The business people out their are already questioning how a business plan works that instantly makes valuable information available for free (why don’t the foundations all sit around waiting for someone else to pay to have a report created and then use the free version?), but that’s because of a fundamental difference in for-profit and philanthropic marketplaces. In the for-profit arena, “controlling” valuable information is the key to high profit margins. In philanthropic market places, “spreading” valuable information is key to creating impact. This is because the “returns” that philanthropists generate from applying knowledge accrues to everyone. When you pay to have a report created and others use your work to generate social good, that social good is a result of your work and so you have created more impact.
In Lucy’s words this practice of information release “directly leverages the initiating foundation’s investment with other funders money.”
PS: I think what Tom and Lucy (and I’m sure other consultants as well) are doing is great. But I want to clarify that my longer term argument for foundation transparency is focused on the idea that foundations can enhance their impact by making their accumulated knowledge available to the public. This does not mean they have to spend a lot of money to package the information for general consumption. Just as GuideStar and Charity Navigator packaged up 990 info for the public, I’m sure that third parties would emerge to package up foundation information and market it to the public.
5 Comments
Sean,
Interesting distinction about non-profit versus for-profit. I think the future of non-profit may evolve into being a for-profit company that makes a humanitarian impact by using its profits
I think that there is a segment of nonprofit services that will follow that model. But I think the vast majority of causes that nonprofit are focused on have no profit opportunity. Can you imagine a business model that profitable helps victims of sexual abuse with psychological recovery? Or a profitable model for preserving the oral history of native cultures on the verge of dying out?
As the director of an organization whose core mission is the collection and dissemination of such reports, I have to jump in on a couple of points.
1) Your distinction between for profit and non-profit is totally on target here but information sharing doesn’t just contribute to the social good, it also results in smarter funding choices, improvements to programs by practitioners who are often stretched too thin to do their own research and evaluation, and improvements to the overall quality of research when we (the nonprofit sector) can do the kinds of literature reviews that academics take for granted. This is why other sectors have an information infrastructure that has been strangely absent in the third sector. I could go on and on about why I think this is – but will spare you 🙂
2) This whole conversation re: information sharing would be lacking if we don’t also talk about the broader role that foundations can play in relation to intellectual property rights. Foundations are in a unique position (as Lucy well recognizes) to require that their grantees release their work under copyright licenses that allow for broader information sharing. Again, other industries and communities of practice, like musicians and visual artists, have made creative commons licensing work for them. I think this is a broader discussion that needs to be had.
3) The whole reason IssueLab exists is to provide the sector with a publishing platform that allows for consistent information sharing, rather than relying on just those folks who “get it” like Lucy and Tom. When organizations, (both NPs and foundations), begin to prioritize dissemination over controlling their “message” I believe we all benefit. When we let go of the research and analysis we produce (while still maintaining attribution rights etc.) there is a real possibility for getting this work into spaces and places where people might not know what a nonprofit even is but they value what is being reported on.
The Wallace Foundation (www.wallacefoundation.org) is a good example of a foundation that designs grantmaking initiatives with the goal of producing knowledge that it can then share with wider audiences (for the common good). The intent is to use the knowledge about what works as well as what doesn’t to extend the impact of its grantmaking. As it says in the “knowledge center” section of its website: “The Wallace Knowledge Center offers credible, useful knowledge that can help policymakers, practitioners, researchers and concerned citizens make progress in the fields in which they work. It is at the core of Wallace’s effort to share ideas and practices that can help organizations expand opportunities for people.”
Great points Gabi. I’ve tagged Issue Lab’s website and it will appear in tonight’s Link List post.
Bruce, Wallace’s knowledge center is really interesting. I blogged about it once before when I discovered that Wallace is competing with my firm Ensemble Capital to provide information about private foundations. (Good for them!). I’ve tagged the site for the Link List post.