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The Hewlett Foundation Blog

Follow-up on Our Decision to End the Nonprofit Marketplace Initiative  

April 4, 2014 — By Fay Twersky

Yesterday, the Chronicle of Philanthropy published an article about the ending of our Nonprofit Marketplace Initiative, which we discussed in a recent blog post and video. The article suggested that, by this, the Hewlett Foundation is somehow abandoning its commitment to pursuing what has come to be known as "effective philanthropy."

Needless to say, we're doing no such thing. Our president, Larry Kramer, wrote the following response to the story, which the Chronicle has printed in its entirety.

To the Editor:

It’s necessary to correct the record on several points in Doug Donovan’s article, “Hewlett Ends Effort to Get Donors to Make Dispassionate Choices on Giving” (April 3), which describes the Hewlett foundation’s decision to wind down its Nonprofit Marketplace Initiative (NMI). As the article notes, we launched NMI in 2006 with the objective of influencing 10% of individual donors to be more evidence-based in their giving, a goal we sought to achieve by making high-quality information available about nonprofit performance. Based on independent research and evaluation, we concluded we were not going to meet that goal. And because we are committed to being transparent about our work—both successes and failures—we openly shared our reasons for ending the initiative in a video and blog post on our web site.

We made the decision to end NMI because of our commitment to effective philanthropy. We certainly were not abandoning the idea, much less repudiating it; nor do we believe the movement will or should “lose some luster” as a result. Of course, it helps to begin with an understanding of what we mean by “effective philanthropy,” which scarcely resembles the caricature depicted by some commentators. Effective philanthropy means philanthropy done for a purpose. It calls upon donors to choose goals and direct their gifts and grants to organizations that achieve them. It is agnostic about what the goals should be, and (contrary to the suggestion in Mr. Donovan’s article) indifferent as between short- and long-term goals. What effective philanthropy does require, however, is that if goals are not being achieved, resources should be directed elsewhere.

The Nonprofit Marketplace strategy was untested and risky when we began, worth the effort but inherently uncertain.  When some of the risks turned out to be true—meaning we were not achieving the results we had hoped for and sought—we made the difficult but sensible decision not to continue.  Thus, Jeff Raikes has it exactly right in observing that we were simply doing what we ask of grantees and other donors: “pull[ing] the plug on efforts with no evidence of results.”

Yet saying we failed to achieve the results we sought is emphatically not the same as saying that our grantees failed. We ended the initiative because our strategy wasn’t reaching its target goals, not because any of the organizations we supported were underperforming on theirs. It’s an important distinction. Mr. Donovan mentions Charity Navigator, GiveWell, and GuideStar, for example. All three organizations do many things and do them well. We can envision potentially supporting them (or other organizations from NMI) down the road in a future strategy. That certain global results we sought from our strategy were unrealized reflects nothing more than the failure of hopes we had about what individual donors might do under certain conditions.

Other funders continue to support other strategies aimed at making data about nonprofit performance a more significant driver of individual giving than it is today. These include such things as giving circles and donor forums, for example. We applaud such efforts and hope those pursuing them can and will benefit from our experience. That’s a big part of why it’s valuable to be open and transparent about results—and an important way in which openness can and should increase the effectiveness of philanthropy.

Even if being open does, sometimes, come at the cost of being misrepresented or misunderstood.

Sincerely yours,

Larry Kramer
President, William and Flora Hewlett Foundation

We believe this is an interesting and productive debate, and we welcome your thoughts on it.