Policy Project on the Social Economy

The most recent complete review of regulations, policies and practices for the nonprofit sector (of which I am aware) was the 2005-2006 Panel on the Nonprofit Sector, hosted by Independent Sector, which produced a first report with 120 recommendations and a supplemental report a year later.

Since then we’ve seen the development of new reporting and ratings systems (GIIRS, IRIS), whole new “sectors” such as Social Capital, a steady increase in online giving, a rise in international giving flows, the expansion of two new organizational forms through state law - the low profit limited liability company (L3C) and the B Corporation and probably lots of other system-oriented innovations of which I am not aware.

We’ve also seen a boon in citizen participation in reading, informing, mashing up and making sense of government data and regulations as a result of The Sunlight Foundation, Data.gov, and Government2.0. The federal government is testing new community-driven mechanisms for awarding patents that involve citizen experts, requiring public access publication of NIH funded research, and is now proud home to a Chief Information Officer and a Deputy Chief Technology Officer for Open Government.

This is a perfect opportunity to invite nonprofit and philanthropy professionals, social entrepreneurs, social capital market makers, data wonks, think tanks and others to reimagine the regulatory and policy structures that guide and inform philanthropy.What policies or regulations would improve philanthropy? Here are some that are being discussed at Internet watercoolers (or even being debated in legislatures):

• Proposed new accounting rules for philanthropic equity, based on the proven success of work done by the Nonprofit Finance Fund.
• New requirements for foundations about racial and ethnic diversity, first proposed by the Greenlining Institute, defeated in California (AB 624) and then brought back to the national discussion by NCRP.
• Requirements for independent finance and investment structures to prevent the kinds of endowed asset losses that resulted from the massive Madoff ponzi scheme.

I proposed a Policy Project on the Social Economy as a way of inviting new ways of thinking about the regulations and policies that guide the flow of capital to social good. I tend to try to simplify complex problems in order to get started, so I’d approach this by asking a couple of basic questions:

What would better philanthropy and social investing look like? (Is it more money? More focused money? More democratized? More visible? Better informed? More accountable? More market-oriented? Less market-oriented?)
What is likely to make those improvements happen?
Are there policies or regulations that could accelerate or direct the change? (Based on the ideas already mentioned there are viable debates under way on accounting rules, governance structures, reporting requirements, and organizational options)
What are those policies/regulations and at what level do they need to exist or be changed? (Who needs to be involved)
I’m thrilled to announce that I have been named a Visiting Scholar at Stanford’s Center on Philanthropy and Civil Society (http://pacscenter.stanford.edu/) - where I will be working to launch a global network of scholars, activists, and stakeholder to look at the existing policies and regulations that guide philanthropy and social investing. I’m hopeful we can coordinate with other efforts, such as Independent Sector’s Future Lab, and that we can take a broad look at the areas of policy that should be up for discussion. Let me know if you would like to be a part of this, either in the comments below or at http://philanthropypolicy.wordpress.com/.

Lucy Bernholz is the founder and president of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as executive producer of The Giving Channel on Fora.tv.

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