This is the fourth piece in a series about the “Sustainability of (Open) Data Portal Infrastructures” reports. In this highlight, the focus is on “Funding Portals: A Business Case Approach to Funding Model Longevity”
Sustainability of (Open) Data Portals Infrastructures reports
Over the next months, all six reports included in the ”Sustainability of (Open) Data Portals Infrastructure” will be summarised using featured highlights. This particular article will focus on the fourth report, “Funding Portals: A Business Case Approach to Funding Model Longevity”. The report devises a toolkit based on 3 business cases, 4 financing models and 20 cost considerations that can support portals to develop a funding strategy.
In most cases, portals and related activities are funded by government departments. Nationally, this has largely been based on transparency budgets or municipal IT departments. Few portals are financially sustainable, and some have no basis for becoming financially sustainable either. The 2018 Open Data Maturity Report found that the cost of running portals is subsumed into wider open data strategy funding and no national governments were identifying the cost of sustaining an open data portal as its own activity. Also, no alternative funding models had been explored by portal owners.
Business Case Development
Since Member States are obligated to publish certain datasets, this can be seen as a regulatory cost. This, to an extent, explains the cross-state hesitation to explore funding from other angles. However, this ‘compliance’ approach obscures the possibility of understanding the funding of open data from a more sustainable point of view, which can be developed using a business case. The report discussed in this featured highlight presents three different business cases, including examples, for opening up data:
- Direct Budget Savings – Case: Helsinki Region Infoshare (regional)
- Citizen Participation – Case: Data Mill North (mixed public and private publishers)
- Innovation in Products and Services – Case: Score/SCIFI (city and regional)
The choice of business case influences the decisions about the most appropriate financing models. The report reviews four financing models and explains how they might work in practice:
- Internal (public) financing: Internal financing of a portal, either cross-subsidised or as a regulatory cost, can be referred to as the status quo. It is sustainable to the extent that it is a regulatory cost and will therefore be included in budgets going forward.
- Co-funding: With co-funding a consensus must be reached on what will be shared. Co-funding thus requires a clear decision-making process and there may be some additional costs of agreements/contracts or a way to reduce these will have to be agreed.
- External funding: External funding happens when the government and privately held data are combined.
- Self-financing: In order to generate revenue to support financial sustainability, open data portals could charge for either data, services or tools using a freemium model.
The business cases can be used with a variety of financing models. However, not all financing strategies can be used for all business cases. Details of full implementations, including limitations, of each of these models can be found in the full report.
Cost Considerations for Portals
After conducting analysis on the report “Ensuring the Economic Sustainability of Open Data Portals: Understanding Impact and Financing (2018)” 20 cost areas were identified which must be addressed whenever a business case or funding model is used. Based on these areas, the report created a template for developing a budget that covers all the areas. These methods can be useful for three different parties:
- Portal owners at all levels from the national to specialist areas as they can utilise these methods as a toolkit to focus and direct financing strategy and operations. Also, portal owners can use the business case approach to understand what data might be valuably utilised that should not necessarily be opened up.
- Policy makers can use this to help to assess ways in which policy can be used to support movement away from a focus on open data as an IT cost and towards integration with other governmental activities.
- Potential funders who are interested in supporting open data can use these methods to identify appropriate opportunities and ways to get involved with publishers across the spectrum.
As stated, this article focused on a few key findings of the report. For more information on developing a funding strategy for your portal, explore the full report “Funding Portals: A Business Case Approach to Funding Model Longevity” on the EDP website. Moreover, keep an eye out for our next the EDP team’s fifth featured highlight on 20 January 2021 that will focus on ”Open Data Portal Assessment using User-oriented Metrics”. Interested in learning more about the topic? Join the EDP’s webinar series on “The Future of Open Data Portals”!
For more information or examples on open data, explore the European Data Portal’s (EDP) news archive and featured highlight section. Aware of open data examples or stories? Share them with us via mail and follow us on Twitter, Facebook or LinkedIn to stay up to date!