Stephen King, Luminate, CEO.

Last year, Luminate, once part of Omidyar Network, was launched as an independent undertaking with a mission to help create just and fair societies where citizens are able to participate fully and equally and to hold governments to account. The new organisation’s CEO, Stephen King, explains the rationale for separation to Alliance and talks about how and where Luminate works, the advantages of having a ‘dual chequebook’ and the virtues of making grants without strings.

Luminate grew out of Omidyar Network’s Government and Citizen Engagement programme. Why was the decision taken to make it a separate entity?
This strand of work started within Omidyar Network around 10 years ago, mainly in the US and focussed on what we used to call government transparency, which was about providing greater access to people about how government worked, the ability to hold it to account and so on. The transition to governance and citizen engagement happened around 2010-11 and coincided with the idea – which sounds quite outmoded now – that technology would be a great liberalising force. It would provide people with access to information, the ability to hold their leaders accountable, the ability to organise – this was in the heady days of the Arab Spring, when that seemed plausible. There was also a sense of optimism around that time, particularly with the Obama administration, the Cameron coalition in the UK and the launch of the Open Government Partnership in 2011, that open data, open government would be the future. But in 2016, Brexit, the election of Trump and the rise of authoritarianism and populism checked that assumption.

That change was one of the two main drivers for the creation of Luminate. With the Board including Pierre [Omidyar] who’s passionate about these issues, we concluded that a dedicated organisation was needed to support those organisations working to combat the roll back of freedoms connected to the rise in authoritarian leaders and governments. The second driver was that we wanted to be more flexible in terms of the resources we can provide to organisations to ensure we are helping to set them up for success. Traditionally, we’d provided a sort of one-size-fits-all grants and for-profit investments, but we were hearing directly from our investees that they needed tailored support to help with their management, with their campaigning and advocacy. A final consideration was also a sense of opportunity for us as actors in the field to have a more assertive voice and be a more active advocate for the issues we work on.

You’re set up as an LLC. What’s the thinking behind that?
We’re set up both as an LLC and a 501(c)3, so we have this dual chequebook. The 501(c)3 part is the channel for our grants, the LLC – and that’s the smaller part of our investment portfolio – allows us to make for-profit investments. Taking this approach enables us to support a much wider range or organisations and initiatives, provide the best type of support and ensure that support delivers the impact we are seeking.

“Financial transparency underpins strong and healthy societies, increasing accountability, reducing corruption, and ensuring public funds are spent delivering the services the public really needs.”

Financial transparency is one of your areas of work. I wondered if the decision to set up the LLC had any implications on that score.
We have always been transparent about where our funding is going and we will continue to build on and improve this. Within Omidyar Network, we pushed the idea of signing up to the International Aid Transparency Initiative (IATI) and we’ve continued that commitment within Luminate, so we report each of our grants according to IATI parameters. So, particularly in developing countries, it is clear what funding is going where. We’ve committed to publishing that annually. In addition, in the next couple of months we are going to launch a searchable database on our website that will include all of our investments and grants. The other thing we’ve done is, for the first time, we’ve published our strategy online to make it clearer what we stand for, why we’re doing what we do and for our prospective investees and grantees to know how to engage with us. As with any philanthropic organisation, we get a lot of requests for support and, obviously, many are outside the range of what we do. Hopefully, this will be one of a number of things which will make us much more transparent.

I think philanthropy can do a better job of being transparent. I don’t think there’s anything deliberate in that, it’s just there hasn’t previously been a pull for greater transparency in philanthropy in the way that there has in the last six months to a year or so.

Do you solicit approaches, or is it mainly your team on the ground who draw your attention to possible grants and investments?
In some cases, we do solicit requests. We’ve launched a number of challenge funds with partners, for example, with City University New York (CUNY), we’ve launched a membership challenge fund for independent media, so organisations that want to start up membership schemes as a way of diversifying their income can apply for funding to allow them to do that. We’ve also launched the first fund in Latin America for civic tech called ALTEC (Latin American Alliance for Civic Technology) and also one in South Africa for independent media. So, we’ve done a range of calls for proposals where we’ve set some parameters and invited people to bid. But, yes, we also rely on the expertise and resources of our people on the ground. The majority of our staff are based close to where our investments are – Brazil, Argentina, Kenya, South Africa, etc – and are from those regions.  Our regional teams are the ones who really spot the opportunities and trends and it’s on the basis of their views that we make up our blend of different activities.

You have these four programmes: civic empowerment, data and digital rights, financial transparency and independent media. Could you give me a couple of examples to illustrate in concrete terms what Luminate does?

We see investigative journalism as a critical part of again holding leaders to account and building strong, just and fair societies. Photo: Luminate

On civic engagement, we’ve supported an organisation in Brazil called Nossas, which is based in Rio de Janeiro but now has city chapters all over Brazil. It developed tools to help citizens organise and apply pressure to local governments. An example of how they did that was, around the time of the Olympics in Brazil, there was a community school near the Macarenhas Stadium which was going to be closed without local consultation. It was a high-performing school and also served people from lower income groups in the local community. The community organised using Nossas as a platform and were able to overturn that decision. On data and digital rights, we’ve been doing work on a digital democracy charter and a bill of data rights – a good example there is Privacy International based in the UK, which is ensuring that surveillance by the state has to comply with human rights standards. It’s combatting the use of illegal surveillance equipment by the Ugandan government and it’s helped tighten the EU regulation for surveillance technology manufacturers which are exporting to repressive regimes. In financial transparency, we support Global Witness, an investigative campaigning organisation which publishes reports on natural resource governance issues. Their investigations have directly led to the trial and prosecution of corrupt officials. They’ve done a six-year investigation into the award of one of the oil concessions in Nigeria to Shell and Eni which allegedly involved executives from both companies bribing ministers. They’re now on trial in Milan. Finally, on independent media, you’ll be aware of the International Consortium of Investigative Journalists (ICIJ) and their work on the Panama and Paradise Papers. We’ve been a big supporter of them and we see investigative journalism as a critical part of again holding leaders to account and building strong, just and fair societies.

You give grants and make investments and do some direct work, too. How do you decide what kind of support is appropriate
Grants would typically be given to non-profit organisations – ICIJ and Global Witness are both grants. It’s also important to say that we’re big supporters of unrestricted grants and that’s something we wish other funders would do more. Over the 10 years, we’ve seen the real benefits of providing that kind of support. Too much of NPOs’ time is taken up in sending duplicate reports to multiple donors and having to debate whether they can spend money on salaries or admin costs and the rest of it, so one of our main principles is that wherever possible and appropriate, we give unrestricted grants.

The role of Alliance and SSIR and others is to hold us to account, to be able to report on trends, to be able to report on malfeasance, if you find it, and to open a critical channel on philanthropy.

In for-profits, we’re seeing investment opportunities in two of our four impact areas, independent media and civic empowerment. There’s a sub-component of civic empowerment – civic technology – which often provide the interface between government and citizens. We’ve supported SeeClickFix which works in the US and designs customised software platforms which are sold to local government and which allow people to make complaints, or to report services that aren’t functioning properly. Typically, we’ve seen those civic tech for-profit investment opportunities growing in US and Europe, some in Latin America. In Brazil, there’s a company called Colab.re which works with city governments in Sao Paulo and other larger cities providing platforms through which citizens can engage with local governments. It’s not necessarily about promoting e-government, but about providing a feedback mechanism. Overall, though, equity investments are probably only about 15 per cent of our portfolio. The majority goes into grantmaking.

How much do you spend each year, or is that dependent on circumstances?
We’ve invested just USD306 million over the last 10 years in about 230 organisations, spread over 18 countries. This year, as we’re going through the transition to Luminate we expect to provide in the region of around USD60 million in grants and loans.

The four areas of work obviously overlap. Do you see any one as more important, or are they all equally so?
That’s a ‘which of your children do you love the most?’ sort of question! They all have a part to play and in different countries, we dial up or down the importance of certain elements. For example, we’re seeing some real opportunities around data and digital rights. There’s a new privacy and surveillance bill coming through the Brazilian parliament and there’s also great opportunities there around independent media, and there are opportunities in financial transparency in South Africa. Overall, we’re seeing a reasonably even balance between the four.

In the wake of the Cambridge Analytica scandal, there’s increasing concern about people’s agency and control over their own data.

We also have a fair amount of activity at a global level and what we see at the moment are some real opportunities around data and digital rights and independent media. For example, the UK government has announced a focus on press freedom and independent media and Jeremy Hunt [UK Foreign Secretary] is hosting an international conference on the issue in July. This provides a real opportunity, not only to advance the cause of press freedom but also to showcase the achievements of some of the organisations we’ve supported. We’re particularly concerned about increased persecution of journalists worldwide. That’s something where we’re seeing a bit of international momentum – the murder of Jamal Khashoggi has really brought this to the fore. On data and digital rights, in the wake of the Cambridge Analytica scandal, there’s increasing concern about people’s agency and control over their own data. Different governments around the world are looking at appropriate regulation and, again, that’s something where we could put in both our expertise and views. So probably this year, those two issues will come to the fore. Next year, it could be something different. Our belief, though, is that the four areas of work we’ve chosen are fundamental to healthy democracies and are areas where we have real expertise and experience that we can bring to bear.

The language of your website is couched more in terms of the threat posed by digital technology, but as you’ve made clear, you also see the opportunities it offers for more open and participatory societies. Where do you see the balance – is it more towards threat than possibility?

“Data and technology are not neutral representations of reality. They are reflections of power – the power of those who collected the data and those who designed the technology. ” Photo: Luminate

Yes, there’s an element of both. I think we are facing a time of unprecedented threat, particularly when you think of the combination of authoritarianism and new technologies. The ubiquity of social media channels is presenting new threats at both a personal and societal level. The tragic case of Molly Russell, who took her own life partly as a result of images she was seeing on Instagram – these are things that five years ago, we could never have imagined. The allegations of Russian interference in the US elections, we’re seeing this in other elections as well, whether it’s in France, in the UK around Brexit – the deliberate manipulation and misinformation are things that we are having now as a society to grapple with. The other thing which is on the horizon is deep fakes – you believe that someone is saying something but the images and voices have been manipulated so that they’re saying completely contrary to their actual views. All of these are existential threats which we’re trying to find our way around.

We made the decision early on not to try and cover everywhere. Even with the generous budget we have, you can’t spread that effectively around the world

That’s the bleak view. The optimistic view is that there is still time to have a reasoned debate about this. I think there is now an appetite and increasingly a demand from consumers to check the social media companies, whether it’s the issue around data rights, or around competition, and to see greater safeguards put in place.

With independent media, there is a delicate question of supporting them but at the same time ensuring their editorial independence. How do you approach that?
We’re very clear there – we don’t interfere at all in our grantees’ editorial stances. It’s entirely up to them. We make it very clear within the grant agreements or investment memoranda that it’s not the role of philanthropists to tell editors what they should or shouldn’t be covering. There’s no role for us in the newsroom. What we do encourage our investees to do is to have a clear set of editorial guidelines so, if challenged, they can point to them and say; ‘these are our editorial principles, these are what we stand for,’ etc.

Thinking about media independence on a smaller scale, how important is it to have an independent philanthropy media and what should its function be?
I think it’s critical. The role of Alliance and SSIR and others is to hold us to account, to be able to report on trends, to be able to report on malfeasance, if you find it, and to open a critical channel on philanthropy. There’s a lot of debate, particularly in the US, at the moment, about what’s the right role for philanthropy. That’s raising a whole set of issues which is a very legitimate thing to do. And generally – again, this speaks to a wish to be more transparent ourselves – I think philanthropy can do a better job of being transparent. I don’t think there’s anything deliberate in that, it’s just there hasn’t previously been a pull for greater transparency in philanthropy in the way that there has in the last six months to a year or so.

How do you decide where you are going to have people on the ground?
We made the decision early on not to try and cover everywhere. Even with the generous budget we have, you can’t spread that effectively around the world and our selection of countries was driven by a few things. One was places with large populations where we can have more of an impact. If you can change the independent media environment in Nigeria, say, with a population of 180 million or so, that’s probably going to have a greater impact than doing it in Guinea-Bissau.

The important thing is to work directly with local partners in these countries and to recognise that we alone aren’t the solution to these issues.

We also chose places with some sense of democratic accountability. We’re more likely to gain traction and find willing partners in places like Nigeria, Brazil and India than we are in North Korea and Eritrea. So there needs to be some adherence to the idea of regular elections, the existence of independent and critical media, the existence of civil society and partners you can work with and so on. With our expertise in technology, the penetration of technology is an important factor, too, and through our for-profit lens, the ease of doing business is another consideration. A more nebulous thing is geopolitical influence, so in Africa, we tend to work primarily in Nigeria, Kenya and South Africa because of that.

We also look for countries where we see there are particular opportunities in time. These could be major social, political or economic changes that create an opportunity to have more impact more quickly. We’ve worked in Myanmar since 2013, for example, and we continue to work there today, though we’re less hopeful about its trajectory. Those are really the governing considerations.

So you look for places where the moment might be ripe for intervention?
Yes, and again, the important thing is to work directly with local partners in these countries and to recognise that we alone aren’t the solution to these issues. There are very few donors who are actively working in the governance space – OSF, Hewlett, MacArthur, Ford and a few others – so whenever possible, we try and work alongside them, and where possible domestic funders and philanthropists, for the sake of greater impact and we’re also in touch with each other and know what their priorities are.

Collaboration among foundations is often not easy. How does that work?
We each have our own priority areas of work and what we also find at a sectoral level within our different impact areas, is that there are communities of practice. So, within independent media, there is a small group of donors who meet every six months and compare notes and strategies and it tends in my experience to be quite a collaborative group. It’s not as competitive as it’s often made out.

Andrew Milner is associate editor of Alliance magazine