The Nonprofit Marketplace: Bridging the Information Gap in Philanthropy

This short publication aims to help create a stronger non-profit marketplace by answering two related questions: how can donors be helped to make smart philanthropic decisions? and how can we ensure that the strongest, most effective non-profits get the resources they need? The authors note that giving decisions are often led by the heart rather than the head because, unlike other higher-performing markets such as stock exchanges, commodity markets or eBay, the non-profit sector lacks a robust flow of timely, accurate information. The authors suggest that better data on performance and impact, greater donor demand for such information and strengthened intermediaries could all improve the efficient allocation of philanthropic funds. In addition to making this argument, the paper provides a useful overview of the types of information that are currently available and outlines strategies that can be implemented by donors and charities, such as a ‘non-profit logic model’ to differentiate between inputs, activities, outputs, intermediate outcomes and ultimate outcomes. Whilst the paper is, perhaps inevitably, based exclusively on US data and interviews, the website that hosts the free download has a discussion accessible to international contributors and encourages surfers to view materials produced by the UK’s New Philanthropy Capital.