Markets for good strategic story march 2013

UPGRADING THE INFORMATION INFRASTRUCTURE

FOR SOCIAL CHANGE

Spring 2013

Markets for Good is an initiative to discover how the social sector can better use and share information to improve outcomes and change lives.

2

3

THERE IS A SPECTRUM OF MARKETS, CREATING A RANGE OF VALUES

The scope of this initiative is the full social

sector: global in reach, consisting of

both nonprofit organizations & socially-focused businesses

Our vision is of a social sector powered by information, where...

• Capital flows efficiently to the organizations that are having the greatest impact

• Programs and interventions are more effective and responsive

• Beneficiaries have a voice

• There is a dynamic culture of continuous learning, development, and innovation

4

THE SOCIAL SECTOR HAS THE POTENTIAL FOR

EVEN GREATER IMPACT

TODAY

6

INVESTORSINVESTMENTS

COMMERCIALBUSINESSES

PROFITS/EVIDENCE OF ROI

ACTIVITIES

CUTOMERS

FEEDBACK/OUTCOME

EFFICIENT MARKETS ALLOW CAPITAL TO FLOW EASILY TO THE MOST EFFECTIVE ENTERPRISES

In an efficient private market, each transaction provides feedback to investors and businesses,

which facilitates continued financial value creation.

EFFECTIVE PRIVATE MARKETS CONTAIN FEEDBACK MECHANISMS

7

INVESTORSINVESTMENTS

COMMERCIALBUSINESSES

PROFITS/EVIDENCE OF ROI

ACTIVITIES

CUTOMERS

EVIDENCEOF IMPACT

INFORMATION

STRUCTURED & CONNECTEDINFORMATION & KNOWLEDGE

INFORMATION INFORMATION INSIGHTINSIGHTINSIGHT

EFFECTIVE PRIVATE MARKETS SUPPORTED BY A SYSTEM OF SHARED KNOWLEDGE

FEEDBACK/OUTCOME

8

FUNDERSTIME, MONEY,EXPERIENCE

NONPROFITS &SOCIAL BUSINESSES

LIMITED EVIDENCE OF SOCIAL RETURN

INTERVENTIONS

BENEFICIARIES

LIMITEDFEEDBACK

Capital flows are inefficient & costly

Impact of interventions is often unclear

Limited/Broken Feedback Loops in the Social Sector

9

FUNDERSTIME, MONEY,EXPERIENCE

NONPROFITS &SOCIAL BUSINESSES

LIMITED EVIDENCE OF SOCIAL RETURN

INTERVENTIONS

BENEFICIARIES

LIMITEDFEEDBACK

UNSTRUCTURED INFORMATION & KNOWLEDGE

LIMITED SUPPLYOF INFORMATION

LIMITED DEMANDFOR INFORMATION

LIMITED KNOWLEDGE& CERTAINTY

OF IMPACT

SOCIAL SECTOR HAS LIMITED, UNSTRUCTURED, & UNUSED INFORMATION

The needs of the stakeholders are not being met.

• Funders do not have enough information to make informed investments

• Nonprofits and Social Businesses do not have enough information and feedback on their interventions to learn, adapt, and scale

• Beneficiaries do not have a voice

10

11

Funders struggle to find the organizations to support

They do not know if their dollars are making

a strong impact

FUNDERS DO NOT HAVE ENOUGH INFORMATION TO MAKE INFORMED INVESTMENTS

12

NONPROFITS & SOCIAL BUSINESSES DO NOT HAVE ENOUGHINFORMATION AND FEEDBACK TO LEARN, ADAPT, AND SCALE

Nonprofits and social businesses end up spending too much time searching for the information and money they need to do good work

They do not have a standard way of reporting

progress to all of their funders

13

BENEFICIARIES DO NOT HAVE A VOICE

People have knowledge of solutions for their communities, but it often goes untapped when feedback isn’t heard

A SOCIAL SECTOR POWERED BY INFORMATION

TOMORROW

Our vision is of a social sector powered by information, where...

• Capital flows efficiently to the organizations that are having the greatest impact

• Programs and interventions are more effective and responsive

• Beneficiaries have a voice

• There is a dynamic culture of continuous learning, development, and innovation

15

16

EFFICIENT GIVING WITH GREATER IMPACT

Capital flows more effectively & easily

Interventions are more effective & innovative

• More money to the organizations with the greatest results

• Less expensive to move money

• Improved programs & services

• New and expanded programs & services

• Brand new innovations

EVIDENCE OF SOCIAL RETURN

FUNDERSNONPROFITS &

SOCIAL BUSINESSESTIME, MONEY,EXPERIENCE

FEEDBACK

BENEFICIARIESINTERVENTION

S

STRUCTURED & CONNECTEDINFORMATION & KNOWLEDGE

EVIDENCE OF SOCIAL RETURN

FEEDBACK

INFORMATION INSIGHTINSIGHTINFORMATIONINSIGHTINFORMATION

FUNDERSNONPROFITS &

SOCIAL BUSINESSES BENEFICIARIES

GREATER IMPACT& EVIDENCE OF THAT IMPACT

TIME, MONEY,EXPERIENCE INTERVENTION

S

17

CENTERED ON A SYSTEM OF SHARED KNOWLEDGE

In this system stakeholders have easy access to the information they need to make important decisions.

• Funders make informed capital allocation decisions (investments, grants, and donations)

• Nonprofits and Social Businesses have information and feedback so they can learn, adapt, and scale

• Beneficiaries have a voice

18

19

TRACKperformance of my social investments

PROVIDE capital &EXCHANGE knowledge with

organizations

SEARCH & DISCOVER social challenges & organizations

COMPARE & EVALUATEorganizations

FUNDERS MAKE INFORMED INVESTMENTS, GRANTS, DONATIONS

20

REPORT results of my interventions &

TRACK operations

ENGAGE beneficiaries in intervention design & strategies, EXCHANGE knowledge with funders,

and RAISE money

SEARCH & DISCOVER social challenges

& funders

LEARNabout intervention strategies that work & how to improve

performance

NONPROFITS & SOCIAL BUSINESSES HAVE INFORMATION AND FEEDBACK SO THEY CAN LEARN, ADAPT, AND SCALE

21

SHAREmy feedback

SEARCH & DISCOVER available resources

in my community

COMPARE & EVALUATE

available resources in my community

BENEFICIARIES HAVE A VOICE

22

OTHER STAKEHOLDER BEFEFITS

Reliably TRACKdata across sectors

ENGAGE people in more effective approaches to the social

sector

SEARCHthe most successful

intervention strategies

ANALYZE trends & EVALUATE effectiveness

We don’t believe that we need a single platform, database, or application for the whole social sector, but we do need to link together the isolated and fragmented data and information “islands” that exist today.

23

INFRASTRUCTURE FOR THE SOCIAL SECTOR

TOMORROW

25

A SOCIAL SECTOR POWERED BY INFORMATION

26

YESTERDAY

Limited, unconnected, & dated information

TOMORROW

Comprehensive, comparable, & timely information

BUILDING A BETTER TOMORROW REQUIRES STRUCTURING THE FRAGMENTED TODAY

INFORMATION INFRASTRUCTUR

E• Classifications

• Technical Standards• Reporting protocols

• Knowledge platforms• Governance

27

Classifications Taxonomies for data that provide a “common language” across organizations

• NTEE codes for nonprofits• IRIS metrics for social businesses• GeoTree for geographic coding

Technical Standards Specifications for electronic data interchange that allow easy and accurate access to information by multiple parties

• hGrant for machine readable foundation grant reporting

Reporting Protocols Standards for data reporting that ensure data is reported accurately, consistently, and promptly

• IRS 990 requirements• The Foundation Center’s Reporting

Commitment for foundation grants

Knowledge Platforms Platforms that allow social sector data to be captured • GuideStar for nonprofit data• GreatNonprofits for stakeholder reviews• ImpactBase for impact inv’s

Governance: Oversight, Rights & Protection

Oversight to maintain the system, ensure intellectual property rights and privacy concerns are managed, build consensus, and drive compliance

• US Government for policies, legal standing, tax issues

• GIIN for impact investing• IATI to maintain standards

and increase transparency for international aid

STRENGHTENING THE SECTOR’S INFORMATION INFRASTRUCTURE IN FIVE KEY AREAS:

28

SOCIAL ISSUES(WHAT IS NEEDED)

INTERVENTIONS(WHAT WORKS)

ORGANIZATIONS(WHICH ARE

BEST EQUIPPED FOR IMPACT)

RESOURCES(CAPITAL FLOW

DETAILS)

Baseline social indicator data and information on the breadth, depth,addressability, and drivers of issues,including beneficiary needs

e.g., 50% of children from at-risk backgrounds are below the basic level for reading and math skills

The goals, strategies, and programs for addressing social issues, and data,research and feedback on their outcomes and “what works”

e.g., regular nurse visitation for new mothers and their babies leads to a 0.2 point increase in math & readingGPA in grades 1-6

The goals, strategies, activities, operations, and finances oforganizations, their effectiveness, andtheir impact

e.g., Nurse-Family Partnership is currently serving 22,795 babies and their mothers in 40 states across the U.S.

Details of the grants, donations, investments, volunteer time, andother human capital that support interventions and organizations

e.g., The Robert Wood Johnson Foundation made a 5-year, $10 million grant to Nurse-Family Partnership in 2007

CATEGORIES OF SOCIAL SECTOR INFORMATION

29

BETTER SOCIAL SECTOR KNOWLEDGE

WILL HELP UNCOVER INSIGHT...

FOR BETTER DECISION MAKING...

LEADING TO GREATER IMPACT

Stronger information infrastructure will make data more useful, accessible and easy to provide

Insight... Cross-referenced and connected information will allow stakeholders to make better decisions about budgets, strategies, services, policies, and more

BETTER KNOWLEDGE = GREATER IMPACT

30

BUILDING AN INFORMATION INFRASTRUCTURE WILL ENABLE DATA TO BECOME INSIGHT

+

Information Infrastructure Organizes Raw Data Into Useful Information

Knowledge Platforms Uncover Insight

Information

Knowledge

Insight

Information Platforms Synthesize Knowledge

Data

THE WAY FORWARD

Engage & LearnBring together ideas about how to create, use, and share information in the social sector.

Establish & Communicate a VisionWe’ve published a White Paper containing our preliminary vision that will evolve and change as we move forward with the initiative.

Map the LandscapeCreate a common understanding of what is being done today, and where there are opportunities for further collaboration of innovation.

Define an Investment Strategy & ApproachEvaluate the importance, priority, feasibility, and cost for upgrading the social sector’s information infrastructure.

Support Key InitiativesStrengthen the information infrastructure by funding shovel-ready projects and future pilot projects.

32

NEXT STEPS

33

JOIN THE CONVERSATION

@MarketsforGood#mkts4good

marketsforgood.org

facebook.com/MarketsforGood

Markets for Good - LinkedIn Group

34

THE SUPPORTERS

LET’S BUILD A BETTER TOMORROW. TOGETHER.