Online Dating Tricks, Gamification, And Cold Hard Cash: Is This The Future Of Funding Good Causes?

A Pennsylvania startup set out to collect better data and build a sort of eHarmony for philanthropy with an eye on wealthy Millennials. No sweat, right?


The elevator pitch sounds simple enough: eHarmony for philanthropists. The reality is anything but.


In fact, after five years of research and development and help from at least 150 people along the way, the Phoenix Impact Exchange is a far cry from the tools Tamarah Black once relied on to make funding decisions for the Pennsylvania-based family foundation she joined as executive director in 2008, the year the financial downturn fizzled her luxury jewelry e-commerce company.

Tamarah Black

“My job description [with the foundation] was to manage the grant administration and make recommendations to our board about funding, and the tools I had at my disposal were go to lunch, go to coffee, and read annual reports,” says Black, who is now CEO of Impact Exchange and its parent company, Phoenix Cosmopolitan Group.

But there were hundreds of nonprofit programs with projects and goals worthy of the funds donated each year by the small, private foundation co-created by Samuel P. “Pat” Black III, an entrepreneur-investor and Black’s former father-in-law.

“I calculated what it would take for me to meet each of them once, and it would have taken me three-and-a-half years,” Black recalls.

Beyond the face time required to get the information she needed to determine program performance and social impact, Black was surprised and frustrated by the lack of available data in the first place. This was data she was looking for not only to help her decide which organizations would be good funding matches for her foundation, but also to follow and track the progress and impact of programs once the money was in charitable organizations’ coffers. Other than basic financial information captured in the 990 tax forms required of such organizations by the IRS, there was often little else to go on other than anecdotes and marketing materials.


“You can’t make a strategic decision if you don’t know what you’ve got to work with,” Black says.

To be sure, collecting data is an arduous challenge for even well-established, well-funded nonprofits. Take buildOn, which works with youth in six major metropolitan areas in the U.S. to build schools in poor, rural communities around the world. Its supporters range from Brandeis University to the Kellogg Foundation to Madonna. But even then, gathering data is no small task.

“We’re in these countries where there’s no access to high-speed Internet, and they’re on the computer for three hours to send a really basic file back to the U.S.,” says buildOn Founder Jim Ziolkowski.

Once paper attendance sheets and participation logs and records of service performed both by students in the United States and volunteers working on projects abroad find their way into Excel spreadsheets and into the organization’s database, it takes a full-time employee and the help of outside academics, experts, and analysts from graduate level programs at universities like Brandeis and support from places like General Electric to analyze and draw meaningful conclusions from all the information captured.

But Ziolkowski says it’s crucial. “Data collection and evaluation in my view is critical, not just because donors want to see it but because you can’t go in and improve your programs without the strengths and weaknesses.”


Easing the burden on nonprofits of collecting and interpreting data was part of Black’s aim from the start, when she set out to find a new way to assess her foundation’s donations as strategically as possible in the hopes of maximizing impact in and around Erie. But it quickly became clear that manually collecting data presented myriad problems and meant a limited project scope. Creating technology to automate and accelerate the process started to look like the only real answer. Five years later, what began as an internal attempt to solve a problem inside one foundation has become a company of its own now in a private beta with 20 nonprofits and 20 philanthropic donors representing different sizes, service goals, and impact areas. A public launch in the fall will open the platform up to yet more causes and people with the money–as well as in-kind donations–to help nonprofits operate.

At the platform’s heart is a cloud-based social technology that collects qualitative and quantitative information as donor organizations and nonprofits create profiles. Next, it uses that information to generate real-time matching strength ratings between user profiles in a way that echoes online dating. It effectively saves donors’ criteria so that new matches appear automatically, without the need for repeated searches. For donors, the idea is to streamline the process a foundation or philanthropic entity is likely to run into while hunting for nonprofits compatible with their existing funding visions, missions, and goals. Once a donor finds a match, it can use the platform to send funds, connect with other donors who may want to join forces to fund a single project, and keep track of their funded projects and progress over time in an easy-to-navigate dashboard.

The appeal to millennial philanthropists is by design, and Black can rattle off a quick list of reasons she had teens and 20-somethings in mind as she worked with her 30-person team to develop the platform.

“This millennial generation, 85% of them won’t make a decision without consulting a peer. They expect to have an app for everything. They want to ‘do it themselves,’ and they want to connect with people they already trust. They don’t trust marketing materials, and they want to make their own decisions,” says Black, who spoke about the rise of “technophilanthropists” last month at SXSW.

Along with its technology, the platform’s emphasis on impact is also in line with millennial thinking. “Younger philanthropists and tech entrepreneurs have been at the forefront of the donor movement toward impact and wanting to make sure that their gifts are really moving the needle on problems that the country and the world faces,” says Nicole Wallace, a senior editor at the Chronicle of Philanthropy.


For charitable causes, the platform offers the obvious allure of free access to potential donors. But there’s more: money. As nonprofits complete different sections of their profiles, they unlock payments in a way that’s reminiscent of online gaming. Finish inputting your organization’s financial data, get paid. Add requested information about your programs and services, get paid. Exactly how much money, of course, depends. The company would not disclose payout amounts from the beta, but Black says nonprofits receive compensation tied to the amount of time it would take her team to collect and input the information on its own.

That calculation is based on a formula that considers a nonprofit’s revenue, size, and service complexity as indicators of the time it would take to capture the information and doles out dollars accordingly. Paying nonprofits to enter their data into a third-party system is an unusual tactic at a time when more than a few sites are vying for their participation, among them the Social Impact Exchange and GuideStar, but Black says it’s what’s needed to obtain the information funders want and, ultimately, the commitment of funds charitable organizations need to survive.

“The funders feel frustrated that they can’t get data, but there doesn’t seem to be a lot that want to pay for it,” Black says. “But they want it. We said, ‘Look, if the biggest barrier is the infrastructure and the second biggest barrier is the overhead, let’s just pay them.”

For its part, Phoenix Impact Exchange aims to make money through transaction fees levied when donors use the platform to transmit funds. It’s also part of the Phoenix Cosmopolitan Group, a consulting company Black runs offering a wide range of advisory services to philanthropic entities and media production to nonprofits. Black chose to found the company as a for-profit venture both because she’s hoping to attract investors in the future and to avoid a reliance on grants and donations for operations.

It’s not the first time a company has sought to build a business around matchmaking donors with worthy causes.


“There have been attempts in the past to create online matchmaking services between foundations and nonprofits, and they haven’t worked out because foundations are sort of set up to do their own research, and they have experts on staff and they see themselves as being uniquely qualified to find the best match,” explains Wallace.

Black says her company isn’t setting out to replace or remove the need for the work foundations do, but rather to make the process more efficient, targeted, and personalized. Still, she does note that the foundation she formerly headed up no longer needs a full-time director now that it can rely on Phoenix Impact Exchange’s technology to do much of the legwork instead.

And while cutting back on inefficiencies and waste in the nonprofit world is part of Black’s goal, so is long-term grappling with the complexities and opportunities that come with collecting large sets of data and interpreting those in an ever-changing landscape. About that, though, she seems undaunted.

“It’s the cool thing about data,” Black says. “Once you have it you can ask a lot of different questions that can change over time.”

All of which suggests that in time, Black can help change how good causes get funded.