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Nonprofit profiles: advancing equity through data

By Ann Mei Chang (she, they)
February 1, 2022

Woman at a computer filling out a paper application.

Inequitable access to funding in the social sector remains a persistent problem, negatively impacting our collective ability to do good. Both nonprofits and funders feel this acutely, particularly in recent years as we grapple with a global pandemic and the systemic implications of racial injustice.  

Funders share how frustratingly difficult it can be to find Black, Indigenous, and people of color (BIPOC)-led and community-based nonprofits that are closest to the needs but may not have the resources to create visibility for themselves on a broad scale. On the other hand, these same (often smaller) nonprofits carry a disproportionate burden from funders’ duplicative and disparate application and reporting requirements. But it doesn’t have to be this way. Addressing these inequities and inefficiencies is inherent to Candid’s promise to support a social sector capable of tackling the critical challenges and opportunities of our time.  

Digging in to the problem 

Recent data from the Technology Association of Grantmakers (TAG) drives this point home. TAG found that 39% of grant applications they reviewed are duplicative across funders. This means that grantmakers are essentially asking nonprofits the same questions in slightly different ways, wasting already-stretched staff time that could be better spent on mission-based work.  

Worse, the effect of these onerous requirements is not equally born. Of the 1.8 million+ nonprofits in the U.S., about two-thirds operate with $499,000 or less in revenue (source: U.S. Social Sector Dashboard). These organizations are typically under resourced and understaffed, without the bandwidth to manage time-consuming grant applications, reporting requirements, and DEI survey requests.   

Get in Motion Entrepreneurs in Palm Springs, CA, is one of these smaller nonprofits, with under $40,000 in annual revenue. Their seminars support Spanish-speaking people in the Coachella Valley with training to succeed in business and make better communities. Armando Ehrenzweig, Get in Motion’s Founder and CEO, attended a fundraising workshop last year presented by the Fundraising Academy for Grassroots Organizations and AcademyGO, a member of Candid’s Funding Information Network. He shared how challenging it is to dedicate time to filling out the dizzying array of applications for small, one-time grants, when what he really needs are two or three significant, five-year grants that allow time to plan programming that results in long-term impact. Armando explained that visibility and fundraising are crucial to his organization’s survival, but his time is finite. He struggles when deciding how much time to spend on those efforts while prioritizing his mission and programs.  

Larger nonprofits have a significant edge here, with more staff and resources (sometimes, entire departments) to focus solely on fundraising and visibility. To put it plainly, organizations like Get in Motion are being overlooked because they do not have the resources to play the game. 

Nonprofit profiles 

Candid was created to provide universal access to the most comprehensive information available on the social sector. This work is centered on our nonprofit profiles (originally called GuideStar nonprofit profiles), which organizations are invited to claim and update, ensuring the field has the most accurate data. As a nonprofit contributes more information to tell its story, they can earn Seals of Transparency, becoming more visible to a vast array of funders. Currently, over 80,000 organizations have earned a Seal, and over 34,000 have provided demographic data.  

Over the last couple of years, Candid has been flooded with inquiries from foundations and corporate grantmakers working to re-focus their grantmaking toward smaller, Black-led organizations that are steeped in their communities and in the best position to tackle issues stemming from racial injustice. Given the surge in demand for this information, Candid decided to incorporate demographic data into the Seals requirements. Now, at the Gold Seal level, we require CEO demographic data to increase transparency around diversity, equity, and inclusion. At the Platinum level, funders looking at a nonprofit’s profile will find program information, financials, leadership demographics, goals, and impact. Additionally, when a nonprofit claims its profile and earns a Seal, it benefits from increased visibility beyond Candid as we push this data out to our partners’ platforms including AmazonSmile, Facebook, Network for Good, and donor advised funds.  

Seizing the moment 

We are starting to build momentum among organizations that recognize the power of the nonprofit profile to establish more equitable practices. As part of Heron Foundation’s efforts to reduce reporting burden on nonprofits, they rely, in part, on information reported in the Candid profile, including demographic modules, organizations’ 990 forms, and Charity Check reports, among other important information disclosed in nonprofits’ profiles. More and more organizations, such as the National Diaper Bank Network, the Charles Stewart Mott Foundation, and The David and Lucile Packard Foundation, are turning to Candid's profiles to gather data for their own purposes and to share with the sector.  

Candid is part of an ecosystem that is acting to determine how we can do better, be more equitable, and be more efficient. We believe it starts with good data. With greater participation and collaboration throughout the social sector, we can make real progress to reduce unnecessary burden on nonprofits and level the philanthropic funding playing field. Information on organizations becomes quickly and easily accessible, getting nonprofits—irrespective of size, budget, or staffing—directly in front of those who seek to support their work. We look forward to continuing to work with nonprofits and funders, along with regional nonprofit associations, grantmaker associations, and other networks, to gather feedback on how we can best serve the entire sector by increasing equity, efficiency, and impact. 

Tags: Seals of Transparency; Foundations and grantmaking; Equity