Big philanthropic data with a purpose

Has anyone used the open, visible portals of philanthropic foundation applications (Knight News Challenge, MacArthur DML, Hewlett OER, others) as a source of data about a certain issue?

For example, if you were trying to understand the "state" of community information efforts, would the applications to the Knight News Challenge be a useful source of data in terms of understanding what people out in the world think is important? Within those proposals exists ideas, some sense of the landscape around them, problem statements, and identified networks of interested parties. The pool of applications might be useful as either a snapshot in time or a view of an issue over time. Recognizing the limits (and changes) in the applicant pools as a sample, could these open pools of applications serve a dual purpose - funding proposals to the foundation (their stated purpose) and a data source on an issue (their big data purpose)?

This is in line with the point I made a few years in a talk at #PDF (video) about the potential of opening up all foundation grant proposals as a means of seeing what applicants think is important, a source of ideas, trends, useful data. The aggregate pool of applications to foundations (and other funding sources) would finally provide some "big data" on the ideas people have, programs that are out there, practices in place for making communities better.

Getting access to all proposals is a long term proposition (many might call it a pipe dream). Since some foundations are now holding these open challenges, do those pools of applications serve any larger purpose? Do you know anyone who has looked at them as such?

Happy Pesach, Easter, weekend.

Big Philanthropy and Democracy

(photo from http://www.bostonreview.net/)

My Stanford colleague and #ReCodingGood project partner, Rob Reich, wrote the cover article for the latest issue of Boston Review.

Rob's article interrogates the role of large foundations in a democracy, a political system that pays inherent homage to some degree of pluralism. His article, "What are foundations for?" questions the philosophical basis of organizations that provide perpetual privilege to those few with significant financial resources. He turns that question over in several important ways before concluding that they actually play a role in protecting and amplifying the minority in a majority system. This role is not codified or built into the structure of big foundations, yet it has proven to be the case for decades.

Responses to his piece come from Larry Kramer, Rick Cohen, Diane Ravitch, Stan Katz, Deborah Fung, Tyler Cowen, Pablo Eisenberg, Seana Valentine Shiffrin, and Paul Brest, among others.

A small group of us discussed the relationships between philanthropy and democracy in our #ReCodingGood charrette - those notes are here. Rob's article and the forum of respondents pushes this thinking further. Read it.

Changing our data defaults

I was thrilled to contribute to the series now running on the Harvard Business Review blog about scaling social impact. Here's a reposting of the article:

Social sector organizations are in the business of changing the world, and the information they collect and use should be the catalyst for making that happen. Courtesy of broadband Internet and mobile wifi we now have global, low-cost ways to share data that every social-purpose organization can plug into. From it, they should be able to draw what they need about previous experiments, effective practices, and achieved outcomes, as well as what has failed and why. That way, local social entrepreneurs can mimic what works elsewhere and share their ideas, successes, and failures.

Here are two organizations doing just that. The Awesome Foundation enables funders on four continents to find great ideas to support. CrisisCommons relies on open data to let others quickly learn from each other to reach people in immediate need.

In 2010, Tim Hwang and a few friends in Cambridge found themselves questioning the costs associated with raising a few thousand dollars to launch an online project. Their colleagues at Harvard and MIT regularly devoted hundreds of hours to proposals for million dollar investments, but they only needed a few thousand bucks to test some software. Several pub conversations and a few Facebook posts later, the Awesome Foundation was born — a small group of friends, each committing $100 a month, would accept proposals online for "awesome projects." Each month the group would put $1,000 to the best idea from artists, community organizers, and techies. The core principles of the group: Make it awesome. Share the ideas. Let folks know.

Fast forward three years. There are now Awesome Foundation chapters in 55 cities in eleven countries. They've funded art projects, wi-fi routers, and community events. Many of their projects go on to raise a next level of funding from Kickstarter or institutional investors. In 2011 the John S and James L Knight Foundation invested $500,000 to expand the Awesome Foundation's model to Detroit.

Open data — the idea that certain data should be freely available to everyone to use as they wish — was the key to scaling Awesome Foundation's core idea. Proposals are open, the process is easily copied, and local adaptation is encouraged. When you apply to one Awesome Foundation you do so knowing that other chapters may take an interest in your proposal, and that what you produce in Toronto will be shared with peers in Melbourne.

CrisisCommons is another example. For years, a small group of crisis responders from nonprofits and the federal government had been meeting for coffee in Washington, DC and talking about how technology could facilitate disaster response. When the devastating earthquake hit Haiti in 2010 they had a ready-made network of project managers and techies in cities all over the world. Within days the network organized to develop lightweight mobile apps for crisis responders.

The tools were built in weekend shifts by coders who worked locally and then shared their code globally for similar groups in other countries. Responders in Haiti could test it, use it, and share their feedback with the dispersed network. Whoever was available to fix the bug or add the features could do it. The effort, called CrisisCommons, focused on building a network of peers and a system for sharing data.

The level of information-sharing that Awesome Foundation and CrisisCommons do is key to the organizations' ability to make a difference. But this is not the norm. Instead most social good organizations adopt an institutional replication model, where an organization focuses on reproducing the institution, not reusing the data.
This needs to change in two ways:

First, nonprofits should be using their data for social purposes only. We already distinguish nonprofit corporations from their commercial counterparts by the "non-distribution" clause that determines how they use excess revenue. A nonprofit must reinvest any "profits" in the work of the organization rather than benefitting private individuals. That's the little trick of corporate code that maintains public trust in the enterprises and keeps resources focused on the social mission.

Nonprofits should take similar heed when it comes to using the personal data of their donors and beneficiaries. To ensure the ongoing support and trust of their supporters, nonprofits should rely on an "opt in" choice for the use of their data. They need to treat data "donation" the same way they protect financial ones. By allowing donors an "opt in" choice, nonprofits will get better, more useful data and maintain public trust.

However, when it comes to enterprise level data, the default should be to share all the data you can. This is the second change that needs to happen. With regard to outcomes data or project insights, the default should be an "opt out" choice. Most of the information that organizations collect on their work never gets shared outside of their own staff meetings. Not because it's proprietary or scandalous, but because that's the way it was done in the pre-Internet, publish-it-once world. Nonprofits don't live in that world anymore, none of us do. If we're going to scale any of our efforts to solve social problems we've got to make much better use of the fastest scaling tool humans have ever built: open data.

Shifting these two defaults will help nonprofits become trusted and purposeful users of data. Have you seen other examples of nonprofits using open data for social impact? What made those examples work?"

Recommended Reading

Information for Impact

The possibilities for change that opening 990 data would unleash. This in-depth report from The Aspen Institute, written by Beth Noveck and Danny Goroff, puts forth numerous possibilities if we had machine-readable, open access to 990 data. It moves the social sector out of its old discussion about the shortcomings of the 990 and puts the sector in the middle of the more interesting reality of open data, new behaviors, data mashups, and the hidden information that is already being collected (investment information, board members). It ties in nicely with discussions about transparency and oversight, while also raising important questions about what the IRS can and cannot do well, how these efforts might help State Attorneys General, and what the public can do with this information.

Trendwatching 2013 - Center for the Future of Museums

What do 3D printing, demographic changes, and MOOCs have in common? They all matter to the future of museums. This is the second annual Trendwatching report from the Center and is well worth a read. The key trends matter to nonprofit organizations beyond museums, and the writing is quick, adept and easily transferable to other settings.

Democracy and Philanthropy

Philanthropy and the Regeneration of Community Democracy tells the story of one foundation's role, over decades, in several key local challenges. This is more than a foundation funding civic engagement or hosting neutral gatherings. It's a point of view about the meaning and purpose of both philanthropy and communities. Written by Peter Pennekamp and Anne Focke, and sponsored by The Kettering Foundation, this report offers a perspective that deserves careful consideration by many kinds of community organizations, not just community foundations.

Connecting NGOs, Data, and Data Experts

Here are some interesting developments on the "data and NGO" front:

I've written about DataKind before - a new nonprofit that facilitates connections between data scientists and nonprofits. Check here for upcoming events.*

Here's an event hosted by NESTA in the UK - doing a one day event on April 29 to help NGOs maximize their data impact.

Kaggle, a company that matches data scientists to other companies, has launched KaggleConnect to help enterprises find the data expertise they need.

TechSoupGlobal has "spun in" a new enterprise, called Caravan Studios, helping NGOs develop apps and data driven tools.  Here's one they're working on - Safe Night.

Stanford PACS is hosting a GoodJobs CodeJam on open data, jobs, and the social sector. We're bringing together student teams with experts from the social sector, data, tech, and investors, with a variety of open data sets. We're thrilled to be partnering with the White House on this and are actively seeking connections to other hackathons, the Gates Grand Data Interoperability Challenge, and other efforts.











*I'm a proud member of DataKind's advisory board.

The Grand Challenge of Data Interoperability

(Photo: http://commons.wikimedia.org/wiki/File%3ALego_Color_Bricks.jpg)

I love LEGOs. Even before the fancy, pre-ordained kits with round wheels, the simple clicking together of those "posts" and "holes" allowed you to build castles, race cars, space ships, people, animals, monsters, anything you could imagine. If my mother couldn't quite tell that that masterpiece taking over the living room was the fabricated city of Lucyopolis with its alien residents, sqaure-wheeled cars, and eight footed dogs, well that's because she lacked the vision of an 8 year old.

My sisters could always tell what it was. Just before they ripped it apart and turned it into JaneVille or MarthaLand.

Jane, Martha and I could each build totally different universes using the same blocks because LEGOs are "data interoperable." Every piece could be clicked into every other piece. Everything worked fine. Until my brother, Dennis, came along with the Lincoln Logs or ERECTOR set. Then things got interesting. The best we could do was to force the pieces together or balance them precariously on one another. Needless to say, Dennis Township was always a bit more vulnerable to being hacked by a passing cat, dog, or sister then one of the pure LEGO villages. If only we could have fit the Lincoln Logs into the LEGO blocks securely - well, we could have connected all of our villages, strung a LEGO/ERECTOR/Lincoln log tramway to the neighbor's house, and transformed the world of play!!

Nowadays I spend my time wishing we could do this with data about the social sector. What problems might we solve if we could connect data from public health statistics with information on clinic locations and open hours? If poverty data, environmental quality, and jobs information could be viewed together, what might we learn? What if we could easily search one website for philanthropic, public, and investment dollars going into clean energy startups? Or do a single search of all nonprofit board members to identify those with tight connections to elected officials?

Make the data work together - This is the challenge that the Gates Foundation and Markets For Good Initiative have put before us. They've announced a new Grand Challenge of Data Interoperability - open for applications until May 7, 2013 - for great ideas that connect data to inform social action.

Perhaps you have a great idea that relies on linked, open data about the social sector? Or perhaps you've been wondering if there is way to use city data from 311 systems to inform participatory budgeting processes? Maybe you have an algorithm to turn Lincoln Log data into LEGO compatible form? Or perhaps you have a system that can use data in its native form (some LEGOs and some ERECTOR Set pieces...) but you can pull it together so we can make sense of it. If so, check out the Data Interoperabilty Challenge - our communities (Lucyopolis, MarthaLand, JaneVille and Dennis Township) need you.

Applications will be accepted online from March 4, 2013 through May 7, 2013, 11:30 AM PST. Each challenge winner will receive a grant of $100,000. More information. And follow #MFGchallenge on Twitter.

Charity, Pornography, and the Press

In 1964, Supreme Court Justice Potter Stewart famously said of pornography, "I know it when I see it” (Jacobellis v. Ohio).

What does that have to do with charity?  As it turns out, we have the same definition of charity. We seem to know it when we see it.

I spent the weekend in a scholarly workshop with political theorists, legal scholars, historians, and sociologists who specialize in charity, philanthropy, and civil society. Among many things I learned is that, in fact, charity is undefined in American law and practice.

When the American colonies revolted against King George III, they effectively threw out English law.  Once the Revolutionary War ended, each of the colonies (now states) needed to wipe clean the old laws and start anew. Out went the English Statutes of Charitable Uses. In particular, writes Ray Madoff in Immortality and the Law, "The charitable trust, associated as it was with privilege, the dead hand, and massive wealth held in perpetuity, was viewed with particular suspicion." (Madoff, 2010, p 92). What has resulted, argues Madoff, is a tautological definition that comes mostly from the Restatement of Trusts, which says that a purpose is considered charitable "if its accomplishment is of such social interest to the community to justify permitting the property to be devoted to the purpose in perpetuity." (Madoff, p 88) In other words something can be dedicated perpetually to charity if it can be justified being perpetually charitable.

Now, I know you're asking yourself, what about the parameters of the 501 (c) (3) statutes, which most of us would argue define charitable? First, these don't define charitable, they define "tax exempt." We get into a bit of further tautology (and Justice Stewart returns to mind) when we actually read section 501 (c) (3), which states:

"The exempt purposes set forth in section 501(c)(3) are charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, and preventing cruelty to children or animals. The term charitable is used in its generally accepted legal sense and includes relief of the poor, the distressed, or the underprivileged; advancement of religion; advancement of education or science; erecting or maintaining public buildings, monuments, or works; lessening the burdens of government; lessening neighborhood tensions; eliminating prejudice and discrimination; defending human and civil rights secured by law; and combating community deterioration and juvenile delinquency." (My emphasis in bold italics)

Every viewer of Sesame Street knows that you can't define a word by using the word. It turns out that the tax code doesn't help us define charitable, since it depends on the use of the term.

The roots of these broad parameters lie in English Common law, despite the Revolutionaries' rejection of the actual code. They have been much filtered through time as Oliver Zunz demonstrates in Philanthropy in America (2011), particularly with regard to political activity and in relation to activities funded by the State. What is particularly notable given the vagaries of the definition of charitable, is that "The law of charitable trusts is all or nothing....There are no degrees of charitableness...." (Madoff, p 90) We may not know exactly what it means, but you're either all it or not it.

Now, I am not an originalist by any stretch of the imagination. Fluidity in social definitions over time is both a historical reality and, I think, important to a healthy society. Both Madoff and Zunz tell great stories of how time and place have shaped how we assess charitability, how it has changed through history, and how political, economic, religious and social forces play parts in our fluidity of definitions and parameters over time.  Want another great read about our twisty road to the present? Try Jonathan Levy's Freaks of Fortune (Harvard 2012) which focuses on the role of risk over time and, in doing so, sets forth an outline of the relationships between fraternal orders (such as the Masons and the Elks), trade unions, insurance companies and our present-day understanding of tax-exempt nonprofit organizations.

Why might you care about any of this? (Assuming that you didn't spend your weekend reading political theory.) Because, what is and isn't charitable is, well, how else can I say this, big business. Big as in $300 billion in giving a year, $600 billion in endowed, untaxed, charitable foundation assets. Toss in many billions more to capture hospitals, universities, and museum endowments.

It's also the core of a conversation and new report released today about the IRS and news organizations. (Livestream of event, Monday March 4, 10 am EDT) Now, you know things have been hard for the news business. And independent news is important - some call it a pillar of democracy, others prefer Edmund Burke's term, "the fourth estate." The new report refers to independent news as a "public good," and calls on the IRS to update its practices to make it easier to finance, produce, and distribute these goods using private, tax deductible resources. Specifically, the report says:

" ...the IRS approach needs to be updated. As applications for tax- exempt status from media organizations are submitted to fill the void in accountability journalism, the current policy present serious and unnecessary obstacles to critical innovation." (p. 3)

More interestingly, the report asserts the following:

"The group confirmed that there have indeed been lengthy delays and even rejections of tax-exempt status for organizations seeking to produce local news and disseminate information in the public interest, as the IRS applies an antiquated and counterproductive standard to a dynamic sector. The group has concluded that the IRS approach needs to be modernized. Specifically, in deciding whether to grant an organization tax exempt status, we recommend that the IRS shift its focus from operational distinctions between nonprofits and for profits that have been made irrelevant by developments in communications technology. Instead, the IRS should evaluate whether the media organization is engaged primarily in educational activities that provide a community benefit, as opposed to advancing private interests, and whether it is organized and managed as a nonprofit tax-exempt organization"(p 2, my emphasis added)

Ignore for a moment the odd final clause of that last sentence (it seems to be saying the IRS should grant an organization nonprofit, tax exempt status if it "is organized and managed as a nonprofit tax-exempt organization." (Justice Stewart? Anyone?))

The bold, italicized section is what interests me. Remember, we have no fixed definition of charitable. This report asks the IRS to ignore operational distinctions and focus on the intended activities of the enterprise - "whether the media organization is engaged primarily in educational activities that provide a community benefit..." 

This is a big change. I've been writing for years about the challenges of equating "tax deductibility" with"enterprise form." The shifts that lead to the social economy, the rise of the sharing economy, and, the same communications technologies that the report above cites are making it harder and harder to limit the use of private resources for "public goods" to any one kind of organizational form.

In a timely complication to the particular case of local news organizations, Warren Buffett, the noted investor, announced on Saturday in his annual letter from Berkshire Hathaway that he would be looking to buy more local newspapers in the coming year (the company bought 28 papers in the preceding 15 months). As he put it, "At appropriate prices – and that means at a very low multiple of current earnings – we will purchase more papers of the type we like."


It isn't every day that we hear about a major investor's excitement about a certain type of investment  in direct juxtaposition to a call to ease the path for those same enterprises to become nonprofit organizations. How do we make sense of the commission's interest in providing news media enterprises with tax subsidies in light of a "buy" statement from "the Oracle of Omaha?" These two views offer a stark choice of how to produce the same "public good" - Buffett through market capital and the commission through tax exemption and charitable support.

As you read the Nonprofit News Media report, please remember, this is not just about the news. The tax code and the tax exempt status it provides speaks for us as a society. It says, through its convoluted mechanisms of tax exemption and organizational form, what we choose to recognize - and to privilege - as vital parts of our democracy and critical parts of our civil society. 

Donating to the homeless with a credit card

This scenario - using plastic (or soon, the NFC chip in your phone) to help out a homeless person - is the standard thought experiment when talking about mobile payments, a cashless society, and charity.

So, it comes to pass today in none other than Harvard Square - where a startup called Leaf and the Harvard Square Business Association  - are partnering to make credit card donations to the homeless possible, using a tablet system installed at local stores.

Here's how the groups are describing it:

"Leaf tablets will be available in many Harvard Square businesses including Black Ink, Brattle Square Florist, Concepts, Curious George, Market in the Square, Tistik and The Tannery, enabling patrons to donate with the swipe of a credit card. HSBA will work directly with local charities including Youth on Fire, Harvard Square Meals Program, On The Rise, Bread and Jams’ Self Advocacy Center, CASPAR, Spare Change and The Harvard Square Homeless Shelter to ensure that the money is put to good use. Donors can select the amount they wish to give – starting at one dollar – and will know exactly how their money will be spent. For example:

• $1 can provide a pair of socks
• $5 can provide three hot meals
• $10 can provide one onsite medical visit
• $20 can provide one meeting with a counselor
• $50 can provide a living wage (3.5 hours of paid work)
• $100 can provide shelter for a week"

It appears that the donations go to local organizations serving the homeless, not directly to the homeless. In that regard, it's not that different from any other version of "embedded giving," except that it's a lot more local. Because specific dollar amounts are correlated with specific "provisions" (See list above) the groups talk about it as if this offers donors more assurance about where there money is going. It doesn't really, it just feels that way - you don't know your $1 bought a pair of socks, all you really know is that a pair of socks costs a $1.

The Leaf model is interesting, sort of. If donors get receipts from the nonprofits, some actual follow up that their dollar really went to the organizations as stated, then this is a (small) step up from where embedded giving has been. To date, embedded giving of "a nickel donation for using your own grocery bag" variety have relied not on the donors wanting more assurance about their gift but on the ease and "guilt" of the transaction. There is no mechanism for checking that the companies for whom the check-out teller works actually donate those nickels to anybody. How and why anyone has ever believed that stores are setting aside all those nickels and making donations to the organizations that they claim to be supporting is the biggest mystery to me.  Why would anyone think it is more efficient or trustworthy than giving a nickel directly to someone who needs it or directly to a nonprofit organization, skipping the grocery store middleman? This kind of cash-register giving is designed to be opaque, and little has been done to change that.

The thing about mobile payments and credit cards is that they make the "paper trail" of follow up easier - it's all digital data that can be tracked. If someone "re-builds" embedded giving so that the digital data trail is visible, and donors who care can "follow their money," well, then, fine. Making the transaction itself a "swipe" instead of a "drop" in a cup but not doing anything about trust, transparency or follow-up, well that's not really interesting, is it?

The version that Leaf and HSBA are modeling has potential to be interesting in another way - it's super local. The folks in Harvard Square - merchants, shoppers, homeless people, and service agencies - know each other. They recognize each other. They can do more than just give money, they can look out for each other, care about each other, pay attention over time. Don't laugh - this happens in much larger communities than Harvard Square (NYC, for example). If technology serves here as a bit of a trojan horse to help tighten those bonds of people caring for people, that would be great. It might even help some of the folks without homes get back on their feet.

As it stands, the Leaf/HSBA model appears to have that potential, as well as the potential for the digital follow up.  It will be interesting to see if anything comes from that opportunity.