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$15M From Mackenzie Scott Fuels NPO Data Platform

A $15-million gift from uber-philanthropist MacKenzie Scott has allowed Candid to build out its product suite, establish an innovation fund and provide for its staff. New York City-based Candid is a nonprofit that provides data and insights about tax-exempt organizations and the social sector. The Candid umbrella was formed in February 2019 with the merger of nonprofit information services The Foundation Center and GuideStar.

In blog post last week, Candid CEO Ann Mei Chang detailed the impact of Scott’s gift. Chang noted the grant came with a request for a brief note summarizing the use of the funds, and added: “We have also elected to share [the note] publicly in the spirit of transparency and mutual learning, as well as to illustrate the transformative potential of general operating support.”

Candid leaders took less than 12 months to determine how to best use Scott’s grant. They set aside $9 million to build a new technology platform that integrates its offerings, which include its Form 990 Finder, Foundation Directory, GuideStar/Charity Check, Seals of Transparency, and other products. When deployed, the new, integrated suite will offer free access to the organization’s data and insights.

The organization will also invest $500,000 to establish the Candid Innovation Fund, which will fund proposed improvements from its staff in features, new markets, products and services. “Our intent is to test a wide range of bold new solutions and identify those with the greatest potential before placing a big bet,” Chang wrote. “For those that demonstrate the strongest potential for impact, we’ll consider larger investments from the remainder of your gift.”

Scott’s gift has relieved Candid of some financial pressure, and the organization is passing that relief along to some of its clients. Candid has begun offering free access to its Foundation Directory Essential to nonprofits with budgets less than $1 million that have earned its Gold Seal of Transparency.

Candid also used some of the funds to recognize and reward the efforts of its staff during the trying times of the coronavirus pandemic. “To show our appreciation for their dedication and hard work in this time of crisis, in November 2021 Candid provided a flat $2,000 grossed-up bonus for every full-time employee (except for the President), as well as a $1,000 bonus for every part-time employee,” Chang wrote.

The impact of Scott’s gift comes into focus given Candid’s finances. According to a Form 990 for 2020 provided by the organization Candid generated gross revenue of just less than $42.9 million, down from $49.1 million the previous year, largely due to a $9 million drop in contributions and grants. The organization reported net revenue of $3.4 million, down from $11.5 million, and net assets of $50.4 million, up from $45.4 million. These figures reflect a period prior to Scott’s gift.

Chang lauded Scott for making the grant free of restrictions. “[N]on-programmatic investments in our technology infrastructure, innovation, and human capital are exactly what we need to maximize our impact. We applaud the example you have set in demonstrating the power of what has been called trust-based philanthropy,” Chang wrote. Under the tenets of trust-based philanthropy, funders are encouraged to make unrestricted gifts through streamlined (i.e. minimum-paperwork) processes in return for transparent accountings of how the gifts are used.

“Because we believe that teams with experience on the front lines of challenges will know best how to put the money to good use, we encouraged them to spend it however they choose,” Scott wrote in the June 2021 post announcing the round of gifts that included Candid. “Many reported that this trust significantly increased the impact of the gift.” Scott has given away more than $12.4 billion in publicly announced gifts, with a concentration on unrestricted donations, since 2020.

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