A practical and existential challenge to nonprofits

Thanks to those who chimed in on my post about Digital Data and Blurring Boundaries. To summarize - I note that digital data don't naturally respect boundaries between public, private and independent sectors, and that nonprofits/philanthropy and other civil society organization need to think hard about how they treat digital data as a resource/asset. I raise a possibility that I've been thinking about for a long time - that civil society organizations will need to encode into their structures (i.e. new corporate requirements) how they will use digital data as a private resource for public benefit in an analogous manner to the existing non-distribution and non-ownership regulations that define nonprofits and nongovermental organizations.

In particular, I want to pick up on a theme that Pete Manzo articulated most clearly of those who commented - in his own words:

"On the encoding question, I wonder if the coding of the rules should be done with regard to the type of information and its purposes, rather than by the type of entity that holds it (so, not encoded in the tax rules governing nonprofit status). You've probably seen Alastair Croll's suggestion that we should "link what the data is with how it can be used. I might, for example, say that my musical tastes should be used for song recommendation, but not for banking decisions." http://solveforinteresting.com/big-data-is-our-generations-civil-rights-issue-and-we-dont-know-it/ Not sure how to do that, but it sounds like a good place to start."

With regard to digital data, this is an interesting proposition. It's much harder than it sounds, because data collected for one purpose but stored on the internet in an accessible fashion immediately subjects it to the very forces that make "big data" big - it can be copied, repurposed, and connected to other data sources in ways that stray far from any original purpose.

But Pete's comment reminded me of another issue that I've been thinking about for a long time that has not so much to do with digital data as with the nature of hybrid enterprise forms and the new social economy.

Simply put that question is this - in an age when commercial social enterprises, nonprofits, hybrid organizations, informal networks and other structures all claim to be using private resources for public benefit, why are the regulatory incentives for doing so still linked to the organizational structure and not to specific activities?

This is a huge challenge for all of us - we're used to these equations:

Private resources for public benefit (PR4PB) = Nonprofit

Tax exemptions + tax deductible revenue provide incentives for PR4PB

But today the first equation actually reads:

Private resources for public benefit = nonprofit, social enterprise, impact investing,         hybrid enterprises, some informal networks....

 So why are tax incentives not = to all PR4PB?

But if its the activities that turn the private resources into public benefit, and those activities are the purview of many types of organizational structures, than why are the incentives aligned only with one type of enterprise? It's not hard to imagine a world in which regulatory or tax incentives are not "attached" to the organization type but to the "activities" - much as Peter suggested might be done in encoding certain values into the uses of digital data, not into the enterprise form. This, my friends, is an interesting - and very real - slippery slope.

This is the existential, and increasingly practical, challenge facing nonprofits in the social economy - what is their unique value that makes them privy to the tax incentives they enjoy?

It's an existential question because it goes to the heart of why we need civil society, why we provide regulatory incentives for these actors in our democracies (OK, philosophical at least, if not existential). It's a practical challenge because of the very real need these alternatives present for nonprofits to be able to show their unique value.

Digital data further blurs boundaries between sectors

The White House released its report, Big Data: Seizing Opportunities, Preserving Values, yesterday.

The only place the word "nonprofit" appears in the report is in the appendix explaining where public comments to the process came from. The report focuses on the collection, use, sharing, storing, mining, retention, and destruction of personally identifiable data by corporations. Many analysts have already commented that the report was timed and designed to draw attention away from the government's own practices regarding data collection, use, sharing, storing, mining, retention, and destruction of personally identifiable information. The report rightly points out the potential of digital data for efficiency and convenience and the perils it poses in terms of due process, discrimination and privacy.

Regardless, no attention is paid to the role of digital data in civil society, philanthropy, and the social sector. (This despite the fact that several of the public meetings held to inform the report were coordinated with university and nonprofit partners.)

Nonprofits and foundations do all the same things with digital data that businesses do - they collect, store, use, share, mine, retain, and destroy it. They may not do it on the scale of business or government, although certainly nonprofit research universities, hospitals, and science centers are pretty big. Often nonprofits will do everything they do with digital data on commercial services - internet service providers, telecommunications companies, and broadband providers. In this blended reality, where you willingly give your cell phone number and email address to the politically active social welfare organization you support because you think that that information will be kept private, you'd be wrong. If the organization stores the information on commercial cloud servers, moves their information over telecommunications firms wires or broadband connections, or made it easy for you to sign up with an online form, your information - and its connection to that organization - is already being stored somewhere else. It is subject to the same rules of disclosure or chance of being hacked as data on you collected by a commercial app or website.

Do we care? Should we expect nonprofits to treat our data differently? Do we want the text message alert system we agree to from our kids' after school program or the prenatal clinic or the cause-related group to be protected somehow? Do donors opting for anonymity in their charitable giving expect that their online interactions with the groups they support will somehow stay unreleased, protected, anonymous?

Does civil society have a set of values and/or norms that should be brought to bear in how organizations working within it treat digital data? If so, what are they? Given how digital data flattens terrain between organizations - it may be collected via a nonprofit website that is hosted on a commercial service - how will nonprofits express those values, how will they treat those data, and how will they affirm the expected norms with the constituents and donors they serve?

Nonprofits are distinguished in the corporate code by the rules that govern how they manage financial assets. Excess revenue above costs must be returned to the mission (it cannot be distributed as profit) and the enterprise has no owners. What are the analogous structures for governing digital data? Once we figure out how we expect nonprofits to value and protect our digital data, perhaps we'll look at how those practices need to be encoded into the organizational structure.

Funding digital civil society

Since September of last year I've had the honor of being a Visiting Scholar at The David and Lucile Packard Foundation. One of the things I've been doing there is working closely with staff from across the Foundation as they make sense of the emerging landscape of digital civil society. We're working on several public projects that I'll be thrilled to share here and elsewhere when they're ready.

In the meantime, let me share a little of what we're doing and invite you to send resources, join us in thinking about these issues, and helping us plan.

1. What do funders need to think about when funding digital data projects? This is a question we'd been thinking about when I had the opportunity to join Paul Tarini of the Robert Wood Johnson Foundation on a webinar about digital data and philanthropy. Paul and his colleagues had reached out to experts at the Center for Democracy and Technology and assembled a list of questions funders should ask. They graciously gave me permission to share the list at Packard and post it here. Thanks!  You can find the webinar video and the slides that include these questions here.

2. Remember NOLO Press guides for nonprofits? They offer easy to use templates for setting up a nonprofit corporation, including templates for the articles of incorporation, bylaws and other policies. Well, nowadays, the list of policies every civil society organization needs goes further than that - and includes many things, like data policies, terms of service, privacy policies, and IP asset transfer agreements that are hard to wrap your head around. We're working on "Good Data Governance" toolkit/templates that will draw from some of the great work that organizations have already done to draft these policies and make several models available to everyone for their consideration/use/improvement. After all, not everyone wants to spend time developing these (hah!)

3. What are all the ways civil society organizations are using digital data? These are countless. Which won't stop me from trying to count them. With my colleagues at the Packard Foundation we've been tracking ideas and examples on this wiki - please add yours. Here's a snapshot typology I developed for a presentation in Brazil - feel free to improve on this as well. We'll do our best to get some kind of typology out there - your insights are more than welcome.

Thinking today like an historian of tomorrow

I had an interesting conversation with folks at the Atlantic Philanthropies the other day. Atlantic has announced it will spend out its endowment and close up shop - something it is working on quite publicly. One of its concerns is how to make sure that the work it has funded can be used by others.

Now, I entered philanthropy through the side door of a historian-in-training. My interests in grad school (and still today) were in questions of public and private - what's what and who decides? While reading history on the Reconstruction South I became particularly intrigued by philanthropic giving of Northern whites to help educate blacks. I realized that American public schooling held a long, convoluted, not-well-told history of philanthropic involvement and activism. I  went on to write my dissertation about philanthropic giving in the San Francisco public schools in the decades prior to the passage of Proposition 13.

It was not an interest in foundations that led me to this work, it was an interest in how we, as a society, decide what we will support with public dollars (and what we won't). Schooling was an obvious place to look, but you could also turn to public health, social welfare, criminal justice, higher education - almost every public system in the U.S. has a history that involves private dollars, either commercial or philanthropic or both.

So when asked how to think about Atlantic's legacy - how it should store, categorize, apply metadata and search optimization tools to its records - the only advice I could come up with was to think like an historian. How will someone even know to look for the work of this long-gone foundation 50 or 100 years from now? Will it be through a biographical interest in the founder? A historical interest in the Affordable Care Act (one of many issues Atlantic has funded)? And if the foundation is to shut down, how will information catalogued with today's tools be updated for tomorrow's search mechanisms?

There are, of course, professionals who know how to catalogue, preserve, and store information for use in the future, they're called librarians and archivists. So few foundations have made their records available (exceptions can be found at the Rockefeller Archive Center and at Indiana University, and grant making histories of larger foundations exist in the database of The Foundation Center) that our historical knowledge of philanthropy is largely limited to the small universe of organizations whose records are available. See Olivier Zunz's 2011 history, Philanthropy In America, for both a view that extends beyond the few well-archived institutions and a sense of what we're missing.

As foundations begin sharing more information publicly and digitally perhaps they will also begin to think about where their records live on. After all, their tweets are with Twitter and the Library of Congress, Facebook owns their pages (as its does everyone who uses its services), and their tax forms are public record (and, someday, may be easy to access). So what of the material contributions they're making now to the issues they fund - whether it's support for free enterprise or the Affordable Care Act? What of the research they fund, the organizations they support, the evaluations they use, or the collaborations and advocacy initiatives of which they are part?

Future historians looking to understand the issues that today's foundations work on will need to be able to find traces of philanthropy in the archives and documentary history of those issues or they'll never look any further. Whether it's healthcare, immigration reform, marriage equality, or charter schooling the future history of philanthropy will be written within the issues it funds. The time to think about how that history will be found is now.