Learning from Uber and AirBnB

Brian Walsh

My interview with Brian Walsh is over. He summons an Uber, and shows me his phone. The driver has a 4.7 rating. Reliable.

Disruptive startups like Uber, AirBnB and TripAdvisor use technology to collect and share data about drivers, renters, hotels and their customers. If they use feedback loops to build trust, why can't nonprofits? Is that a crazy idea?

No, says Walsh, who is the executive director of Liquidnet For Good, which is the corporate-responsibility arm of Liquidnet, a New York-based financial firm that operates a trading platform for institutional investors. Like Uber or AirBnB, Liquidnet has built a platform that is valuable, in part, because its users have reason to trust one another.

Foundation and nonprofits could also benefit by building meaningful feedback loops with those they are trying to serve, says Walsh, who is 34 and launched Liquidnet for Good back in 2007. He is a key connector of people who want to use data and technology to helps nonprofits and foundations have greater impact.

"Our vision," he tells me, "is of a social sector powered by information."

For nonprofits, that means having "the information they need to effectively manage their programs, to be responsive to the people they seek to help and to improve their program delivery.”

For institutional and individual donors, the goal is "great giving," which Walsh defines as "giving with intention, giving with information and giving with others."

Fueled by data and insights, the social sector as a whole, if all goes according to plan, would become more dynamic, innovative and powerful. It would function more like a market, with dollars flowing to high-performing nonprofits.

To that end, Liquidnet for Good is backing two initiatives. Along with the Bill and Melinda Gates Foundation, the William and Flora Hewlett Foundation and the Omidyar Network, it has helped build Markets for Good, a web-based community of people who want to create a robust, ambitious "information infrastructure" for the social sector. Liquidnet also supports the Fund for Shared Insight, a foundation-led grant-making effort that is intended to improve philanthropic practices, by encouraging foundations to share information with one another, and listening to those they want to help.

Like much else in the world of nonprofits, this all sounds a little fuzzy.  So what, exactly, do these initiatives do? Among other things, they are building networks. Leaders of nonprofits including Guidestar, GlobalGiving, TechSoup Global, The Foundation Center, Charity Navigator, GiveWell, Network for Good, Urban Institute, GreatNonprofits and 92Y -- all of them committed to strengthening the sector --- have joined in meetings held by Markets for Good. In 2012, Walsh, Darin McKeever and Victoria Vrana of the Gates Foundation and Kelly Born of the Hewlett Foundation outlined their vision in an excellent (and readable) paper, Upgrading the Infrastructure for the Social Sector.

One set of brainstorming sessions led to the creation of BRIDGE (Basic Registry of Identified Global Entities), a collaborative project to that will assign a unique identifier or “numerical fingerprint” to nonprofits worldwide to promote information sharing and track the flows of philanthropic dollars. Jeff Falkenstein of The Foundation Center has said that BRIDGE will make possible "a dynamic network of philanthropic data with limitless applications."

More recently, the software company Intuit (they own TurboTax and personal finance website Mint), working with the Gates Foundation and a Seattle-based firm called Intentional Futures, built a mobile phone app called Charity Match. Charity Match takes "trusted charities" that have been reviewed by Charity Navigator, and recommends them to users of Mint.

In a blogpost on Markets for Good, Jeff Zias of Intuit says that the ultimate goal of Charity Match is a “giving eco-system” where the better-run, higher-impact nonprofits get more donations.

Smarter giving is, likewise, the goal of the Fund for Shared Insight, a multi-year $15-million effort to improve philanthropy, co-chaired by the Hewlett and Ford Foundations, and funded by six other foundations, plus Liquidnet.

Some of the thinking behind the fund can be gleaned from a 2013 article in the Stanford Social Innovation Review, headlined Listening to Those Who Matter Most, the Beneficiaries, in which Fay Twersky of Hewlett, Phil Buchanan of the Center for Effective Philanthropy and consultant Valerie Threlfall wrote:

Too often nonprofits and funders ignore the constituents who matter most, the intended beneficiaries of our work: students in low-performing schools, trainees in workforce development programs, or small farmers in sub-Saharan Africa. In bypassing the beneficiary as a source of information and experience, we deprive ourselves of insights into how we might do better—insights that are uniquely grounded in the day-to-day experiences of the very people the programs are created for.Why don’t we place greater value on the voices of those we seek to help? Why don’t we routinely listen to our most important constituents?

The story goes on to describe ways in which nonprofits in the education and health care systemically solicit feedback from their beneficiaries, and use it to reshape their programs.

Last fall, Shared Insight awarded $5.26 million to its first round of grantees, mostly organizations that are trying to build or improve upon feedback loops.  YouthTruth, for example, is a national survey project, run by the Center for Effective Philanthropy, which gathers feedback from students in grades 3 through 12 for use by school leaders and education funders. Global Giving, a charity fundraising website, will seek "to establish a new norm in the social sector in which organizations systematically listen to those they seek to help and meaningfully incorporate those voices into their work, beginning with the more than 2,500 nonprofits in the GlobalGiving network."

Not all of these initiatives will bear fruit, Walsh acknowledges, and that's fine. A willingness to experiment means a willingness to fail, and to learn from failure, just as for-profit startups do.

The point is, there's an enormous amount of creative thinking going on around the topics of nonprofit effectiveness and openness. Smart nonprofits will see this as an opportunity, and not a threat.