Monday, July 14, 2008

Data, data everywhere and not a drop to drink*

Ever noticed that we seem to be simultaneously drowning in information but can't find what we need when we need it? We've got data everywhere, but not what we need, when we need it, and how we can use it.

Several efforts at addressing information in social capital markets make recommendations to address the availability, accessibility, comparability, and value of performance, outcome, indicators data. These efforts are focused on the need for emerging philanthropic capital markets to be able to track, compare, and discuss social outcomes in comparable, meaningful ways. Here are some of the data efforts that I know of:
Of course, existing data providers such as Guidestar, Center for Effective Philanthropy, Charity Navigator, GiveWell, Charity Scorecard, the IRS, Attorneys General, Better Business Bureau, etc. form a core component of this expanding marketplace of data.

These efforts are exciting, and, be necessity, duplicative. Why is this duplication necessary? Because we don't know what data matter, to whom, and for what purposes. This is a period of experimentation and market sizing, and many of the organizations above are seeking ways to price their products, entice potential customers, massage business plans, and source their data.

Several factors will drive what happens to these various providers. Some of these forces are fairly obvious - donor motivation, economic trends, demographics of donors, growing reliance on the internet for information, and continuing shifts in the marketplace of financial products for donors. Other forces, such as regulation of nonprofits, new hybrid organizations such as L3Cs and B Corporations, and changes in the capital markets themselves, will matter.

And then there is a circle of influences another level removed which also matter - decisions about who owns and can resell certain data. The Guardian Newspaper company in the UK is experimenting with some ideas in this regard that may hold lessons for purveyors above. Legislation and regulation about net neutrality, data access and ownership currently in play in the US also will matter. The future of newspapers matters to these efforts - they have been trusted sources of information for decision makers for years - but what does the future hold?

From my perspective this is all exciting, predictable, and represents a moment when we can truly see how philanthropy operates within many of the same forces of creativity, maturity, and disruption that mark other industry cycles. Is the answer to the "data problem" in philanthropy contained somewhere in the list above? Possibly - but it probably has roots and tendrils in several of the efforts/organizations above and the next few years will be a process of teasing out the key pieces and re-organizing this cycle of providers into a sustainable set of credible and independent sources.

A good portion of what will determine success for any of these ventures is the degree to which they can develop their products and services with a keen eye on the needs, wants, and willingness of their final customer. Who is that customer? What does s/he need? What does s/he want? And what will s/he pay for? Sadly, most of the reports, papers and proposals that I have read are woefully thin on real answers to these questions. Without those answers, these "supply side" proposals and business plans can get us only so far in building new markets for information. We may be at the point where all of these "information suppliers" should turn their attention to really understanding what thirsts the "info users" really have, will really use, and will really pay for.

*Apologies to Samuel Taylor Coleridge's Ancient Mariner

**Disclosure: I have or have had board, advisory board, or some kind of professional working relationships with several of the individuals/organizations in this list, including, but not limited to, GiveWell, Nonprofit Reporter, SmartLink, Keystone, Aspen Institute, Center for Effective Philanthropy, and Jed Emerson.


Anonymous said...

Hi Lucy,

On the topic of data availability for the social capital market...

Do you know if the Hewlett Foundation is actively working on creating an online information marketplace? In last year's Hewlett Foundation annual report, Paul Brest opened with an intriguing essay on "Creating an Online Information Marketplace for Giving." Unfortunately, I haven't seen any further discussion of those ideas.

Anonymous said...

Speaking just for myself, as one individual donor, I've written up some thoughts about what I'd like to see in any new effort to make an online information marketplace for social capital markets.

If you're interested, here's a list of 14 suggested features and characteristics for a nonprofit information marketplace, included in an excerpt I posted from a letter that I sent to Hewlett Foundation last fall:

Lucy Bernholz said...


Thanks for both comments and for the charity scorecard approach. It is great that you did this as a wiki - inherently iterative and expandable. Know they customer - a key concept for anyone trying to offer a new product or service - and comparable, useful data on nonprofit impact is certainly that.

As for Hewlett's work, I believe they are working to release a study of the sector that they commissioned, but don't know their timeline or other plans.

Perhaps we might hear from someone at the Foundation.....



Jason said...

Great thoughts. I think that we are living in a wage where interpreting and presenting/representing data to a constituency is as important as the data itself. Why else would people read blogs to learn cutting edge info?