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Advocating for Philanthropy: Policy and the Industry Infrastructure

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Provocations on the policy infrastructure American foundations need.

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Advocating for Philanthropy: Policy and the Industry Infrastructure

  1. 1. ! ! Advocating+for+Philanthropy:+ Policy+and+the+Industry+Infrastructure+ + + + + April+2015+ Lucy+Bernholz,+Ph.D.+ Prepared+for+the+Charles+Stewart+Mott+Foundation+ ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! This%paper%was%commissioned%by%the%Mott%Foundation%as%part%of%its%ongoing%program%strategy%review%and%development% process%related%to%the%U.S.%nonprofit%sector%and%philanthropy%infrastructure.%%Any%views,%conclusions,%and% recommendations%offered%are%strictly%those%of%the%author.
  2. 2. 2+ ! ! Advocating+for+Philanthropy:+ Policy+and+the+Industry+Infrastructure+ + Executive)Summary+ ) ) This+paper+compares+the+existing+philanthropic+infrastructure+to+those+in+journalism,+ benefit+corporations,+crowdfunding+and+the+digital+humanitarian+sector+with+an+eye+toward+ successful+policy+influence.+It+concludes+that+a+stronger,+more+policyLLLcapable+philanthropic+ infrastructure+would:+ + • Proactively+engage+with+other+philanthropic+options+and+mechanisms+for+using+ private+resources+for+public+benefit.+These+include+impact+investing,+crowdfunding,+ B+corporations.+This+involves+relationship+building,+identifying+common+policy+ objectives,+and+building+a+more+diverse+and+flexible+coalition+to+both+develop+and+ influence+policy+matters+at+the+state+and+federal+levels.+ • Separate+policy+expertise+from+bigLtent+membership+associations+so+these+experts+ can+be+more+proactive,+flexible,+and+coalitionLoriented.+ • 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.+This+will+require+foundations+to+give+attention+and+ support+to+others’+agendas.+ • 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.+ • Focus+less+exclusively+on+tax+policy.+The+foundation+infrastructure+and+policy+groups+ need+to+build+expertise+on+corporate+code,+digital+policy,+and+investment+regulations+ if+it+is+going+to+build+the+relationships+noted+above.+This+need+not+be+permanent+ infrastructure+expertise;+it+can+be+relationshipLbased.+ • 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.+
  3. 3. 3+ ! ! Advocating+for+Philanthropy:+ Policy+and+the+Industry+Infrastructure+ + + “There's+a+big+difference+between+a+set+of+tools+and+an+infrastructure.”1+ Nicholas+Carr+ + + In his injunction above, Nicholas Carr argues that an infrastructure is more than the sum of many parts. While there may be specific roles for each component, they must work together or complement each other so that there is ample support for all of the needs of all in the system. In considering the capacity of the current philanthropic infrastructure to advocate on behalf of the sector it supports, it would appear that not only is the sum insufficient, it is perhaps not composed of the right variables. There have been at least one half-dozen studies of the philanthropic infrastructure conducted in the past decade. All of them seek answers to the questions “what is its purpose, how is it changing, and how to make it work better.” 2 This paper reflects specifically on how the infrastructure works (or doesn’t) on issues of public policy. There are two reasons for this. First, the policy landscape for philanthropy is changing, largely due to the efforts of adjacent industries (as will be discussed below) and broader political agendas such as tax code simplification and budget deficits. Second, regulations on the use of digital technologies to protect fair access, personal and community privacy, and asset ownership are on the rise. These issues – access, expression, assembly, and ownership/donation --‐ are the first principle upon which nonprofits and foundations have been built. The sector needs to understand, dare I say engage, on these policy issues. The philanthropic infrastructure, so far as I can tell, is completely unprepared to do so. Toward the end of discussing the infrastructure and policy, I will sprint through sections on what the infrastructure is and how it is changing in order to focus on insights specific to the question of infrastructure and public policy. I draw from examples of journalism, the B corporation movement, and digital humanitarianism to expand my view of what’s possible and what works. I also considered recent efforts regarding digital policy and civic tech. These are neither exhaustive nor conclusive cases – they are illustrative only. What is the infrastructure? Using an industry organization or political economy definition of infrastructure leads us to focus our attention on organizations that provide professional development and networking, standards and best practices, research, government relations (advocacy or policy influence), and media and awareness. Looking at the sector through the lens of social movement theory the infrastructure would expand to include many more of the affinity‐ basedorissue‐basedfundergroups.Inthe digitalage,asub‐categoryofinformation infrastructure emerges, including shared online platforms, information standards, and (in close proximity) specialized software vendors. Earlier maps of philanthropy and nonprofit infrastructure such as those done by The Nonprofit Quarterly (2008), the 2015 funding scan done by the Foundation Center, or
  4. 4. 4+ ! ! analyses done by the Monitor Institute (2006) are still broadly useful.3 They show that there are a great number of organizations dedicated to specific issues or affinities among foundation professionals; thattools andindustry‐wideinformation sources are prioritized; and that public awareness efforts are managed primarily by individual foundations --‐ the trade associations and media invested in by the sector speak within the sector but not much beyond it. All of the existing infrastructure maps reach only as far as the 501c3 universe. Despite a well‐ rehearsed trope that the sectors are blurring, the philanthropic and nonprofit infrastructure is heavily tilted on organizations as defined by a small section of the tax code; they do not reflect the full reality of where and how people use private resources for public benefit. The infrastructure doesn’t support or even build bridges to organizations that have developed from within the impact investing field (GIIN, TONIIC, consulting firms, research groups), the B Corporation and social enterprise spaces (Skoll World Forum, B Labs, SoCAP), or nascent organizations such as GiveWell or Philanthropy Insight. A 2015 book, Understanding the Social Economy of the United States, provides useful baseline information on the areas adjacent to traditional philanthropy and nonprofits. These adjacencies are important for at least two reasons: 1) their areas of expertise are increasingly becoming part of philanthropic practice and 2) we don’t know to what degree their events and associational fees are adding to or competing with resources previously dedicated to “traditional” infrastructure organizations. The broader context for the philanthropic/nonprofit infrastructure matters when considering the interests (and policy influence) from industries such as trust and estate attorneys and financial management firms. In addition, since 2010 and the Citizens United decision, the blurred lines between subsectors of nonprofits and campaign finance interests have further complicated the landscape of interest groups in nonprofit policy. Philanthropy and nonprofits have not yet developed fully digital infrastructure groups. Information sources such as Inside Philanthropy, GuideStar, the Foundation Center, the digital versions of trade publications, and some of the technology support organizations (Nonprofit Technology Network, TechSoup Global) are the closest approximations. The industry--‐wide use of digital space is limited to ratings systems and information exchanges regarding nonprofits. The net effect of this is a public--‐facing digital presence that focuses on “how to avoid being scammed” when being charitable. One striking finding about today’s infrastructure comes from a 2015 Foundation Center study on funding for these organizations. This work found that Rockefeller Philanthropy Advisors was the fourth largest recipient of infrastructure dollars. RPA provides many services to the field, including project and initiative hosting and some publicly available research, but a significant amount of its work is client--‐specific and confidential.4 This is the infrastructural equivalent of private security firms instead of public safety officers. It is worth keeping an eye on further developments like the support for RPA, which might indicate theinfrastructureis splittinginto “haves”and “have‐nots.”
  5. 5. 5+ ! ! What’s changing the infrastructure? Philanthropic support organizations have proliferated without ever reaching deep market penetration. Real data are lacking, but of the 87,000 foundations in the USA, it’s been estimated that at best no more than 10% have ever joined any of the membership‐based support organizations.5 The most optimistic research, recently conducted by the Foundation Center for the Hewlett Foundation posits that just over 700 foundations actively supported infrastructure organizations between 2004‐2012 and also notes that a greater proportion of funding since 2008 is coming in fewer, larger grants. In other words, the infrastructure for the sector rests on the investments of a few. This makes the infrastructure extremely vulnerable. The digital environment makes the landscape for membership associations much more competitive. Face to face meetings, a core source of earned revenue, become less attractive as information sharing and networking is facilitated by online tools, often those external to the sector (e.g., LinkedIn, GoToMeeting, video streaming). Since the 2008 recession slightly more than half of all membership associations (in general) have seen membership increases year over year, but it’s unclear how much of that is rebuilding from big losses in 2008. Benchmarking to associational norms is only partially useful, given the mix of trade and individual associations and the nonprofit nature of the infrastructure.6 Changes in the larger media environment matter to the philanthropic infrastructure. Major news outlets have cut back on philanthropy coverage and open data and slightly increased transparency in the sector have made it easier for sector critics to be heard. There’s no centrifugal force to sector efforts at “message management” or public awareness. Today’s philanthropic infrastructure is isolated, inwardly focused, duplicative, and reactionary. • Isolation: Philanthropic associations continue to focus on foundation staff, even though recommendations that they seek to be inclusive are on record since at least 2008. They are thus representative of little more than the ~ 15000 foundation professionals in the United States. The exclude important adjacent stakeholders, including board members, impact investors and wealth management firms. • Inwardly‐focused. Major revenue flows to the infrastructure, as measured by the Foundation Center, are going to consulting firms such as Rockefeller Philanthropy Advisers, Bridgespan, and FSG. These organizations provide consulting services to the industry, but are silent on policy issues and rarely communicate beyond small professional circles. They are also bound, in many cases, by client confidentiality rules, so that even the knowledge they generate is often limited by rules of proprietary information. These organizations are also likely to limit their “big idea” generation to those that can lead to more consulting income, not those which might inspire or require collective public policy action. • Duplicative.Foundationprofessionalsareover‐servedwithchoices.Affinity groups, issue groups, regional associations are all targeting the same small number
  6. 6. 6+ ! ! of professionals. Most of these associations are membership‐based, pitting their fee structures into competition with each other. • Reactionary. While individuals participate in associational activities, they are often there in an institutional capacity. This, plus the “big tent” nature of the larger membership associations, hypothetically limits the ability of associations to push proactive policy ideas. What policy work is the infrastructure good at? • Maintaining the status quo: o Membership associations and their Capitol Hill relationships have been effective in holding off significant changes in the tax deduction. o Good at mobilizing members on this issue in DC. • Economicresearchthatsupportstax‐codeprotectionpolicyarguments. • Dedicated regulatory pushes by non‐membership associations. o Aspen Institute work on open 990s. o Minimum overhead in government contracts led by Urban Institute (with the National Council on Nonprofits).7 The infrastructure and policy‐making A small subset of the infrastructure is concerned with industry‐wide public policy. Primary actors include regional associations of grantmakers, state and national associations of nonprofits, the Council on Foundations, Independent Sector, The Philanthropy Roundtable, Alliance for Charitable Reform, The Urban Institute, and the Program on Attorneys General at Columbia Law School. Many of these do not appear in the 2015 funding scan of infrastructure organizations, implying they are too small (measured by financial size). None of the organizations named by that study as the largest recipients of funds are in this issues.8 One policy issue of concern to all of these groups is the charitable tax deduction. Over the last decade the preservation of the tax deduction has been the primary focus of the sector’s policy action, and those efforts have succeeded. When it comes to consistent shared interests, preserving the charitable tax deduction may be the sector’s sole uniting issue. Other issues are far more divisive within the sector, including excise taxes, payout rates, accountability standards, and donor advised funds that often divide nonprofits from foundations or private from public grantmakers. On these issues, the industry associations have been muted by their own divided memberships. Policy success has been limited to preventing changes proposed by others; proactive policy change by the sector is much harder to find (regulatory changes for electronic filing of the 990 tax form is a notable exception). On issues outside of the tax code, such as new corporate enterprise forms (B Corporations and L3Cs), regional associations of grantmakers and nonprofits have appeared on both sides of the proposals, sometimes in favor, other times opposed. On digital policy issues
  7. 7. 7+ ! ! affecting association and access, in which civil society organizations have been quite influential, the philanthropy industry associations have been silent. It is worth asking two pointed questions about associations and policy influence. First, despite the self‐defense exclusion, how do limitations on nonprofit lobbying shape nonprofits and foundations participation in policy discussions about their own sector? Second, does the membership model of industry associations help or hurt the sector’s capacity to influence policy? In an age when nonprofits and foundations have played influential roles on major public policy issues from many perspectives, gay marriage to campaign finance, immigrant rights to broadband access, it is notable that philanthropic and nonprofit associations have been reactionary or silent on policy forces shaping their own industry. What works elsewhere? Scholars look at the role of associations and policy making through at least three different lenses: social movement theory, industrial organization, and as political economies. The following insights point to areas worth further inquiry; they are hints, not definitive declarations. 1) Coordinated industries lobby most effectively. When there are a few big players in an industry, and there is public money or regulation at stake, they tend to be very successful at coordinating messages to the public, policy options for consideration, and lobbying dollars. It’s not to say that the industries always win, but that they can move quickly, stay engaged, and present policy options for consideration. 2) Industry infrastructures are changing in the digital age. Digital tools have changed both who and how policy influence happens. Studies of organizations such as MoveOn, nonprofit advocacy groups, and political campaigns are rich with examples where professionally staffed organizations seek (or pretend to seek) public engagement and where digitally native models (such as the DailyKos in democratic politics) have become powerful makers of digital conversation and policy attention.9 3) Foundations aren’t helping themselves by isolating themselves from adjacent players with similar policy interests. Specifically, areas such as B corporations, donor advised funds, and impact investing have built‐in, sometimes custom built, policy experts and advocates who could be willing and valuable allies to foundations. This requires a very different approach to relationship building, coalitions, and inclusion than philanthropic infrastructure organizations have practiced to‐date.
  8. 8. 8+ ! ! Case examples The following examples offer very brief snapshots of other industries and the way they organize to influence policy. There are vignettes from journalism, digital humanitarians, crowdfunding, and B corporations. Each vignette is intended to prompt inquiry about what works in other industries or on other issues. Brief examinations of the emerging civic tech industry and recent net neutrality policy fights are also offered. + Journalism Journalism and nonprofits have more in common from an industry perspective than might first be recognized. Both draw fundamental privileges from the First Amendment of the U.S. Constitution (free press and peaceable assembly), yet it’s fair to say that the news business has done much more to use (and abuse) free press doctrine to its own advantage.10 Nonprofits and philanthropy, like the journalism industry, is divided between wealthy owners and professional employees. Journalism has professional associations that represent these two constituencies separately; philanthropy less so (though one might view Exponent Philanthropy, Philanthropy Roundtable, National Center on Family Philanthropy, and other organizations serving donors as being more of the “owner” group). Like journalism, digital outsiders are changing philanthropy. Established news organizations (both print and broadcast) have done more to engage and adopt the practices of these “disruptors” than philanthropy has done with their “edge competitors,” such as donor advised funds, wealth managers, family offices, crowdfunding platforms, online givingsites,orvendorsof software--‐drivenfoundation management services. The news industry has traditionally been organized into three subsections – print, television, and radio. Industry infrastructure thus distinguished between print interests and broadcast. There is one major association of news print owners (Association of Media Executives), one for broadcast owners (Radio and Broadcast Association), and a third for the journalists (Society for Professional Journalists). A new organization, the Online News Association (ONA) has grown rapidly in the last decade, primarily attracting reporters. Increasingly, the media owners’ groups find common ground in shared opposition to telecommunications or cable companies. On the other hand, most news organizations – and the associations that serve them – strive for good business relationships with big Internet companies (Google, Yahoo, Facebook, Twitter). These frequent distributors and partners are not seen by (or desiring to be seen as) explicit parts of the news industry. From a public policy perspective, all news organizations concern themselves with First Amendment issues; broadcasters have long been engaged with federal communications policy (spectrum licenses), media consolidation and anti‐trust rules (from which newspapers have been essentially exempt since 1970). Labor issues, open meeting and good governance rules are of interest to both print and broadcast media. Policy advocacy is primarily a function of nonprofit civil liberties organizations, specifically those focused on the First Amendment; pro bono legal counsel, and a small set of nonprofit advocacy organizations specifically dedicated to civil liberties or digital freedoms, (e.g. Free Press, Public Knowledge, Center for Democracy and Technology, Electronic Frontier Foundation). As digital distribution channels, search, and app design become increasingly
  9. 9. 9+ ! ! important in how news is accessed, the industry is facing intrasectoral ethical challenges between journalistic practice and digital design issues.11 These have not yet risen to regulatory or public policy issues but such a trajectory seems possible. Other major policy issues include broadband access and net neutrality, pitting the news and distribution sites against cable and telecommunications companies. Journalism’s ecosystem changes in the last decade include drastic refocusing and scaling back of journalism schools, and the creation of numerous stand‐alone innovation hubs and nonprofit media organizations. Other than the rise of the ONA, however, the industry infrastructure has mostly retracted in size and membership. Association membership for both print and broadcast associations has dropped significantly and these organizations (which rely on conference fees, membership dues, and sponsorship) do not have other identifiable sources of revenue. Oneimportantassetvis‐à‐vispolicymakingfornewspapersinparticularisthepowerof the editorial pages. While the professional associations often represent media owners’ interests and lobbyists, newspapers have long wielded the power of the pen to influence policy at both the state and federal level. This power is so well understood that the President of the United States is a regular speaker at News Editors annual conference every other year when it is held in Washington, DC. Foundations have a similar, though far less visible or acknowledged resource, in their living donors. These are often individuals with political ties and strong corporate ties, with access to policy makers and their staffs. Insights: • The infrastructure is split between organizations representing owners and professionals, although these lines are blurring somewhat in the digital age. • The power of the owners/professionals are aligned on many issues, though by no means all. • Owners’ policy interests are generally represented by hired/pro bono law firms as needed. Organizations that work on key policy issues (First Amendment rights groups) are supported by the industry, but not as infrastructure providers. Digital Humanitarians People using digital technology to help with crisis response and relief are now an assumed part of humanitarian work. They are organized in a global network of networks, working closely with and for many governments, and both contributors to and creators of new standards of industry practice. All this is somewhat remarkable, given that the terminology and tools didn’t even exist five years ago. Since the 2010 earthquake in Haiti, networks of volunteers such as CrisisMappers, Ushahidi users, the Digital Humanitarian Network, and Humanity Road have become critical parts of the response/relief infrastructure. Governments, multilateral organizations and nonprofit institutions are changing their practices to make better use of these networks, rather than fighting their existence (which was their first reaction).12
  10. 10. 10+ ! ! The infrastructure of digital humanitarian work is built on two types of networks – human and software. Software code is made freely and openly available to anyone, anywhere and networks of experienced volunteers are primarily used to support locals in using the tools, improving existing tools and experimenting with new ones, and participating in policy discussions about practice and governance. They also actively work on corporate partnerships and government relationships, looking for both access to expertise and new digital tools. The infrastructure for the field is built primarily of practitioners whose jobs have shifted fromon‐ the‐groundresponderstonetworkbuildersandpolicythinkers.Majoractors include the Harvard Humanitarian Initiative, Ushahidi, and the Qatar Foundation to Advance Humanitarian Technology. Policy issues, including standards of practice, data use, and data exchange are generally worked out within the “industry,” between and among providers and funders. These are not easy issues, and the policy‐making can be very contentious. While some of it involves working with legislative bodies, most of the issues are matters for regulatory or funding bodies. Insights: o The field is a network of networks that include both institutions and individuals. o Shared software code is more than just a way of getting the work done --‐ it is a means of replication, engagement, and governance decisions (embedded in the code). o Tactical relationships built over time, and out of discord, have developed into influential coalitions that bring together established institutions with the new disruptors on issues of policy and practice. Crowdfunding Crowdfunding got its start in the philanthropic community (e.g. DonorsChoose and Kiva), but grew to its current size by drawing the attention of commercial interests. After launching in 2009 Kickstarter quickly demonstrated how online fundraising platforms could be used to launch new products. Soon thereafter, a coordinated effort at changing investment regulations to allow equity crowdfunding was underway and legislative success came with the Jumpstart our Business Startup (JOBS) Act passed by Congress in 2012. The Act was passed with bipartisan support in both houses of Congress. Supporters of the Bill included an odd alliance of venture capital associations, commercial companies, high‐profile impact investors (Steve Case), and former executives of NASDAQ. Arguments in support of the Act emphasized new investments and startup companies as a response to the recession, defeating the voices of caution who argued that a recession caused by financial recklessness hardly called for looser investing rules as part of the solution. Lost in most discussions of the JOBS Act were issues of public good. Such concerns include data openness, research protocols, and commitments to transparency. Researchers and
  11. 11. 11+ ! ! subsets of crowdfunding platforms are now taking up these issues, looking primarily to influence industry practice (not regulations at this point). The crowdfunding case, should it be examined in more detail, raises interesting questions about alliances of philanthropic and commercial venues on policy matters. In the near term, similar alliances are being considered to address proposed regulations of donor advised funds. Insights: • Commercial interests were able to mobilize and support crowdfunding policy efforts quickly and take advantage of a particular political moment. • Nonprofitor nonprofit‐orientedcrowdfunding platforms were carried along as part of these policy change efforts. It’s not clear if any principles were compromised along the way. B Corporations The B Corporation movement can be thought of as a revolution in corporate code.13 The goal of the movement’s founders is to change how capital markets work. The strategy of setting up a new enterprise form is both an engagement tactic and a first‐phase regulatory change. By focusing on state‐level corporate code the grand arguments about new capital markets for good were exchanged for the far‐less sexy work of rewriting regulations. Doing so allowed the strategists at B Lab to focus on the structural issue that would only engage the wonkiest of their allies (and enemies) while also offering up a practical solution to a real world problem of new entrepreneurs. It meant they could get some early wins in places where there was momentum, thus building the base of allies that would help them make the case for their next wins (in places where opponents might show up). The strategy revolved around focusing first on the easy regulatory shift, branding the idea as biggerthanitreallywas,andbringinginsupporterswitheachstate‐by‐statevictory. Supporters of the idea of a new, branded, do--‐good business could use the brand before the regulations even changed. B Labs built its association of members by offering tiers of affiliation – ways for members to signal they are part of the bigger idea (capital market change) even as progress on actual legislation was still moving slowly, state by state. Buzz built, the idea grew, and new constituencies were activated in states on a rolling basis. Having a benefit corporation option in a state’s corporate code went from being unusual and distinctive to being a competitive necessity very quickly. The Lab’s strategy of mixing branded idea with generic legislation has caused some confusion. Some see the B Corporation brand and the “benefit corporation” legislation as interchangeable. They’re not and it’s hard to know whether this confusion has helped or hurt the spread of either one.
  12. 12. 12+ ! ! Insights: • Policy changes were used to build a movement of individuals and enterprises. The strategy is to turn these into the base of support for future policy proposals. • The leaders needed and sought both commercial and philanthropic support from the beginning. Civic Technology Civic technology (or civic tech) describes the ecosystem of organizations that have emerged in the last five years to improve how governments and communities use and connect via digital technologies. The industry is diverse and dynamic, including nonprofit organizations such as Code For America, commercial vendors such as O’Reilly Associates and Microsoft, advocates and community sites such as NextGov, GovFirst, and CivicMakers, and insiders in public agencies that seek to upgrade services, ranging from mayors’ offices to the White House, which just hired its first‐ever Chief Digital and Chief Data Officers. The civic tech space can be seen as a triangle – with points defined by civic minded, technologically skilled volunteers, government officials and agencies, and software vendors seeking government contracts. Funding comes from foundations, angel investors, venture capitalists, and corporations. Individuals working on these issues have moved freely between government, corporations and nonprofits, seeking to make significant changes in government procurement policies and procedures. The public facing element of the sector focuses on making government services more efficient and user--‐friendly; there are significant purchasing possibilities at stake as well as government agencies seek to upgrade their information systems. There is not yet an identified leading infrastructure association for civic tech so much as there numerous human and software networks connecting the different players. These include national, regional and local networks of professionals and volunteers as well as software repositories such as GitHub. These networks are global by nature. Policy activities relevant to civic tech have primarily focused on making regulatory changes to procurement processes, an unsexy topic that sits at the heart of how government technological systems are built and maintained. These changes can and have been made largely out of the public eye, via the revolving door of individuals across sectors as well as the zeitgeist of using shared software code as a replications strategy. As important, the civic tech community – a disbursed, technologically savvy, always online network – has been readily mobilized and active in supporting digital policy actions, from fights against Intellectual Property legislation (SOPA and PIPA battles) to efforts to change FCC regulation of internet communications (Net Neutrality).
  13. 13. 13+ ! ! Net Neutrality as an issue In the last few years, previously arcane bits of telecommunications laws have become the focus of tremendous public attention. From proposed laws about intellectual property on the internet to transmission speeds and preferences, nimble coalitions of activists, law school professors, major corporations, the startup community, and civil liberties groups have defeated several pieces of legislation (SOPA/PIPA) and turned back proposed regulatory actions (Net Neutrality). Each of these victories involved several nonprofit organizations and lots of funders, but received little foundation support and effectively no attention from the nonprofit/foundation infrastructure organizations. While histories of these legislative battles are still being written, they are useful provocations for our purpose as illustrations of the campaign nature of coalitions. While there are nonprofit organizations with missions dedicated to these types of policy issues, each new fight required the assembly of new coalitions. Each one had different leaders. Each one built on the successful online fundraising and engagement tactics of their predecessors (shutting down websites, twitter handles, online petitions, etc.) but each also involved new experiments and permeable boundaries that could embrace newcomers. There were, behind the activists and those courting public opinion and offering policy makers new options, strong established relationships with legal experts and academic centers, some of which had been preparing for these legislative battles for years. There were fluid coalitions to be built to address the issues, but established sources of policy analysis, legislative options, and regulatory reforms to draw from.14 Analysts of the Net Neutrality debate in particular point out that online organizing on digital policy issues is somewhat distinct. As one observer wrote: “…[it’s] much easier to use the Internet to organize a grassroots campaign when the cause involves the Internet. Everyone online already has a stake in the fight, and the websites themselves can use their platforms to rally their users.”15 That being said, success did not come solely from the online petitions, twitter support or email petitions, but from the dedicated campaign nature of the work, the coalition leadership, and the body of pre‐existing policy analysis and options that were ready to deploy when the political moment arrived. What can philanthropic infrastructure learn? As limited as these examples are, they prompt us to see more clearly the limitations of current infrastructure and ask what better might look like. The philanthropic infrastructure primarily consists of foundation support groups, and it has edged itself off with razor wire from other means of dedicating private resources to public benefit. Not surprisingly, activists with new ideas have gone elsewhere. The infrastructure groups have succeeded in isolating themselves and now find themselves surrounded by, and with no
  14. 14. 14+ ! ! meaningful relationships to, alternative structures that are both enticing to donors and more nimble than foundations. The examples of journalism, B corporations, crowdfunding, and digital humanitarianism reveal a number of shortcomings to the philanthropic infrastructure: 1) Internal practice focus with no capacity for alliance building or policy innovation a. As noted in the Foundation Center study the organizations receiving the greatest percentage of infrastructure funding are RPA, Bridgespan, and the Foundation Center. These all serve the sector internally; they don’t do policy analysis, policy development, or public messaging. b. Foundationshaveinvestedheavilyinsector‐focusedconsultingfirms,but these organizations focus their research on practice (and ideas that have revenue potential), not on new policy ideas. 2) A lack of coordinated public messages a. Most of philanthropy’s messages to individual donors over the last decade, via charity ratings websites, have been about how to avoid being scammed, not about how to strategically solve problems. b. None of the industry associations provide a sufficient voice to the public about the value and role of foundation philanthropy 3) Dependence on the wrong type of organizations to do policy development a. Those organizations within the philanthropic infrastructure that do have a policy mandate tend to be big‐tent membership associations. Wherever their members have competing priorities these organizations are effectively hamstrung or silent. They’ve succeeded at prevention, but not at new action. b. At the same time, smaller, more focused organizations and alliances within philanthropy have been very effective at policy change by building nimble coalitions and staying the course. Gay marriage, immigrant rights, disability rights, charter schools, and campaigns to change campaign finance law are all examplesofphilanthropicallyfunded,long‐termsocialpolicychange. 4) Foundation philanthropy hasn’t looked to build shared policy priorities with allied industries, donors, or nonprofits. a. The national Donor Advised Funds have typically been shunted to the side by foundation associations; they have thus built their own policy capacities and have (possibly) lost interest in aligning with foundations on policy issues. b. Philanthropic foundations are a single product choice for donors; donors’ policy interests don’t necessarily align with those of foundations. 5) The philanthropic infrastructure has not demonstrated capacity to think of new ideas or develop proactive policy agendas. The crowdfunding, digital humanitarian, and B corporation examples show how new ideas and policy options for social good financing and structure have come from outside. The supporters of these innovations rarely see the need to build alliances with the existing infrastructure for philanthropy and the infrastructure has done little to engage them. What needs to change?
  15. 15. 15+ ! ! What are the critical functions that must be collectively addressed for the philanthropic sector to adequately fulfill its role in society? What are the key components of a healthy industry infrastructure? Drawing from the vignettes above, and a sense of the importance of adjacent industries that assist people in using their private resources for public benefit a stronger, more policy‐capable philanthropic infrastructure would: • Proactively engage with other philanthropic options and mechanisms for using private resources for public benefit. This involves relationship building, identifying common policy objectives, and building a more diverse and flexible coalition to both develop and influence policy matters at the state and federal levels. • Separate policy expertise from big‐tent membership associations so these experts canbe moreproactive,flexible,andcoalition‐oriented. • Build relationships that reach into adjacent areas so that broad coalitions can be mobilized to respond to policy opportunities. This will require foundations to give attention and support to others’ agendas. • Reach beyond the professional staff of foundations to build coalitions, more diverse skill sets, and deeper relationships with adjacent industry allies, regulators and government partners. • Develop a coordinated voice to the public about philanthropy’s inherent and comparative value. • Focus less exclusively on tax policy. The foundation infrastructure and policy groups need to build expertise on corporate code, digital policy, and investment regulations if it is going to build the relationships noted above. This need not be permanent infrastructure expertise; it can be relationship‐based. • 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. Foundations have a structural privilege to think several decades into the future. They should be investing in tools that can adapt, constantly engage innovation at the edge, and actively investigate the liminal spaces between institutions and individuals and all the ways we use private resources for public benefit. One such edge is technological – foundations need to assume that activists and philanthropists of tomorrow will be using digital platforms. The industry needs to start building digital policy expertise now. Others include new enterprise forms (benefit corporations, hybrid organizations), investment opportunities, and political action. The philanthropic infrastructure primarily serves the internal needs of endowed, staffed foundations. Today more than ever, foundations are but one means by which individuals seek to use their financial resources to make change. The policy domain that shapes those choices ranges far beyond the tax code. The set of enterprises and adjacent industries vested in the full realm of policy domains is much bigger than just foundations. To be effective the infrastructure needs to be able to build allies from these adjacencies or risk being outflanked, ignored, or left to rust.
  16. 16. 16+ ! ! Experts(contacted(for(this(report! Jacob+Anbinder,+Century+Foundation+ Jim+Bettinger,+Stanford+University,+Knight+Journalism+Fellowship+ Jack+Chin,+consultant+to+Asian+Americans+Pacific+Islanders+in+Philanthropy+(AAPIP)+ C.R.+Hibbs,+consultant+to+Hispanics+in+Philanthropy+ Julius+Parras,+consultant+to+Asian+Americans+Pacific+Islanders+in+Philanthropy+(AAPIP)+ Patrick+Sweeney,+EveryLibrary+ Marsha+Semmel,+former+director+of+the+Institute+of+Museum+and+Library+Services+ Elizabeth+Weise,+USA+Today+ + + + 1+Nicholas+Carr,+The)Glass)Cage:)Automation)and)Us,+New+York:+W.W.+Norton+&+Co,+2014,+p+ 195+ 2+David+Renz,+“The+U.S.+Nonprofit+Infrastructure+Mapped,”+Nonprofit)Quarterly,+December+8,+ 2008,+“Accessed+on+March+25,+2015,+https://nonprofitquarterly.org/management/1053LLL++ theLLLusLLLnonprofitLLLinfrastructureLLLmapped.html,++“Foundation++Giving++for++Nonprofit++and+ Philanthropic+Infrastructure,+2004LLL2012,”+The+Foundation+Center,+A+Report+to+the+William+ and+Flora+Hewlett+Foundation,+2015;+internal+memos+to+the+W.K.+Kellogg+Foundation+from+ the+Monitor+Institute,+2006;+Jessica+Bearman+and+Anna+Pond,+Effective)Collaborations:) Recommendations)for)a)Connected)Philanthropic)Infrastructure,+The+Council+on+ Foundations,+2010;+in+addition+strategic+planning+documents+and+trend+reports+for+ Exponent+Philanthropy,+Hispanics+in+Philanthropy,+Asian+Americans+Pacific+Islanders+in+ Philanthropy+all+include+scans+and+commentary+on+the+current+state+of+the+philanthropy+ infrastructure.+ 3+See+David+Renz,+“The+U.S.+Nonprofit+Infrastructure+Mapped,”+Nonprofit)Quarterly,+ December+8,+2008,+“Accessed+on+March+25,+2015,+ https://nonprofitquarterly.org/management/1053LLLtheLLLusLLLnonprofitLLLinfrastructureLLL+++ mapped.html,+“Foundation+Giving+for+Nonprofit+and+Philanthropic+Infrastructure,+2004LLL+ 2012,”+The+Foundation+Center,+A+Report+to+the+William+and+Flora+Hewlett+Foundation,+ 2015;+and+internal+memos+to+the+W.K.+Kellogg+Foundation+from+the+Monitor+Institute,+2006.+ 4+Foundation+Giving+for+Nonprofit+and+Philanthropic+Infrastructure,+2004LLL2012,”+The+ Foundation+Center,+A+Report+to+the+William+and+Flora+Hewlett+Foundation,+2015.+ 5+This+is+an+old+estimate+from+a+presentation+given+by+the+Forum+of+Regional+Associations+of+ Grantmakers,+in+2005.+ 6+Marketing+General,+Inc.,+2014)Association)Membership)Marketing)Report,+Accessed+online+ March++25,++2015,++++http://marketing.marketinggeneral.com/acton/attachment/6893/fLLL++ 0033/1/LLL/LLL/LLL/LLL+ /The%202014%20Membership%20Marketing%20Benchmarking%20Report.pdf+ 7+National+Council+of+Nonprofits,+https://www.councilofnonprofits.org/trendsLLLpolicyLLLissues/governmentLLL+ grantsLLLcontracting.+++See+++https://www.councilofnonprofits.org/ombLLLuniformLLLguidance).+ 8+Foundation+Center,+Funding+for+Infrastructure,+2015.+ 9+Karpf,+The)MoveOn)Effect:)The)Unexpected)Transformation)of)American)Political)Advocacy.+ 10+Author+interview+with+Jim+Bettinger,+Stanford+University,+Knight+Fellowship+Program,+ April+1,+2015.+
  17. 17. 17+ ! ! + + 11+See+Michael+Annany+and+Kate+Crawford,+“A+Liminal+Press:+Situating+App+Designers+within+ a+Field+of+Networked+News+Production,”+Rochester,+NY:+Social+Science+Research+Network,+ 2014.+ 12+Patrick+Meier,+Digital)Humanitarians:)How)Big)Data)Is)Changing)Disaster)Response,.+ London:+Taylor+and+Francis,+2015.+ 13+Along+with+a+concurrent+movement+to+create+and+support+LowLLLprofit,+Limited+Liability+ Corporations+(L3Cs).+ 14+Brandon+Sasso,+“How+a+Ragtag+band+of+Activists+won+the+battle+for+net+neutrality,”+ NextGov,+ February+5,+2015+(accessed+March+23,+2015)+ http://www.nextgov.com/cioLLLbriefing/2015/02/howLLLragtagLLLbandLLLactivistsLLLwonLLLbattleLLL+++netL LLneutrality/104688/+ 15+Ibid.
  18. 18. 18+ ! !
  19. 19. 19+ ! ! +

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