research and define social Our goal is to create an cause expert network that: - is a representative sample of  Step 2: identify and recruit experts foundation professionals, nonprofit senior staff, researchers, and other  Step 3: run survey to identify high- experts - is geographically representative impact nonprofits - produces high-quality of responses 5 Philanthropedia Whitepaper 3/5/2010
  • 7. Philanthropedia’s Methodology  Step 4: analyze survey data We collect the following data  Step 5: run a second survey to determine for each top nonprofit: agreement among experts about high- • Number of expert votes • Agreement among expert network impact nonprofits, strengths and areas for that nonprofit is most effective improvement for nonprofits, and ask • % allocation as part a social cause fund experts to allocate funding across • Strengths and areas of nonprofits improvement  Step 6: compile results and publish list of high-impact nonprofits for the social cause Conclusion: surveying experts allows us to compile expert reviews and recommendations about high-impact nonprofits in a social cause at low cost 6 Philanthropedia Whitepaper 3/5/2010
  • 8. Results and Data Analysis To date, we have researched four social causes to test and develop our methodology: education, climate change, microfinance, and homelessness in the Bay Area. To demonstrate this approach, we share the climate change results: Building a diverse and Top high-impact nonprofits representative expert network recommended by experts Expert Network Statistics Name of Organization # Expert Votes # of experts invited 773 Natural Resources Defense Council, Inc. 48 # of experts participating 139 Environmental Defense Action Fund 35 Average years of World Resources Institute 32 12.94 experience Union of Concerned Scientists, Inc. 27 % Foundation professionals 19% Sierra Club 19 % Researchers 12% National Wildlife Federation 15 % Nonprofit professionals 47% Pew Center on Global Climate Change 13 % Other 22% Alliance for Climate Protection 11 # of nonprofits World Wildlife Fund, Inc. 10 15 recommended League of Conservation Voters Inc. 9 East coast experts 41% ICLEI Local Governments for Sustainability USA 8 Midwest experts 9% Nature Conservancy, Inc. 8 South experts 4% Energy Action Coalition 7 Northwest experts 6% Greenpeace, Inc. 7 West coast experts 30% 1Sky 7 International and other 10% 7 Philanthropedia Whitepaper 3/5/2010
  • 9. Results and Data Analysis To determine how much our final results are influenced by each expert type, we ran correlations between the combined top nonprofit list and the lists recommended by each expert type. While nonprofit senior staff had the most influence on the final list due to their larger representation in the sample size, all three expert types had a high degree of agreement about which nonprofits are most effective. Nonprofit senior Researcher Climate Change Top National Organizations Funder ranking staff ranking ranking Correlation with final ranking (# of votes) 0.83 0.94 0.86 In order to determine what factors might influence the final ranking of nonprofits, we ran correlations with these external factors. We found that none of these external factors (as seen by the low correlations) influenced the final nonprofit rankings in any significant way. Therefore, compiling expert opinion adds unique value when identifying high-impact nonprofits. Brand awareness Size (# of Revenue Climate Change Top National Organizations (# of Google Age employees (2007) mentions) in 2007) Correlation with final ranking (# of votes) -0.14 0.01 0.26 -0.10 8 Philanthropedia Whitepaper 3/5/2010
  • 10. Areas for Improvement Even with our encouraging early results, we believe that our methodology still has room for improvement. We have identified several areas where we intend to make changes: in the way we sample experts, state questions in our surveys, and share results. Our goal is to improve:  Research quality in terms of expert responses and ability to identify high-impact nonprofits  The clarity of language used in order to better communicate our goals  Our transparency by sharing more information publicly so that we can continue to build trust in the community 9 Philanthropedia Whitepaper 3/5/2010
  • 11. Conclusion  We hope this whitepaper sheds some light on the Philanthropedia approach of collecting expert opinion about high-impact nonprofits.  We are excited about the unique advantages that our methodology offers in terms of quality and cost, which is why we are investing in further improvements.  We thank the experts who made this research possible, our advisors and funders who provided valuable feedback and resources, and our team for all their dedication and work.  We invite feedback and discussion about this paper and our work at http://www.myphilanthropedia.org/whitepaper 10 Philanthropedia Whitepaper 3/5/2010
  • 12. Contact Information Philanthropedia 2121 Sand Hill Road Menlo Park, CA 94025 650-234-4768 feedback@myphilanthropedia.org Website: http://myphilanthropedia.org Blog: http://blog.myphilanthropedia.org Twitter: @Philanthropedia 11 Philanthropedia Whitepaper 3/5/2010