Open Sourcing Philanthropy

Today's columnist is Stephen Huddart from the J.W. McConnell Family Foundation. Stephen writes:

While the private sector has developed a broad range of business models and financial instruments over the past 150 years, Canada’s community sector is limited to a narrow range of tools for achieving its objectives: grants and donations, fee-for-service, and a low level of entrepreneurial activity. No bonds, few bank loans, and with the exception of co-operatives, no access to share capital.

As innovations like micro-lending or the Registered Disability Savings Plan (RDSP) have shown, financial instruments can have a big impact on social problems. By adopting approaches already proven in the US and the UK, we could be doing a great deal more to build low-income housing, improve school completion rates, and reduce healthcare costs. On November 30 at MaRS in Toronto, the Task Force on Social Finance will present several recommendations to spur fresh approaches to complex social and environmental challenges. Provided regulatory support follows, we could be looking at a period of unprecedented innovation and creativity in and around Canada’s community sector. Full details will be available shortly on socialfinance.ca, the must-read blog on financial innovation.

For the sector to attract new resources - to warrant the trust of patient investors, and to meet the scrutiny of public and private boards - it will need to demonstrate higher degrees of transparency and accountability for results. Unlike private sector companies whose profit and loss statements can be used to compare performance and attract investment, the community sector generally lacks social impact measures, or even the means to compare one organization with its peers. Well meaning but misguided efforts to simply compare “administration costs” obscure the fact that social change is complex and demands measures that take this into account. Pioneering efforts in this space include Impact Reporting and Investment Standards (IRIS) – used by a growing number of blended value (financial+social or environmental) investment funds, such as Acumen.

Together, philanthropy and the open source community have an important role to play in this unfolding scenario. The Knight Foundation’s support for the Drupal platform is a good example of what core funding, shared learning, and collaboration can do to make open source tools available to those who work for the public good. We need similar support for accessible (low cost, easy to learn, open source or at least open architecture) operating platforms that provide access to suites of compatible tools. Take a look at the Framework Foundation’s technology and operations portal at it.timeraiser.ca to see what one leading Canadian organization is doing. By making its policies and practices visible and open to comment, Framework is contributing its tacit knowledge about cloud computing tools to anyone who can use it. Imagine what an expanded platform of this kind could do to save time and money for community agencies.

Other platforms could aggregate data from organizations working on similar issues and share promising practices among them. At Boys and Girls Clubs of Canada, work is proceeding on a set of metrics that will allow its member clubs to track progress on dozens of operational and programmatic variables, eventually enabling sophisticated analysis of individual clubs and the entire association. When these kinds of metrics are adopted across a sector - say "youth-serving agencies" - and the results are shared openly along with the learning that accompanies social innovation across levels of scale, the result will make our work in the social sector today look two-dimensional.

The Task Force on Social Finance is about to propose a set of lenses for seeing past the restrictions of the grant economy. One of the next things to appear should be open operating systems for social agencies. Together, they would accelerate the rate at which we accomplish beneficial change in society, through continuous social innovation.