Founded in 1936, Consumer Reports (CR) describes itself as an independent, nonprofit membership organization that works side-by-side with consumers to create a fairer, safer and healthier world. CR mixes evidence-based product testing and ratings with investigative journalism, public education and works on the policy front, as well, with the help of its 1.5 million volunteers and online activists. In the 1930s, CR’s inaugural issue exposed that consumers who paid more for grade A milk weren’t getting higher quality than those who bought grade B. By the 1970s, CR was an important player in the consumer protection and environmental movements. Its reports, for example, led to the enactment of the 1974 Safe Drinking Water Act.
Given its long and successful history, it’s no surprise that Consumer Reports counts the Ford Foundation, Alfred P. Sloan Foundation and William and Flora Hewlett Foundation among its philanthropic partners. Tech donor Craig Newmark is also a supporter of Consumer Reports, and earlier this month, gave a $6 million gift to the organization—the largest in Consumer Reports’ history. The funds CR’s new Digital Lab, focusing on the data privacy and security issues that consumers face in today’s digital era.
Newmark’s gift to CR—which comes less than a year after his $20 million donation to The Markup, a new tech media watchdog—helps cement his unlikely role as the leading U.S. philanthropist supporting greater scrutiny of Silicon Valley’s business practices and power. “We need to know what technologies are doing with respect to gathering information about us. I’m watching TV, but I don’t want TV watching me,” Newmark told me.
In a recent conversation, both Newmark and Consumer Reports President and CEO Marta Tellado couldn’t be more clear that the consumer rights space of old needs to be updated for the rapidly changing digital world of today. “A lot of the consumer protections and rights we’re proud of in the last 85 years don’t, for the most part, apply to the digital age,” said Tellado, a nonprofit veteran who was once vice president of global communications at the Ford Foundation.
Keen readers might recall our coverage of Ford’s BUILD, which is a five-year, $1 billion investment in the long-term capacity and sustainability of up to 300 social justice organizations around the world. Tellado says that Consumer Reports was part of the initiative’s first cohort of grantees, and calls the timing perfect: “BUILD was looking for organizations that were in a transformative moment.”
In the two years since launching Digital Standard, Consumer Reports says that it has published initial investigations on peer-to-peer payment services, home security cameras, and even found privacy flaws within a fertility tracking app. Tellado also told me about investigative work done on the price of car insurance, which is often said to be strongly tied to driving history. “But what we found is that it has more to do with where you lived, zip code and the color of your skin. So we got to look at algorithmic bias. That really got us excited, and that these standards mattered,” she added.
Tellado believes the Digital Standard can transform the way companies work in this new era. “We’ve already seen a response from manufacturers making changes and adjustments. You have a potential to create a race to the top by defining what those standards should be and putting consumers first,” she says.
Newmark, who has been making waves lately with a string of major philanthropic gifts, tells me that Consumer Reports’ stellar history of impact is what motivated him to get involved with the organization. “I knew they had been protecting consumers for years and were a trusted source, so I joined the board. They have a great track record of protecting consumers, and they’re a great example of fact-checking that frankly, I hope inspires other similar groups,” he told me.
While digital privacy issues have exploded in the news in the past year, Tellado has been beating this drum for quite a while now, believing that privacy is the consumer issue of our time—a view that also resonated with Newmark during his time on CR’s board.
Tellado says, “JFK came up with the Consumer Bill of Rights, where he established these four basic rights—to safety, to be informed, to choose, and to be heard. When I took this job, I thought, there’s now a fifth right—the right to privacy. The digital marketplace introduces new harms, and the need for new rights. And that is what we hope to recognize and elevate. Craig really connected to this, as well. We had a lot of different conversations, and we were at a conference in Aspen three years ago, and began to really think about this. We need to truly incubate this notion. Can we create a digital standard?”
We often talk about philanthropy happening in an escalating manner, and Newmark’s involvement with Consumer Reports is a good example. His $6 million gift for CR’s Digital Lab will underwrite a new investigative arm focused on rating and reviewing the privacy, security, transparency and data collection practices of various mobile and internet-based products and services. One of the lab’s first priorities will be to assess the security of internet routers, a classic route for hackers to take control of devices on a network.
Tellado reminds me that while Digital Lab will be, in a sense, a literal lab—a place of testing and conclusions—it will also be a space to “congregate thought leaders and explore what the long-term solutions are to some of these issues.” And while Newmark is no longer on CR’s board, he will serve as the honorary chair of a digital advisory council of tech experts and researchers who will evolve Digital Lab.
In our conversation, Tellado also emphasized the importance of philanthropy in funding new and edgy work. “I’ve been really pleased with partnerships that we’ve renewed with philanthropy and their recognition of the important role of consumer empowerment, particularly in the digital age. In the nonprofit world, you really don’t go out to VCs to raise money for new initiatives, so it was a matter of renewing the great work in advocacy in journalism and testing, but also turning to philanthropy for that risk capital. That partnership has really made this possible.”