The UK government is ‘the most open and transparent in the world’, according to research by the World Wide Web Foundation.

This announcement was greeted gloomily on all sides. Those who wish to see greater transparency and more public data opened up for scrutiny claim the British government still falls short of the mark while sceptics, worry that the UK is too free and easy with data as it is, and should practise restraint.

Amid this argument sit charities and foundations. The former potentially hold a haul of data about the people they seek to help; the latter, at their best, have access to facts and figures about what works and what they want to fund in the future. If this sort of information were put to use, charities could learn from success and failure across the sector. We’d be entering controversial territory – the potential pitfalls if sharing private data goes wrong are well documented – but the rewards can trump such concerns. We believe it is a challenge the charity sector should step up to meet.

The concept of funders using data is not new. But we have seen their interest and involvement in data undergo a resurgence, moving away from a rather traditional, limited approach taken in application and reporting forms, towards opening up their own funding data and using ‘open data’ – that is, ‘data that can be freely used, re-used and redistributed by anyone – subject only, at most, to the requirement to attribute and share alike’.

NPC’s report on 10 innovations in global philanthropy last year highlighted some examples of this, including WASHfunders.org. Run by the Foundation Center in the US, this is an online database for the water, sanitation and hygiene (WASH) sector for use not only funders’ but also by NGOs, policymakers and researchers. The portal combines 17 different data streams to produce an interactive mapping tool that allows funders to see information about who is funding what, where. Moreover, it provides analysis of need and challenges and successes within the sector, set within the context of multilateral agency funding.

The purpose of  WASHfunders.org is to encourage philanthropists to use data in a way that aids better decision making in WASH grants. Such practice can, at its most effective, target money where it is especially needed and avoid funding that merely replicates work already under way.

Not only are funders opening up their own data, they are also encouraging government to do the same. The Oak Foundation, for example, funded NPC to work with the Ministry of Justice to set up the Justice Data Lab (JDL). The JDL allows criminal justice organizations to access data for free, so they can compare the re-offending rates of their service users with those of a matched comparison group. This is a hugely powerful tool that can help to inform what works, and what does not, in the sector.

Oak is now supporting NPC to assess the feasibility of a Health Data Lab to help charities access anonymized data on information such as A&E admissions, while keeping beneficiaries’ details protected. Care.data has earned a bad press, but initiatives like these are vital in our quest to improve and save lives.

The availability and use of open data in the non-profit sector is increasing and projects like the ones highlighted here demonstrated how useful and important it can be. Accurate and timely data allows funders to learn quickly about issues they are interested in. It encourages them to think strategically about their giving and to communicate and collaborate with others in the sector. Funders are already playing a role in opening up data, but there is more to do:

• Funders are data holders: this can be shared on a funders’ website or, even better, with intermediaries such as 360 Giving and WASHfunders.org. Transparency will enable more informed decision making.
• Funders can follow the Oak Foundation’s example and work with government to open up its data, with the intention of helping charities better understand their impact. NPC is currently working with multiple government departments to drive the case for data labs in every government department.
• Funders of criminal justice organizations can encourage their grantees to use the Justice Data Lab.
• Funders also have a role to play in helping grantees to navigate the world of data. Some guidance exists on how to use and access it, but it is a complex environment and funders could signpost to this information.

Data, effectively captured and sensibly used, can transform the way funders and charities do business – they just need the courage to grab the chance.

Rachel Findlay is deputy director of research & consulting at NPC.