Fourthsector3

AFTERNOON SESSION: A report on the Mapping the Fourth Sector Project

Introduction: Elizabeth Boris, director, Center on Nonprofits and Philanthropy, The Urban Institute, co-lead, Fourth SEctor Mapping Project

For Benfits share two practices:

• Driven by social purpose
• Earn substantial portion of income from commercial businesses

"We need a systematic approach to differentiating these organizations."

There is a critical need for comprehensive data -- taxonomy or classification system. What are important data elements. Understand the barriers facing these organization.

"The lack of accessible data hinders public polciy ... peer learnign and the development of a supportive policy structure.

PHASE ONE: The building blocks

TO COME:

(PHASE TWO: Definition and Taxonomy of For-Benefit Organizations) (PHASE THREE: Data Requirements.

Develop a framework for defining for-benefit organizations

They have an only database prototype already; it will be part of a public data commons.

They've had a brain trust working on it. REached out broadly and inclusively.

About 170 advisors stepped up to the table. All working toward developing a consensual framework and website.

"They have had many, many serious issues to confront."

Why are the users of this data going to be?

Joel Getzendanner reviewed 40-page overview of the project. Staging the project over time.

Have to find data that other people have gathered.

Develop rules for the data commons.

Who will use thei information: Arturo Gonzalez

• Manager, consumer and community development researcion, division of consuemr and community affiars, board of governors of the Federal Reserve System

Key desire: Gather information that will allow policy makers and regulator to make evidence-based decisions. It will help for-benefit organizations to find each other for supplies, support, best practices. It will help impact investors and funders to locate support services and investment opportunities.

It will help journalists to find data for sharing with the rest of the world, and also help conscious consumers to make purchasing decisions. it will help job seekers to understand the mission and impact of potential employers.

How is project managed: Nathan Dietz

• Senior reserach associate, Center on Nonprofits and Philanthropy, The Urban Institute, co-lead, fourth Sector Mapping Initiative

Former four groups:

• Taxonomy development -- how to classify
• Data acquisition -- How can we find?
• Survey design
• Data commons

Primary goal: What defines the fourth sector?

Secondary goal: Separate fourth sector organizations into families. Define sector boundaries and key attributes. Define families.

Over 70 people were intersted in definitiona issues and put together a 10-12 person drafting team. Strove for diversity and multiple user roles.

"When people say for-benefit organizations or fourth sector, what do they mean?"

They are not intendign to just do a survey; they don't just want people's thoughts. They want organizations to deliver administrative-quality data about the work they do and how they are structured.

Four drafting teams for the survey-instrument drafting:

• profiles
• barriers
• ecosystems
• impacts

Need to do more work publicizing the project. "So people udnerstand what we are trying to do." Want to expand the initiative across the world and outside US borders.

Want to establish something that will be a living, breathing resource.

Definition and taxonomy development: Allen Bromberger

• Partner, Perlman & Perlman, LLP

"There are lots of definitions out there which means there is effectively no definition."

The are looking at about six distinguishing issues.

There are also unresolved issues:

1. How much overlap between sectors shoudl be expected?
2. Should we require that defining characteristics be "primary" or "substantial?"
3. Can we/should we definie key terms like "social purpose," "ownership", "control," "capital,", etc., or are these beest left to the field to develop over time for different purposes?
4. And how will the taxonomy work outside the United States?

Release 1.0 of the taxonomy will come after this initial review process.

Survey instrument design key considerations/challenges: Andrew Hewitt

• Hewitt is founder & CEO, GameChangers 500

Who are targets: for-benefit orgs, support ogs, those at the intersection.

Survey will hve neutrla, non-biased, non-leading language and WILL NOT use terms like fourth sector, social enterprise or impact investing. There will be notes within teh survey and branching logic to customize responses for each respondent.

Data will be collected into an open database with focus on use caess for policy makers, regulators and economic developers.

Data collection will be ongoing. Survey will identity geographic considerations, also.

Q&A comnments from tables in the afternoon.

"Is it practical what we are trying to do?"

---

What is the Data commons? Joel Getzendanner

• Principal, Commons Consulting

If we had a taxonomy, how would we use it? We would build a data commons. Will find out what that means from Joel Getzendanner.

His guiding principle:

"In essential things, unity ... in non-esssential things, freedom and diversity ... in all things, generosity."

Four characteristics, or notions:

• Pooling information that lots of different people contribute to and don't always totally give up control of.
  • Distributed -- More like the Internet thing. Important things are standards of operation, not the structure of the database.
  • Control levels: (1) open data, (2) entrusted data or (3) private and proprietary data.
  • Crowdsourcing (we can all be both users and generators)

• Collaboration -- Working together to create somethign of value for us all.
  • Who would you find it valuable to collaborate with to get something done?

• Self regulating -- There is no one else to create the rules, we wil lgenerate the rule sfor ourselves -- what are the rules that make this work well
  • Agreements for interoperation and control and use -- and curation. "Who creates the hitchhikers guide to the fourth sector?"
• Making room for the right answer -- there is more than one right answer.
  • Curation allows for there to be more than one good right answer
  • Create a space where people can freely create applications

Data Commons Architecture -- Jeff Gedmin

• Senior fellow, Georgetown University and senior fellow, Institute for Srategic Dialogue.

A quick history of how we measure things in modern times. We started in economics in 1937 when an economist named Simon Kudnitz told Congress we have to understand the American economy and he came up with a method called the Gross Domestic Product (GDP). In the last 20 years there has be a proliferation of indices.

The Legatum Institute produces the prosperity index which uses 89 variables to produce an index of wealth and prosperity. The outcome is two fold: It used and uses only publicly available, free, accessible data. It has impact because in a short amount of time "this prosperity index has been used by policy makers all around the world." It measures in about 160 countries. "It's amazing how measurements like this are so muhc in demand."

Question for participants: What would this data do for you?

• Lower the transaction costs of doing business because you wouldn't be debating terms.
• It would tell you who the players are, what's going on and be able to take temperature of the community and see what opportunities exist; who is in compliance and not in compliance.
• Get a sector-by-sector impact measure so investors can sort of develop a normalized what your level of impact should be.
• Who is doing what -- knowledge for the social entrepreneur -- best practices
• Open access for communities or individuals who might otherwise have this data
• Help philanthropists find what is out there that they can support: Need examples, examples.
• It will help organization focus on showcasing the community rather than data analysis
• By discovering who is using and not using the data you can decided where to market
• It should inspire others to rush into the sector as well.
• Help you to know who you want to do business with.