What is it about the nonprofit structure?

You’ve probably heard about OpenAI — a new, billion dollar nonprofit to focus on artificial intelligence research that is good for humanity. In their own words:

“OpenAI is a non-profit artificial intelligence research company. Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.

Since our research is free from financial obligations, we can better focus on a positive human impact. We believe AI should be an extension of individual human wills and, in the spirit of liberty, as broadly and evenly distributed as possible.

The outcome of this venture is uncertain and the work is difficult, but we believe the goal and the structure are right. We hope this is what matters most to the best in the field.”

In an interview posted on the Singularity University newsletter, one of the founding researchers, Andrej Karpathy, a Stanford doctoral candidate who interned at Google and DeepMind, says:

“A lot of it comes from OpenAI as a non-profit. … It’s not clear that you would want a big for-profit company to have a huge lead, or even a monopoly over the research. It is primarily an issue of incentives, and the fact that they are not necessarily aligned with what is good for humanity. We are baking that into our DNA from the start.

Also, there are some benefits of being a non-profit that I didn’t really appreciate until now. People are actually reaching out and saying “we want to help”; …

OpenAI… encourages us to publish, to engage the public and academia, to Tweet, to blog. …. If something like [CRISPR which has great potential for benefiting — and hurting — humankind. Because of these ethical issues there was a recent conference on it in DC to discuss how we should go forward with it as a society] happens in AI during the course of OpenAI’s research — well, we’d have to talk about it. We are not obligated to share everything — in that sense the name of the company is a misnomer — but the spirit of the company is that we do by default.

In the end, if there is a small chance of something crazy happening in AI research, everything else being equal, do you want these advances to be made inside a commercial company, especially one that has monopoly on the research, or do you want this to happen within a non-profit?

We have this philosophy embedded in our DNA from the start that we are mindful of how AI develops, rather than just [a focus on] maximizing profit.

It’s a lot of responsibility. It’s a “lesser evil” argument; I think it’s still bad. But we’re not the only ones “controlling” the field — because of our open nature we welcome and encourage others to join in on the discussion. Also, what’s the alternative? In a way a non-profit, with sharing and safety in its DNA, is the best option for the field and the utility of the field.”

So here we have a case of knowledgeable people recognizing a threat and deciding that the way forward is to create a nonprofit organization. This moment has some historical precedent. In 1955, Albert Einstein, Bertrand Russell and several other scientists got together and issued a manifesto about the dangers of nuclear technologies. It would launch decades of Pugwash conferences and the anti-nuclear movement.

The founders of OpenAI also issued a manifesto. Back in January 2015, Stephen Hawking and Elon Musk, one of OpenAI’s key funders, signed an “Open Letter on Research Priorities for Robust and Beneficial Artificial Intelligence.” We’ve spent decades monitoring, signing treaties about, building and dismantling nuclear weapons. The Einstein-Russell Manifesto and Pugwash happened after the U.S. had detonated two atomic bombs and the world could agree on the horror they created. Nuclear capacity still plays a major role in global politics but efforts to prevent their use and spread have mostly succeeded. My questions are not about nuclear power or AI per se, they are about the viability of the nonprofit organization in today’s world of shifting public, private, and corporate roles.

• Will a set of voluntary manifestos and a few nonprofits work to keep AI from harming people? Unlike the nuclear weapons case, the likely builders of dangerous applications are not nation states, they are corporations. Unlike nuclear weapons (or energy) the component costs are dropping, not rising, and there is no singular component that can be tightly controlled (as in the case of enriched uranium).
• Is the strategy of “out R+D’ing” the commercial competitors via a nonprofit that will share some (most) of what it learns realistic? In most cases where there is competition between for-profits and nonprofits the capital scheme favors the commercial players (see, for example, car sharing. medical devices, pharmaceuticals)
• Is the governance model of nonprofits — no shareholders, public purpose mission, excess holdings limitations, nondistribution clauses — enough to direct research with potentially harmful applications away from those harms?

There will need to be other strategies to “control” dangerous AI. But the application of the U.S. nonprofit corporate model to a global challenge such as this provides a great moment to ask ourselves”.

• What can the nonprofit enterprise form do and what cannot it not accomplish?
• What kind of structure can best manage intellectual, digital, and algorithmic resources for long-term public benefit?
• How might open source governance models augment the nonprofit enterprise form and where, if anywhere, do they conflict?

Unlike the machine learning experts who are joining OpenAI, I see no reason to assume that the nonprofit structure is sufficient to accomplish their goals. If the challenges of AI are as great as these minds seem to suggest, is the “lesser evil” OK? 

I commend them for directing their expertise toward beneficial uses of the technology. I also think it’s time to reconsider the institutional technology of the nonprofit corporation. We need institutions that can generate, direct and hold digital resources for long-term public benefit; I’m not sure the current nonprofit firm is the answer.

Philanthropy Buzzwords 2016 (and back to 2007)

Blueprint 2016: Philanthropy and the Social Economy is now available. You can get your FREE copy via Grantcraft here.

This year's Blueprint has a worksheet focused on some of the big themes designed for nonprofits and foundations to use as part of organizational development or strategic planning processes - you can access that here. 

The Chronicle of Philanthropy is running an edited version - you can see that list here. The Blueprint has an more expanded and revamped version.

And here, where it all began, is a a complete list of top ten buzzwords, by year, going back to 2007.

2016

1.     “…for Good.”.

2.     Overhead Myth.

3.     Effective Altruism.

4.     X-Risks

5.     Platform Cooperativism

6.     Worm War

7.     Algorithm.

8.     Augmented Reality.

9.     Biononymity.

10.  CRISPR.

Bonus, late in year addition - the $45 billion buzzword - LLC. 

2015

1. Internet of Things

2. Citizen Science

3. Giving Days                                              

4. A/B Testing

5. Data Gender Gap

6. Encryption                                     

7. Artivists

8. Wearables

9. Smart Cities

10. Iterate

2014 

1. Privacy

2. Performance Management

3. Peer-to-peer services

4. Constituent Feedback

5. Makers

6. Bitcoin

7. Commons

8. Metadata

9. Randomista

10. Solutionism

Bonus – Hackers

2013

1) X
2) MOOCs
3) Hackathon
4) Fiscal Cliff
5) Resilience
6) Social Welfare Organization
7) Sensemaking
8) Data Scientist
9) Flash Mob Philanthropy
10) Data

2012

1 Social Impact Bond
.2 Collective Impact
.3 Storytelling
.4 Charitable Tax Reform
.5 Infographics
.6 Evidence-based
.7 Shapeshifting
.8 Disruption
.9 Amplify
.10 # 

2010 and 2011

10 - Giving Pledge
9 - Markets for Good.
8 Crowdfunding
7. Chugger
.6 - Co
5 - Charity washing
4 - Curator.3 - Networked2 - Sector Agnostic
1 - Scale

2009

Impact Investing
B Corporations
Mergers

 Taxonomy
Maps
Charity Challenge
Leverage
Pipeline
Sidecar Fund
 "move the needle"

2008

10) Philanthrocapitalism
9) Social Capital
8) NextGen
7) Charitable Gift Cards
6) Good gifting
5) Micro - (endowment, philanthropy, finance, franchise, consignment)
4) Design,
3) Outsourced Program Advising,
2) Labs,
1) Mobile Giving,

2007

10. Philanthropy 2.0

9. B Corporation
8. Endorsement Philanthropy
7. Social Stock Exchanges
6. Embedded Giving
5. Aligned investing
4. Open Philanthropy
3. Microfranchising
2. Microphilanthropy
1. Hyperlocal

$45 billion ought to get your attention

That's the current value of the funds Mr. Zuckerberg and Dr. Chan have announced they will dedicate to social purposes. In doing so they are sending a clear signal that they recognize the choices available to them (and, indeed, all of us) and have chosen to use them to pursue their interests. The Chan Zuckerberg Initiative, a Limited Liability Corporation, puts all of these choices in one vehicle.*

(photo credit: Lucy Bernholz, Blueprint 2011) 

Despite the timing (GivingTuesday) and the headlines, what the couple announced does not constitute a gift or a charitable donation. It's inspiring, may produce positive social good, may usher in a new era or serve as a watershed moment for the new social economy, and is certainly an important and impressive act. But what they did was set up an LLC. They didn't transfer the possession of any assets, nor when they do shift assets to the LLC will they have relinquished possession or control.


*Possibly not crowdfunding, but who knows.

Democracy in digital times

I'm honored to have had my first ever newspaper article published in Portuguese in the Brazilian paper Gazeta do Povo. It was published as part of the first ever Semana da Democracia - Democracy Week.

The link above will take you to the article, there's a photo below, and if your Portuguese is as bad as mine, the English original is below.

The Demands of Digital Democracy
Lucy Bernholz

            Digital data and infrastructure are changing business, government, and the ways that people help each other out. We now shop, vote, and donate money and time using networked digital connections. In twenty years mobile phone access has risen from 1% of the world’s population to more than 70%. This is the year that analysts predict there will be more mobile phone accounts than people on the planet. 

            In the United States most of the discussion these digital tools are often described as democratizing. As more people gain network access, more voices can be heard, more engagement can be created, and more participation is possible. The democratizing potential of digital tools is one of their greatest selling points.

           

            Since we’ve now been using these digital tools for almost two decades, we should be able to answer the question of when and how they are democracy enhancing. There is a great deal of data – from political protests to community organizing based on mobile phones to civic technology efforts focused on helping governments be more responsive and engaged with their electorates.

            But all the data do not point in one direction. Despite promises of digital democracy, voting rates are still low and protestors are easily tracked. And with every step forward, to bring more people into the digital conversation, the digital divide moves as well – it doesn’t close, it simply shifts from being about access, to being about skills, to be about voice, to being about power and influence. As people better understand the surveilled nature of digital spaces that knowledge has tempered the enthusiasm of community associations to rely on these low cost tools. Two decades into the digital revolution we are excited and cautious, dependent upon and tired of being always connected, always available.

            How to use digital tools to engage citizens safely, to encourage participation, and to involve and listen to the many new voices now ready to be heard remains a challenge. It is not as simple as just making the technology available. Left to their own devices, people with digital access do not automatically seek greater learning opportunities, take more active roles in their communities, or take part in the public life of their nations. But we know they can’t and won’t take these steps without the tools to do so.

             Digital tools and infrastructure are not innately democratizing. As they’ve become common, the thing they’ve created is a need for more equitable access to them. They will not counteract apathy or powerlessness or structural exclusion. The lesson of the last twenty years is that the tools and the skills to use digital tools well have become a necessity, but access is not sufficient. Greater democratic participation in the digital age depends on a commitment not to digital tools, but to the values of democracy itself.

Money, Data, and Democracy

I'm proud to have submitted this commentary on a new tool from The Foundation Center  - a map of democracy funding. The following post was written for PhilanTopic and originally appeared on PhilanTopic here. They're running a series of posts on democracy as we head into Election Day in November.

The U.S. presidential election is thirteen months away. At this point, more than fifty candidates are vying for nomination by the two major parties. The field includes the lone member of the United States Senate to stand as a Socialist and a New York City businessman who has four corporate bankruptcy filings to his name. Members of the voting public may be said to fall into two camps at this point — political junkies who simply cannot ever get enough of campaign politics and the majority of Americans who plan to tune in about a year from now. The former group is hell-bent on getting enough attention from the latter to raise the country’s dismal voting percentage to its presidential-election average, which hovers around 60 percent (ten points lower than the average for OECD countries).

Voter turnout is a big deal. Not just to political junkies and clipboard-wielding party volunteers but also to American foundations. According to Foundation Center’s newest mapping tool, Foundation Funding for U.S. Democracy, 180 foundations have spent more than $150 million on voter education, registration, and turnout since 2011, a period that includes one presidential and one midterm election.

Seems like a lot of money to get Americans to do what people in many other countries die for. But we’re good at spending a lot of money on our democracy. Even this early in the campaign, big donors are talking big numbers, promising (threatening?) to spend $100 million or more each on their favorite candidates or issues. And political junkies are predicting that more than $4.4 billion will be spent on TV ads alone — while election spending in total could run as high as $10 billion. Suddenly, nearly $150 million of foundation funding over four years doesn’t look so big in comparison to $10 billion for a single election cycle.

The huge sums of money have become as much a part of the quadrennial American narrative as the quirky unknown candidates, their inevitable stumbles and blunders, and the occasional important policy discussion. Part of the interest lies in the sheer magnitude of the sums involved. Imagine what we might accomplish in social services, education, or health care if we spent an additional $10 billion.

But some of the interest also is driven by persistent efforts to make campaign spending more transparent. Because presidential elections only happen every four years, there’s a better-than-average chance that each one will be “the most expensive ever.” Telling that story, tracking the numbers, and highlighting the huge sums provided by a (tiny) subset of political donors has become part of our republic’s ritual.

Organizations such as the Sunlight Foundation, MapLight, and the National Institute on Money in State Politics find, clean, and load (in useful formats) the fundraising and spending reports that candidates, campaigns, and various aligned political organizations are required to file. The costs of doing this are more than you might at first imagine, as we tend to think that simply posting data sets is all that’s necessary to make that data useful. As proponents of transparency and those trying to obfuscate know, raw data by itself as a first step is not sufficient for sensemaking. Open and accessible is a requisite first step, but cleaning, verifying, analyzing, and using it are still very much required. Even so, various political agendas have stymied efforts to require e-filing of these reports as a first step, a regulatory change that would go a long way to lowering the cost of making sense of political fundraising.

In the looking-glass world in which we find ourselves, the more raw data on political fundraising and spending that becomes available, the more we need nonprofit intermediaries, including investigative reporting organizations, to help make sense of the data. For all its potential to make information available at ever-lower cost, opening up data requires complementary investments in mechanisms to make the data useful and help us make sense of it.

If the issues swirling around campaign finance reform sound familiar to those of you who work in nonprofits, they should. The same set of questions about e-filing and data disclosure also applies to nonprofit tax filings. Earlier this year, the IRS lost a legal challenge aimed at accelerating its heretofore-glacial efforts to put nonprofit tax data online. Any year now we should see mandatory nonprofit e-filing and the release of tax data in a machine-readable format.  

If the nonprofit space follows in the footsteps of our political system, the end result of a law to require nonprofits to e-file won’t be a straight line to cheaper and more convenient access to that information. We’ll also need more investments in the intermediaries and infrastructure that can help us make sense of the increasing quantities of data we generate.

We’re reaching the stage where ready access to data on spending in politics, on politics, and from foundations and nonprofits can be assumed. This bodes well as a catalyst for greater understanding, more insights, and, potentially, more participation. Not because the data will make the responsibility of being an active citizen in a democracy any easier, but because it will gives us more tools with which to work. Democracies depend on participation and accountability, and broadly accessible useful information is a precursor to both.

---

Ethical, safe, and effective digital data use in civil society

The Digital Civil Society Lab held workshop on ethical, safe and effective digital data use in civil society. A synthesis of the meeting and two DRAFT tools we developed are online here.

We welcome your feedback

Provocations on American Foundations and Policy

American foundations sometimes fund advocacy or policy analysis or community organizing as part of their strategies for particular types of social change.

But who advocates on behalf of foundations about philanthropic policy? And what are the policy domains that matter to foundations as enterprises? In 2013 my Stanford colleague Rob Reich and I published a policy forecast on the issues that pertain to American foundations and nonprofits. The usual suspects - tax code, payout rate - those are in there. You can read that document here.

But it's high time to recognize that the tax code is no longer the fundamental policy frame shaping philanthropy and nonprofits. In a time when social businesses, impact investing, campaign contributions, and crowdfunding are all growing,  it should be obvious that tax privilege is only one factor that Americans consider when thinking about using their private resources for public benefit.

And in the digital age, the infrastructural issues that matter to civil society are going to be about data privacy, ownership, infrastructure access, security, and consent.

The tax code was the 20th century policy infrastructure for philanthropy.
Digital regulations will provide the scaffolding and shape for 21st century associations and expression - aka, civil society.
The laws on digital data and infrastructure will define how civil society functions in a digital age.

With this in mind, back in April I wrote a provocations piece on the policy infrastructure for philanthropy. I'm pleased to now make this document public. Here are the key points:

• Focus less exclusively on tax policy. The foundation infrastructure and policy groups need to build working relationships and expertise on corporate code, digital policy, and investment regulations (at least)
• Proactively engage with other philanthropic options and mechanisms for using private resources for public benefit. These include impact investing, crowdfunding, B corporations. 
• Separate policy expertise from big‐tent membership associations so these experts can be more proactive, flexible, and coalition‐oriented.
• Build relationships that cross type – foundations and crowdfunding platforms, foundations and impact investors – so that broad coalitions can be mobilized to respond to policy opportunities. 
• Reach beyond the professional staff of foundations to build coalitions, more diverse skill sets, and deeper relationships with government partners, regulators and adjacent industry allies.
• Develop a coordinated voice to the public about philanthropy’s inherent and comparative value.
• Consider how the journalism industry’s focus on First Amendment issues serve as an analog for thinking about associational (nonprofit) policy. This could lead to more flexible and diverse relationships with existing First Amendment policy organizations and advocates.

You can read the download the paper here.

I welcome your thoughts.

An index we really need

We've been measuring philanthropic giving for decades. There are several directories and annual tallies of American charitable giving.

For about the last decade, the impact investing movement has been trying to establish definitions, baselines, and annual measurements. It's a work in progress, but they're getting there.

All kinds of groups monitor and measure spending on political campaigns, including the money (expected to be in the billions of dollars for 2016 Presidential election) that flows through organizations registered in the nonprofit code (C4s, C5s, C6s).

We also spend a lot on consumer goods that make us feel good - buying things because we think the product manufacturers give back. Call it cause marketing or embedded giving - it's a significant practice. This is the least well-measured of all of the above practices.

And, now there's also crowdfunding - some percentage of which is people putting their money behind projects with a social or public purpose. This space is still emerging, as are those who want to measure it (and make sure the data are made publicly available)

For every dollar an individual chooses to donate to a social or public purpose, she has to make one of these choices: donate, invest, political support, shop, crowdfund. This the universe of choices we face for all the private resources we want to put to public benefit.

There's a lot of information about this behavior that would be helpful. What type of dollar allocation "works" best for what kind of change/outcome? Are these choices complementary or exclusionary? Are people shifting from one choice to another?

We can't get to any of those questions until we first recognize that this is the world we live in, and start counting the dollars in each of these buckets. This we can do. We have data - not great, but something to start with - in each bucket. We should come together and create a unified index that brings the different strands together. Mark the baseline now.

Then we can have a meaningful discussion for the 21st century over how people use their private money for public benefit.

Donors will be to see their choices better and make better decisions. Philanthropy advisers, like Jamie Forbes of Opus Advisors with whom I was discussing this idea, can better help the hundreds of thousands of families whose money makes up all this revenue make more meaningful choices.

The social economy that relies on this funding will be seen as the sum of its parts, not just the components. It, too, is not monolithic  - it includes charitable nonprofits, social businesses, co-ops, networks, online alliances, and new enterprises that are just coming into being. It looks like this:

This framework of the social economy has been the basis of the Blueprint series for the last six years. Most people I talk to now see this world, all around them. It's time we came together and measured and reported on what's really happening. We need this new index. The data are out there - let's make it happen.


(Cup of coffee on me to whoever comes up with catchiest name for it....)

Digital Philanthropy

There’s a new research journal — RIO- that is an experiment in opening up science. As the description says

"All outputs of the research cycle, including: project proposals, data, methods, workflows, software, project reports and research articles together on a single collaborative platform. Watch a short video explaining RIO Journal."

This isn’t a gimmick. It’s an adaptation of existing scientific publishing to the reality and potential of digital data and the practices they enable.

The same opportunity exists for philanthropy and civil society. Imagine if the whole process of foundation funding — from problem scoping through outputs was designed so that the participants, the beneficiaries, the grant receiving group and the funder shared what they were doing, why, how it was going, iterations and changes, and accomplishments, successes, and failures. Others could learn from what was happening. Problem statements could be shared, iterated, diversified and rejected, instead of endlessly recreated in vacuums. Same for the rest of the process.

Designing for open first requires getting ongoing human centered consent and using minimum viable data practices (at least). Working this way aligns with the possibilities of using our private digital resources for public benefit — the working definition of digital civil society.

There are a several steps being taken in this direction:

• The Hewlett Foundation has a “default to open” approach.  
• The Open Philanthropy Project and the work of GiveWell and Good Ventures in general is much more transparent than most philanthropic action. 
• A new platform by Sphaera, trying to “promote philanthropic plagiarism” offers tools for this.
• The “replication marathon” by DataLook has some important traits to build on. 
• I’ve been writing about what I call “github governance” in the last two Blueprints, and I think there’s lessons there.  
• Copia.is — a project of TechDirt to help small companies create and share policies openly has some important traits; 
• as does the fact that Mozilla and Automattic share their company policies on github already (policy as code). 
• There may also be ways that the blockchain could be useful.

Plenty of puzzle pieces here — what fun it would be to start with these and design new philanthropic practice (and enterprise structures)…

The blockchain and civil society

(Photo; BTC Keychain)

A lot of the excitement about the blockchain - the distributed ledger technology that undergirds currencies such as bitcoin - has to do with the potential of distributed authority and record keeping. Super enthusiasts think it could do away with traditional regulatory practices and intermediaries.

I think the pendulum of history will show that such a tech-dependent, unmonitored future is not without real challenges and won't come to pass. By now we ought to accept that algorithms alone don't provide due process, recourse and redress procedures, or protection against discrimination.

That said, why don't we investigate uses of the blockchain that aren't designed to disrupt but to complement (heresy, I know).

As algorithms and data become core resources for public policy, and as shared social goods and research on people increasingly depends on either deliberately or de facto black box decision making, there's a lot of interest in expanding Institutional Review Boards out from the halls of scientific research and academia into the community. This has potential and problems. Another idea is to use external ethics panels. This, too, has pluses and minuses.

The technology is said to facilitate private transactions, recorded in a public way that can't be (hyperbole alert!) be altered.

Here are some ideas for how it might be useful in  civil society:

• Maybe there's a use for it as a record of consent along the data chain? 
• Or as a "mutual monitoring and accountability" tool between those doing the research and those being researched? 
• Maybe it would be useful to activists trying to track legislation? 
• Or for community collaborators trying to track contributions and progress on shared goals?
• For direct donations between giver and recipient?

Got more ideas? Please add them. MIT has launched a new Digital Currency Initiative - a great opportunity to be part of their research agenda.

A memorial to free speech

This stopped me in my tracks this morning. Apropos my comments about park benches on the Internet, let us hope we don't yet need to memorialize free speech.

(Valencia Street, San Francisco, August 17, 2015.)
In case you can't read the plaque, here's a closeup of the text:

 And another view.

Park benches on the internet

Park benches are really important. They are places where you can grab a seat by yourself and read without anyone else knowing what you're reading. Or sit with a friend and chat and not be overheard. Or step out at midday with a work colleague to complain about your boss or plan your startup, without being listened to. 

Our actions on the Internet are listened to. Monitored. Scraped. Mined. Stored. If you read a book on a Kindle, Amazon knows the page number where you stopped. Read blogs, websites, Tumblr posts, newsletters - all tracked. Social media - stored. Text messages - stored. Search history - stored.

There are no park benches on the Internet. 

Why does this matter to civil society and philanthropy?

In order to develop independent ideas, we need places to think and learn without fear of being wrong or curious or different. We need private places where can study new ideas or develop different ways of framing a problem or try out someone else's ideas. Only then do we come together with others to debate, discuss, make plans, take action, make change. With no private place to think or read there is no space for ideas to develop. Without the development and exchange of ideas there is no free expression. Without places to debate and exchange and share and discuss and improve those ideas, there is no assembly. Without space for expression and assembly, there is no civil society.