For years, nonprofits have been pleading their case to the philanthropy community via Form 990′s and ratios of overhead vs. program cost. No more. The big charitable reporting organizations – Guidestar, Charity Navigator and 3 others – have just announced a move away from the overhead ratio as a measure of nonprofit effectiveness.

The reporting organization’s press release suggests that new measurements will be more impact-focused, covering things like financial sustainability, governance and transparency, and actual outcomes.

The news has many nonprofit managers cheering, as overhead has long been regarded as an obtuse and easily misleading measure of actual organizational impact. But drawing up a new set of well-defined and universal metrics is not likely to be an easy task – certainly not for any single organization or even set of organizations. Since we ‘re up to our knees in the Internet and social media, maybe the time has come for true crowd participation in the development of these metrics?

Peter Campbell of IdealWare, who broke the story to us, writes on this concern:

“We have to share our outcomes and compare them in order to develop actual standards. And there are real opportunities available to us if we do compare our methodologies and results.”

Couldn’t agree more. In fact, this might be the perfect time to unleash all the data, methodology and creativity that’s been sitting behind closed doors – and let it all have a conversation with itself. We’re convinced that collaboration and open data are concepts whose time has come, especially when there’s ample opportunity to improve the impact and flow of philanthropy dollars.

Of course, the other side of this coin is the new pressure for nonprofits to get rigorous with their own impact management, assessment and communication. This report (pdf) from the Foundation Center affirms exactly that: in the wake of recession, foundations and grant-makers are getting increasingly strategic with their funding decisions. A critical mass seems to be gathering around this issue, too, as organizations like  SVT Group and others devise innovative ways for nonprofits to measure and manage the impact of each dollar spent.

We can loop all of this back to mapping. Depending on the context, maps are slick communicators, organizational efficiency drivers and well-filtered knowledge pools. In his blog, Campbell suggests that “NPO’s who have have never had the wherewith-all to invest in technology systems to assess performance do so.” We agree – especially in the case of mapping. But it’s worth mentioning that doing so doesn’t have to be costly, either cash-wise or time-wise. Two favorite mapping platforms of ours, Google’s Fusion Tables and IBM’s ManyEyes are both free and exceedingly easy to use. See posts about each here and here.

At the moment, the question on the lips of many folks in the philanthropy and nonprofit worlds seems to be: “What will the sector look like in 2010?” This has prompted more than a few Twitter round-ups, “Top 10″ lists, and blog posts – this one, I’m sure, won’t be the last. Check out our friend Lucy Bernholz’s blog for a (correctly critical) post on the new mini-trend and related links.

2010 looms, of course, with all the weight of the economic recession and the “is it over/isn’t it over” forecasting. But it’s pretty clear that even if 2010 does mark the moment we poke our heads out of the economic darkness, philanthropy and nonprofits probably won’t be out of the woods until a bit later. The reasons for that range from the loss of experienced staff to the time it’ll take for foundations to bounce back from tough asset losses in 2008. Whatever the case, most sources, like this Chronicle of Philanthropy article, tell us that 2010 will likely be a rough year for the sector.

What initially prompted this blog post was this insightful report (pdf) from the Foundation Center, titled “Foundation’s Year-End Outlook for Giving and the Sector” It’s not long – 5 pages – and well worth a look as it seems to compile most of what I’ve been hearing elsewhere on this topic in one place. Here are the highlights, interspersed with related quotes culled from the report:

*Giving is likely to continue to fall through 2010. 2009 is expected to register a fall in the range of 8% to 13%.

Among respondents to the September 2009 survey who established a grants budget at the start of the year, the vast majority (70 percent) expect to distribute roughly what they budgeted earlier this year. However, one in five funders (20 percent) expect to give less than the budgeted amount; only about 11 percent anticipate giving more.

*Recession may force nonprofits to get more streamlined, more efficient, and better at communicating impact. Funders are likely to emerge more strategic in their giving.

In seeking support, grantees “will need to show more concrete sustainability plans in order to compete for limited dollars” and “be transparent about how they do business and the costs of doing business.”

*The nonprofits that survive the recession are likely to emerge better in the above ways, but there’ll be fewer of them.

The long-term impact of the economic crisis on the nonprofit sector will be that only the strongest, smartest, and most strategic will survive.

The overwhelming message here seems to be that 2010 won’t be easy, and it’ll force the nonprofit world to improve its methods and its impact. Embracing certain technologies, like social media and mapping, is an obvious way forward, as is a more rigorous approach to managing and communicating impact. But greasing the wheels with good, accessible, well-filtered data is hugely important – the convergence of open source culture, mapping and nonprofits, then, is at least one glimmer of optimism in what looks to be a challenging 2010.

Oh, and two resources worth mentioning: Foundationcenter.org, the publisher of the report just discussed, has this set of maps about the foundation response to the recession. And here is their helpful grant RSS feed.

Image: www.thebiggive.org.uk