Conversations about transparency, accountability, and collaboration have dominated the nonprofit world for years, yet large-scale change remains elusive. We’ve all become adept at naming the pre-existing conditions that stand in the way of such change: an imbalance of power, a lack of trust, and inequitable distribution of resources, to name a few.
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To overcome these shared challenges, those with power and influence who control most of the resources — namely grant makers and organizations directly serving nonprofits — must be open to feedback, commit to behavior change, and prioritize the whole nonprofit field as much as, if not more than, our own institutions.
That includes my organization, Candid, which provides data and research on nonprofits and foundations. In recent years, we’ve faced criticism for being too slow to adapt and listen to feedback. Most notably, some have accused us of using extractive practices because we ask nonprofits to contribute their data for the organizational profiles we run on our platform but charge a fee to those who want deep access to that data.
We believe our efforts to respond to such criticisms and revamp our approach during the past few years could be a helpful guide to other organizations that recognize the need to change but aren’t sure how.
Candid’s history is itself a microcosm of larger sectorwide tensions. In February 2019, the Foundation Center, which housed the largest database on grants and grant makers, merged with GuideStar, stewards of the largest database on nonprofits. The resulting entity, Candid, faced an immediate challenge: How do we better connect the two halves of the nonprofit field — grant makers and grantees — to work together to solve critical problems?
Power Imbalance
The charitable world is characterized by an imbalance of power, with foundations able to determine who gets the resources to solve problems. That doesn’t mean nonprofits are powerless. In fact, grant makers can’t meet their stated missions, or fulfill the requirements of their tax status, without them. But it does put nonprofits in the position of having to perform according to grant makers’ varying expectations to secure the resources needed to do their work.
Though much of our work at Candid aims to remove barriers to nonprofit success and achieve a more equitable distribution of power, we’ve had to dig deep to examine whether we were contributing to that imbalance. Candid, like any other nonprofit, must consider the need to remain financially sustainable with a desire to do all we can to fulfill our mission. Just 20 percent of our income comes from contributions, including grants, while 80 percent is earned income.
In some cases, that reality means we need to charge fees for our services. While 95 percent of our users get our data and tools at no cost, product and subscription fees are core to our financial sustainability and allow us to provide those free services. Fees can run from $1,599 a year for our Foundation Directory to nearly $10,000 annually for the more sophisticated technology needed to access and integrate the most extensive information from nonprofit profiles.
It was clear that we had to do more to provide the small nonprofits that need it most with greater access to our information and services. So in October 2021, our new CEO, Ann Mei Chang, embarked on a series of conversations with partners, donors, nonprofits, and philanthropic associations to get honest feedback on what Candid could do better.
Those conversations resulted in a re-evaluation of our pricing model, including how we could reduce or remove fees entirely for nonprofits with limited resources. We also created a department focused on equitable access to funding and Candid’s role in encouraging grant makers to expand their networks and connect to lesser-known nonprofits.
Sharing Data
Our efforts have focused on three main areas: ensuring nonprofits have autonomy over the data they provide to Candid, making data more accessible, and decreasing the burden on nonprofits by encouraging more efficient data sharing practices.
Data autonomy. All nonprofits that give data to Candid now get a shareable link they can use free as often as they like to drive traffic to their full profile and make their case for funding. The goal is to give them more ownership of and value from the data they contribute to us. Since making this change last year, more than 10,000 nonprofits have used their links to tell their story.
Accessibility. We’ve taken specific steps to make sure our data is available to as many people as possible.
First, in the past year, we doubled to more than 1,400 the number of community locations across the country, such as libraries, that provide free access to our data and services.
Second, we made permanent a program that allows nonprofits with budgets of $1 million or less to use Candid’s donor prospecting tool for free if they earn our “Gold Seal of Transparency.” To do that, they need to provide information on their profile that demonstrates transparency, including the name of the board chair, leadership demographics, and an audited financial report or basic financial details.
Third, we responded to concerns that charging fees, even nominal ones, for online nonprofit training made it difficult for small organizations to participate. So last year, we started offering nearly all those training sessions at no cost. Since then, the number of people attending sessions on subjects such as finding grants and creating a grant proposal budget has almost tripled from 6,123 in 2022 to nearly 18,000 in 2023.
These actions have affected our earned revenue: Last year we lost $121,000 in training fees compared with 2022. But we accept that the larger benefits to the nonprofit world are worth the costs and are critical to meeting our mission.
Efficiency. We’re using our influence within the nonprofit field to encourage more efficient data practices. Through our Demographics via Candid initiative, we work with grant makers to streamline their data requests and support more equitable approaches to giving. Nonprofits share their demographic information with grant makers, researchers, or potential donors one time on their nonprofit profile — instead of dozens of times in multiple ways and formats. We in turn provide this data at no cost to Demographics via Candid partners.
While we’ve made progress, we recognize we still have a long way to go. We continue to seek regular feedback and input from partners, including on our new platform, which we’re launching early next year. The revamped platform will offer the most extensive data available on nonprofits and foundations, while ensuring organizations of all sizes and budgets can access our information when they need it.
What’s best for an organization and what’s best for the larger social sector aren’t necessarily the same. Through collaborative problem solving, those of us with power and resources can change our practices and demonstrate the behavior needed to create a truly equitable charitable world.