Transparency Talk

Category: "Accountability" (73 posts)

Foundation Transparency: Game Over?
May 23, 2016

(Brad Smith is president of Foundation Center).

BradfordKSmithThe tranquil world of America's foundations is about to be shaken, but if you read the Center for Effective Philanthropy's (CEP) new study -- Sharing What Matters, Foundation Transparency -- you would never know it.

Don't get me wrong. That study, like everything CEP produces, is carefully researched, insightful and thoroughly professional. But it misses the single biggest change in foundation transparency in decades: the imminent release by the Internal Revenue Service of foundation 990-PF (and 990) tax returns as machine-readable open data.

Clara Miller, President of the Heron Foundation, writes eloquently in her manifesto, Building a Foundation for the 21St Century: "…the private foundation model was designed to be protective and separate, much like a terrarium."

Terrarium photo 2Terrariums, of course, are highly "curated" environments over which their creators have complete control. The CEP study, proves that point, to the extent that much of the study consists of interviews with foundation leaders and reviews of their websites as if transparency were a kind of optional endeavor in which foundations may choose to participate, if at all, and to what degree.

To be fair, CEP also interviewed the grantees of various foundations (sometimes referred to as "partners"), which helps convey the reality that foundations have stakeholders beyond their four walls. However, the terrarium metaphor is about to become far more relevant as the release of 990 tax returns as open data will literally make it possible for anyone to look right through those glass walls to the curated foundation world within.

What Is Open Data?

It is safe to say that most foundation leaders and a fair majority of their staff do not understand what open data really is. Open data is free, yes, but more importantly it is digital and machine-readable. This means it can be consumed in enormous volumes at lightning speed, directly by computers.

"The release of 990 tax returns as open data will literally make it possible for anyone to look right through those glass walls to the curated foundation world within."

Once consumed, open data can be tagged, sorted, indexed and searched using statistical methods to make obvious comparisons while discovering previously undetected correlations. Anyone with a computer, some coding skills and a hard drive or cloud storage can access open data. In today's world, a lot of people meet those requirements, and they are free to do whatever they please with your information once it is, as open data enthusiasts like to say, "in the wild."

Today, much government data is completely open. Go to data.gov or its equivalent in many countries around the world and see for yourself.

The theory behind open data, increasingly born out in practice, is that making information available leads to significant innovation for the public good while the demand for and use of such data also improves its accuracy and quality over time. And some open data is just fun: one of my personal favorites is the White House visitors list!

What is the Internal Revenue Service Releasing?

Irs-logo-250Thanks to the Aspen Institute's leadership of a joint effort - funded by foundations and including Foundation Center, GuideStar, the National Center for Charitable Statistics, the Johns Hopkins Center for Civil Society Studies, and others - the IRS has started to make some 1,000,000 Form 990s and 40,000 Form 990PF available as machine-readable open data.

Previously, all Form 990s had been released as image (TIFF) files, essentially a picture, making it both time-consuming and expensive to extract useful data from them. Credit where credit is due; a kick in the butt in the form of a lawsuit from open data crusader Carl Malamud helped speed the process along.

The current test phase includes only those tax returns that were digitally filed by nonprofits and community foundations (990s) and private foundations (990PFs). Over time, the IRS will phase in a mandatory digital filing requirement for all Form 990s, and the intent is to release them all as open data. In other words, that which is born digital will be opened up to the public in digital form. Because of variations in the 990 forms, getting the information from them into a database will still require some technical expertise, but will be far more feasible and faster than ever before.

"Over time, the IRS will phase in a mandatory digital filing requirement for all Form 990s, and the intent is to release them all as open data."

The Good

The work of organizations like Foundation Center-- who have built expensive infrastructure in order to turn years of 990 tax returns into information that can be used by nonprofits looking for funding, researchers trying to understand the role of foundations and foundations, themselves, seeking to benchmark themselves against peers—will be transformed.

Work will shift away from the mechanics of capturing and processing the data to higher level analysis and visualization to stimulate the generation and sharing of new insights and knowledge. This will fuel greater collaboration between peer organizations, innovation, the merging of previous disparate bodies of data, better philanthropy, and a stronger social sector.

The (Potentially) Bad

The world of foundations and nonprofits is highly segmented, idiosyncratic and difficult to understand and interpret. GuideStar and Foundation Center know this.

But many of the new entrants who are attracted by the advent of open 990 data will not. They will most likely come in two forms: start-ups claiming their new tools will revolutionize the business of giving, and established, private sector companies, seeking new market opportunities. Neither of these is intrinsically bad and could lead to some degree of positive disruption and true innovation.

The negative potential could be two-fold. Funders will inevitably be intrigued by the start-ups, their genius and their newness and divert funding towards them. Foundations are free to take risks and that is one of their virtues. But while needs grow, funding for the data and information infrastructure of philanthropy is limited, technology literacy among foundations relatively low, and many of these start-ups will prove to be shooting stars (anybody remember Jumo?).

"Once the 990 data is 'in the wild,' conclusions may be drawn that foundations find uncomfortable if not unfair."

The second category of new entrants is far more complex and will come in the form of for-profit data analytics companies. Some of these have business models and immensely sophisticated black box technologies that rely heavily on government contracts for defense and national security. They will be lured by the promise of lucrative contracts from big foundations and mega-nonprofits and the opportunity to demonstrate social responsibility by doing good in the world.

But these for-profit analytics companies will quickly discover that there is only one Gates Foundation among the 87,000 private foundations and only a handful of richly-resourced nonprofits among the 1.3 million on the IRS registers. And those who choose to contract the services of "Big Analytics" will need to consider the potential reputational consequences of aligning their "brands" with the companies behind them.

Sound defensive? Not at all: Foundation Center welcomes the competition, has been building for it since 2010, and knows the challenge can only make us and the social sector better.

The Ugly

Once the 990 data is "in the wild," it is possible if not probable, conclusions will be drawn that foundations find uncomfortable if not unfair. Those who are new to the field and relatively uninformed (or uninterested) in its complexity, may make claims about executive compensation based on comparisons of foundations of wildly disparate size and scope.

The same could be done with overhead rates, payout, or any other figure or calculation that can be made based on information found in the 990-PF. Some foundations already chafe when responsible sector advocates like the National Committee for Responsive Philanthropy (NCRP) use Foundation Center data to rank foundations according to their Criteria for Philanthropy at Its Best. Imagine claims coming over the transom from individuals and organizations whose core values do not include a belief in the practice of philanthropy and a normative vision for how it could be better.

"Another potential consequence lies at the intersection of the open 990 data and the growth of impact investing."

Another potential consequence lies at the intersection of the open 990 data and the growth of impact investing. This was the spirit in which Clara Miller introduced her terrarium analogy to highlight what she sees as the artificial disconnect between the controlled, strategic, and curated world constructed by the grants side of foundations and the sometimes contradictory forces at work in the larger economy in which their assets are invested.

Foundations like Heron are striving to put 100% of their assets toward mission, while others like Rockefeller Brothers Fund are divesting their investment portfolios from fossil fuels and re-investing those assets in ways that further the goals of their climate change grantmaking, rather than exacerbate the problem.

A recent (and as of yet unpublished) Foundation Center survey found that 60% of foundations were not engaged in impact investing and had no plans to do so. That is their choice, but open 990 data may well put them in a position of having to publicly explain it.

For example, using Foundation Center databases, I searched across several hundred thousand foundation 990-PF tax returns and found 37 foundations that held Corrections Corporation of America stock in their investment portfolios. These foundations may well believe, as the majority of foundations insist, that the purpose of the investment arm of the foundation is to generate the highest sustainable return possible in order to fund the mission through grants. But if a foundation holding that stock is striving to work on juvenile justice or improve the lives of black men and boys, an investigative reporter or activist might well ask why they are investing in a corporation that runs private, for-profit prisons

It's 10:00pm, Do You Know Where Your 990 Is?

With the game over for foundation transparency, the big takeaway is to know your 990-PF (or 990 for community foundations). Suddenly, it will be transformed from a bureaucratic compliance document into one of your foundation's key communications vehicles.

"Regardless of how each of us may feel about the greater transparency required of foundations, it is increasingly inevitable."

Right about now, you may be thinking: "What about the website re-design we spent all that money on, with our new logo, carefully crafted initiative names, and compelling photos??" It's still important, and you can follow the lead of those foundations guided by the online transparency criteria found on Foundation Center's Glasspockets website.

But for the sector as a whole, while fewer than 10% of all foundations have websites, they all file 990 tax returns. As the IRS open data release unfolds and mandatory digital filing kicks in, the 990-PF will become one of the primary sources of information by which your individual foundation will be known and compared to others.

I recently asked a group of foundation CEOs whether they ever had an in-depth discussion about their 990-PFs among their board members and was met with blank stares. In a world of digital transparency, this will have to change. As 990s become a data source and communications vehicle, the information on them will need to be clear, accurate and above all, a faithful representation of how each individual foundation makes use of the precious tax exemption it has been granted to serve the public good.

A few simple tips for starters:

  • Take advantage of Section 15 (block 2) to talk about your priorities, grant process, limitations, and restrictions.
  • In Section 15 (block 3) write the correct, legal name for each grantee organization and add its EIN or BRIDGE ID
  • In the same section, write clear and compelling descriptions for the purpose of each grant (more than you might think, people look at foundations by what they fund).
  • Make sure all numbers on the form add up correctly (you'd be surprised!).

Regardless of how each of us may feel about the greater transparency required of foundations, it is increasingly inevitable. Philanthropy is essential to American society and a positive source for good in a challenging world.

As the terrarium walls insulating individual foundations fall, we will surely face a few moments of anxiety and discomfort. But greater transparency, fueled by open IRS data, can only make us more conscientious stewards of our resources, more effective decision-makers, and better collaborators on our way to achieving greater and greater impact in the world.

Game over? It's just beginning!

-- Brad Smith

The Next Generation of Nonprofit Data Standards
May 2, 2016

(Jacob Harold is president and CEO of GuideStar and Brad Smith is president of Foundation Center. Join Harold and Smith for their webinar, How Data Standards Can Help Save the World, on May 12 at 2:00 pm EDT. In the webinar, Harold and Smith will discuss the ways data standards are already improving the grantmaking process for both funders and grantees. They'll also address how foundations can participate in these initiatives and promote a better information system for the sector. See you there! This post first ran in PhilanTopic.)

Our current moment in the human story is often called the age of information. And indeed, we are too-often overwhelmed by the torrent of data coursing through our lives. As a society, we have developed many tools to organize the information we rely on every day. The Dewey Decimal System helps libraries organize books. UPC codes help stores organize their products. Nutrition labels help to present information about food ingredients and nutritional value (or lack thereof) in a way that's consistent and predictable.

Data Standards Image-600wi
The nonprofit sector has also relied on data standards: we use the government's Employer Identification Number (EIN) to identify individual organizations. The National Taxonomy of Exempt Entities (NTEE) is used by many — including GuideStar, Foundation Center, and others — to help reveal the diversity of the nonprofit community, guide funding decisions, and foster collaboration.

But just as other information systems have continued to evolve so must ours. When the Dewey Decimal System was developed in 1876, Melvil Dewey could not have imagined Amazon.com, e-readers, or Goodreads.com. Similarly, the EIN/NTEE framework is simply not enough to explain, organize, and share the complex story of nonprofits.

So we are glad to share the news that a new generation of social sector data standards is emerging. These can help us all do our work better, making smarter decisions while saving time to focus on that work.

There a several standards that are important, but we'd like to direct your attention to four:

Standard

Description

History

BRIDGE

A unique identifier for every nonprofit organization in the world.

A joint project among GlobalGiving, Foundation Center, GuideStar, and TechSoup Global.

Philanthropy Classification System

A taxonomy that describes the work of foundations, recipient organizations, and the philanthropic transactions between them.

Led by Foundation Center, with significant input from hundreds of stakeholders.

GuideStar Profile Standard

A standardized framework for nonprofits to tell their own stories. Used by more than 100,000 nonprofits.

Includes the five Charting Impact questions (developed in partnership with Independent Sector and the BBB Wise Giving Alliance). GSPS feeds the GuideStar for Grants system that was developed as part of the Simplify Initiative in partnership with the Technology Affinity Group.

eGrant/hGrant

An easy way for foundations to share the grants they make in near-real time.

Over 1,200 foundations use eGrant to report their grants data to Foundation Center and 19 foundations publish their data in open format through the Reporting Commitment.

This list is by no means comprehensive — other standards are also important, including but not limited to IATI and PerformWell. Others, such as XBRL or LEI, could become important for the field. But for now, we urge the nonprofit sector to understand these four standards and, where possible, to adopt them for your own use.

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It is worth noting that we in the nonprofit sector use the word "standards" in two distinct ways. First, there are "practice standards" that work to define excellence. The BBB Wise Giving Alliance Standards for Charity Accountability or Independent Sector's Principles for Good Governance and Effective Practice fit this definition. Practice standards are a powerful way to help define and promote good practices.

But here we're pointing to "data standards" that are simply a way of organizing information in a consistent format to make it more useful. Both practice standards and data standards exist to help us do our work better. Neither guarantee excellence, but in different ways they help us drive toward excellence.

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As a field, we need to absolutely minimize the amount of time we spend managing data — and maximize the time we spend solving problems. Think of these standards as enablers to help us do just that, and do it at scale.

--Jacob Harold and Brad Smith

Walking the Talk on Foundation Openness: Behind the Scenes in the Making of an RFP
April 19, 2016

(Chris Cardona is program officer for philanthropy at the Ford Foundation.)

Chris Cardona Photo

When the latest Star Wars movie came out on DVD, Disney made a big deal about its inclusion of deleted scenes. Director J.J. Abrams announced the deleted scenes on social media and mentioned them in magazine interviews.

While we haven’t just directed a billion-dollar-grossing movie, the Fund for Shared Insight (“Shared Insight”) is taking a page from Abrams’ playbook and offering the following commentary on our own deleted scenes. In our case, they’re from our recently published request for proposals for projects that advance foundation openness.

Come take a look behind the scenes of how a philanthropic initiative evolves….

"Compared to what nonprofits do on the front lines, foundations talking about failure is not particularly courageous."

Shared Insight is a funder collaborative working to improve philanthropy by increasing foundation openness – i.e. sharing our goals, strategies and failures; listening and engaging in dialogue with others; acting on what we hear; and, sharing what we have learned.  We made our first round of grants in 2014, and have been learning a lot alongside the grantees with whom we’re privileged to work. And as my colleague Melinda Tuan wrote about on the CEP blog, one of the things we’ve learned from our evaluation partners at ORS Impact, who are looking at the impact of our grants as well as that of our own collaboration, is that we’re not making as much progress as we’d hoped on foundation openness. (To download the full report, please see Fund for Shared Insight: Theory of Change Progress and Lessons.)

In an effort to do better, we sought the advice of our philanthropy infrastructure colleagues and had a number of productive conversations among members of the collaborative. Based on those discussions, we developed a draft request for proposals (RFP), and decided that we should model the behavior we hope other funders will adopt by publishing the draft online, and inviting anyone to comment.

If you compare the draft and the final version, they’re pretty different.

So what changed, and why did we take certain things out in response to feedback?

We were honored to receive 18 pages worth (!) of feedback on the draft request for proposals. Here’s what we took away from the comments:

  • Don’t impose a framework where it doesn’t belong. At the core of the draft RFP was a three-part model distinguishing among “closed organizations,” which don’t practice any openness; “fundamental openness,” in which foundations broadcast information in a one-way manner; and “courageous openness,” in which they engage in two-way dialogue with outside parties. This framework went through much iteration in our internal discussions. Somewhere there’s a PowerPoint slide with an image of a mountain, with “courageous” at the summit, “fundamental” at the basecamp near the foot of the mountain, and “closed” in a cave underneath the mountain. We talked about it as a spiral. We talked about multiple points of entry. Gosh, foundation folks sure do love our frameworks. But this one just didn’t work. No matter how we tried to frame it, people told us, it’s not a spectrum. All three levels are valid and have their benefits, and all three require changes in practices and/or culture. So, we dropped the idea of a spectrum with judgments about more or less desirable kinds of openness.
  • “Courageous” we’re not. That specific label was VERY unpopular. We were inspired by one of our colleagues who used that term to describe (we thought) things like foundations talking openly about failure. Yet that very person wrote to us to say that we’d gotten it wrong! Compared to what nonprofits do on the front lines, and what the people we seek to help face in their daily lives, foundations talking about failure is not particularly courageous. Whatever risk a funder might face in engaging in dialogue about what works and what doesn’t pales compared to the risks our partners and beneficiaries take all the time. So we dropped that label.
  • Listen to the sounds of silence. Our category of “closed foundation” didn’t take into account funders that deliberately remain anonymous for personal or ethical reasons. Anonymous giving is a tradition with deep cultural and faith-based roots, and is very different than the case we had in mind, of a foundation just neglecting to share information it has ready at hand. So we dropped “closed foundation” as a category or point of contrast, and focused instead on the positive or affirmative elements of openness that we seek to foster.
  • Don’t assume you have control over your message. This is the flip side of anonymity. One commenter pointed out that because of the increasingly public nature of foundation tax returns (known as 990-PFs), which are starting to become machine-readable, foundations do not have the luxury of remaining anonymous. As this commenter observed, soon, two kids in a garage in Ohio could be able to write a program that searches machine-readable 990-PFs and produces analyses of giving patterns. Another commenter made a related point; we shouldn’t assume that foundations have control over their communications and information, because in an increasingly social-media-saturated and surveilled world, they don’t. To assume that a base level of openness is a choice may not turn out to be true. This is another reason we dropped the “closed foundation” as a point of contrast.
  • What will it take to make this real? Finally, we heard from commenters who asked about the implications of foundation openness for decision-making. Under the kinds of practices we’re encouraging, will foundations retain control over decision-making about resources? In “courageous” openness, how much decision-making power are you giving stakeholders? While it only came from a couple of people, this was a particularly interesting piece of feedback, because it gets to a core issue in foundation openness: the desire for control, and the fear of giving it up. Foundation openness does usually mean real change in organizational practices and culture. That’s not something we took out in response to feedback; if anything, we’re doubling down on that notion. We are betting it will take real commitment by CEOs and boards to change their culture and become more open.

The upshot of this feedback is we’ve produced an RFP that we hope is more streamlined, more straightforward, and more direct. We added several more examples of the types of projects we’re interested in funding, and we made our definition of openness much simpler, without a framework. The process of gathering the feedback was tremendously informative, and we deeply appreciate all those who contributed their time and wisdom to this effort. We hope the result was worth it – and that in the end, we’re able to fund even better projects that advance foundation openness.

Apparently, a feature of the new Star Wars DVD is that if you already have a toy of the robot* BB-8, it can react to what’s playing on the screen. While we can’t promise anything as cute or compelling as that, we hope you’ve enjoyed this peek behind the scenes of how a philanthropic initiative evolves. We look forward to the projects that will result, and to the impact that they’ll generate.

*Yes, I know it’s technically a droid!

--Chris Cardona

Blind Spots No More: Introducing Transparency Trends
April 13, 2016

(Janet Camarena is director of transparency initiatives at Foundation Center.)

Janet Camarena

There are some lessons you learn that you never forget. "Mirror, signal, blind spot," is thankfully one of those lessons for me, dating all the way back to driver's ed when I was equal parts excited and horrified that someone was handing me the keys to a moving vehicle. I still recall the teacher emphasizing how important it is when changing lanes to first check the mirror for what is behind you; signal to let others know you are entering/exiting a lane; and then to check your blind spot, assuming there is someone invisible to you that only looking over your shoulder and out the window will reveal.

"The new Transparency Trends tool helps foundations benchmark openness."

So, is our new Glasspockets' Transparency Trends a mirror, a signal, or a viewer for revealing blind spots a foundation may be creating? It actually serves all of these purposes. Transparency Trends, created with support from the Barr Foundation, aggregates the data we have collected from all foundations that have taken and publicly shared their "Who Has Glass Pockets?" self-assessment transparency profiles, and allows the user to interact and display the data in a variety of ways.

The default view displays data about all 77 participating foundations, and users can perform a number of helpful transparency benchmarking activities with the tool, including:

  • Learn which transparency elements are most and least commonly shared online;
  • Access lists of which participating foundations share each transparency indicator;
  • Access statistics about the sharing frequency of each transparency element;
  • Compare a specific foundation to a select peer group by region/asset/foundation type; and
  • Download a customized report detailing suggested improvements for a particular foundation.

Some interesting facts quickly reveal both strengths and blind spots:

Searchable Grants Performance Assessment
  • Nearly two-thirds of participating foundations provide searchable grants via their websites;
  • 87% of participating foundations provide key staff biographies;
  • Fewer than half of participating foundations post a Code of Conduct online;
  • Despite all of the talk about impact, only 22% of participating foundations share foundation performance assessments via their websites; and
  • Only 31% of participating foundations use their websites to collect grantee feedback.

The more I explore Transparency Trends, the more excited I became about the "Mirror, signal, blind spot" rule of the road as a metaphor for the importance of philanthropic transparency. After all when you are handed the keys to a foundation, it's great if someone also hands you some institutional memory so you can have a view of the road travelled so far and what has been learned so you can actually get somewhere rather than driving in circles.

And since there are likely others who are travelling a similar path, the notion of signaling to the world what direction you are going resonates as well, since you might get there faster (and more efficiently) via a pooled or shared ride approach, or by at least sharing your road maps and shortcuts.

And finally, are you and the others on the road actually creating blind spots that prevent those around you from knowing you exist and building on your shared efforts? From Transparency Trends, you can see that fewer than half of participating foundations have a Knowledge Center that shares the lessons they are learning, and only 12% have open licensing policies that make it clear how to build on the knowledge the foundations funds and produces.

Knowledge Center Open Licensing

As fun as it is to explore the data on the pinwheel display, don't miss the opportunity to download a customized report. Since the reports are particularly helpful as a mechanism to surface both the transparency blind spots and strengths a particular foundation might have, Transparency Trends is accessible to any foundation, whether or not they have previously participated in Glasspockets.

So, if you have not submitted a profile to Glasspockets, you can still explore and extract helpful information from the tool by completing a short questionnaire about your existing transparency practices. The questionnaire will not be shared without your permission, but it will allow you to view your foundation as compared to others in our database.

Customized ReportA customized report from Transparency Trends

Our hope is these reports will serve to encourage greater foundation transparency by quickly surfacing data that identifies areas in which a foundation is behind its peers in regards to specific transparency indicators. And for those foundations that have already participated, you get a shortcut to your customized report since you will skip the questionnaire and go directly to a report to reveal your strengths and weaknesses, or areas where you may inadvertently be creating blind spots.

And speaking of blind spots, I have been thankful for the "Mirror, signal, blind spot" mantra many times when it has literally saved my life. I can recall several occasions when I've ritually check the blind spot, convinced it was empty, and only because I did the over-the-shoulder check did I avoid a collision. I'm reminded of this particular lesson at the launch of Transparency Trends because perhaps philanthropy needs a way to do the over-the-shoulder check as well. By visualizing both philanthropy's strengths and weaknesses when it comes to greater openness, we can collectively work toward a future with fewer blind spots, more awareness of those around us, and a clear view of what we have learned from the road travelled so far.

Explore Transparency Trends and let me know what you think.

-- Janet Camarena

Size Doesn't Matter
March 28, 2016

(Molly Talbot-Metz is vice president of programs at the Mary Black Foundation.)

Molly Talbot-MetzWhat does the Mary Black Foundation, a small private foundation in Spartanburg, SC, have in common with some of the country's biggest and most well-known foundations like the Bill and Melinda Gates Foundation, the Robert Wood Johnson Foundation, the Ford Foundation, and W.K. Kellogg Foundation?

The Mary Black Foundation is pleased to announce that we have joined 19 other U.S. foundations that have each joined the "Reporting Commitment," an initiative managed by Foundation Center. The Reporting Commitment is intended to shed light on the flow of philanthropic dollars. Housed at Foundation Center's Glasspockets, the Reporting Commitment calls for foundations to make grant information available to each other and the public at least quarterly in a common reporting format that shares the kinds of grants we fund, including the amount, duration, and purpose.

Mary Black FoundationOur decision to participate in the Reporting Commitment is a reflection of our desire to be a transparent community partner. According to Merriam-Webster, to be transparent is to be "easy to notice or understand; honest and open; and not secretive." Having been in philanthropy for almost 15 years, I know that transparency is not a word many use to describe foundations. For most people, the work of philanthropy is a mystery. There is often confusion and uncertainty about how foundations work and what they fund. They are often disconnected and isolated from the communities they serve. Slowly, this may be changing.

The Mary Black Foundation strives to be transparent in all that we do, and our participation in the Reporting Commitment was a logical addition to our existing efforts to be open and transparent with our community partners, the nonprofit sector, other foundations, and the general public. Since its inception, the Mary Black Foundation has published its grants in an annual report in print or on our website. In 2014, we redesigned our website to more clearly communicate our grantmaking process and guidelines.

"Openness requires a culture of transparency."

Now, in addition to our annual report and listing of funded organizations, you will also find on the Foundation's website its bylaws, code of ethics, financial statements for the past five years, listing of staff and board members, strategic plan, and funding logic model. It is important to the Foundation's board and staff that we go above and beyond the required IRS disclosure of funded grants. This kind of openness is not difficult for foundations of any size, but it does require a culture of transparency. 

Our commitment to transparency goes beyond openly reporting our policies and procedures and the grants we fund. The Foundation strives to be actively involved in the community and to be equal partners in community initiatives. Our public commitment to partnership is one of the reasons we were selected to lead Spartanburg's involvement in a national competition to improve health outcomes in our community. We will ensure that lessons learned and changes in health outcomes are tracked and reported. In that way, our successes and challenges both can help others as they embark on similar efforts.

We hope other foundations - big and small - will see the importance of being more transparent and engaged in the communities they serve and make the Reporting Commitment pledge. By collectively being transparent about our work, we strengthen our credibility and increase public trust, improve grantee and community relationships, facilitate collaboration among each other and reduce duplication of efforts, and build a shared community of learning.

-- Molly Talbot-Metz

Who Has Glass Pockets Now? New Transparency Indicators Added
March 9, 2016

Who Has Glass Pockets?As of today, the "Who Has Glass Pockets?" transparency and accountability self-assessment form has been expanded to a total of 25 indicators, which includes the addition of three new indicators: diversity data, open licensing, and strategic plans.

When Glasspockets launched in 2010, there were a total of 23 indicators that were developed based on an inventory of current foundation practice and on a framework designed to identify how foundations were using their websites to demonstrate transparency and accountability.

Those 23 elements were never meant to be the same indicators forever, and in fact, our hope was that they would evolve over time to reflect greater transparency at work in the field. Well that time has come, as foundation websites (for those that have them) have continued improving and some foundations are using them as a place to build awareness about their evolving strategies, or to build for scale through open licensing efforts by stating what can be done with the knowledge the foundation funds or produces, or to demonstrate their own commitment to diversity by providing demographic data about the foundation's staff and leadership.

The three new indicators were selected based on a survey of Glasspockets users, from our own inventory of emerging transparency practices in the field, and on which have the greatest potential to address critical transparency gaps. As was the case when we launched, every indicator has examples of foundations that are already using their websites as a way to share this information.

As part of the evolution of the "Who Has Glass Pockets?" assessment framework, we also determined it was time to remove the indicator that focused on how economic conditions affect the foundation's grantmaking since that had greater relevance during the recession, and we can bring that back in the future, when appropriate.

"By opening up strategic plans, grantmakers can strengthen relationships with their grantees."

Open Licensing Policies

Among the new indicators, there seems to be greatest momentum around sharing information about open licensing policies in which foundations specify what can and cannot be done with intellectual property that the foundation produces and/or funds. Generally, an open license is one which grants permission to access, re-use, and redistribute a work with few or no restrictions.

For a field that focuses on investing in new solutions to complex issues, this seems a natural and necessary next step to spreading the knowledge produced from those investments, and ultimately creating a learning culture in philanthropy. In our latest review of foundations which have used the Glasspockets assessment, 13% of them now have such policy statements on their websites, and most have recently added this to their websites, so there is reason to believe that this will continue to grow.

Strategic Plans

Though nearly all of the foundations that have used the Glasspockets assessment use their websites to share information about their grantmaking priorities, only 12% share information about the strategy that led to those priorities. By opening up strategic plans, grantmakers can strengthen relationships with their grantees as well as understanding about how a particular grant fits into the overall foundation's strategy.

Diversity Data

We are continuing to track which foundations have values statements related to diversity and inclusion, which has been an indicator since the beginning of Glasspockets, and have now added a new transparency element indicating which foundations openly share diversity data about their staff and, in some cases, also their board. Currently, relatively few foundations provide diversity head counts, with only 6 out of 77 profiled foundations sharing that data publicly.

A good example of why it's important to share this information can be found in the tech industry, where public pressure pointing to the lack of diversity led many companies to issue such reports. Though the diversity gaps were known before, the act of aggregating and publicly sharing the information has led to increased and formalized efforts to diversify the industry with many leading companies now offering fellowships and other diversity pipelines. Pinterest's Inclusion Labs, Intel's Diversity in Technology Initiative, Google's NextWave program, and Toptal's Global Mentor program are just a few examples of the power transparency has to make inclusion a priority.

You can learn more about the importance of sharing diversity data from this blog series featuring California Endowment's efforts in this area.

Next Steps

The "Who Has Glass Pockets?" self-assessment form has now been updated to reflect the new indicators and framework. So, if you are currently working on your submission, please download the new form. And for those foundations that have already participated, this may be good timing to revisit the transparency indicators and discuss whether your foundation's approach to transparency would benefit from providing these added dimensions. 

Our team reviewed the websites for all 77 foundations who have publicly participated in the transparency self-assessment process, and added links to the new indicators on each profile, as appropriate. Of course, in our review, it's possible we may have missed a relevant link, so let us know if you have any links that we should add. 

So, how about it - Who has Glass Pockets now? We can't wait to find out.

-- Janet Camarena

Transparency Chat: CEP On Sharing What Matters
March 2, 2016

CEP_Ellie-ButeauEllie Buteau, Ph.D., is the vice president of research at the Center for Effective Philanthropy (CEP), which received a grant from the Fund for Shared Insight (FSI). FSI is a multi-year collaborative effort among funders that pools financial and other resources to make grants to improve philanthropy. Transparency Talk is featuring grantees in the FSI openness portfolio. Janet Camarena, Foundation Center’s director of transparency, and Ms. Buteau discussed the findings of CEP's new report, "Sharing What Matters: Foundation Transparency."

Janet Camarena:  I'm going to start with what jumped out at me as surprising. The report lists time and inconsistencies across staff members as the most common barriers to greater foundation transparency.  Only 6% responded to your survey that a lack of commitment to transparency was a barrier and a full 24% responded that there was nothing specific that limited their foundation's transparency. Could this be because those surveyed are already predisposed to pushing the effectiveness envelope? Can you talk a little bit about the survey sample and how representative it might be? 

Ellie Buteau:  Yes, definitely. Response bias is always a top-of-mind question when we conduct a survey. The main bias we wondered about for this study was whether or not foundations that are already working on, and care about, transparency were more likely to respond. Unfortunately, we have no way of reliably measuring that. We did have data about a few other variables that were important to compare, including assets, giving, geographic location, etc. The main difference we saw was that foundations that have used one of CEP’s assessments (such as our Grantee Perception Report) in the past were more likely to respond to the survey. This is something we find in most of our survey samples. It doesn’t mean that foundations that haven’t used our assessments aren’t responding, but they are doing so at a lower rate. It could indicate, though, that foundations interested in gathering feedback on their performance were more likely to respond. We have more information about what we tested for response bias on page 45 of the report. 

JC:  I found it a little troubling that only 45% of CEOs of independent foundations view the general public as a relevant stakeholder group for their transparency efforts, yet the premise of philanthropy is that it is dedicated to serving the public good.  Did you also find this surprising? And any thoughts on the disconnect there?  

CEP_Foundation-Transparency_coverEB:  I did not find that surprising, and I’m not sure our data indicates that there is a disconnect between how foundations are thinking about certain aspects of transparency and serving the public good. If foundations are focused on being open with the nonprofits they fund and the nonprofits that may want funding from them in the future, that does seem like a pretty direct connection to serving the public good. After all, those are the organizations through which foundations are able to serve the public.

I think sometimes conversations about transparency suggest foundations should make sure they are sharing information with anyone and everyone. But that doesn’t seem like the most effective or efficient use of foundation resources. If people want to know what foundations are up to, most of the foundations of the size included in our study have websites or publicly available annual reports. Where I see real opportunity for foundations to do more is in sharing information about what does and doesn’t work in addressing the tough challenges they’re working to address. While that information itself may not be of interest to the general public, it can be applied in ways that benefit the general public.

JC:  Since the report points out that the philanthropy field is weak when it comes to sharing lessons learned and assessments of foundation performance, and since it also correlates stronger grantee-grantmaker relationships among foundations who have a tendency to be more transparent, will you be advocating that those who use your Grantee Perception Reports and other survey products share them?    Why or why not?

EB:  It’s up to foundations that use our Grantee Perception Report to decide whether to share their results publicly. Many, in fact, do, and almost all at least share a summary of what they learned. You can find on our website a list of those foundations that have made their GPRs public (scroll down on this page). I think it’s great when foundations are open in this way. But I don’t think that a foundation publicly sharing its GPR results is necessarily indicative of it doing more to respond to feedback or having strong relationships with its grantees.

JC:  Of the websites you examined, only 5% shared any information about lessons learned when things didn't go as planned.  Often this is because grantmakers fear harming the reputation of grantees or casting their work in a negative light.  Can you talk about how those grantmakers that were opening up this side of the work tackled that issue.

EB:  In the report, we share some examples of foundations being open about when things didn’t pan out as hoped. Those foundations do not name names of specific grantee organizations or tie results back to any individual organization. They seemed to share their lessons in a more general way, but still communicated enough specificity that others could learn from their experiences. I think their examples show that it’s possible to strike this balance.


JC:
 One of the struggles with the field and transparency is, of course, that there is no one-size-fits-all solution. However, once you start looking under the hood of foundation websites, patterns of emerging and best practices often surface.  Can you point to one or two transparency examples you uncovered that you wish others in the field would emulate?

EB:  Here is where we had a finding that did surprise me. I thought that perhaps the more information foundations shared on their websites, the more transparent they’d be seen to be by grantees. It turned out that was not borne out in the data. I think this is really important to consider: that the amount of information shared isn’t directly tied to perceptions of transparency. In my own experience, that makes sense. Sometimes, even when I know that a foundation has shared information about what it’s learned, I’ve had difficulty figuring out where to find that on a foundation’s website because there is so much other information on the site. I think what I’d suggest is that a focus be on how their websites can most effectively be used as a tool for sharing information that matters.  

 JC:  The last time CEP issued a report on transparency, it led to changes in the kinds of questions you include in your Grantee Perception Survey, which now includes questions specific to assessing perceptions about foundation transparency.  How will what you learned from this report impact your own work in the future? 

EB:  This research has given us a better understanding of how foundation CEOs, themselves, are thinking about transparency. It turns out there is a lot of agreement about what transparency means, so this research really validates the importance of the questions we added to our grantee survey a few years back. Transparency, especially about the substance of foundations’ work, is considered crucial by both grantees and foundation CEOs. Foundations and grantees are more aligned than they may realize when it comes to the information they think is important for foundations to share. Now it’s about foundations implementing — and really doing it well. Our research suggests they are doing well in some areas but not in others. We will build off of the findings in this study as we continue our research on other related topics. For example, we recently fielded a survey on evaluation practices at foundations, in partnership with the Center for Evaluation Innovation, and are seeing findings in that study that further build upon what we published in this report.

'Dark Money' Expected to Set 2016 Records
January 18, 2016

(This post first appeared in Philanthropy News Digest.)

The amount of so-called dark money, contributions to nonprofits and other tax-exempt entities that are not required to disclose their donors, backing various presidential campaigns in 2016 is expected to exceed the more than $300 million contributed during the 2012 presidential election cycle, the New York Times reports.

The troubling lack of transparency, the Times notes, is being driven by political advocacy groups that exploit a loophole in the tax code that allows them to avoid disclosing their donors while holding on to their tax-exempt status. Many of those organizations court special interest groups and wealthy donors who crave the influence that political contributions can buy but spurn any public accountability implied by those contributions. For example, almost 20 percent of the television ads touting the positions of Sen. Marco Rubio (R-FL) have been financed by dark money, the Center for Responsive Politics reports, with most of that coming from the nonprofit Conservative Solutions Project.

The biggest dark money spenders in this cycle, however, have been the U.S. Chamber of Commerce and Crossroads Grassroots Policy Strategies, a D.C.-based nonprofit organization that operates under the umbrella of the American Crossroads "super" PAC, which was co-founded by longtime Republican strategist Karl Rove. While the Federal Election Committee could force such organizations, with their heavy involvement in political campaigns, to register as political action committees, the commission hasn't shown any inclination to do so. Indeed, with Congress having effectively quashed, in the ominubus spending bill it passed at year-end, near-term efforts by the Internal Revenue Service to regulate these groups until after the 2016 election cycle and the FEC content to sit on the sidelines, the Justice Department is seen as the only federal agency that might attempt to shed some light on their activities.

Fred Wertheimer, the president of Democracy 21 and a longtime advocate of campaign finance reform, has asked the Justice Department to do just that, with an emphasis on political activities associated with Rubio's campaign. "Secret money is the formula for corruption," Wertheimer told the Times. "It's the influence buyer's dream."

Albert R. Hunt. "'Dark' Funds May Bode Ill in 2016 Election." New York Times 01/03/2016

Big Philanthropy’s Social Impact Depends on Its Social License
January 14, 2016

(Krystian Seibert is the Policy & Research Manager at Philanthropy Australia and tweets at @KSeibertAu.)

KSeibert2Mark Zuckerberg and Priscilla Chan’s recent pledge to donate 99 percent of their Facebook shares to the Chan Zuckerberg Initiative (CZI) quickly became the subject of criticism from some quarters of the not-for-profit sector.

Some of this criticism focused on how Zuckerberg and Chan decided to establish the CZI as a “Limited Liability Company” (LLC), rather than as a traditional foundation.

There are some advantages to doing this – a LLC has much more flexibility to contribute to the common good by investing in for-profit companies as well as by donating to not-for-profits.

But because a LLC isn’t subject to the same regulatory requirements as a traditional foundation, in theory it could fund things which don’t necessarily further charitable purposes.

“Legitimacy is critical to philanthropy.”

Criticism has also focused on how such a massive pledge, combined with the use of a “less accountable” LLC, could lead to a further concentration of power in the hands of wealthy people such as Zuckerberg and Chan.

This debate has opened up an opportunity to have an important discussion about how philanthropy, particularly “big philanthropy,” relates to the broader community – and what kinds of actions can enhance this relationship in order to maximize both philanthropy’s social impact and the community’s support for its work.

In this context, the concept of a “Social License to Operate” is very relevant. This concept has received more attention within the private sector, particularly within the mining industry, but has received little attention within the not-for-profit sector.

It reflects an increasingly common view that private companies can’t just do what they want and ignore the needs of communities. 

Rather, they need to acquire and maintain a Social License to Operate – which is the level of acceptance or approval continually granted to an organization’s operations or projects by the community and other stakeholders.

Defining the Social License to Operate

It’s not a license in a formal sense – you don’t apply for it and if you tick the right boxes you get it. It’s something a company earns through its actions – it’s an intangible asset which a company builds up and must work to maintain, in a similar way to a company’s reputation (although it’s different to a company’s reputation).

Therefore, Social License is a type of “informal” or “soft” regulation, as opposed to “formal” or “hard” regulation which is determined and enforced by governments and regulators.

It essentially revolves around a question of legitimacy – whether a company’s actions are viewed as “right” – not just by their shareholders, but by stakeholders more broadly. It has various levels, as shown in the diagram below.[1]

 

Krystian Graphic

It’s therefore equally relevant to philanthropy. That’s because legitimacy is critical to philanthropy – if philanthropy is not seen to be contributing to the common good, or acts in a manner which is inconsistent with community expectations and norms, then it will lose its legitimacy. Ultimately that means that philanthropy will stop being philanthropy.

Philanthropy’s Social License to Operate

That’s why it’s important for there to be conscious attention to what philanthropic organizations need to do in order to acquire and maintain a Social License.

Arguably, Social License is easier to acquire and maintain for smaller foundations – for them it could simply come down to adopting a conscientious approach to grantmaking which involves supportive engagement with grant recipients, and being responsive to the needs of the community as they change over time.

It’s particularly important in the case of “big” or “mega” philanthropy such as the CZI – and for these philanthropic organizations the bar will be set higher.

That’s because “big philanthropy” does vest a large amount of power in philanthropists to direct what outcomes are funded. Despite widespread apathy about government, government does still derive legitimacy from the ballot box – but “big philanthropy” isn’t subject to elections or term limits.

Because of its size, the actions of “big philanthropy” will be scrutinized by other organizations within the philanthropic sector, not-for-profits, the media, as well as the communities in which it operates. Therefore, if “big philanthropy” lacks a conscious focus on its Social License, its actions could result in a loss of legitimacy.

So what does acquiring and maintaining a Social License actually require of “big philanthropy”? There are no hard and fast rules, and each philanthropic organization which recognizes the importance of its Social License should examine for itself what it needs to do in its own particular situation.

Transparency

However, operating in a manner which is transparent and shares power would be particularly important in the case of the CZI and other large philanthropic organizations.

“The Chan Zuckerberg Initiative will need to both be open about its work and also share power.”

Transparency means being open about how a philanthropic organization such as the CZI is governed, what it funds, how it funds and what the outcomes are.

If the community doesn’t know what the CZI is doing, how will they be able to make an assessment of that work and its merits in terms of furthering the common good? If the community is unable to do that, then it’s impossible to establish and maintain legitimacy.

A culture of secrecy tends to breed skepticism. On the other hand, by being and transparent and open, a philanthropic organization such as the CZI can actively demonstrate its commitment to the common good, and establish a relationship with the community based on mutual trust and respect.

A good first step would be for the CZI to commit to meeting the full range of transparency measures which are set out as part of the Foundation Center’s Glasspockets initiative.

Sharing Power

The next step would be to think about ways to share power, which means directly engaging with the communities in which a philanthropic organization such as the CZI will be active. Engaging doesn’t mean just listening – it means working in genuine partnership with stakeholders.

Again, there are no hard and fast rules – but at one end of the spectrum, such engagement would involve consulting stakeholders and using their feedback to inform a foundation’s strategy and key decisions. At the other end of the spectrum it could involve more directly including stakeholders in the decision making process, which is what one small foundation in Indiana has done.

I would expect that the CZI will be trying to address some really complex and multi-faceted problems – to do this effectively, it will need to both be open about its work and also share power with subject matter experts, community leaders, not-for-profits and other philanthropic organizations.

Sharing power is an opportunity to leverage expertise, secure stakeholder buy-in and also share responsibility for outcomes.

Ultimately these are just two examples of how philanthropy can go about establishing and/or maintaining its Social License – however every philanthropic organization’s legitimacy will depend on a variety of factors. It’s something “big philanthropy” certainly needs to focus on, but also something which all philanthropic organizations should turn their minds to.

What do you think philanthropic organizations need to do to establish and maintain their Social License?

--Krystian Seibert

 [1] Adapted from: Ian Thomson, Robert G. Boutilier, Modelling and Measuring The Social License To Operate: Fruits Of A Dialogue Between Theory And Practice, 2011. This paper, along with other resources on the topic of Social License, is available at this website.

Through a Glass a Little Less Darkly: 2015 Philanthropic Transparency Highlights
January 7, 2016

(Janet Camarena is director of transparency initiatives at the Foundation Center.)

Janet Camarena PhotoAs we begin 2016, it’s important to reflect on the progress and highlights from the previous year.  And here at Glasspockets, we are always looking for examples of how the field is opening its windows and giving us all a better glimpse of what is going on inside. So, here you will find a listing of the top ten moments, efforts, and singular examples in 2015 that stood out to me as serving to bring the great kaleidoscope of philanthropy into sharper focus. 

The Thought Leaders:

#10 - Fund for Shared Insight (FSI) shares baseline report, Feedback Loops and Openness: A Snapshot of the Field, in March.  One of the report’s most interesting findings was that the key barrier to foundation openness is organizational culture.  This could be seen as a lowlight rather than a highlight since culture is tough to overcome.  But this was an important finding and report to be commissioned and shared because FSI is not just another industry group out to improve philanthropy; it is actually made up of philanthropy professionals now representing more than a dozen leading foundations, so the opportunity for peer learning, influence, and momentum building is high. 

Laura Arrillaga-Andreessen#9 - Philanthropist and Silicon Valley Thought Leader, Laura Arrillaga-Andreessen, advocates that philanthropy should adopt a "glass skulls" approach, encouraging donors to open up about the processes and strategies foundations use to think through grantmaking decisions.  In an August Transparency Talk blog, she explained that true transparency "provides a window into the brain of the foundation," and also elaborated on the link between greater transparency and greater impact.  The tech community has not exactly been lauded for openness around its giving. Since Arrillaga-Andreessen is particularly influential among Silicon Valley’s tech philanthropists, this is a hopeful sign that her peers may eventually recognize openness - as a better strategy than stealth - to attain social impact. 

Darren Walker photo#8 - Leading foundations opened up their processes and strategies via the blogosphere and other online engagement.  Some foundations have been blogging for a long time, but last year I noticed a couple of online missives in particular that I hope signals a new trend of foundations, including their own CEOs, more regularly engaging online with audiences-and more importantly, signaling that they are listening, informing strategies based on what they are hearing, and responding to feedback and questions.  A notable example is Ford Foundation CEO Darren Walker and his online letter in June, "What’s Next for the Ford Foundation?" Much has been written, and deservedly so, about Walker’s eloquent case for continuing to focus the foundation’s resources on inequality.  What stood out to me happened earlier in that letter, where Walker wrote about the responses he received when he asked stakeholders to assess his first year on the job: "Tell me the truth. That simple request drew more than 2,000 e-mails to my inbox. Some of them were profound and insightful. Others, lighthearted. But all of them were truthful. And I couldn’t be more grateful. In reading and reflecting on each and every response, I have become more aware of the ways in which we can improve our institution, and serve our mission."

In a field in which many grantees never receive a response to a completed grant report, hearing about a CEO who reads his emails is hard to believe were it not for how Walker proceeded to then openly share the kind of institutional self-awareness that is only possible from taking such an exercise seriously.

Larry Kramer PhotoAnother notable mention in this vein is the William and Flora Hewlett Foundation's "Work in Progress" blog, which counts CEO Larry Kramer as a regular contributor, and offers insights into foundation operation, strategy, and direction.  The blog, which just completed its second year, quickly gained attention when Kramer made it a key part of his foundation leadership to create a culture of transparency at Hewlett, and has consistently offered a window on a variety of leaders at Hewlett.  At a foundation with term limits, in which the cast is consistently changing, having this kind of frequent access to the humans behind the philanthropy machinery is important.  This was underscored in a blog Kramer wrote in September called Question Time in which he re-caps good questions that came up in "open forum" calls the foundation hosted in the summer to offer grantees a platform to ask the foundation about "anything and everything."  The questions and answers included everything from the foundation’s strategy to combatting climate change to preparing grantees for program staff transitions given the term limits, as well as future directions for funding. But the key message from the post and the Open Forum is that the foundation is listening and responding.

The Watchdogs:

David Callahan photo#7 - Inside Philanthropy becomes a must read.  The world needs watchdogs, and in 2015, Inside Philanthropy became a must read for many insiders looking to see if they had been written about.  David Callahan used his journalistic chops and considerable knowledge about philanthropy to write compelling content about high profile givers and didn’t hold back on his assessments.  More than 30 of Inside Philanthropy’s blogs in 2015 either mention or focus on transparency, and in fact, he closed the year with a particularly detailed piece, Darkness Grows: Time for a New Conversation About Philanthropy and Transparency that shows why for those who find transparency a burden, it is definitely better to give than to receive.

 

Aaron Dorfman photo#6 - NCRP’s executive director, Aaron Dorfman releases video footage of how difficult it can be to get an appointment with foundation executives. Philamplify, which is a project of NCRP, produced a report criticizing the opacity of the Hess Foundation and challenging it to evolve beyond "transaction philanthropy."  The only problem is they had no way to actually make sure the foundation ever saw the written report.  You can watch the video to see the lengths to which Dorfman went to try and deliver the unsolicited advice.  But the reason this is a highlight and not a lowlight is that the video and Philamplify have a sphere of influence beyond just the foundation in question, and it served as a cautionary tale here to others about why the "don’t call us, we’ll call you" approach in philanthropy is part of the problem and not a solution.

 

Philanthropy-Not Business as Usual:

DonSDoering Photo#5 - While some foundations are still debating the merits of sharing grants data publicly on websites or external databases, one foundation executive director devoted significant real estate on the JRS Biodiversity Foundation website to showcasing the full story of each funded project. In a March Transparency Talk blog post, Don Doering outlined the JRS Biodiversity Foundation’s commitment to transparency in service to greater philanthropic impact.  The online "Grant Portfolio" section of its website reads like one might expect an internal board docket would look.  Visitors to this area of the website can quickly get up to speed on: the background of each grant; key objectives and activities of the grant; planned outcomes and outputs; progress reports; lessons learned; and notes from JRS staff about the project in question.  When colleagues ask me what my hopes are for the future of transparency in philanthropy, it often looks a lot like what the JRS Biodiversity Foundation website already has to offer. 

James Canales#4 - In late November our CEO Brad Smith wrote a blog post that appeared in PhilanTopic and Transparency Talk on the growing and troubling trend of foundations accepting applications by invitation only. In fact, he cited that only 28 percent of foundations in our database appear to have a responsive grantmaking process, and asserted that isolating a foundation from the outside world is not a best practice and concluded with some practical suggestions for how the field can open the door, "even if it’s just a crack."  Well, we heard back very swiftly from one foundation CEO, Jim Canales of the Barr Foundation, who immediately took the advice to heart and took the time to add language to the foundation’s website explaining the various ways in which one can get invited to apply.  The page outlines the often mysterious process of things like trustee-directed grants, staff initiated grants, and how to introduce foundation staff to a new idea or organization. Since taking the helm of the Barr Foundation, similar to what I stated earlier about Kramer at Hewlett and Walker at Ford, Canales has made improved transparency a priority at Barr and a signature of his leadership strategy. I hope this signals a trend of foundation leadership transitions that actually do lead to, well, leadership.   It may seem a small thing to add language to a website, but to those on the outside looking in, explaining the process of securing an invitation shows sensitivity toward inclusion, as opposed to the growing tendency toward exclusion.

Ross-150#3 - Throughout 2015, a number of high-profile foundation CEOs wrote about the importance of tracking and sharing diversity data.  Business as usual in philanthropy often can mean a double standard applies, with high expectations for transparency with grantee organizations, and a completely different yardstick for foundations.  So it was refreshing to see the foundation executives who were stepping forward to make these declarations do so with their own data in hand.  Dr. Robert Ross, CEO of The California Endowment (TCE), wrote about why diversity is important enough for philanthropy to measure in a Transparency Talk blog post last month, and he reflected on the impact the TCE Diversity Audit has had.  Ross states, "The Diversity Audit has helped us strengthen the culture and authorizing environment to express our values through our policies, practices, processes." In case you’re wondering, TCE is one of a very few foundations that conduct and publicly share transparency data.  According to our "Who Has Glass Pockets?" transparency assessment tally: of the 77 foundations that have taken and shared their assessments, only six publicly share head counts of this kind publicly, so TCE’s example here will perhaps serve as a framework for others. 

Another initiative, Green 2.0, has been pushing for similar transparency among environmental organizations, including environmental funders.  According to its latest chart, 12 of the top 40 environmental funders are sharing diversity data, and eight have made public statements about its importance. So the net positive here is not just the individual sharing of the data, but the movement building among peers that has the potential to influence how foundations approach inclusivity and diversity in the future, and perhaps more importantly, expand the spectrum of individuals who might consider philanthropy as a viable career path.

Rainbow Flag#2 - One of the great philanthropic strategy success stories happened in 2015 with Marriage Equality officially becoming the law of the land.  Through the work of the Civil Marriage Collaborative, philanthropy learned that when it works collectively and engages in storytelling about its beneficiaries, it can accelerate the pace of change.  Changing public opinion on gay marriage was key to the decision. In a break from business as usual in philanthropy, a collective of funders came together to support advocacy efforts, and stuck together over 11 years, investing $153 million to change hearts and minds.  Key to this was a willingness to invest in media campaigns, as well as to think broadly about the beneficiaries who would benefit from this investment, and then to humanize the case by showcasing stories featuring the voices of parents and grandparents of gay children as part of the effort.  The Civil Marriage Collaborative also gets extra kudos for sharing the lessons learned over those 11 years, the successes as well as the failures, with a case study and video titled appropriately, Hearts and Minds: The Untold Story of How Philanthropy and the Civil Marriage Collaborative helped America Embrace Marriage Equality.

Zuckerberg & Chan#1 - Mark Zuckerberg and his wife, Priscilla Chan launched the Chan Zuckerberg Initiative in December, and in so doing, also launched a global debate that put philanthropic transparency in the spotlight like never before.  Some may be surprised to see me list the Chan Zuckerberg Initiative as a transparency highlight, but what gave me hope is not the Initiative on its own, but the attention and visibility it gave to the importance of philanthropic transparency.  Suddenly topics usually reserved for the geekiest of foundation geeks--tax code, philanthropic vehicles, and the difference between traditional philanthropy and the LLC approach -- were being covered by everyone from The New York Times to San Jose Mercury News.  Committing Facebook shares currently valued at $45 billion to "advancing human potential and promoting equality" was bound to make a splash, but the ripples of the splash had more to do with the structure the couple chose for its largesse, rather than their eloquently written letter and the couple’s desire to make a positive difference. 

Unlike private foundations, LLCs are not required to provide details on giving, are able to fund both for profit and nonprofit entities, and there is no transfer of funds to an entity that is regulated to serve the public good.  However, on the positive side, with the launch of the Initiative,  Chan and Zuckerberg didn’t just write a moving letter; as one might expect, they developed an extensive and actually very informative Facebook page that includes a detailed timeline going back to the Initiative’s inception in 2009 through to the present, outlining key milestones and investments.  There are many foundations that don’t go to this extent.  However, at least with a private foundation, eventually all grants must be disclosed on the 990pf form, and there is no telling whether whatever information the Initiative provides is comprehensive.  So, is a Facebook status update really enough for an Initiative of this scale? It is a fair question to ask whether the public is really going to be served if there are no public disclosures actually required. And the win here is that perhaps enough people globally raised this question that it will inspire greater affinity for more transparent vehicles. 

So, what am I missing?  The drawback of a list like this is that inevitably something that should be included gets left off.  And we want to continue to use this space to highlight excellent examples of transparency at work in philanthropy, so please share any thoughts, self-promotion, or suggestions below.  We have a whole year of blog content ahead of us to fill and welcome audience input.  Happy New Year!

--Janet Camarena

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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."

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