The Next Generation of Nonprofit Data Standards

Our current moment in the human story is often called the age of information. And indeed, we are too-often overwhelmed by the torrent of data coursing through our lives. As a society, we have developed many tools to organize the information we rely on every day. The Dewey Decimal System helps libraries organize books. UPC codes help stores organize their products. Nutrition labels help to present information about food ingredients and nutritional value (or lack thereof) in a way that's consistent and predictable.

The nonprofit sector has also relied on data standards: we use the government's Employer Identification Number (EIN) to identify individual organizations. The National Taxonomy of Exempt Entities (NTEE) is used by many — including GuideStar, Foundation Center, and others — to help reveal the diversity of the nonprofit community, guide funding decisions, and foster collaboration.

But just as other information systems have continued to evolve so must ours. When the Dewey Decimal System was developed in 1876, Melvil Dewey could not have imagined Amazon.com, e-readers, or Goodreads.com. Similarly, the EIN/NTEE framework is simply not enough to explain, organize, and share the complex story of nonprofits.

So we are glad to share the news that a new generation of social sector data standards is emerging. These can help us all do our work better, making smarter decisions while saving time to focus on that work.

There a several standards that are important, but we'd like to direct your attention to four:

Standard	Description	History
BRIDGE	A unique identifier for every nonprofit organization in the world.	A joint project among GlobalGiving, Foundation Center, GuideStar, and TechSoup Global.
Philanthropy Classification System	A taxonomy that describes the work of foundations, recipient organizations, and the philanthropic transactions between them.	Led by Foundation Center, with significant input from hundreds of stakeholders.
GuideStar Profile Standard	A standardized framework for nonprofits to tell their own stories. Used by more than 100,000 nonprofits.	Includes the five Charting Impact questions (developed in partnership with Independent Sector and the BBB Wise Giving Alliance). GSPS feeds the GuideStar for Grants system that was developed as part of the Simplify Initiative in partnership with the Technology Affinity Group.
eGrant/hGrant	An easy way for foundations to share the grants they make in near-real time.	Over 1,200 foundations use eGrant to report their grants data to Foundation Center and 19 foundations publish their data in open format through the Reporting Commitment.

This list is by no means comprehensive — other standards are also important, including but not limited to IATI and PerformWell. Others, such as XBRL or LEI, could become important for the field. But for now, we urge the nonprofit sector to understand these four standards and, where possible, to adopt them for your own use.

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It is worth noting that we in the nonprofit sector use the word "standards" in two distinct ways. First, there are "practice standards" that work to define excellence. The BBB Wise Giving Alliance Standards for Charity Accountability or Independent Sector's Principles for Good Governance and Effective Practice fit this definition. Practice standards are a powerful way to help define and promote good practices.

But here we're pointing to "data standards" that are simply a way of organizing information in a consistent format to make it more useful. Both practice standards and data standards exist to help us do our work better. Neither guarantee excellence, but in different ways they help us drive toward excellence.

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As a field, we need to absolutely minimize the amount of time we spend managing data — and maximize the time we spend solving problems. Think of these standards as enablers to help us do just that, and do it at scale.

Jacob Harold is president and CEO of GuideStar and Brad Smith is president of Foundation Center. Join Harold and Smith for their webinar, How Data Standards Can Help Save the World, on May 12 at 2:00 pm EDT. In the webinar, Harold and Smith will discuss the ways data standards are already improving the grantmaking process for both funders and grantees. They'll also address how foundations can participate in these initiatives and promote a better information system for the sector. See you there!

Comments

[George McCully]

Two constructive suggestions:

1) It would help to distinguish between, and separate, "nonprofits" (tax-exempt organizations in general) and "philanthropy" (those nonprofits that are private initiatives, for public good, engaged in public fundraising for charitable grants and donations). Recent thorough and detailed examination of the IRS Master Data File of nonprofits for a large state found that only 1/10 of "nonprofits" clearly qualified as "philanthropies." 75% had obviously nothing to do with philanthropy—i.e., condo associations, social clubs, real estate trusts, professional, trade, and other self-serving membership associations, cemeteries, the NFL, Blue Cross Blue Shield, teachers retirement funds, etc., etc. 15% were highly dubious and require case-by-case qualification. The discussion in this blog is about the philanthropic marketplace of grants and donations, not "nonprofits" in general. Reducing the dataset by 90%—from millions to several hundred thousands—yields a much more practical and manageable constituency for any "standardization" of data.

2) Eligibility for precise, rigorous, systematic, statistical analysis requires a _systematic_ taxonomy of fields of activity—i.e., in which the various fields are logically connected to comprise a coherent whole of thus-ordered parts—so that the parts are seen and understood not as separate entities, but as related to each other in a common enterprise, in this case "philanthropy."

Philanthropy as a whole is an objective, institutionalized expression of a society's values—a subject eminently worthy of scholarly analysis, and of practical cultivation through donor education, for our public good or common weal. To accomplish that, it would help to distinguish philanthropy from "nonprofits", and to taxonomize philanthropy by fields of activity so that we can see both the parts and the whole strategically and even philosophically. I know of only one systematic, comprehensive, taxonomy of the fields of philanthropy, which is currently being patented to protect its quality from inferior rip-offs. It certainly merits consideration as we all collaborate, pushed and enabled by systematic technology, to achieve "standardization of data."

[Aplos Software]

We completely agree with George and his comment!

It would definitely be in our best interest to distinguish philanthropy from "nonprofits"!

[Cavelle]

would anyone have the actual research reference above, where the author quoted only 1 in 10 non-profits were clearly philanthropic? I'd love to read more