UPGRADING THE INFORMATION INFRASTRUCTURE FOR SOCIAL CHANGEWe recognize that [our] vision is ambitious, and realizing it will require many technical, behavioral, and
cultural changes. It will necessitate incentives and support so that organizations are better able to
supply information, and efforts to enable and encourage people to make productive use of
information. While all of these elements are necessary, the focus of this paper is on the
information infrastructure for the social sector. By that we mean the architecture that can
help to connect, organize and structure information so that it can be supplied and used more easily.
We realize that upgrading the information infrastructure will not change the sector’s use of
information overnight, and that other elements are needed to support the free flow of quality data in
the sector. But we believe that in order to move towards a more effective sector, powered by
information, we need to begin by strengthening the core building blocks of data exchange. Our hope is that this paper, together with the new website www.marketsforgood.com, can
help to expand and amplify a conversation to explore issues, discuss challenges, and discover the best
approaches for getting and using better, more reliable, and more consistent data in the social sector.
While this paper is an outgrowth of numerous discussions among more than 20 social sector
intermediaries that have been part of the Markets for Good collaboration, we realize that we are still
very much at the beginning of this journey. As such, we intend this paper to be a “living
document”that will evolve as others join the conversation, as new lessons are learned, and as
progress is made.
While the challenge is great, we are not starting from scratch. There are many important initiatives
already addressing many of the issues we see today, and through Markets for Good we hope to build
on what exists, and connect, align, and accelerate these works and ideas already in progress.
We look forward to your thoughts, and hope you join us as we imagine, and help build,
a better tomorrow.Markets for GoodM4Gb5bbeb4d-4461-4867-a8c3-8ae6ae518496Social SectorWhat is the Social Sector?
The scope of this initiative is the full social sector: global in reach, consisting of both nonprofit organizations and socially-focused
businesses; and inclusive of all stakeholders tied to the sector, including funders, beneficiaries, the government, and others.
The social sector consists of all private organizations around the world devoted to creating social good. While the social sector
used to be synonymous with nonprofits, the rise of for-profit companiesthat actively seek to create positive environmental or
social impact has broadened the definition of the sector. Although there are certainly important differences between nonprofits and
social businesses, both share a common goal of creating social benefits and have a common need to measure their impact.
The social sector also includes a broad set of stakeholders. In addition to nonprofits and social businesses there are those who
benefit from these organizations’ programs and services, funders – including individual donors, impact investors, and foundations –
multilaterals, evaluation firms, academics, researchers, consultants, the media and other intermediaries. But perhaps the most
important other actor is the government. Through grants and payments for goods and services, the U.S. government alone provides
more than 30% of U.S. public charities’ revenue each year, establishes policies that have a fundamental impact on the sector, and
through the IRS collects data on nonprofit organizations via 990 tax filings. Internationally, Official Development Assistance from
DAC countries alone reached more than $130 billion in 2011, more than double what it was ten years prior.Bill & Melinda Gates FoundationThe William & Flora Hewlett Foundationliquidnet... a social sector powered by information. To improve the system for generating, sharing, and acting upon data and information in the social sector. ID-f6f3ae0d-6ead-4b9f-afb0-a9a09e9527e1InformationMore Information, More Insight, Better Decisions --
Imagine a sector where the whole is greater than the sum of its parts. Where experiences, learning, and views are shared freely and
easily, enabling better decisions, better actions, and better results.
The image above depicts a vision for a more efficient social sector. It is a system in which beneficiaries have a voice; nonprofits and
social businesses have information and feedback on their programs and activities so they can learn, adapt and scale; and in turn,
funders have – and use – the information they need to make informed investments, grants, and donations. In addition, other
stakeholders, such as policy makers, researchers, multilaterals, consultants, and board members, can access information to inform
their own decisions. In this system stakeholders have easy access to the information they need to make important decisions, and
feedback loops foster a system of continual learning and improvement.InsightShared KnowledgeCentered on a System of Shared Knowledge --
The key difference between today’s system and the vision of the future above is the presence of connected information and
knowledge that operates at the heart of the sector. Whereas today the sector experienceslimited supply and demand for
information, in the future the sector will benefit from the free flow of quality, accessible information, assisting and engaging all
stakeholders. Information on social issues, interventions, organizations, and resources, generated by different types of organizations,
from nonprofits to the government to multilaterals to beneficiaries themselves, will be connected and accessible. Individually this
information is useful. Cross-referenced and connected, it is potentially transformative in its ability to allow stakeholders to make
better decisions about budgets, strategies, services, policies, and more. Information InfrastructureInformation Infrastructure Will Help Enable the Free Flow of Quality Information --
Information infrastructure will help convert the many disparate pieces of data into useable information and knowledge, assisting in
the free flow of quality, accessible data and information, and leading to a more effective social sector.
Standards for structuring and organizing data will make it easier and more convenient for organizations to provide information,
helping to increase supply. It will also make data more available, accessible, consistent, clear, timely, and useable. Further, as more
quality data is shared, it will become easier to add value to the data – through aggregation, visualization, and other forms of
synthesis. All this will make it easier to use information productively, helping to increase demand.
As supply and demand increase and more information flows freely, it will become easier for information to be integrated into the
processes and operations of organizations throughout the sector, and become more common in decision-making. This will impact
not only nonprofits and social businesses, but foundations looking for new opportunities, impact investors searching for investments,
beneficiaries seeking to provide feedback, government officers trying to craft effective policy, and countless others. MarketsOther Markets Demonstrate the Value a Functioning Information Infrastructure --
Examples of how structured and organized data facilitate the flow of information are evident in other markets. In the financial
markets data aggregators like Bloomberg and Thomson Reuters, rating agencies like Morningstar and S&P, and standard bodies like
FASB all help facilitate the flow of quality information, and create important feedback loops between businesses and investors. In the
world of consumer products and services, organizations like Yelp provide a means for users to provide reviews, leading to better
feedback for businesses, and better information for consumers. In healthcare, Electronic Medical Records (EMRs) allow for more
accurate, transferable, real time information on patients. This helps providers do their jobs better, improves patient safety and
satisfaction, and reduces costsin hospitals, laboratories, and other medical facilities. The use of Vehicle Identification Numbers
(VINs) in the automotive industry allows companies like CARFAX to track data to a specific vehicle, even as it changes owners,
allowing dealers, repair shops, consumers, auction houses, and watch-dog groups to make more informed decisions. And
Amazon.com and other retailers use ISBN numbers to organize book inventories. This allows Amazon to link many types of
information together, including detailed product information, external multimedia, expert reviews, customer reviews, links to similar
products, the capacity for simple and accurate transactions, and more.
While the economics of creating these standards are going to be different in the social sector (e.g., the relatively limited demand for
data would not allow an organization to generate $630 million in annual revenues like Morningstar), it is still illustrative to
understand how better standards for collecting, reporting, and transmitting data allows markets to operate effectively, and how
similar structures and feedback loops could help the social sector.TransformationBetter information flows could transform the sector.
A social sector powered by information will lead to a more efficient sector where capital flows more easily and programs and
services are more effective. This will lead, in turn, to greater impact and greater evidence of that impact. Capital FlowsCapital Flows More Effectively and Easily --
More money to the best organizations. While much of charitable giving is “emotional” and will not be influenced by more
data, research by Hope Consulting shows that foundations and donors in the U.S. alone are willing to give $15 billion (5% of total
giving) annually to higher-performing nonprofits if they have trustworthy information on impact.2
Less expensive to move money. A study by McKinsey & Company shows that nonprofits spend ~3x the amount of money on
fundraising and marketing than do private companies on a per-dollar basis. Better information and the growth of effective
intermediaries could reduce that burden. Halving these costs could unlock more than $20 billion each year in the U.S. alone.EffectivenessPrograms and Services Are More Effective and Innovative --
Better programs and services. Connected, accessible information will allow organizations to hear the voice of their
constituents and participants, evaluate and benchmark their performance, learn about other approaches, and make better decisions
about strategy and operations. This will lead to more impact by organizations, and more collective impact in the sector.
New and expanded programs and services. Better information can shed light on unmet needs and gaps in services.
Brand new innovations. Better information can enable creative thinking and the development of innovative solutions.InnovationLearningThe Sector Learns, Adapts, and Operates Even More Dynamically --
Continuous learning. A sector with good information can continually learn, adapt, and progress.
AdaptationNonredundancyLess redundancy, more accuracy. Today, many organizations conduct the same processes of scrubbing and mapping data. AccuracyConsistent FormatsInformation in consistent formats will greatly reduce these needs and lead to fewer redundant exercises and more accurate data.
ConnectionsMore connected. Consistent and useable information makes it possible for a range of organizations – from nonprofit intermediaries to financial service organizations to search engines to social media sites – to access, link to, and provide value-added
services like visualizations, trend analysis, or impact evaluations.Value-Added ServicesVisualizations Trend Analysis Impact EvaluationsStakeholdersBenefits to Stakeholders Throughout the System --
The benefits of a sector powered by information can be seen in the lives of stakeholders who interact with the sector every day ...CollaborationCollaborating towards a better future.
The social sector needs to improve the flow of high-quality, accessible information.
Structured InformationThat starts with structuring information so it can be easier for organizations to supply meaningful data, to add value to that data, and to use that data to make better decisions. High PerformanceThis will help enable more informed and efficient capital flows, higher-performing organizations, more effective interventions, and greater social impact.
InterventionsSocial ImpactDiscussionThe Markets For Good initiative hopes to spur this discussion, and to identify and fund the initiatives with the greatest potential to move the sector forward. This is a complex space. No one has all the answers, and many perspectives are needed to make this initiative a success. EngagementThe best way to participate is to engage in this dialogue, and contribute ideas and perspectives. DialogueIdeasPerspectivesEngagement & LearningBring together the best ideas about how to create, use, and share information in the social sector.ID-174007f6-439d-4130-99dc-9c76a5e1d6a91Engage and Learn. In order to be successful, this initiative needs to bring together the best ideas about how to create, use,
and share information in the social sector. There are many individuals and organizations with experience and expertise – both
inside and outside the social sector – whose voices and perspectives will be critical to the success of this initiative. There are
also many organizations working – consciously or not – on improving the quality and flow of information. Their opinions, the
lessons they have learned, and their collaboration will be vital for the success of this effort.
The primary medium for facilitating engagement is through the Markets for Good website, www.marketsforgood.com. The site
is hosting an open discussion about how the social sector can create, use and share information. It will bring together diverse
perspectives on a range of related topics, and feature content relevant to this work.VisionEstablish and Communicate a (Preliminary) Vision. ID-37f62095-1bd5-426d-9808-7e879d8772642This paper is the first draft of the Markets for Good vision. It is
intended to provide a more concrete sense of the initiative’s ambitions in order to foster dialogue, but is a “living document”
that will evolve and change as others contribute new and better thoughts, as ideas are tried, and as progress is made.Landscape MappingConnect, align and accelerate works and ideas already in progressID-f16217dc-494d-4a72-87f1-c795ac80f72d3Map the Landscape. There are hundreds of initiatives and organizations already working to upgrade the social sectors’
information infrastructure. www.marketsforgood.com is building and maintaining a map of these initiatives in order to create a
common understanding of what is being done today, and where there are opportunities for further collaboration or innovation.
The goal is not to develop a series of brand new initiatives to replace the work that already exists. Rather, the aim is to
connect, align and accelerate works and ideas already in progress, where possible.Investment StrategyDefine an Investment Strategy and Approach. ID-e737fbf0-6f21-47c3-8bba-420680690d444While no initiative as complex as this can or should establish a rigid
list of ex-ante priorities, it is important to establish a framework, a fact-base, and a list of initial priorities in order to evaluate
ideas objectively, and to direct funding to the projects and initiatives with the greatest potential. This work will rely in part on
the input received from others, and will evaluate the importance, priority, feasibility, and cost for upgrading different elements
of the social sector’s information infrastructure. In addition, it is also necessary to establish clear project governance. This will
include establishing clear decision rights, defining and communicating a funding approach that is open, transparent, and efficient;
and creating a plan to monitor key metrics so that progress can be measured and priorities can adapt.Information InfrastructureCollect and deploy capital to fund a strengthened information infrastructure.ID-a0ec98ce-f1e0-4c9a-9117-8942b2a001d55Support Key Initiatives. This is ultimately about supporting the work that will strengthen the information infrastructure in
the social sector. The goal is to collect and deploy capital to fund a strengthened information infrastructure, with a focus on
supporting sustainable business models, strengthening existing efforts, and fostering new opportunities for collaboration. The
funding will include supporting both:
• Shovel-ready projects that meet identified needs through projects that have already been seeded.
For example, these projects could include:
- Furthering current initiatives that still require support to get to scale, such as the Reporting Commitment, Unique
ID’s, Form 990 and others (see descriptions in section 7, “The right place to start, the right the time to act”)
- Supporting beneficiary feedback by helping organizations working on this today to improve and scale
- Supporting a common nonprofit profile, in which nonprofits could provide a common set of information once and
have it be updated across multiple sites automatically
- Supporting common technical standards, such as common Application Programming Interfaces (APIs), to allow
information to be accessed more easily
• Future pilots and projects that address additional needs. This will include funding to stimulate and
accelerate new ideas and pilot projects, as well as substantial grants or investments to enable organizations to develop
and scale the most important elements of the information infrastructureClassificationsCreate a ‘common language’ so that similar data will be understood and interpreted consistently across different organizationsID-a2bf1380-5e81-40df-8544-851e2373eb5c5.1NTEE NTEE codes for nonprofitsIRISIRIS metrics for social businesses GeoTreeGeoTree for geographic codingWhat it is: Taxonomies for data that provide consistent
definitions and descriptions. These are
applicable to many types of data in the social
sector including data on issues, activities,
organizations, geographies, and populations.
Why it is needed:
Creates a ‘common language’ so that similar data
will be understood and interpreted consistently
across different organizations. This will ensure data
is accurate, consistent, and clear, and allows data to
be aggregated and communicated clearlyTechnical StandardsAllow information to be accessed easily and accurately by multiple parties.ID-1785e839-f256-47a6-aba1-b584754afc5a5.2hGrant hGrant for machine readable foundation grant reportingWhat it is: Specifications for electronic data interchange
that facilitate data sharing in the social sector
Why it is needed: Allows information to be accessed easily and
accurately by multiple parties Reporting ProtocolsEnsure data is reported accurately, consistently, and promptly.ID-d568e2b2-4c59-4e38-a653-e8ad5d9520245.3IRSIRS 990 requirementsFoundation CenterThe Foundation Center’s Reporting Commitment for foundation grants What it is: Standards for what social sector data is to be reported and when
Why it is needed: Ensures data is reported accurately, consistently,
and promptly. There are few mandates for data reporting today (outside of the IRS), and what is required is limited and dated.Knowledge PlatformsScale and improve existing platforms collecting data and information.ID-3fadbc71-e443-4a12-b675-f89269d379f95.4GuideStarGuideStar for nonprofit dataGreatNonprofitsGreatNonprofits for stakeholder reviewsImpactBaseImpactBase for impact inv’s What it is: Platforms to bring together key types of social sector data, including socioeconomic data, nonprofit financials, beneficiary needs and
opinions, and more.
Why it is needed: Many platforms collecting data and information today have excellent intents, but are sub-scale. There is a need to scale and improve those –
not to create a single centralized databaseGovernance: Oversight, Rights & ProtectionsClarify and adequately fund governance to facilitate compliance and coordination. ID-ce2512f6-1033-46ae-8295-f4229c945d985.5US Government US Government for policies, legal standing, tax issues GIIN GIIN for impact investing IATI IATI to maintain standards and increase transparency for international aidWhat it is:
Oversight to maintain the system, including
ensuring that intellectual property rights and
privacy concerns are managed, and that there
is a means to build consensus and drive
compliance.
Why it is needed: Current governance is often unclear, underfunded, and insufficient, which hinders compliance and coordination. Given the difficulty of sharing and using data, as well as the need for scale and collaboration, there must be mechanisms and leadership to oversee these efforts2013-08-29OwenAmburOwen.Ambur@verizon.net