The Cost of Information Sharing in Philanthropy

My last post on the way that information has different characteristics in the social sphere compared to the for-profit sphere, generated a string of reader comments. The comments covered a lot of ground and I encourage you to check them out here. But one recurring theme pointed to the costs of sharing information being something that was difficult for nonprofit entities to cover.

Gabi Fitz of IssueLab:

When we forget the original intention behind knowledge production in the social sector (namely that it will contribute to social good and social change) we also forget to dedicate the necessary resources to sharing this knowledge more broadly…

Just like any other social need that is not satisfied by the market (or is maybe even the result of a market failure), the work of making meaning from information, providing effective filters, and brokering knowledge in the social sector is a social service that needs charitable support.

Dan Elitzer of Full Contact Philanthropy:

I agree that unlike in the for-profit sector, information sharing in the nonprofit sector does not have a negative impact on the information-creator’s ability to achieve their goals. However, there is still an opportunity cost for organizations to package their knowledge and transmit it in a form that will reach and be actionable for other actors. Foundations may have the resources to engage in information sharing if they think it will advance their mission, but for most nonprofits, investing the time and financial resources to share their data or knowledge requires making cutbacks in other areas.

If a nonprofit staff member is directed to evaluate a program and capture information on how it can be effectively replicated, the time spent on that task is time not spent on providing direct client services or fund-raising or training new staff, etc. If that staff member then has to find a way to distribute that information so that others in a position to act on it will find it, that’s more time not spent on other mission critical work. Yes, the time spent on capturing and disseminating information may ultimately do more to advance the organization’s mission than whatever other activity was superseded, but unless the organization is confident it can make that case to its supporters, that’s a hard call to make.

These are important points. I think the way to address these concerns is though the Googlization of Philanthropy and the way that technology is unbundling the process of creating information from its distribution. In a Chronicle of Philanthropy column last April I wrote:

The Googlization of philanthropy is about organizing knowledge to allow for smarter giving by more people. Most important, the Googlization of philanthropy means that organizing the information will not be done by the information creators, but by third parties and — excitingly — the people who want to consume that information.

The point here is that we are witnessing the rise of information processing organizations like Google, Yelp and Twitter (when it is used to create information filters) which do not themselves create information, but which pay for the infrastructure of information distribution. Something similar could clearly occur in the nonprofit sector (with current examples like IdeaEncore, PubHub and IssueLab).

The rise of these intermediaries both bring light to the information that is already available and creates incentives for more information sharing. The Foundation Center’s Glass Pockets project is a good example. The site, which shows how transparent and accountable large grantmakers are, both allow users direct click through access to an enormous amount of information about foundations and importantly it helps set expectations around information sharing. Certainly foundations which are currently not sharing information which Glass Pockets deems necessary will at least need to give some thought to changing their policy.

The takeaway from all of this is that it is critical that the social sector, both nonprofits and grantmakers, embrace a cultural ethic of information sharing. That as a sector, we realize that we don’t need to “own” our social impact. If we have valuable information that can help inform the activities of others, it is our duty and our biggest impact opportunity to share this information widely. Even the Bill & Melinda Gates Foundation, the largest grantmaker in the world, makes up only 1% of the amount given to charity each year. So to the extent that they are able to share what they know to help inform the other 99% of giving, they have an opportunity for the impact from what they know to dwarf the impact from the money they give.


  1. Good for you, Sean, for keeping the conversation going.

    I think, though, we have to distinguish between information that should flow naturally from organizations that do a good job managing what they do and being willing to share freely vs. the process of collecting, analyzing, processing and preparing more extensive reports, documents, etc., that do have real costs.

    Also, since Gabi Fitz has given more thought than most to the subject of knowledge dissemination, I invite people to view a Comnetwork video chat she recently recorded with Susan Herr. It’s here:

  2. Good point Bruce. I agree that the “natural flow” of information is part of the “cultural ethic” that I tried to imply in the post. I think this is more important than formal reports and presentations.

  3. Jeff Mowatt says:

    Sean, As I tried to relate on the previous post, what we’ve done at P-CED from the beginning is to publish all of our research on the web, beginning with the paper on inclusive capitalism, and throughout our work in Russia and Ukraine for the past decade.

    We observe the influence on Coca-Cola, a company which does not share product information, and the reflection of P-CED ideas on Connected Capitalism. Another more recent influence being our profit for purpose business model becoming the evaluation criteria for the UK Social Enterprise Mark.

    When one offers information, there are times that it can be less than welcome. For instance our research on disabled children in state care which met with much hostility and defamation from parts of the nonprofit sector that didn’t like what was being said.

    On reflection of what I wrote yesterday about Coca-Cola, I remembered that 2 years ago, I’d tried to offer the model of inclusive capitalism, to IBLF the organisation which their former CEO now heads. I’d also offered our research on microfinance and social enterprise in Eastern Europe to Oxfam who replied with a rejection of my offer. A similar experience came from offering the UK parliament’s APPG on microfinance a presentation on the success in Russia.

    Clearly there are many whho don’t want information.

    Some months ago I blogged about the “you, me, we and ethics” of sharing , relating the spread of a new economic paradigm which began with sharing an idea on the web.

  4. Jeff Mowatt says:

    Let me offer a little more information from the same source:

    “The P-CED concept is to create new businesses that do things differently from their inception, and perhaps modify existing businesses that want to do it. This business model entails doing exactly the same things by which any business is set up and conducted in the free-market system of economics. The only difference is this: that at least fifty percent of profits go to stimulate a given local economy, instead of going to private hands. In effect, the business would operate in much the same manner as a non-profit organization. The only restrictions are the normal terms and conditions of free-enterprise. If a corporation wants to donate a portion of profits to its local community, it can do so, be it one percent, five percent, or even fifty percent. There is no one to protest or dictate otherwise, except a board of directors and stockholders. This is not a small consideration, since most boards and stockholders would object. But, if an arrangement has been made with said stockholders and directors such that this direction of profits is entirely the point, then no one will object. The corporate charter can require that these monies be directed into community development funds, such as a permanent, irrevocable trust fund. The trust fund, in turn, would be under the oversight of a board of directors made up of employees and community leaders.”

    More than a decade later these ideas will be found in the Community Interest Company, B Corporations and even the recent Manifesto for Philanthrocapitalism.

    Somewhere recently, I read the question “where is the evidence of philanthrocapitalism working?”. I don’t know that, but I do know that while it was being talked about at the Davos Ukrainian Lunch we were on the ground in Ukraine directing our business to focus on social problems and had made some progress. Not least in influencing changes to childcare policy which would see a 40% increase in domestic adoption within 3 years.

    This perhaps may be too much information