Putting data in context





(logo from NFF Financial Scan)



The Nonprofit Finance Fund has a new tool out, called Financial SCAN, that is quite exciting. It takes the deep financial analysis for which NFF is noted as a framework for gathering and making sense of nonprofit organizations' 990 data. In partnership with Guidestar, Financial SCAN pulls information from nonprofit profiles and presents it in a templated form built from NFF expertise.


A user gets the best of aggregated web data - you can search for any nonprofit - and the expertise of financial experts who've been working with nonprofits for decades. I hope this will be the end of "one size fits all" measures, such as the overhead ratio, that were easy to generate from aggregated data but almost meaningless in real life. Financial SCAN takes a broad slice of data and puts it in context so you can understand it.

Here's the video introduction to Financial SCAN:



I've already thought of several uses for Financial SCAN. Obviously, nonprofits can use it to understand their own information more completely - it's an inexpensive way to get NFF's wisdom about their own finances, something a lot of organizations can use. It will be useful to foundations and donors in their due diligence process, especially if they use the reports as a jumping off point for discussion with potential grantees. You can order up comparables - so you can compare arts organizations, you can look at an organization's finances over time, and you can cluster by geography so place-based grantmakers (I'm looking at you, community foundations) can get useful snapshots of key partner organizations.

Financial SCAN can be used as a one-off, as a regular part of due diligence, as a capacity building tool, for regional or issue-based planning (Mash these data with a CEP/Monitor Institute Strategy Landscape tool to get a vital sense of the health of a sector), and to help understand organizational change over time. Nonprofit executives, donors, donor advisers, public agencies, public funders, and program officers can all benefit.

The data powering Financial Scan is organizational and financial information. The NFF screens help users understand what data means what, what financial signs to look for, and how to assess the "health" of the organization from a series of independent "vital signs." Full analysis and understanding still requires knowledge of the people involved, local context, constituent feedback, performance and outcome measures.

In our data rich world, putting data in context and making sense from it is where the fun is. It's taken us almost ten years to build a robust supply of information about nonprofits and make it available online. Keeping that data supply updated, "clean," and comparable is an ongoing task. But now that it's here it's great to see the practical iteration and innovation on top of it that makes it actually useful. This is the phase that's given us WASHFunders, strategy landscapes and now Financial SCAN. There will surely be more to come.




Governance in the 21st Century

Remember the public pressure on the Komen Foundation that led the organization to change a board decision? I said back then this was a harbinger of a new expression for public accountability that foundations need to understand. It is an early edge of a new kind of governance capacity for which most foundations (and most nonprofits) are not prepared. If you think it's about a social media strategy, you're wrong.

The Gates Foundation is experiencing this right now. The Foundation provided grant funds to the American Legislative Exchange Council (ALEC). ALEC works on many policy issues. In the wake of the killing of Trayvon Martin ALEC's support for "stand your ground" laws has drawn outrage and calls for boycotts from many directions, including from a group called the The Progressive Change Campaign Committee (PCCC). The Gates Foundation has said it will continue to meet its current grant obligations to ALEC (which run over another 17 months) but won't make further grants.

Put aside what you think of Komen, Gates, ALEC, or PCCC for a moment. This is not about any of these organizations per se. It is about public pressure, organized and otherwise, on nonprofits and foundations, about their decision making. It is about making decisions that will be challenged, and striking the right balance between legitimate board governance and respecting people's right to agree or disagree with you.

The kind of organizing that led Komen to change its decision and that is now calling for change from Gates is easier than ever. It can be turned on in an instant and reach unprecedented scale at unprecedented pace. Boards of directors of nonprofits and foundations need to know this, they need to expect it, and they need to engage with both critics and supporters. They need, in other words, to govern in a new landscape in which each and every decision they make may be the one that transforms supporters into critics (see Komen) or turns educational policy grants into part of national outrage about gun laws and racial justice (see ALEC).

Is this about a social media policy? I don't think so. Is it about governance, engagement, conversation, accountability, structural consistency, clarity of mission, and a willingness to remain civil while participating in difficult areas of work riven with disagreement? Yes. Nonprofits are part of civil society which thrives only when it is filled with multiple points of view and diverse approaches to problem solving. The "public" will not agree with every decision a foundation or nonprofit makes and they have a right to express that disagreement. Foundations and nonprofits have a right (and a responsibility) to make their decisions and expect a public response to them.

What we need civil society organizations to do is discuss, civilly, their points of view, their decisions, and their goals. And to structure themselves to be able to do so. This requires thinking about the constitution and skills of their staffs, boards, and advisors, the way they provide access to their key decision makers, and the ways they engage with critics and supporters in the real context in which those things will happen, not in some nostalgic early 20th century institutionally-bound model.

Business has already learned that there is simply too much information for one organization to hold it all. As Bill Joy has said, "the smartest people are always going to work for someone else." The MIT Media Lab has an interesting chart to show the relationship between information and organizations.The point of these ideas is to encourage businesses to build networks that will be better able to manage information and generate new ideas. But the power of networks and permeable organizations applies not just to generating new ideas. In the case of nonprofits and foundations, generating ideas with the public, communicating ideas and theories and strategies with the public, and civilly debating with the public - especially the public that disagrees with you - is going to be a critical attribute in the future. See this article (pp 14- 15) from Darin McKeever of Gates Foundation on "embracing the scrutiny of the crowds."

This may involve new kinds of constituent representation on boards. It could involve an ongoing advisory board role or meaningful, regular discussion of issues with stakeholders. There are many forms and tactics that institutions can try to be more conversational.  But first, they need to recognize that the days of "broadcast" and "isolation" are over and structure themselves accordingly. What is at stake is not individual grant decisions, but public trust in and the legitimacy of these organizations as a whole.

ReCoding Good - Are Nonprofits People, Too?

Stanford Social Innovation Review just posted the latest in our series of #Recodegood updates. Here is the synthesis of the conversation on March 20 about Citizens United, political giving, and the nonprofit sector. The SSIR post has links to the previous updates as well.

The conversation also catalyzed thinking about data - here is that post.

There are several presentations and materials linked off the article. Would love to hear your thoughts.

Data and ...

On March 20 a group of researchers, policy makers, data experts, and nonprofit policy experts met to talk about Citizens United and the Future of the Social Sector. This was one of the #ReCoding Good charrettes I'm organizing as part of the Stanford Philanthropy, Policy and Technology Project - and a full synthesis of the meeting will soon be available on SSIR.

In the meantime, I wanted to highlight a few themes from that meeting that are very much on my mind.

1) Data and stories

We were honored to be joined by Jane Mayer of The New Yorker at the March 20 event, along with Dan Newman of Maplight and Lee Drutman of The Sunlight Foundation. Mayer is an investigative reporter, whose stories on the Koch brothers and Art Pope have been critical in helping Americans see the emerging intersections between politics and nonprofit organizations. Maplight is a data nonprofit - it collects, curates and shares data on money and politics. The Sunlight Foundation focuses on government transparency and uses a lot of data and data visualization to show patterns and connections.

The journalist and the data wonks agree - they need each other. Stories need data, data need stories. For example, check out the story on money and politics that ran on This American Life, informed by data from Sunlight Foundation. There was further reporting on the story, "Take the Money and Run for Congress" on NPR's Planet Money podcast. 

You can listen to the episode here, see the charts and read Planet Money's report here, and check out the analysis Sunlight's Lee Drutman conducted for these stories here.

Let's get past the false dichotomy between data and stories and get on with making change happen. Some new finds that I'm playing with and learning about that fit into this intersection:

  • Sparkwi.se- drag and drop dashboards to mix web data with video and other context. Find the stories in your data. This system is so easy to use that if you don't use it, you really just don't want to.
  • PopTech's World ReBalancing App - go ahead, play with it. From @poptech and @datanoborders
  • Civic Data Challenge - a new challenge to take municipal data and make it useful. Brought to you by National Conference on Citizenship, Knight Foundation and others. 
  • Catalyze4Change - 48 hours to generate idea for ways out of poverty (from Rockefeller Foundation and Institute For the Future)

The point of all this? It's getting ever easier to use and make sense of data. This is great because it means we can get to the next step, using the data to inform decisions, find new opportunities, think differently about change, and work with new partners. The point all along has been not about tech and not about data but about making change happen. We're getting there.

2) Data and a different kind of transparency

Another big point in the Citizens United discussion was the role of transparency. When it comes to money and politics, a lot of the discussion has been (and will continue to be) about donor disclosure. My summary at SSIR will have more to say about this. For our purpose here, however, I want to think about this a little bit differently.

Back in the early days of the web, folks often asked "What do I need a website for?"  Nowadays, people think "If I can't find it on a search engine, it doesn't exist." Lots of nonprofits (not so many foundations, fewer than 30%) have since built websites because they want to be found. They need to be findable to be relevant.

This same dynamic is going to work on philanthropic data. More and more governments and businesses are finding ways to use their data, publicly, to inform decisions. Check out what the UN is up to with its Global Pulse initiative. More and more people are mashing up multiple data sets - or using apps that do the mashing for them - in order to think about how the world works.

As this unfolds, nonprofits and foundations (which have a lot of data) are at risk of being irrelevant because of their opaqueness - if their data isn't findable, it isn't usable. If the data aren't visible, they can't be part of new solutions.

(Photo from UN Global Pulse)

And if nonprofits and foundations aren't part of new solutions? Well...I'll leave that to you. Here's what I had to say about this last year at Personal Democracy Forum. Here's what Fast Company said about the UN Global Pulse initiative and "data philanthropy."

I'll be talking more about this (5 whole minutes more, that is) at an Ignite Session at the Council on Foundations conference on May 1st. Hopefully, they'll share it.

3) Data and change

Digital public goods is the next topic for our #ReCoding Good charrettes. Is there such a thing? Is the digital economy - and the changes it makes to funding, creation and distribution - fundamentally shifting the dynamics of using private resources for public good? I think this is true though I don't yet know the full scope or scale of it.  Efforts at data philanthropy and data commons, the digital rights work of organizations such as Creative Commons, Media Democracy Fund and Electronic Frontiers Foundation are pointing toward a new set of digital goods, digital associational relationships, and digital assets. We'll be talking about this on April 19 - with SSIR blog posts before and after as always. Please join us.