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The distinguishing factor of nonprofits, legally, is not that they don't take in more revenue than they pay out in expenses, it's that they don't distribute those excesses (the profits) to any individual. This is the "non distribution" clause of the corporate code that classifies nonprofit organizations - profits must be re-invested in the work of the organization, in its mission.
That little bit of legal code has worked well and created a large class of organizations who use the financial resources they have to pursue their social mission. For the most part, nonprofits have earned the public's trust in terms of how they use these financial resources. We have dozens of ratings systems and reporting requirements that a cautious donor can use to find out just what the nonprofit organization is doing with her money. Ask any nonprofit - public trust is critical.
But what about data?
There's nothing in the current nonprofit corporate form that says "We'll use our data for our mission." As important, there is nothing in the current corporate form that says to the public "We'll use your data for our mission."
And nonprofits have lots of our data. Our email addresses, cell numbers, credit card numbers, physical addresses. If you've attended a gala they know whether you like chicken or fish. Bought something at a charitable auction? They know if you like art or red wine. Attended a community event? They know what kinds of speakers you like, what kind of music you prefer, what kind of environmental causes matter to you. Pledged a donation over time? They know a lot more about your financial situation than you may think they do. Stop for one second and think about your alma mater's development department and what they know about you. All that data.
When it comes to data, we're all donors. And when it comes to nonprofits, don't we deserve some information about what they're doing with all that data?
The non-distribution clause has worked well to ensure that money gets used for mission. We need a similar enterprise innovation to make sure that our data get used the way we expect.