Through an agreement with UK-based Alliance magazine, PND is pleased to be able to offer a series of articles about global philanthropy.
How is data on philanthropy collected and analyzed on each side of the Atlantic? What is collected, what isn't and why isn't it? Foundation Center president Bradford Smith and Rosa Gallego of Donors and Foundations Networks in Europe (DAFNE) compared notes and pondered the need for collaboration between countries and regions in an era when foundations increasingly work across borders.
Bradford Smith: What is the state of data on philanthropy in Europe, Rosa?
Rosa Gallego: It's quite uneven, and this is one of our big challenges. Foundations do collect data, but they often do it very much on an individual basis and don't think how it could be done collaboratively and in a way that could maximize its use for the sector in general. I am afraid that data collection is not yet a major topic for the majority of the sector. There could be various reasons for this. One is that it is not seen as the tool that will allow foundations to do their work better, but maybe more important is that they see it as too expensive and time-consuming.
BS: When the project to create the European Foundation Statute was first conceived, the European Union commissioned a study which, among other things, had some very interesting estimates of the assets of European foundations and the amount they spend on their programs every year. This is the kind of data that the sector needs for policy purposes, but do you think it's sufficient?
RG: I think this first attempt shows how much we have to do still. We need data to make society, governments, and public administrations aware of the importance of the sector, and to give them a realistic sense of how much we can achieve, for instance in areas from which the state is retreating. Data are also important for the reputation of the sector; it is important that society knows what foundations do.
BS: I often cite that study to American audiences, and they are amazed that the assets of European foundations are equal to or greater than the assets of American foundations, and that the amount they spend is roughly equivalent. It impresses on them that philanthropy is not just something made in the United States.
RG: It's interesting that you say that, because I think it has the same effect in Europe. People often are unaware of the strength of the sector and think that philanthropy is much stronger in the States. One of the areas on which we have to work — and DAFNE and the European Foundation Centre are trying to move towards this — is to see European philanthropy as a whole. Most of us have been looking at philanthropy and the foundation sector nationally. If we are to have a European Foundation Statute, if we want a Europe of citizens, we have to be able to prove that philanthropy has a presence and a significance at European level.
BS: People in philanthropy sometimes think "our data will never be good enough, the institutions are too individualistic, the problems are too big, it costs too much money," so nothing gets collected. But even very simple data like the volume of assets collectively of foundations and the amount spent on their programs can be illuminating. We are seeing this in other parts of the world, too. The China Foundation Center, which started two years ago, has just begun to collect data from government sources and directly from Chinese foundations. They have collected data on roughly twenty-five hundred foundations. When you tell people that there are twenty-five hundred foundations in China, they're amazed, because people don't think of any foundations in China. Another interesting point: over a third of those foundations have Web sites, whereas a Foundation Center survey found that only 26 percent of U.S. foundations have Web sites. If you tell American foundations that, it makes them think about their own sector, and that they need to improve.
RG: What kind of data are available about the work of U.S. foundations and how is it collected?
BS: In one way, it's easier because the U.S. is a single country, not a union of countries like Europe. All American foundations have to submit a tax document called a 990-PF and it has to be available for public inspection. The Foundation Center gets these documents in bulk from the Internal Revenue Service and can produce data from them. The downside is that this is a compliance document, not a data-collection instrument, so it has its weaknesses as a data source.
The other problem is that there's tremendous variation in the way foundations complete this document. In the U.S., everyone thinks of the big professional foundations — Ford, Rockefeller, Mott, Gates. But in a survey we did of a representative sample of eleven thousand foundations, 76 percent had four staff or fewer, and, as I mentioned earlier, only 26 percent had Web sites. There are thousands of foundations that are simply a husband and wife and an accountant. Some of these documents are filled out in pencil, whereas the Gates Foundation is filing theirs electronically.
Interestingly, the IRS sends these forms to us in image form, requiring that they must all be converted into a form which we can load into a database. Foundations are supposed to attach a list of all the grants they make — the organizations they made them to, the amount, and the purpose. Sometimes they don't put the purpose, or they misspell the name of the organization or put an acronym instead; all this means that the data have to be cleaned. But the fact remains that there is a basic data source about the sector, which is a huge asset.
RG: Absolutely. In Spain, one of the barriers is that, although foundations have to submit their annual accounts to the supervising authority, there is not yet a standard form for providing that information — but we are working on it and we hope there will be one next year. However, it will not be in electronic form, so we will have to do the same work that you do to extract the data from the document, and we don't have enough resources for this. Perhaps because of that, we only consider a small number of items, like income, expenditure, and assets. We don't, for instance, try to ascertain whether the source of the income is public or private, or whether it's regular. Another source of data is to ask foundations directly, which we also do.
BS: As you mentioned, philanthropic institutions are quite individualistic, and a field that is made up of individualistic institutions often thinks of itself as unique. People in philanthropy have this myth about the private sector that everything is very organized and efficient, but we've been talking with Bloomberg LP and they tell us that they have similar challenges. We have people actually sitting reading tax returns, hand-copying information and keying in data, and they have the same thing in the corporate sector! So we shouldn't let the obstacles be a reason not to do things. The other thing is that technology is getting better, so the problems of automatic scanning and coding will gradually be solved, and it will become cheaper to do this.
RG: I think we as representative organizations have a role in convincing our members about the importance of data. How are we going to represent the sector if we cannot tell society or governments what the sector does and how it does it? If foundations have come together in a platform, like the Spanish Association of Foundations, or any other national or supranational association, it is because they feel that working together will make it easier to defend the interests of the sector, but of course we can do that only if the data are there. We can be very good at making proposals on how to improve the legal environment or the fiscal framework, but we will be able to achieve those goals only if we can demonstrate the importance of those changes.
BS: It's getting easier to show people the value of data because of data visualization. Virtually everyone in our sector uses some kind of mapping application on their mobile device. They probably pick restaurants or go to movies using software that rates and visualizes things. There are vast amounts of data behind this, but it is presented to them in a way that solves, very simply, a need they have. I think we could do a lot more with data visualization in our sector. Even just by using an interactive map that shows where foundations are located in a country, by province or by city, and showing the assets, the volume of programs, and the types of programs. There are ways in which we can make this data come to life so that people will begin to see it as useful.
RG: You are very much the avant-garde in this respect, and we all need to be thankful for the fact that the Foundation Center has decided to reach out and work in other areas of the world. And WINGS will help to spread those advances in data collection, and particularly in data visualization, in other countries. We are not as advanced as you, and we never will be, because it is not our main activity, but by cooperating with you and WINGS, we will benefit from your work and tools, and it will be easier to show foundations in the different European countries the importance of data.
BS: As is often said, we live in a networked world and organizations need to develop a networked style of thinking. Basically we work across borders and across fields, using the comparative advantages and strengths of different organizations to contribute to the social good. The relationship that the Foundation Center has with WINGS (Worldwide Initiatives for Grantmaker Support), and the relationship that WINGS has with DAFNE and DAFNE's members, for example, mark the beginning of thinking more like a network and adding up the strengths and capabilities of our different organizations. The Foundation Center is not a membership organization, so we aren't representative in the way that you are. What we're good at is data collection and data visualization.
WINGS was a tremendously visionary idea, created before anyone imagined that something like it would be necessary. It was based on the idea that philanthropy is global, that there are support organizations everywhere that make it better and defend the sector, and that these support organizations could achieve a lot by sharing their experience and building on each other's strengths. The challenge now is how to take advantage of this wonderful organization and help it to live up to its potential, especially in this area of data. WINGS has the structure and the potential to talk to organizations like the World Bank and the International Monetary Fund and say, "Here's what philanthropy is doing in Asia, or globally," because increasingly people want to know.
RG: This is a bit like what I was talking about before, in Europe. We need to have a picture of philanthropy at the European level and in each of our countries, because we want to be able to show the strength of the whole continent in philanthropy.
BS: You mentioned that some foundations are collecting data in a given sector or on a given issue. It's important to recognize that there are groups of foundations that have decided to work together on issues like immigration, or disability rights, or whatever, that have engaged in collecting and sharing information.
RG: Yes, these are good examples of the importance of collecting data. It is interesting to look back at the work of some of these foundations and to recognize, for instance, the improvements in legal status for certain groups, like disability groups, that have been achieved over the past few decades. When you talk to them, they always cite the data that support those improvements. These examples also provide a way to encourage foundations to work towards policies alongside the individual projects they might be working on.
BS: Examples of this are occurring across borders in Europe. There is a project we have been involved in with the International Human Rights Funders Group and Ariadne, the European association of human rights funders. Its aim is to collect data to understand the level of human rights philanthropy and the trends within it: by region, by different kinds of rights, by sub-issues. It has been incredibly interesting. Both European and American foundations, and some in other parts of the world, have been very willing to provide data because they want to be able to say, "This is what philanthropy is doing around the world for human rights," and to see the advances and changes.
I'd add one caution. When some foundations think of data, they think of it as being provided by the people they support rather than themselves. They need to make sure they have the ability to use all the data their partners collect, because collecting it is a lot of work for them.
RG: As a last word, I'd like to add that we at DAFNE are very happy to be part of this pilot of cooperation between the Foundation Center and WINGS. We eagerly await feedback on the information we are passing on to you. We are always delighted to see it presented it to us in a totally different form; it makes us think in different ways. It is a very interesting adventure!
BS: Yes, the same goes for us. Transatlantic and global collaboration is the future of our field. It's a really exciting time to be working in philanthropy and research and data. When it comes to data, the glass is half full.
Rosa Gallego is chair of DAFNE and deputy director of the Spanish Association of Foundations; her e-mail address is firstname.lastname@example.org. Bradford Smith is president of the Foundation Center; his e-mail address is email@example.com.