THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, January 22, 1997 TAG: 9701220375
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: WILLIAMSBURG LENGTH: 105 lines
Americans contribute $150 billion a year to charitable groups - more, by far, than any other society. But Arthur W. Schmidt Jr. thinks we'd give even more if we knew more about charities.
It's that belief that led Schmidt to start Philanthropic Research Inc. Based in Williamsburg, the nonprofit PRI maintains the nation's largest database on charities.
Funded by the the Rockefeller Family Office in New York, the group has been quietly performing its mission since it was launched by Schmidt in late 1994. Under the trade name GuideStar, it published a directory and a CD-ROM.
In October, PRI moved into the online world: putting its database of 40,000 charities on the Internet's World Wide Web. And that was the end of the organization's low-profile days.
In the first two and a halfweeks of January, PRI counted more than 26,000 sessions in which Web surfers searched its free database. That was up from just over 1,500 sessions in the site's first two weeks.
That's likely to be just the beginning. Last week, Internet Navigator Netscape named PRI's site as one of the Web's hottest spots. Meanwhile, search service Yahoo! and financial service Quicken recently devoted special links on their sites to PRI.
It's been a gratifying response to what even Schmidt himself thought was perhaps a quixotic mission. It's not like Americans were crying for data on charities, the Vermont native admits.
Still he had this hunch. Perhaps, if he built the database, they will come. They will learn. They will find charities whose purposes closely match their goals and beliefs. Then they will give even more, and society will be better off.
``There's huge charitable capacity that's untapped,'' he says. ``We just need to increase the confidence of donors to give more.''
The 44-year-old Schmidt got the hunch in the late '80s. He had just finished an eight-year management stint at Cargill Inc., the Minneapolis-based grain giant. He and his wife had moved back to Williamsburg. They'd lived there during Schmidt's first two years of working for Cargill - at its Chesapeake grain elevator.
As do many ex-corporate executives who live in Williamsburg, Schmidt became a consultant. He had the credentials corporate America pays for: Princeton graduate, MBA from Stanford, former secretary of Cargill's long-range planning committee.
But Schmidt took a different tack. He went to work for a Norwalk, Conn.-based nonprofit called TechnoServe, which helps low-income people in developing countries start business enterprises.
One of his main roles at TechnoServe was raising money. It was a frustrating job. Having worked for a large private business, where decisions about investments are based on extensive research, Schmidt was ``just struck by the comparative inefficiency of information flow'' in the charitable world.
``I have to pull money from your pocket . . . and you don't know anything about me,'' he lamented. Worst of all, he says he knew there were many people whose aspirations and values were the same as TechnoServe's - but the group could only afford to solicit so many.
Schmidt turned his frustration into action in 1994 by placing a newspaper help-wanted ad seeking ``entrepreneurial researchers.'' ``I probably didn't use the words `start-up' or `nonprofit' because that would have scared people away,'' he says.
Three others soon joined him: Charles E. McLean, director of data management; Kimberly A. Reardon, managing director of operations; and Beth N. Rossheim, director of research. PRI was off and running.
They set about building the database and figuring out ways to disseminate the charities' information - everything from their founding purposes to their finances.
``The theory was that by shining the light of day, we'll help improve accountability, more accurate reporting, more effective operations - and along with that, more donor generosity,'' Schmidt says.
He funded the organization on his own until January 1996 - well over $100,000, he says. Then The Philanthropic Collaborative of the Rockefeller Family Office stepped in. This year's funding of $1.6 million will enable PRI to boost its staff of 13 to 25 by summer, Schmidt says.
PRI aims to increase the number of organizations in its database to about 150,000 by spring 1998 - and make the information more current and complete. Most of the information on the charities' functions and finances is now gleaned from forms filed by the charities with the IRS. But PRI sends questionnaires to the groups requesting additional information. Schmidt says nearly 3,000 have responded so far.
Charles D. Terry, director of philanthropy at the RFO, says Schmidt's earnestness and business skills won his confidence. Terry now sits on a PRI board that's chock-full of heavyweights in charity.
Other board members include Georgetown University research professor Virginia A. Hodgkinson, a former executive director of National Institute of Independent Colleges and Universities, and Claude N. Rosenberg Jr., founder of money-management giant RCM Management and author of ``Wealthy and Wise - How You and America Can Get the Most Out of Your Giving.''
Terry says PRI's work is timely because the United States is entering an era in which there will be a record transfer of wealth from one generation to another - according to PRI's estimate, $4.8 trillion over the next 20 years.
Much of that wealth has been earned in the stock market or by entrepreneurs in high-tech fields. As these wealthy Americans age and die, ``I think the potential for greater philanthropy is significant,'' Terry says.
``Our task is to help eliminate the excuses'' not to give, says Schmidt.
MEMO: Staff writer Dave Mayfield can be reached at (757) 446-2270 or by
e-mail at dmay(AT)infi.net ILLUSTRATION: [Color Photo]
HUY NGUYEN
The Virginian-Pilot
Arthur W. Schmidt Jr....