A data sharing initiative’s ability to fundraise and/or generate revenue impacts the sustainability of its operations and investments in continued growth. Ensuring financial sustainability and exploring a diverse set of funding models was a common concern across most data sharing initiatives included in the landscape analysis.
While a majority of the initiatives remain donor funded, all of them recognized the importance of diversifying funding sources and/or building revenue models into their operations. Most initiatives expressed interest in moving from donor-based to revenue-generating (or partially revenue-generating) approaches, but there were few examples of successful transitions. Similarly, there are not many examples of initiatives that managed to diversify the origin of their funding or to ensure sustainability based on this approach.
Some funding models currently being explored include subscription fees, fees for data services offered, and fees for data storage/processing. However, such models are still in their early stages, and their scalability and sustainability are not yet clear.
Adopting appropriate financial models
The California Data Collaborative is an example of a self-funding initiative based on a revenue-generating model. Most of CaDC’s operational costs are met by the annual fee paid by members. While this makes the CaDC more expensive than a trade association, it is cheaper than the cost each agency would incur to hire a data manager or software developer. CaDC also receives supplementary grant funding to underwrite its research projects.
The Humanitarian Data Exchange, on the other hand, relies on core funding from key partners of the initiative. Initially, in 2014, HDX received project funding from the United Kingdom’s Department for International Development’s Humanitarian Innovation and Evidence Programme; the Government of Sweden; and the Humanitarian Innovation Fund. Today, most of HDX funding is ensured by the United Nations Office for the Coordination of Humanitarian Affairs, and this enables the continuity of the operations of the platform. HDX also seeks additional funding for specific projects (IT updates) from other donors, but the availability of these funds does not affect the initiative’s core functioning. Applying for funding to various donors has allowed HDX to refine its vision and get constructive feedback. Diversifying funding sources for core and additional activities helps mitigate financial risks and allows for tapping into additional resources when needed.
Finally, changing the funding approach while the initiative is ongoing is always possible. The Data for Children Collaborative, for instance, is currently funded by the Scottish Funding Council and the Data Driven Innovation Programme and will receive this financial support for the first three years of existence. However, the Collaborative aims to become a consultancy that builds data collaboratives as a service. This will entail switching from donor-based funding to revenue-generating approaches in the near future.