Built on the Idea of Transparency, Candid Outlines Plans for MacKenzie Scott Windfall

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Candid, the leading nonprofit data provider on the social sector, is built on the ideas of transparency and sharing information for the greater good. So it’s no surprise that it’s pulled the curtains back on its plans for the $15 million it received from MacKenzie Scott and Dan Jewett last year.

In an open letter from CEO Ann Mei Chang, Candid outlined plans to use the first two-thirds of the funding it received on three things: building out its products and platform, creating an innovation fund to incubate the next generation of ideas, and recognizing its staff for rising to the unprecedented challenges of COVID-19. The boost in funding comes at an important time for Candid as it implements a 10-year vision under a new CEO, and responds to major shifts and challenges in the sector. 

Candid is one of dozens of philanthropy- and nonprofit-supporting organizations that received a big boost from Scott, including the Center for Effective Philanthropy, the National Committee for Responsive Philanthropy and the Bridgespan Group, which also advises Scott and Jewett. As is the case for all of the couple’s investments, revealing dollar amounts and details was left to the discretion of recipients.

Candid’s decision to detail the numbers and plans for the funding — a practice that will hopefully gain steam among others — offers a glimpse into what the organization has on the agenda for the future, and some actionable insights on how Scott and Jewett’s giving is shaping philanthropy’s infrastructure.

The evolution of Candid

Best known for its GuideStar tools and online foundation directory, Candid provides some of the most comprehensive data about the social sector — “where money comes from, where it goes, and why it matters” — and helps boost transparency on trillions of dollars in philanthropic activity around the world. The nonprofit was created when the Foundation Center and GuideStar merged in February 2019 with the mission of delivering the information philanthropists need “to do good.”

Leading foundations like Bill & Melinda Gates, Charles Stewart Mott and William and Flora Hewlett joined other supporters to provide the nearly $27 million in costs to create the new entity, with early stage development support from Fidelity Charitable Trustee’s Initiative and the Lodestar Foundation, which works to build social sector capacity. Today, Candid reports an operating budget of approximately $40 million, 85% of which comes from the revenue generated by its programming and services. Grants and contributions bring up the balance.

By July of 2020, a year and a half after its founding, Candid had developed and shared the broad vision it expects to carry forward through 2030. The document outlines significant challenges in the sector, including an “inefficient and arbitrary” system of funding, lack of up-to-date information, and declining trust levels. Its vision centers on strategies like providing real-time data collection, cross-referencing information across siloed categories, and improving understanding of the sector.

Today, its research, collaboration and training tools, and platforms attract a half-million users each month.

Under new leadership

In October 2021, a few months after the funding from Scott and Jewett was announced, a new CEO came on board. A social innovation expert with a background in tech, government and the nonprofit world, Ann Mei Chang spent the first two decades of her career working as an executive at Google, Apple and Intuit. From there, she became the first executive director of the U.S. Global Development Lab, which harnesses innovative practices from Silicon Valley, universities and the private sector to accelerate solutions to the world’s most intractable problems. It now sits within USAID, where Chang served as chief innovation officer.

Though the initial vision process preceded her, Chang considers it broad and ambitious enough to allow impact, and said she has wide latitude on making the “audacious” moves she thinks are needed for success. She was also given time to get her arms around operationalizing Candid’s vision, and to get the lay of the land. Final decisions on how the organization would use the funding from Scott, for example, weren’t made until a board meeting in May.

For now, she sees Candid’s primary challenge as “too much opportunity,” with dozens of ways to support the sector that manifest in multiple products that “splinter” staff and users. Bringing one suite together will mean making tough decisions on “what works and what doesn’t,” toward the overall goal of “doing a few things really well.”

Chang is currently focused on the outcomes that drive innovation, working with the board, leadership team and an impact task force. Innovation, Chang said, isn’t typically found in one transformational idea, and instead involves finding the North Star of what an organization is trying to accomplish, then using the talents of staff and partners to “let a million flowers bloom.”

Speaking up

While it makes sense for an organization named Candid, there are a number of pros and cons to going public on the levels and plans for Scott and Jewett’s support. Groups that receive very large sums may be concerned that smaller donors will no longer feel valued. Those receiving smaller amounts within giving categories may not want to give the impression that they didn’t stack up well against peers doing the same work. And there’s also the potential of spurring competition, rather than collaboration.

Some of it comes down to the time and attention it takes to digest such a large donation and identify the best ways to use game-changing support, especially when actions may highlight deficiencies. Even those that do come forward generally stick to the broad strokes.

At the same time, the vote of confidence from Scott and Jewett can shine a light on work that may have been happening under the radar, especially in underfunded areas. The hope is that the public elevation will bring in new supporters and encourage confidence in organizations and communities that have been overlooked by funders in the past. Scott’s messaging has been clear about encouraging other investments.

Often, the response from grantees varies by cohort. All but one of the recipients in the veterans support category proudly and promptly announced the funding. But there wasn’t much reporting coming from Indigenous groups or the global investments made in Brazil, for example.

Candid’s support was part of the “Seeding for Ceding” tranche of June 2021, which also included 70 other organizations working in philanthropy and nonprofit management, with the goal of strengthening sector infrastructure. To date, few have gone public with dollar amounts or details on how they plan to use the funding, including Charity Navigator and BoardSource.

Bucking the trend, Chang said going public was a “pretty easy decision” for Candid. “We stand for transparency, and greater transparency will lead to the sector doing more good,” she said. “We can all learn from each other and collaborate, and use information to make better decisions.”

While Scott and Jewett eschew regular grant reporting requirements, they do ask recipients for an annual one- to three-page letter on accomplishments and how funds are being spent. Chang said it was an easy letter to write — and one Candid decided to share publicly. 

Still, she acknowledged that Candid is in “a privileged position, with a strong financial base,” and can therefore risk sharing ideas that don’t put “its best foot forward” in front of a wider audience.

Where the money is going

The letter spelled out the specifics on the three areas that Candid committed two-thirds of the Scott-Jewett funding to: platform, staff and innovation.

Platform and product integration will be funded with $9 million over the course of three years, but users can expect to see changes sooner than that. Chang said Candid is taking a “very staged” approach to upgrades, and that the first release integrating more functionality will be introduced this year, with others to follow.

The vast majority of users, 99%, currently access Candid free of charge, and 3 million users are registered for free programming. Data availability is currently tiered, awarding paid accounts greater detail. As to what will and won’t be free going forward, Chang said that in principle, Candid never wants cost to be a barrier, especially for smaller organizations that have taken steps toward transparency by claiming their Candid profile and sharing enough proprietary data to earn a gold seal. It’s also reevaluating a pricing model to give smaller organizations — those with budgets of $1 million and lower — a path to access.

Candid also announced a decision to use Scott funding for staff bonuses, an uncommon practice in the sector. The commitment to acknowledge a tough stretch for Candid’s 200 employees was green-lit before Chang arrived, but her understanding is that the gesture came from observing the special stresses and strains of COVID-19 and a desire to recognize their work and give them a little “breathing room on the crosswinds across their lives.”

The new innovation fund Candid created is perhaps the best illustration of how the Scott-Jewett brand of trust-based philanthropy benefits organizations, as Chang acknowledged that bold risk-taking can only occur without fear of reprisal, and in the full knowledge that not all moves will succeed.

Chang’s mindset on innovation developed over two decades in Silicon Valley, and she favors casting a “wider net” on smaller ideas, then quickly pivoting to what works. Her approach to finding the best big bets for the social sector is grounded in bold risk-taking, against which a lack of flexible funding creates a bias.

Though it’s too soon to share examples of what’s to come, Chang provided two examples of the kind of initiatives Candid has explored, one that worked and one that didn’t. One was a personalized mobile alert on RFPs, which didn’t draw significant engagement. The other was a training program for trainers, which will allow program expansion beyond staff capacity. It went well, and drew a number of sign-ups.

Like most other organizations on the receiving end of Scott and Jewett’s work, Chang acknowledged the critical nature of unrestricted funding in Candid’s decision-making. It allows organizations to take risks, invest in brass-tack needs like human capital, and to fail and talk about it.

For the good of philanthropy, let’s hope more organizations do.