Tuesday, September 29, 2015

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.

Thursday, September 24, 2015

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

Tuesday, September 15, 2015

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 bigtent membership associations so these experts can be more proactive, flexible, and coalitionoriented.
  • 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.

Thursday, September 10, 2015

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....)

Friday, September 04, 2015

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