Digital technology and data are driving the use of private resources for public good, and the shape of that emerging social economy will depend on how nonprofits, philanthropies, business and government address critical questions about the ways that data are collected, shared and used, a new report says.
“How we use private data for public benefit will be a definitional issue for our future social economies in Europe, the United States, and across the globe,” says Philanthropy and the Social Economy: Blueprint 2013.
The annual industry forecast was written by Lucy Bernholz, a visiting scholar at Stanford University’s Center on Philanthropy and Civil Society, and produced in partnership with GrantCraft, a joint project of the Foundation Center and the European Foundation Centre.
Key digital issues
The report focuses on three areas in which the adoption of “digital practices, not just digital devices, is changing the root structure of work in the social economy.”
Those include the “nature of voluntary association which requires a degree of privacy that may be in jeopardy online;” the “nature of ownership and governance,” both of which are being looked at differently in the digital era; and that way data could “become a backbone resource for the digital economy.”
The report also looks at the emerging trend of tech-savvy individuals volunteering for local governments.
Associations and privacy
In associating with one another to do work that benefits others, people count on “making private choices to act publicly,” the report says. “We are most likely to take these actions if we are certain that we can do them voluntarily, without retribution or fear.”
The U.S. constitution “grants the right to ‘peaceable assembly’ in its First Amendment,” and European countries mainly “put the full force of their laws behind the right to individual privacy and enforce these protections on the Internet and in corporate behavior,” the report says.
Yet the “current digital infrastructure shares certain elements with some governmental regimes, both present and past, which made associations and private voluntary action unsafe,” it says.
“The trails of evidence created through the use of digital tools are long-lasting, remotely stored, and not controlled by the users but instead by the owners of the digital infrastructure or network interface,” it says.
The collection and storage of digital communications “metadata” are the “equivalent of a tap on every phone or an intercept of every piece of mail,” it says. “This can compromise users’ privacy and make digital tools unsafe.”
While nonprofits and foundations are using social media and digital video to “tell their stories, build movements, and raise awareness,” the report says, doing so may be “jeopardizing their existence as private alternatives outside the public sphere.”
So the organizations that make up “digital civil society,” it says, need to think about their own practices involving digital privacy.
And because their existence “depends on the right of people to gather outside the bounds of the market or the state,” the report says, those organizations “have an obligation to participating in shaping the rules and norms regarding digital privacy.”
Ownership and governance
Unlike the era when goods and money “could not be endlessly reproduced,” the report says, digital goods “can be infinitely copied, with no degradation to the original,” thus requiring the invention of “new rules and software to control how digital copies are made, shared, sold, and stored.”
New approaches to owning and sharing digital good now are expanding to apply to digital databases, the report says.
A small group of organizations such as Mozilla Foundation, Creative Commons, Open Knowledge Foundation and Wikimedia foundation are working to seek “redress or exemption from the tax or oversight authorities wherever they are based.”
That work is creating a model for many associations, and the “challenges they face and rule-exceptions they seek now will become norms for many organizations,” particularly as a growing number of organizations become “inherently global in membership and ownership.”
Data as a ‘starting’ resource
Data have become “core resource of the digital age,” the report says.
And data include not only numerical information on grants but also images, stories, movies, music and “almost anything that can be digitized,” it says.
And while major efforts are underway to “collect better information about nonprofits and foundations and the revenue that supports them,” it says, “we still have a long way to go before this information becomes a valuable resources of and for the work of the social economy.”
Early examples, it says, include shared maps of commonly-coded grants data that are being used by funders interested in black male achievement, and a shared platform used by philanthropic education funders to track federal education proposals that need matching funds.
The ability gather, store and share digital information “can change the fundamental practice of social economy actors,” the report says.
The emergence of “impact investing” over the past five years, for example, “has depended on the development of shared metrics for social and environmental return,” it says.
“Data did not create impact investing,” it says. “But the movement would not have grown with the momentum it has if digital solutions hadn’t been available to meet the demand for both common language and metrics.”
Shared, comparable data “are a prerequisite for the impact investing movement,” it says. “Their use here demonstrates how data can catalyze new enterprises, behaviors and investments.”
Yet the “human and organizational resistance to new practices and behaviors is significant, and the pressures to change philanthropic behavior are weak,” the report says.
Still, some groups are pioneering the use of digital data.
GiveWell, a nonprofit charity review group, and GoodVentures, a philanthropic funder, for example, have teamed up to use data-driven analysis as the basis for individual and shared philanthropic funding decisions, and where all the data and analysis used by the partners are share publicly, the report says.
It also says the role of data in the social economy raises a number of issues, including disclosure of data on donors to social welfare organizations and charitable nonprofits.
No common practices exists to guide the sharing of data “funded by, used by, and resulting from grants given by philanthropic organizations,” it says.
And because “every funder has individual requirements,” it says, a nonprofit with two funders can find itself in the “impossible position of presenting the same information under two different standards.”
What’s more, it says, because many organizations “rely on revenue earned from data in either raw or analyzed form,” while they “may see a benefit to sharing the data freely, they also need to keep the lights on.”
In recent years, tech-savvy individuals in a several cities have been volunteering for local governments, the report says.
While those efforts are driven by volunteers, it says, public agencies also are reaching out to residents and inviting them to improve city services.
And citizens are connecting with one another.
Cities, for example, provide data that coders use to build apps that give public transit riders arrival and departure times, the report says, and clean air advocates reuse data from those apps, along with open mapping software, to propose new bike routes.
Citizens also use software games that let them play with city street grids, and can redesign streetscapes, rally neighborhoods and work with city agencies to build new parks, the report says.
“From superficial efforts to suggest new library logos to substantial engagement through participatory budgeting processes, communications technologies are changing the way we interact with our cities, our elected officials, and our civil servants,” it says.
— Todd Cohen