Transparency Talk

Increasing Attention to Transparency: The MacArthur Foundation Is #OpenForGood
April 17, 2018

Chantell Johnson is managing director of evaluation at the John D. and Catherine T. MacArthur Foundation. This post is part of the Glasspockets’ #OpenForGood series in partnership with the Fund for Shared Insight. The series explores new tools, promising practices, and inspiring examples showing how some foundations are opening up the knowledge that they are learning for the benefit of the larger philanthropic sector. Contribute your comments on each post and share the series using #OpenForGood.

Chantell Johnson photoAt MacArthur, the desire to be transparent is not new. We believe philanthropy has a responsibility to be explicit about its values, choices, and decisions with regard to its use of resources. Toward that end, we have long had an information sharing policy that guides what and when we share information about the work of the Foundation or our grantees. Over time, we have continued to challenge ourselves to do better and to share more. The latest refinement of our approach to transparency is an effort toward increasingly sharing more knowledge about what we are learning. We expect to continue to push ourselves in this regard, and participating in Foundation Center’s Glasspockets  and #OpenForGood movements are just a couple of examples of how this has manifested.

In recent years, we have made a more concerted effort to revisit and strengthen our information sharing policy by:

  • Expanding our thinking about what we can and should be transparent about (e.g., our principles of transparency guided our public communications around our 100&Change competition, which included an ongoing blog);
  • Making our guidance more contemporary by moving beyond statements about information sharing to publishing more and different kinds of information (e.g., Grantee Perception Reports and evaluation findings);
  • Making our practices related to transparency more explicit; and
  • Ensuring that our evaluation work is front and center in our efforts related to transparency.

Among the steps we have taken to increase our transparency are the following:

Sharing more information about our strategy development process.
The Foundation's website has a page dedicated to How We Work, which provides detailed information about our approach to strategy development. We share an inside look into the lifecycle of our programmatic efforts, beginning with conceptualizing a grantmaking strategy through the implementation and ending phases, under an approach we refer to as Design/Build. Design/Build recognizes that social problems and conditions are not static, and thus our response to these problems needs to be iterative and evolve with the context to be most impactful. Moreover, we aim to be transparent as we design and build strategies over time. 

“We have continued to challenge ourselves to do better and to share more.”

Using evaluation to document what we are measuring and learning about our work.
Core to Design/Build is evaluation. Evaluation has become an increasingly important priority among our program staff. It serves as a tool to document what we are doing, how well we are doing it, how work is progressing, what is being achieved, and who benefits. We value evaluation not only for the critical information it provides to our Board, leadership, and program teams, but for the insights it can provide for grantees, partners, and beneficiaries in the fields in which we aim to make a difference. Moreover, it provides the critical content that we believe is at the heart of many philanthropic efforts related to transparency.

Expanding the delivery mechanisms for sharing our work.
While our final evaluation reports have generally been made public on our website, we aim to make more of our evaluation activities and products available (e.g., landscape reviews and baseline and interim reports). Further, in an effort to make our evaluation work more accessible, we are among the first foundations to make all of our evaluation reports publicly available as part of Foundation Center's #OpenForGood campaign.

Further evidence of the Foundation's commitment to increased transparency includes continuing to improve our “Glass Pockets” by sharing:

  • Our searchable database of grants, including award amount, program, year, and purpose;
  • Funding statistics including total grants, impact investments, final budgeted amounts by program, and administrative expenses (all updated annually);
  • Perspectives of our program directors and staff;
  • Links to grantee products including grant-supported research studies consistent with the Foundation's intellectual property policies;
  • Stories highlighting the work and impact of our grantees and recipients of impact investments; and
  • Center for Effective Philanthropy Grantee Perception report results

Going forward, we will look for additional ways to be transparent. And, we will challenge ourselves to make findings and learnings more accessible even more quickly.

--Chantell Johnson 

Are You Over or Under-Protecting Your Grants Data? 5 Ways to Balance Transparency and Data Protection in Sensitive Contexts
April 12, 2018

Laia Griñó is director of data discovery at Foundation Center. This post also appears in the Human Rights Funders Network's blog.

Laia Grino photoOver the last few months, this blog has presented insights gained from the Advancing Human Rights initiative’s five-year trend analysis. Getting to these insights would not have been possible had not a growing number of funders decided to consistently share more detailed data about their grantmaking, such as through Foundation Center’s eReporting program. In a field where data can pose real risks, some might feel that this openness is ill-advised. Yet transparency and data protection need not be at odds. By operating from a framework of responsible data, funders can simultaneously protect the privacy and security of grantees and contribute to making the human rights field more transparent, accountable, and effective.

This topic – balancing transparency and data protection – was the focus of a session facilitated by Foundation Center at the PEAK Grantmaking annual conference last month. Our goal was not to debate the merits of one principle over the other, but to help provide a framework that funders can use in determining how to share grants data, even in challenging circumstances. What follows are some of the ideas and tips discussed at that session (a caveat here: these tips focus on data shared voluntarily by funders on their website, with external partners like Foundation Center, etc.; we recognize that funders may also face legal reporting requirements that could raise additional issues).

HRFN Graphic

  • Think of transparency as a spectrum: Conversations regarding data sharing often seem to end up at extremes: we must share everything or we can’t share anything. Instead, funders should identify what level of transparency makes sense for them by asking themselves two questions: (1) What portion of our grants portfolio contains sensitive data that could put grantees at risk if shared? and (2) For the portion of grants deemed sensitive, which grant details – if any – are possible to share? Based on our experience with Advancing Human Rights, in most cases funders will find that it is possible to share some, if not most, of their grants information.
  • Assess the risks of sharing data: Answering these questions requires careful consideration of the consequences if information about certain grants is made public, particularly for grantees’ security. As noted at the PEAK session, in assessing risks funders should not only consider possible negative actions by government actors, but also by actors like militant groups or even a grantee’s community or family. It is also important to recognize that risks can change over time, which is why it is so critical that funders understand what will happen with the data they share; if circumstances change, they need to know who should be notified so that newly sensitive data can be removed.
  • Get grantees’ input: Minimizing harm to grantees is of utmost importance to funders. And yet grantees usually have little or no input on decisions about what information is shared about them. Some funders do explicitly ask for grantees’ consent to share information, sometimes at multiple points along the grant process. This could take the form of an opt-in box included as part of the grant agreement process, for example. At a minimum, grantees should understand where and how data about the grant will be used.
  • Calibrate what is shared based on the level of risk: Depending on the outcomes of their risk assessment (and grantees’ input), a funder may determine that it’s inadvisable to share any details about certain grants. In these cases, funders may opt not to include those grants in their reporting at all, or to only report on them at an aggregate level (e.g., $2 million in grants to region or country X). In situations where it is possible to acknowledge a grant, funders can take steps to protect a grantee, such as: anonymizing the name of the grantee; providing limited information on the grantee’s location (e.g., country only); and/or redacting or eliminating a grant description (note: from our experience processing data, it is easy to overlook sensitive information in grant descriptions!).
  • Build data protection into grants management systems: Technology has an important role to play in making data protection systematic and, importantly, manageable. For example, some funders have “flags” to indicate which grants can be shared publicly or, conversely, which are sensitive. In one example shared at PEAK, a grants management system has been set up so that if a grant has been marked as sensitive, the grantee’s name will automatically appear as “Confidential” in any reports generated. These steps can minimize the risk of data being shared due to human error.

Transparency is at the core of Foundation Center’s mission. We believe deeply that transparency can not only help build public trust but also advance more inclusive and effective philanthropy. For that reason, we are committed to being responsible stewards of the data that is shared with us (see the security plan for Advancing Human Rights, for example). A single conference session or blog post cannot do justice to such a complex and longdebated topic. We are therefore thankful that our colleagues at Ariadne360Giving and The Engine Room have just started a project to provide funders with greater guidance around this issue (learn more in these two thoughtful blog posts from The Engine Room, here and here). We look forward to seeing and acting on their findings! 

--Laia Griñó

“OpenNotes” for Funders: A Radical Idea for More Transparency and Better Relationships
April 11, 2018

Kevin Bolduc is vice president, assessment and advisory services, at Center for Effective Philanthropy. This post also appears in CEP.

Kevin-350x350Transparency — being open, honest, and clear — is a key driver of strong relationships between funders and grantees. It’s valued by foundation and grantee CEOs alike, and grantees think foundations are doing a decent job of being transparent (though more so in sharing about their processes than their learning).

Still, are there more radical ways to improve openness in ways that would benefit both funders and grantees? As I’ve thought about this question, I’ve been drawn to a transparency movement called OpenNotes, which is changing the relationship between doctors and patients.

(To be clear up front, I admit the doctor-patient/funder-grantee analogy is imperfect. Yes, both involve relationship dynamics with significant levels of information and power asymmetry, punctuated by intermittent high-stakes visits and conversations. But, unlike a patient, an individual grantee doesn’t depend on a foundation for its mortal life. Still, I think the analogy can be instructive. Even the savviest patients I know — like my physician husband — talk about not wanting to bother or anger their doctors.)

In the OpenNotes movement, doctors have taken the radical step of directly sharing their medical notes, lab results, and plans — the entire medical record — with patients. They’ve created systems to make those notes easy to access and discuss. It’s a rapidly growing movement, and now more than 20 million patients have access to their doctors’ perspectives about their health, treatments, and plans.

“Transparency — being open, honest, and clear — is a key driver of strong relationships between funders and grantees.”

So how does this relate to foundations? I’d argue that virtually every foundation I’m aware of has similar “notes” in the form of the grant write-ups and recommendations created by program officers for boards and/or senior leadership.

Why not open up those notes to the grantees they’re about? 

If we want to improve funder-grantee relationships — not to mention capacity building and shared learning — what better ways to share than these summaries about why a grant should be funded and what the risks are in doing so? Even when grant recommendations contain worries about a particular risk — organizational capacity challenges or major external risks, for example — a direct, if difficult, conversation between a grantee and her program officer, prompted by an open note, could yield new ideas, clarifications, or opportunities for assistance.

I’ve seen quite a few examples of funder write-up formats, and most contain explanations about a funder’s perspective on the fit between its program’s strategy and the grantee’s work, assessments of why the organization has the capacity to succeed (and sometimes where that capacity can be strengthened), risks the project faces, and observations about potential impact. This is exactly the kind of substance that program officers and grantees should be discussing as much as possible!

I can imagine the reasons why some of you might think this is some combination of silly, impossible, or harmful. Maybe a foundation OpenNotes-style movement would create extra work because grantees would reach out to correct the record or debate the program officers’ assessment of their work. Maybe it would require a different writing style or more editing — or make funders feel pressured to be less honest in their write-ups. Maybe it would create hard feelings.

Well, a lot of that is exactly what doctors once thought, too. I had the chance to sit down with Dr. Tom Delbanco, John F. Keane & Family Professor of Medicine at Harvard Medical School, who was one of the founders of the OpenNotes movement. He told me about how the first doctors to pilot this crazy idea were viewed as “mavericks.” He also described how the early and long-term funding from foundations, including Commonwealth Fund, Robert Wood Johnson Foundation, and Gordon and Betty Moore Foundation, made the movement possible when health systems were skeptical.

Doctors initially felt that the notes would not be easy to share. Of course, they contain the good news of their judgments about what’s going well (e.g., “The patient has had a remarkable response to treatment and is thriving”). But they also contain the unvarnished assessment of what’s not going well (e.g., “Treatment has failed and the patient continues to have unrealistic expectations about the likelihood of cure”).

Funders who share their internal notes with grantees can build “a stronger sense of alignment, approachability, and trust.”

Doctors worried that patients couldn’t handle the more sensitive information, Dr. Delbanco said. The notes felt like expert doctor-to-doctor talk. And doctors worried they’d be inundated with patient requests and extra work. For a few, “closed” notes reinforced a comfortable hierarchical relationship between doctors and patients.

However, research on doctors’ experiences with OpenNotes has been almost universally positive. Writing OpenNotes hasn’t added time to doctors’ work, nor have doctors been besieged by emails from patients. Some participating doctors do feel they need to change their writing (e.g., less jargon, better documentation). But, overall, doctors seem to think opening up their notes provides benefits. In studies of OpenNotes pilots, virtually all doctors chose to continue with OpenNotes even after the pilots ended.

Ultimately, though, this isn’t about the effect on doctors (or funders, in my analogy), right? What we care most about is the effect on patients (or grantees).

This is a question that Dr. Delbanco and others in the OpenNotes movement have studied since the very beginning. It turns out that OpenNotes seems to strengthen both the quality of care and the patient-doctor relationship — and the specifics of those improvements pretty closely match some of the most important components of the grantee-funder relationship.

As a starting point, research suggests that 99 percent of patients feel the same or better about their doctors after having access to their notes. Research by Dr. Delbanco suggests OpenNotes is associated with patients having a greater sense of control, greater adherence to treatment plans, and greater understanding of their medical situation. The results of a qualitative study of patients’ experiences highlights the ways patients say OpenNotes creates better mutual understanding, a greater sense of trust and partnership with their doctors, greater confidence and comfort in their relationships, and better and clearer communication. Another study describes how patients feel that OpenNotes ensures “that we are on the same page,” “helps me come to my appointments better prepared,” and “provides another opportunity for two-way communication.”

Some of these benefits translate fairly directly to the grantee-funder relationship.  I can picture the grantee who, in reading her grant recommendation note, gains a deeper understanding about a funder’s analysis of the context in which she works, greater clarity about how her organization’s work contributes to the outcomes a funder is seeking, and a stronger sense of alignment, approachability, and trust.

When I’m working with funders on responding to results of a Grantee Perception Report, it’s often efforts to improve relationships that feel particularly challenging — especially in an environment where program staff don’t feel they have enough time for more interaction with grantees. So why not try opening up your notes and improving the quality of the conversations you do have? If the experience of patients and doctors is any indication, I bet that simple act of transparency — sharing both the enthusiasm and worries that grant recommendations contain — would help. I’d love to hear your experience if you try.

--Kevin Bolduc

From Dark Ages to Enlightenment: A Magical Tale of Mapping Human Rights Grantmaking
April 4, 2018

Mona Chun is Executive Director of Human Rights Funders Network, a global network of grantmakers committed to effective human rights philanthropy.

Mona HeadshotOnce upon a time, back in the old days of 2010, human rights funders were sitting alone in their castles, with no knowledge of what their peers in other towers and castles were doing – just the certainty that their issue area, above all others, was underfunded. Each castle also spoke its own language, making it difficult for castle communities to learn from one another. This lack of transparency and shared language about common work and goals meant everyone was working in the dark.

Then a gender-neutral knight, clad in human rights armor (ethically produced of course), arrived in the form of our Advancing Human Rights research. With this research in hand, funders can now:

  • Peer out from their towers across the beautiful funding landscape;
  • Use a telescope to look at what their peers are doing, from overall funding trends to grants-level detail;
  • Use a common language to compare notes on funding priorities and approaches;
  • Find peers with whom to collaborate and new grantee partners to support; and
  • Refine and strengthen their funding strategies.

Armed with this knowledge, human rights funders can leave their towers and visit others, even government towers, to advocate and leverage additional resources in their area of interest.

Advancing Human Rights MapMapping Unchartered Territory

The Advancing Human Rights initiative, a partnership between Human Rights Funders Network (HRFN) and Foundation Center, has mapped more than $12 billion in human rights funding from foundations since 2010. Because of the great potential such data has to inform and improve our collective work, many years of work went into this. Ten years ago, HRFN recognized that in order to help human rights funders become more effective in their work, we needed to get a better understanding of where the money was going, what was being funded and how much was being spent. After our initial planning, we partnered with Foundation Center, brought in Ariadne and Prospera as funder network collaborators, formed a global Advisory Committee and hashed out the taxonomy to develop a shared language. Then, we began the process of wrangling funders to share their detailed grantmaking data.

It was no easy feat, but we published the first benchmark report on human rights grantmaking for 2010, and since then, we have worked to improve the research scope and process and trained funders to use the tools we’ve developed. In January, we released our first ever trends analysis. Over the five years of data collection featured on the Advancing Human Rights research hub, we’ve compiled almost 100,000 human rights grants from funders in 114 countries.

Adopting A Can-Do Attitude

In 2010, major funders in our network didn’t believe this could be done.

First, could we get the grantmaking data from members? For the first few years, we campaigned hard to get members to share their detailed grants information. We created a musical “Map It” parody (set to the tune of Devo’s “Whip It”) and launched a Rosie the Riveter campaign (“You Can Do It: Submit Your Data!”). We deployed pocket-size fold-outs and enormous posters thanking foundations for their participation. Several years later, we have seen our gimmicks bear fruit: 780 funders contributed data in our most recent year. When we began, no human rights data was being gathered from funders outside North America. In our first year, we incorporated data from 49 foundations outside North America and in the most recent year, that number more than doubled to 109. The value of participation is now clear. Repeated nudging is still necessary, but not gimmicks.

Rosie Collage
The Human Rights Funder Network celebrates its Rosie the Riveter “You Can Do It: Submit Your Data!” campaign. Photo Credit: Human Rights Funders Network

Data Makes A Difference

Once we had the research, could we get busy funders to use the data? With all the hard work being done in the field and so much to learn from it, we were committed to creating research that would be used. Focusing as much energy on sharing the research as we had compiling it, we aimed to minimize unused reports sitting on shelves. Global tours, presentations, workshops and tutorials have resulted in funders sharing story after story of how they are putting the findings to use:

  • Funders sift through the data to inform their strategic plans and understand where they sit vis-à-vis their peers;
  • Use the tools to break out of their silos and build collaborative initiatives;
  • Use the research to advocate to their boards, their governments, their constituencies; and
  • Enter into new areas of work or geographies knowing the existing landscape of organizations on the ground, search for donors doing complementary work, and discover the issues most and least funded.

Overall, their decisions can be informed by funding data that did not exist before, beyond the wishful daydreams of funders in their towers.

I wish I could say that we’ll live happily ever after with this data. But the pursuit of human rights is a long-term struggle. Those committed to social change know that progress is often accompanied by backlash. As we face the current challenging times together, sometimes we just need to recognize how far we’ve come and how much more we know, holding on to the magic of possibility (and the occasional fairy tale) to inspire us for the still long and winding, but newly illuminated, road ahead.

--Mona Chun

Hiding Your Diversity Data Helps Keep #PhilanthropySoWhite
March 28, 2018

Orson Aguilar is president of The Greenlining Institute.

Orson photoAt this point, it’s no secret: Philanthropy needs to diversify. Diversity, or the lack thereof, has become something of a hot-button issue in recent years. We’ve seen dozens of articles urging foundations to make changes, including a 2016 op-ed co-written by Dr. Robert Ross, Luz Vega-Marquis, and Stephen Heintz entitled, Philanthropic Leadership Shouldn’t Look Like the Country Club Set.

And a handful of foundations have demonstrated what is possible when they make diversity, equity, and inclusion organizational priorities. The California Endowment (TCE), one of the pioneers in these efforts, adopted a 15-part Diversity Plan in 2008, and since that year, TCE has published four “Diversity, Equity, and Inclusion Audits” to track its own progress. The audit is simple and profound, stating: “By openly reflecting on our progress and challenges related to diversity, equity and inclusion, we hope that the audit fosters a broader culture of continuous improvement where we challenge ourselves to always do better and to advance -- for the field, for our staff, and for the communities we ultimately serve.”

And yet, despite this heightened awareness and the concerted efforts of a handful of organizations, diversity and equity in philanthropy as a whole haven’t changed much. The data published by the D5 Coalition suggest that we have seen virtually no increase in the number of people of color who hold staff and leadership positions at foundations, and little increase in the representation of women.

“Making philanthropy more diverse and inclusive should be a top priority for everyone.”

More frustrating is the fact that very few foundations have decided to voluntarily disclose their demographic data since the attempted passage of California’s A.B. 624, proposed legislation that would have required large foundations in the state to collect and disclose demographic data for themselves and for their grantees. 

According to a search on Glasspockets.org, only 10 of the more than 90 foundations publicly committing to working more openly have disclosed both their diversity data and their diversity values policies. The list of 10 foundations includes foundations such as The David and Lucile Packard Foundation, The Rockefeller Foundation, Annenberg Foundation, and Silicon Valley Community Foundation. They should be applauded. Interestingly, more than 40 foundations have stated that they have diversity/values policies, yet most of them fail to disclose their own diversity data.

Making philanthropy more diverse and inclusive should be a top priority for everyone, regardless of whether or not your foundation focuses on supporting communities of color. This isn’t just a numbers game. As Ruth McCambridge reminds us in her recent article for Nonprofit Quarterly, “Lack of racial, ethnic, and gender diversity in philanthropy enlarges the understanding gap between philanthropy and the communities meant to be final beneficiaries.” By not including more people who understand the experiences of communities of color in leadership positions, foundations put extra distance between themselves and these communities and can’t know how best to serve them.

Diana Campoamor and Vikki N. Spruill, veterans in the struggle to diversify philanthropy, jointly wrote in 2016, “Few would argue that there has been too little discussion about making the sector look more like the people it serves. The real challenge has been to set in motion the measures that assure greater diversity throughout the sector.”

“The only way philanthropy will remain relevant is if it evolves along with the communities around it.”

Just as it took #OscarsSoWhite to jolt the Motion Picture Academy into action, will it take #PhilanthropySoWhite taking off on social media to transform this sector? A group of people has championed this issue from within the world of philanthropy for years, and yet progress remains slow. It’s no longer a question of awareness; it’s a question of priorities. Of course, every foundation has its own vision and purpose, but the only way philanthropy will remain relevant is if it evolves along with the communities around it. That means being intentional about hiring more people from diverse backgrounds who can bring much-needed perspectives to the table; tracking the demographics of people who benefit from grant dollars; tracking the demographics of foundation board and staff, and being transparent about all of those numbers.

Why is transparency so important? Because we’ve seen it drive massive change in other fields. Since the California Public Utilities Commission began requiring the companies it regulates to report how much contracting they do with businesses owned by women, people of color and service disabled veterans, these companies’ contracts with diverse businesses went from $2.6 million in 1986 to $8.8 billion in 2016. In philanthropy, transparency can drive the field to build more coalitions of foundations that can hold each other accountable to high standards of transparency and inclusiveness. It can help them learn from the inclusive practices already adopted by some foundations.

Ultimately, it’s going to take a bigger push than anything we’ve seen before to transform the sector. Otherwise, philanthropy will become more and more out of touch with the people it seeks to serve, and it will become increasingly unable to address the needs of a rapidly changing America.

What is perplexing is that large foundations value data and frequently fund social justice efforts to obtain more gender, racial, LGBTQ and ethnic data as positive outcomes of their grants. The fiscal impact on foundations to collect this data about their own operations and grantees would be negligible. Foundations like TCE have demonstrated “the sky didn’t fall” when the data was published, as critics suggested would happen 10 years ago.  Just the opposite: The foundation learned from its data to make better decisions on how to operate.

In an era of greater transparency, and increasing recognition that we are a diverse and multicultural nation, we urge more foundations to take the leap and conduct and share their own diversity and inclusion audits.

--Orson Aguilar 

It’s Not You, It’s Me: Breaking Up With Your Organization’s Inequitable Funding Practices
March 21, 2018

Erika Grace “E.G.” Nelson is a Community Health and Health Equity Program Manager at the Center for Prevention at Blue Cross and Blue Shield of Minnesota. E.G. recently led the Center through an equity scan of its Request for Proposal (RFP) policies and procedures.

Erika Nelson photo“It’s not you; it’s me” is possibly the most cliché break-up excuse, but for many funders, it really is their own policies and procedures that undermine their ability to find community soulmates. Perhaps you have had conversations with community members who have said that they found out about your funding opportunity too late, were too busy to apply, or, worse yet, were rejected even though their project sounds like a great fit based on the conversation you are currently having with them. The reality is that funders typically enact policies that are convenient for themselves, as opposed to what makes sense for grantseekers, and diversity, equity, and inclusion (DEI) fall by the wayside of expediency. As a result, organizations with the most social and fiscal capital have the best shot at receiving awards.

Have you ever taken the time to think about how your funding portfolio might look differently if your RFP process was designed to be more equitable and inclusive? We recently completed an equity scan, and here is a bit about how this reflection has led to changes in our RFP process.

“Funders typically enact policies that are convenient for themselves, as opposed to what makes sense for grantseekers.”

At the Center for Prevention, our goal is to improve the health of all Minnesotans by tackling the leading causes of preventable disease and death – commercial tobacco use, physical inactivity, and unhealthy eating. While Minnesota has one of the best overall health rankings in the nation, we see huge gaps in health outcomes when considering factors such as race, income, and area of residence.

We also know that communities are aware of what they need to be healthy, but organizations established by and for marginalized communities tend to face greater barriers than well-resourced, mainstream organizations in getting what they need. We wanted to remove as many barriers from our application process as possible so that we could find and support more community-based and culturally-tailored approaches to addressing health needs. To begin identifying these barriers, our team reflected on challenges identified by communities we work with and walked through our application process from beginning to end using an equity lens. As a result, we have implemented several systemic changes to move towards our vision of a truly equitable process.

Bringing the Funding Opportunities to the Community

BCBS_Center_Prevention_vert_blueWe began our journey by thinking about funding opportunities. Before an organization can even apply for funding, it needs to know that an opportunity exists. Through community conversations, we learned that many organizations were unfamiliar with our resources and work. We recommended that project teams develop a tailored outreach plan for each funding opportunity, with specific outreach to organizations or sectors we considered to be key stakeholders or who had been markedly absent in previous rounds. Moving forward, we also have a goal of literally meeting folks where they are at – town halls, cultural events, on social media – to share our work and funding opportunities.

As a result, here are some ways we shifted how we engage with community organizations through our RFP process:

  • Time. Once applicants find out about an opportunity, they need to apply, which takes some time. We learned that some potential applicants prioritized other opportunities because they didn’t have the staff capacity to apply for multiple opportunities concurrently. The easiest solution to this problem was to give applicants more time, so we extended our open application period. In our case, we went from no set minimum to at least six weeks.
  • Assistance. We also wanted to make sure that applicants could make informed decisions about how to prioritize staff time, so we opened up new channels for discussing funding opportunities. We made sure that every application had a designated point person for answering questions from the public, and even piloted some creative ways to interact with the community in advance of the submitted application, such as an “office hours” hotline where anyone could call in and ask questions. The number of inquiries was manageable and allowed applicants to receive guidance on whether their projects were a good match before they invested time in applying. Follow-up survey data showed that this strategy paid off because applicants reported that they understood our funding objectives and that the time they invested in applying was appropriate for the potential award.
  • Accessibility. We are also working towards using more accessible language to articulate the merits of a viable proposal. We now run a readability test on all RFP language before publication, with the goal of using language that is no higher than an eighth grade reading level. Such tests have helped us remove jargon, and improve comprehension by professionals outside of public health as well as by non-native English speakers.

Leveling the Playing Field of Community Relationships

Our team also considered the role relationships play in evaluating proposals. We approached equity from two angles. We set limits on which and when “outside information”— knowledge we have about a project that didn’t come from the application—can be shared during proposal review. We also started reaching out to new applicants to discuss their work more deeply. Our familiarity with mainstream organizations and those we have previously funded can influence how we evaluate an application, and in some cases lead to an unfair advantage for groups that already have many advantages.  So these limits on “outside information” were put in place to level the playing field, as well as to begin to strengthen relationships with organizations that were new to us. These conversations helped us to fill in gaps in our understanding that we may unconsciously fill in for organizations we are already familiar with.

“We now run a readability test on all RFP language before publication…to remove jargon, and improve comprehension.”

Transparent Evaluation Processes

We felt transparency in our decision-making process could only improve the quality of proposals. One way we have done this is by making scoring rubrics available to applicants. We also began providing tailored feedback to each declined applicant on how the proposal could have been stronger in hopes that it will improve future submissions. Though we have yet to determine what impact this will have in the future, we can say that applicants have been appreciative and found this feedback to be useful.

Hope and More Work to Be Done

While we don’t yet have much data to analyze post-implementation, we have noticed a few positive outcomes. We have seen a great increase in applications from greater Minnesota in particular, demonstrating that our targeted outreach is increasingly effective. Our funding awards to projects by and for people of color have also doubled in one of two opportunities we have analyzed since implementation. Despite this progress, we continue to wrestle with how to develop scoring tools that better reflect our values. 

The above are just some examples of how we have begun to identify and address equity barriers in our process that may be helpful for others. If your foundation is considering something similar, here are some things we learned from our experience that may be helpful for you.

  • Leadership & Promising Practices. As with any new process implementation, support from leadership is critical. If you are met with resistance, keep in mind that funders typically want to emulate best and promising practices in philanthropy, and sharing what other funders are doing around diversity, equity, and inclusion can be highly motivating.
  • Checks & Balances. It is also important to keep in mind that old habits die hard. It is not necessarily because team members are resistant to change, but simply need to get into the routine of doing things differently. For that reason, be sure that you build in checks and balances along the way to ensure that all who touch your RFP process have the opportunity to identify pain points along the way while also upholding equity commitments.
  • No One Size Fits All. Keep in mind that there is not one model that will work for everyone, and much in the same way, not all the communities you serve will be pleased with the changes you make. So, keep asking for and responding to feedback from community and know that correcting mistakes is part of improvement and part of ensuring our processes continue to be ones that facilitate, rather than undermine, diversity, equity, and inclusion.

--Erika Grace “E.G.” Nelson

New on Glasspockets: Open Knowledge Feature Added to Glasspockets Profiles
March 19, 2018

Janet Camarena is director of foundation transparency iniatives at Foundation Center

Janet Camarena photoWho has glass pockets when it comes to knowledge? Answering this question using our Glasspockets profiles just became a lot easier, thanks to a new feature we’ve added to emphasize the importance of creating a culture of shared learning in philanthropy. Beginning today, Glasspockets profiles are featuring a tie-in with our ongoing #OpenForGood campaign, designed to encourage open knowledge sharing by foundations.

All Glasspockets profiles now have a dedicated space to feature the knowledge that each foundation has contributed to IssueLab, which is a free, open repository that currently provides searchable access to nearly 24,000 knowledge documents. Currently, 67 of the 93 profiles on Glasspockets showcase recently shared reports on IssueLab. For example, looking at the Rockefeller Brothers Fund's Glasspockets profile reveals that it is participating in the #OpenForGood movement; a window appears on the right side of its profile featuring the latest learning the foundation has shared on IssueLab.

"Sharing your knowledge via open repositories is openness that is good for you and good for the field."

This window on shared knowledge is a dynamic feed generated from our IssueLab database, so if you have published evaluations or other publications to share that are not showing up in your profile, simply go to IssueLab to upload these documents, or contact our Glasspockets team for assistance. And if your foundation invested specifically in monitoring and evaluating results, you can share those evaluations in our new IssueLab: Results. To acknowledge your efforts for sharing your recent evaluations, your foundation will receive an #OpenforGood badge to display on your website and on your Glasspockets profile to signal your commitment to creating a community of shared learning.

Though not a formal part of the transparency assessment, the #OpenForGood feature makes profile users aware of the kinds of learning that are available from participating foundations. Besides linking to the two most recent reports, a shortcut is also provided linking the user to a landing page of all of that foundation’s available knowledge documents.

OFG Everyone Learns GroupSince Glasspockets began, the transparency self-assessment has tracked whether foundations make available a central landing page of knowledge on their own websites, and that will continue to be included moving forward. So what’s the difference here? Opening up your knowledge on your own website is great for people who already know about your institution and visit your website, but it doesn’t really help to spread that knowledge to peers and practitioners unaware of your work. The fragmentation of knowledge across thousands of websites doesn’t do much to accelerate progress as a field—but that’s where open repositories like IssueLab come in.

Open repositories have several things going for them that truly live up to the idea of being #OpenForGood. First of all, any report you make available on IssueLab becomes machine-readable, so it can more easily be used and built upon by others doing similar work. Secondly, once a resource has been added to IssueLab, it becomes part of the sector’s collective intelligence, feeding through an open protocol system, which integrates with systems like WorldCat in 10,000+ public libraries, which means students, academics, journalists, and the general public can easily find the knowledge you’ve generated and shared, even if they’ve never heard of IssueLab, Foundation Center, or your organization. Once in the system, your knowledge resources can also be issued something called a Digital Object Identifier (DOI), so you can track access and use of that knowledge in an ongoing way.

The easiest way to think of it is that sharing your knowledge via open repositories is openness that is good for you and good for the field. So how about it? What will you #OpenForGood?

--Janet Camarena

Robert K. Ross, MD, President and CEO, The California Endowment: Parkland Students Inspire Foundation to Screen Out Investments in Firearms Manufacturing
March 14, 2018

Dr. Robert Ross photoOne month after the school shooting in Parkland, Florida that killed 17 people, students across the country are continuing to press for stricter gun control legislation with protests and school walk-outs. According to the Gun Violence Archive, more than 2,837 gun related deaths have occurred so far this year, and both the American Medical Association and the American Public Health Association have recommended addressing gun violence as a public health issue.

The week following the shooting, The California Endowment (TCE), California’s largest healthcare foundation, announced it would begin screening out firearms manufacturing from its investment holdings. TCE’s mission is to expand access to affordable, quality health care for underserved individuals and communities and to promote fundamental improvements in the health status of all Californians. TCE’s mission statement also outlines that the foundation doesn’t focus on prescriptions, but rather “we focus on fixing broken systems and outdated policies, ensuring the balance of power is with the people. We don’t focus on the individual, we focus on the larger community as an ecosystem of health. We work with citizens and elected leaders to find lasting solutions to impact the most people we possibly can.”

Recently, Glasspockets spoke with TCE president and chief executive officer Dr. Robert Ross, about the foundation’s decision to ban firearms investments, and how this aligns with both TCE’s stated health mission, and its core values around diversity, equity, and inclusion.

Glasspockets: The California Endowment recently announced that it will be scrubbing its investments of any holdings in firearms manufacturing, and this is actually not a new practice, but the third “negative screen” you are adding, since you already had screening in place for tobacco and for-profit prisons. Data shows that this practice is actually fairly uncommon in foundation philanthropy, so it’s clear it’s a challenge for the field. When did you begin the practice, and what led to you going down this path initially when you first implemented negative screening?

Dr. Ross: Since we are a health foundation, the founding board actually started with the tobacco screen in the late 90’s.  We added for-profit prisons more recently, after hearing from community leaders that they considered hyper-incarceration as an unhealthy practice affecting communities of color. This is consistent with our core values statement, which also helps guide our board. The very first item in our values states: “We believe that diversity, equity and inclusion are essential to our effectiveness and the long-term health of all Californians and commit to the integration of diversity, equity and inclusion in all our policies, practices, processes, relationships, internal working culture and systems.” By filtering out tobacco, for-profit prisons, and now gun manufacturing we are being consistent with these values.

“We really have to ask ourselves the question of whether the management of our investments portfolio reflects the values we hold dear.”

Glasspockets: There have sadly been many shootings prior to Parkland. What was it about this one that motivated your foundation to act?  

Dr. Ross: We were motivated by the youth and high school student activism – I think we were “shamed” to act by their leadership. The California Endowment “values the energy, agility and fearlessness of youth leadership and youth organizing in its many forms including local, statewide and online community-building.”

Glasspockets: And are you aware of other foundations being similarly motivated to act, either now or that already had such prohibitions in place? 

Dr. Ross: We have followed the leadership efforts of The California Wellness Foundation, Bloomberg Philanthropies and Joyce Foundation, all of which, to the best of my knowledge, already have a screen on firearms in place. I’m not certain how many other funders currently have a firearms manufacturing screen.

Glasspockets: The California Endowment was an early adopter of our Glasspockets approach to a more transparent philanthropy. So clearly transparency, openness, and accountability are priorities. Is your commitment to these values part of what motivated the decision and the public stand you are now taking? 

Dr. Ross: Yes, and it was the reason I published the OpEd in the Chronicle of Philanthropy.  Even though these boardroom conversations can get a little “messy,” it strengthens philanthropic practice if we can demonstrate vulnerability and transparency on tough issues. Without actions, our values just become words on a page.

Glasspockets: Glasspockets is currently advising foundations to become more familiar with what holdings they do have, since these are publicly listed on the 990-PF that foundations annually file with the IRS. And that data is now being released as machine-readable, open data—making it more open and accessible than ever before. Is this something TCE is tracking or do you have any internal practices about monitoring what’s in your 990-PF that may be helpful for others? 

“Without actions, our values just become words on a page.”

Dr. Ross: We have begun utilizing ESG (Environmental, Social and Governance) practice approaches, as have many others, as a “values and principles” overlay to our investments portfolio. [ESG screening is an array of ethical exclusion metrics designed to govern certain investment decisions. Excluded companies can include those in the tobacco, firearms, and for-profit prison industries. The alerts look for mentions of portfolio companies (those not currently excluded) and rate them as positive, negative or neutral in terms of these screens.]

Glasspockets: The things you are screening out make a lot of sense for a healthcare foundation. Why do you think so few do it? And what advice would you have for them as far as overcoming those challenges?

Dr. Ross: The answer to this is values-values-values.  Most foundations have both a statement of mission and a statement of values, and we really have to ask ourselves the question of whether the management of our investments portfolio reflects the values we hold dear.  You can’t make a blanket values exception for the investments portfolio.  

Glasspockets: In terms of the screening that had already been in place, what has been the impact on endowment growth?

Dr. Ross: I’m not sure, but I do know that a concern some raise when discussing this is the belief that growth may be negatively impacted by the lack of tobacco and private prisons holdings.  But if you’re acting on your values, then I’m not sure the question is material.  Slavery is profitable, but we’d never invest in that….

Glasspockets: And how about the qualitative impact—things that bottom lines don’t measure? 

Dr. Ross: It’s good for boardroom cohesion, and messaging to staff and community that we intend to live up to our values, even if it is discomforting.  It’s hard to put a price tag on reputation and accountability.

--Janet Camarena

Why Salary Compensation Transparency Can Counteract Equity
March 7, 2018

Vincent Robinson is founder and managing partner of The 360 Group, a national executive search firm dedicated to creating social impact by placing exceptional leaders into extraordinary mission-driven organizations.

Vincent Robinson photoIn The 360 Group’s work as executive search consultants to foundations and nonprofits, we know that transparency around compensation is a perennially thorny issue, and one that we find many well-intentioned organizations getting wrong. Given the counter-intuitive nature of what I’m about to say, I would like to provide important context that may help others understand how we approach compensation transparency, particularly in light of our efforts to make diversity and equity a key priority in our work.

“...We advise our clients not to ask that candidates submit their salary histories because we know that contributes to inequitable salary structures, particularly for women and people of color.”

For a bit of background: I launched The 360 Group 13 years ago, specifically with an eye on making the sector more diverse, more contemporary, and better prepared to address a whole new set of challenges in increasingly complex times. Our view is that more diverse teams — and more diversity in leadership — maximize the variety of perspectives that organizations need to be successful, effective, and more representative of the communities that they serve. Countless studies, notably those by Maggie Neale and Scott Page, have demonstrated the power of diversity in groups and teams, only emboldening our firm’s mission and theory of change. Diversity in groups can also make what can be challenging work a hell of a lot more fun.

Beyond compensation, then, our goal is to extend our reach and that of our clients to identify people from all backgrounds and walks of life for leadership opportunities. To do that, we want to reduce barriers for candidates, rather than build them up (and those barriers can be completely artificial). Our charge is to understand organizations well and identify candidates who can lead them and have the desire to do so with passion, heart and values.

At The 360 Group, market comparables drive our guidance to clients (and candidates) around compensation, as well as the skills and value of a candidate. We do not tie executive compensation to salary history. We know that women and people of color are represented in just a fraction of leadership roles — across every sector. To build that leadership bank, especially in senior positions, we seek out candidate pools of devoted (and often underpaid) nonprofit professionals as well as highly-paid executives. The salary one has earned shouldn’t dictate the salary one may earn, so we advise our clients not to ask that candidates submit their salary histories because we know that contributes to inequitable salary structures, particularly for women and people of color. That is our philosophy and commitment in this work. And in states like California and Oregon, as of 2018, it is now against the law for employers to ask candidates for salary history because of this very issue.

EquityPerhaps more important than the range itself is transparency around the process by which foundations establish their executive compensation. Demystifying the process serves to create both internal and external understanding about how this key decision is made, and discloses who gets to weigh in on the process. This level of transparency is helpful to the institution as much as outsiders – just ask any compensation consultant! Useful examples of how other foundations are publicly describing their executive compensation process are included in the helpful Glasspockets transparency self-assessment tool here.

Additionally, we also field questions about why we do not post a salary range for the CEO role. Our answer comes from the heart: we don’t want fabulous people to self-select out, based purely on numbers. To be truly committed to equity (which we are), creating even the perception of obstacles runs at cross-purposes to acting in equity. For better or worse, in the philanthropic field, salaries and compensation packages are all over the map. That is why we rely on independent market analyses and our compensation expert colleagues to inform ranges for our client organizations. So if a role is valued at between, say $300,000 and $500,000, the person ultimately selected will be compensated in that range based on the experience and value they bring to the role — regardless of whether they have earned a fraction of that amount or orders of more magnitude. That is equity in compensation, a practice we have relied on from the inception of our firm, and just one important ingredient in our efforts to bring diversity and equity to our sector.

As I’ve noted above, not all transparency works against diversity, equity, and inclusion. There are specific kinds of transparency that work to accelerate the creation of a more equitable sector, and I’ll delve into that in this space in a future post.

--Vincent Robinson

IRS Warns Donor-Advised Funds May Face New Restrictions
February 28, 2018

Lauren Haverlock, CPA, has practiced public accounting since 2004. As a senior manager at Moss Adams LLP, she provides compliance and consulting services to all types of exempt organizations, including public charities and private foundations.

Lauren Haverlock - 150

In recent years, donor-advised funds (DAFs) have gained popularity as a philanthropic tool. The National Philanthropic Trust reports that in 2016, charitable assets under management in DAFs exceeded $85 billion—representing a record amount.

DAFs offer donors a flexible giving option when they want a charitable deduction with administrative simplicity, a long-term distribution of funds, and less transparency than is common with private foundation grants.

But the IRS has indicated that organizations and individuals may be taking advantage of DAFs. Because of this, the IRS has provided a notice warning of tightening its restrictions on the funds.

Background

A DAF is a separately-identified and managed account that’s operated by a section 501(c)(3) public charity—a sponsoring organization—on the original donor’s behalf.

Once a donor contributes to a DAF, the sponsoring organization has legal control over the use and reporting of the funds. The organization then invests the funds until the donor advises they be distributed. Donors often need to follow specific guidelines when advising about fund distribution, but a sponsoring organization has ultimate control.

DAFs and Private Foundations

Private foundations also use DAFs in a variety of ways. Many uses clearly relate to charitable planning, but some are less transparent—including the following:

  • Using a DAF that exists within a community foundation to support the foundation’s initiatives
  • Granting DAFs to another community foundation that offers grant support services for which the foundation doesn’t have its own internal structure
  • Using DAFs to obscure charitable giving. Since the Form 990-PF is public, a grant to a DAF would show up as such on the 990-PF while obscuring the DAF’s recipient
  • Giving funds to a nonqualified recipient. A foundation can bypass giving restrictions—and the additional steps necessary for validating using their grants—by providing a donor-advised fund instead
  • Employing DAFs to help meet minimum distribution requirements—or avoid complex set-aside rules—when it might otherwise fall short

Next Steps from the IRS

In Notice 2017-73, issued in December 2017, the IRS and Treasury Department are considering regulations addressing perceived abuses of DAFs, including some of the above issues. The notice limits the following areas:

Prohibiting Donor Sponsorship or Membership Benefits. The notice prohibits distribution from DAFs that subsidize the donor’s participation in a charity-sponsored event or membership in a charity. This is because the benefit is more than incidental. DAF donors or advisors can only receive an incidental benefit from DAF distributions.

If the prohibited distribution occurs, the donor would be taxed 125%. The fund manager who permitted the transaction would be taxed 10%.

Giving Relief when Distributions Apply to DAF Donors’ Pledges. A charity may use DAF distribution funds to relieve a pledge obligation from the DAF’s donor because the DAF doesn’t provide the donor with a benefit that’s more than incidental.

The guidance provides an example of a benefit that’s incidental and permissible. This rule stems from the difficulty of assessing if the outstanding pledge existed before the donor granted the DAF. To be permissible, a benefit must meet the following criteria:

  • The recipient didn’t reference the pledge when making the DAF distribution
  • The donor didn’t receive additional benefits from the distribution
  • The donor didn’t take charitable contribution deduction, even if the grantee sent them an acknowledgement 

Circumventing Public Support. Donors may no longer be able to use a DAF to anonymize their contribution to a public charity. The notice indicates that the IRS may treat a distribution from a DAF as an indirect contribution from the donor—or donors—that funded the DAF.

If a public charity funds another public charity, the income is considered unlimited public support. If the IRS then treats the DAF as a donation from the original donor, public support could be limited—which could reclassify the charity as a private foundation.

The charity would also face additional donation tracking requirements based on the original DAF donor, and may need to disclose the donor on the Form 990’s Schedule B.

Provide Your Input

The IRS has requested comments on how foundations use DAFs. Comments and data pulled from Form 990-PF reporting could determine the IRS’s future actions in the area.

Specifically, the IRS wants to know:

  • How private foundations use DAFs in support of their charitable purpose
  • Whether a private foundation’s transfer of funds to a DAF should only be treated as a qualifying distribution if the DAF-sponsoring organization agrees to distribute the funds for charitable purposes—or to transfer the funds to its general fund—within a certain timeframe.

Comments may be submitted by March 5, 2018, to notice.comments@irscounsel.treas.gov, or to the following address:

Internal Revenue Service

CC:PA:LPD:PR (Notice 2017-73) Room 5203

P.O. Box 7604, Ben Franklin Station

Washington, DC 20044

Please include “Notice 2017-73” in the subject line. Comments will be available for public inspection and copying.

The Future of DAFs

We expect the popularity of DAFs will continue to grow—especially as the tax landscape evolves. DAFs continue to be a great philanthropic tool for individuals and foundations, so restricting their use could have a wide impact. If you have strong opinions on the matter, now’s the time to let the IRS know.

--Lauren Haverlock, CPA

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About Transparency Talk

  • Transparency Talk, the Glasspockets blog, is a platform for candid and constructive conversation about foundation transparency and accountability. In this space, Foundation Center highlights strategies, findings, and best practices on the web and in foundations–illuminating the importance of having "glass pockets."

    The views expressed in this blog do not necessarily reflect the views of the Foundation Center.

    Questions and comments may be
    directed to:

    Janet Camarena
    Director, Transparency Initiatives
    Foundation Center

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