Big oppor­tu­ni­ties for small organisations

Candid is one of the largest plat­forms for phil­an­thropy in the US. It was foun­ded in 2019 as a merger between Guide­Star, an orga­ni­sa­tion that provi­ded infor­ma­tion on non-profit orga­ni­sa­ti­ons (NPOs), and Foun­da­tion Center, which offe­red infor­ma­tion on funders. The two came toge­ther as Candid to help change the world for the better by giving people the infor­ma­tion they need to do good.

Candid complies with Ameri­can stan­dards for NPOs. The orga­ni­sa­tion aims to provide the most compre­hen­sive data and insights available on the nonpro­fit sector in the US. Candid was formed in 2019 when two tradi­tio­nal online plat­forms joined forces: Guide­Star and Foun­da­tion Center. Today, the plat­form combi­nes its tools for under­stan­ding non-profits through Guide­Star and infor­ma­tion on funders through Foun­da­tion Direc­tory with new resour­ces to provide more wide-ranging, real-time infor­ma­tion on the sector.

Trans­pa­rent data

Trans­pa­rency is a top prio­rity at Candid. The clea­rer an NPO’s profile, the more iden­ti­fia­ble its moti­va­tion. Nonpro­fit orga­ni­sa­ti­ons may claim their profile on Candid. As non-profits provide more infor­ma­tion about their work, they can earn Candid’s Seals of Trans­pa­rency. NPOs increase their visi­bi­lity on Candid plat­forms – and on fund­rai­sing plat­forms that inte­grate Candid tools – by elabo­ra­ting on their mission, staff, leader­ship, program­mes, goals and more.

Here’s how it works.

Candid uses Seals to indi­cate the trans­pa­rency of an orga­ni­sa­tion. There are four levels: bronze, silver, gold and plati­num. Each Seal builds on the infor­ma­tion provi­ded in the previous level. An orga­ni­sa­tion earns a Bronze Seal when it provi­des such basic infor­ma­tion as its name, email address, URL, payment details, mission state­ment and names of the leader­ship team. Silver Seal orga­ni­sa­ti­ons must also publish detailed descrip­ti­ons of their program­mes and geogra­phi­cal infor­ma­tion. At this level, it beco­mes clear whether a group is giving money or seeking it, although the amount of detail remains optio­nal. Howe­ver, an orga­ni­sa­tion may include as much infor­ma­tion as it likes. The Gold Seal requi­res further trans­pa­rency, parti­cu­larly in terms of finance (total income, programme expen­dit­ure, admi­nis­tra­tive costs, total expen­dit­ure, total assets, liabi­li­ties, net assets or fund balan­ces). Figu­res must be from the most recent fiscal years available. For the Plati­num Seal, at least one key programme result or metric must be from the current busi­ness year. All profiles must be updated annu­ally for an orga­ni­sa­tion to main­tain its current seal.

The Seals work!

Rese­ar­chers at Villanova Univer­sity and the Univer­sity of Wiscon­sin-Milwau­kee compared non-profits that recei­ved a Seal of Trans­pa­rency with those that did not. The result: on average, NPOs with a Seal recei­ved 53% more dona­ti­ons in the follo­wing year than those without a Seal.

Trans­pa­rency requirements

In the US, the Inter­nal Reve­nue Service Form 990 provi­des the public with finan­cial details about non-profit orga­ni­sa­ti­ons. Given they are tax exempt, NPOs are scru­ti­ni­sed closely. The IRS requi­res detailed infor­ma­tion on spen­ding and earning habits in order to prevent orga­ni­sa­ti­ons from abusing their tax-exempt status. Form 990 pres­ents a picture of an NPO’s history, which can help donors and foun­da­ti­ons decide whether the orga­ni­sa­tion is trust­wor­thy and using its dona­ti­ons or invest­ments wisely.

Candid and Form 990

Candid helps donors and foun­da­ti­ons decide which non-profit orga­ni­sa­ti­ons they would like to support by inclu­ding the organisation’s past 990s on their profile page. This helps show support­ers how a parti­cu­lar NPO’s expen­dit­ure and income may have chan­ged from year to year. Inte­res­ted donors can easily get in touch with an orga­ni­sa­tion by using the cont­act infor­ma­tion on the Candid profile.

The Candid busi­ness model

Of Candid’s reve­nue, 85% deri­ves from products and services. Candid offers subscrip­ti­ons to its Guide­Star and Foun­da­tion Direc­tory tools for those looking for deeper, richer infor­ma­tion. Candid also hosts webi­nars on fund­rai­sing and nonpro­fit capa­city buil­ding. Insti­tu­tio­nal donors and a handful of indi­vi­du­als account for about 15% of Candid’s revenue. 

Educa­tion and consulting 

Candid has a wide range of tools to help orga­ni­sa­ti­ons tell their story. Candid Lear­ning is the go-to resource for all live and on-demand trai­ning sessi­ons, webi­nars and other resour­ces desi­gned to empower NPOs. The Candid blog keeps NPO and foun­da­tion leaders infor­med of the latest in phil­an­thropy, inclu­ding tips and trai­ning, trends, issues, new data and insights. Phil­an­thropy News Digest (PND) publishes major news pieces on the sector. These include phil­an­thropy-rela­ted artic­les and features cura­ted by media outlets across the coun­try, invi­ta­ti­ons to tender and employ­ment oppor­tu­ni­ties. At Candid Support, staff answer ques­ti­ons about chari­ties, fund­rai­sing and use of the plat­form. The chat func­tion allows for easy exchange. 

What problems does the social sector face today?

Global chal­lenges are beco­ming more dyna­mic and complex: the pande­mic, climate change and geopo­li­ti­cal conflicts with world­wide impact. These deve­lo­p­ments have been acce­le­ra­ted by tech­no­lo­gi­cal advan­ces, which means that problems and the need for solu­ti­ons are crop­ping up more quickly as well. At the same time, our insti­tu­ti­ons, govern­ments, and non-profit orga­ni­sa­ti­ons are not evol­ving  fast enough. We have to find a way to reinvent oursel­ves in the non-profit sector and beyond, in order to get ahead of these issues.

Data means know­ledge. Can the non-profit sector keep up with private and public sectors as digi­ta­li­sa­tion advances?

NPOs and foun­da­ti­ons alre­ady use a lot of tech­no­logy in their ever­y­day work. At Candid, we are connec­ting orga­ni­sa­ti­ons across the social sector. Candid, which was formed from the merger of Guide­Star and Foun­da­tion Center, has crea­ted the most compre­hen­sive source of social sector data in the US. All the infor­ma­tion one might need about NPOs and other foun­da­ti­ons is now in one place. There’s a lot of power in that. This is a huge win for the sector. 

Why, exactly?

We are well aware of the fact that the social sector often lags behind the private sector. One reason is that funders tend to focus more on program­mes than on infra­struc­ture. In contrast, plat­form opera­tors are usually the most highly valued in the tech sector. There has histo­ri­cally been under­in­vest­ment in plat­forms in the non-profit sector. 

Does Candid have any competition?

There are nume­rous actors that serve diffe­rent needs of the sector, many of which we part­ner with. I feel certain that Candid has the most compre­hen­sive data­base, but we are always looking to improve as well. Since the merger, we have been steadily inte­gra­ting both plat­forms’ capa­bi­li­ties. And we try to bundle all the infor­ma­tion we have about the non-profit sector on Candid. We also work with a wide range of rese­arch and tech­no­logy part­ners to conti­nu­ally improve our data and the insights we draw from it.

How important is trans­pa­rency for NPOs in finding supporters?

Trans­pa­rency is at the heart of our values. The more rele­vant orga­ni­sa­tio­nal infor­ma­tion is shared, the clea­rer the non-profit profiles become. More infor­ma­tion helps one make  better decis­i­ons. We encou­rage both foun­da­ti­ons and non-profit orga­ni­sa­ti­ons to share as much infor­ma­tion as possi­ble. The same also applies to us. As a non-profit, our mission-driven work in the public inte­rest means it’s incum­bent on us to model trans­pa­rency for others. After all, we reco­g­nise NPOs and foun­da­ti­ons with Candid’s Seals of Trans­pa­rency based on the amount of infor­ma­tion they share with us on their non-profit profile. 

How do people meet on the platform?

We see oursel­ves as a version of Linke­dIn for the non-profit sector. Linke­dIn brings toge­ther job seekers and employ­ers; Candid aims to connect non-profits seeking funding with funders, so that parti­ci­pants can find better part­ners more quickly. NPOs can publish their infor­ma­tion directly on Candid, telling their story in their own words. What’s great is that, whether you’re a major NPO or a tiny newco­mer, you have the same oppor­tu­nity to present your work on your non-profit profile, Just as on Linke­dIn. It’s why we think this is such a big deal, in parti­cu­lar for small organisations. 

Do you also use algo­rithms for matching?

Yes, that’s alre­ady in place. We use algo­rithms for geogra­phi­cal data, so the plat­form can see, for instance, if someone has inves­ted in projects in Switzerland. 

Who uses Candid the most?

Both NPOs and foun­da­ti­ons are active on the plat­form, but we proba­bly
have the most non-profits users simply given the number of organisations. 

Where are you today on your roadmap?

We are working to present all the data and infor­ma­tion Candid has to offer on a unified plat­form, fulfil­ling our promise to provide the infor­ma­tion people need to do good all in one place. Toge­ther with our rese­arch part­ners, we are coll­ec­ting a wide variety of data to improve our product and recom­men­da­ti­ons. We work hard
at that every single day. There’s still a lot to do, but we believe we are on track to achieve our Vision 2030. 

How important are foun­da­ti­ons to the welfare of the Ameri­can people?

Foun­da­ti­ons and indi­vi­dual donors play a very important role. In the US, we talk about three primary sectors: the private sector, the public sector and the non-profit sector. Many non-profit orga­ni­sa­ti­ons work with private and public sector insti­tu­ti­ons in the areas in which these systems fail. For instance, there are many situa­tions where state measu­res simply do not work and people fall through the cracks. That’s where the non-profit sector steps in. And that’s where colla­bo­ra­tion across sectors is crucial.