$3 Million From Gates To GuideStar

November 10, 2014       Mark Hrywna      

The Bill & Melinda Gates Foundation will provide $3 million over three years to data and research nonprofit GuideStar in support of its strategic plan, GuideStar 2020.

The announcement came Monday during GuideStar’s final impact call of 2014. The Gates grant will provide nearly a third of the $10 million that GuideStar aims to raise by 2016 to implement its transformational strategic plan’s three pillars of data innovation, data collection and data distribution. Financial projections for the strategic plan extend to 2018 and the operational plan extends to the end of 2016.

GuideStar 2020 is the “document we’ve used to chart our path going forward to try to be clear to our broader community, the role we see ourselves playing in the sector,” President and CEO Jacob Harold said.

Victoria Vrana, senior program officer, charitable sector support team, at the Bill and Melinda Gates Foundation, said GuideStar is well positioned to significantly upgrade and expand the information on nonprofits that it provides.

The grant is structured as general operating support so it’s flexible and is meant to align with the strategic plan, Harold said. “As with most nonprofits out biggest expense category is staff costs — and to make the plan a reality, we need to hire a number of new staff,” he said, notably in software development, design, product management and research, as well as investments in new software systems and new data sources. GuideStar also is launching a new office in San Francisco.

“We do need additional philanthropic revenue to help supplement our earn income streams but we also think of its as ‘capital’ – a true investment in our future which will pay both financial and programmatic returns,” he said.

Some 40,000 nonprofits are now using GuideStar Exchange, with 17 percent growth in Gold participants in the most recent quarter. “To get to our goal of 200,000, we have to accelerate this even further,” Harold said, and in 2015 there are a number of initiatives planned to do just that.

It took a full year to bring on the right people and align new strategies for web platform but they’re already seeing “remarkable results,” Harold said. Tweaking details of its products pages and how they are presented led to a 54-percent increase in the number of users who purchase products at GuideStar.org. “It immediately transforms our economic model if we can change that,” he said.

Harold said he thought it would happen faster but is confident in the overall trajectory of the organization. “We’re really pleased with the direction we’re heading, but it’s not easy,” Harold said. “It looks like the financial numbers will line up, even if a little later than preferred,” he said.

GuideStar still is faced with raising another $7 million to get to its $10-million goal. Harold “can’t yet name names” but another $1 million is nearly secured and “conversations are in play” that will lead to some good things involving probably another $2 million. Those conversations probably total $4 million but Harold said they’re assuming that might lead to getting half that total.

The organization will not look solely at grant funding either but also is having conversations about some debt, Harold said. “We’ve got time, it’s a multiyear effort,” he said.

GuideStar’s next impact call is scheduled for Feb. 23.