Report: More than $430 million invested in tech organizations focused on advancing citizen engagement and open government since 2011
Investments by private capital funders and foundations in technology that spurs citizen engagement, improves cities and makes governments more effective is growing significantly, with more than $430 million going to the field between January 2011 and May 2013, according to a major report released today by the John S. and James L. Knight Foundation.
The first report of its kind, “The Emergence of Civic Tech: Investments in a Growing Field,” provides an in-depth analysis of the current state of private capital and foundation investments in civic technology. It aims to help organizations and investors better understand civic tech funding, so that they can strengthen their work and help shape the field. The analysis applies a new approach to research and advances the use of data in the social sector; it showcases an interactive data visualization map that allows users to explore investments across multiple areas of civic tech.
The report reveals a 23 percent annual growth rate in the launch of civic tech companies since 2008. However, it concludes that private capital funders and foundations should coordinate efforts and pursue co-investment opportunities to accelerate advances in the field.
It further highlights the investments of foundations and private investors, as well as individual and corporate funders; prominent investors include: Omidyar Network, Knight Foundation, Google and Ashton Kutcher. Some of the organizations attracting the most funding include: Waze, a crowdsourced traffic monitoring app; NextDoor, a platform that connects people with their neighbors; Change.org, a site that allows users to create petitions for social change; and the Open Data Institute, which helps governments make their data more accessible.
The report also includes an index of investors and civic tech organizations, along with descriptions of the converging areas that make up civic tech—from information access and transparency to community organizing. The list is not exhaustive, but it is the first attempt to capture cohesive investment data for civic tech and analyze trends. Practitioners are invited to use the online tool to expand the study.
“Civic leaders and funders are increasingly exploring the potential for technology to promote healthy, vibrant communities,” said Jon Sotsky, Knight Foundation director of strategy and assessment. “Though activity and investment in civic tech has grown over time, a lack of insights and common terminology for describing the full spectrum of efforts in the space has hindered collaboration around shared strategies for impact. We hope this report will increase understanding about investments in civic tech and help identify opportunities to advance the field.”
The report charts 177 private capital and foundation investments, totaling $430 million that went to 102 civic tech organizations (out of the 209 identified by the study). It identifies two high-level themes in the field: open government, where citizens engage directly with government to spark reform; and community action that centers on peer-to-peer collaboration and information sharing. These groups are further broken down into pockets of innovation in the space, such as neighborhood forums and public decision-making. Using this framework, it provides some essential insights:
• The civic tech space is dominated by private capital: The number of grant investments and private investments to the field is relatively even, but the vast majority of the amount of funding comes from private investments (84 percent).
• Investors are reacting to changing consumption habits in communities: Peer-to-peer sharing of resident-owned goods and services was the fastest growing civic tech activity, growing more than 36 percent annually from 2009 to 2012 and attracting more than $240 million in private capital.
• Most open government investments come from philanthropic capital: With 65 out of 79 investments in open government constituting grant funding ($54 million of the $75 million invested) there is an opportunity to attract more private capital.
Rising investments in civic tech come amid national attention on the role of technology in making government more open, accountable, and transparent. By identifying overarching trends, the report gives funders and organizations working in the field a reference point for collaborating to address such challenges.
Even with rising interest in the field, co-investment between foundations and other funders is limited, and some areas of civic tech—civic crowdfunding, public decision-making and voting—are seeing far less funding. As momentum in civic tech builds, foundations and other investors can leverage partnerships to create a bigger impact.
“Better defining the boundaries of civic tech will allow all of us to tap into its transformative power. The common goal of funders in this space is to strengthen communities,” said Mayur Patel, Knight Foundation vice president of strategy and assessment. “Fundamental to that is seeing their own work in context, connecting and reaching more people through a unified effort that focuses on making an impact.”
Knight Foundation partnered with Quid, a firm that specializes in data analytics and network analysis, to map the field of civic tech.
"For the first time, we're applying the latest in data analytic tools and network theory to the social sector, exploring an area of growing investment among venture capitalists and foundations,” said Sean Gourley, co-founder and CTO of Quid. The tools allow us to understand the complex dynamics of this technology ecosystem, and determine key leverage points within it where capital can be deployed for maximum impact."
Since 2010, Knight Foundation has invested more than $25 million in new technologies designed to improve the health and vitality of cities.
To explore the report, visit Knightfoundation.org/features/civictech/. Follow the conversation on Twitter with #civictech.
About the John S. and James L. Knight Foundation
Knight Foundation supports transformational ideas that promote quality journalism, advance media innovation, engage communities and foster the arts. We believe that democracy thrives when people and communities are informed and engaged. www.knightfoundation.org
Quid offers a world class data intelligence platform that brings together data, algorithms and cutting edge visualization tools to allow strategic analysts to make sense of their world. The Quid platform works with data at any scale and allows users to uncover hidden relationships and insights from within the worlds unstructured information streams. The Quid platform is used by banks, corporations, governments and non-profits from around the world to augment human intelligence. Quid is Headquartered in San Francisco, Calif., and was founded in 2009. It is backed by Founders Fund, Atomico and Amicus Partners. Additional information is available at www.quid.com or follow @quidlabs on Twitter.