Transparency Talk

Category: "Effectiveness" (73 posts)

Trend to Watch: Using SDGs to Improve Foundation Transparency
September 19, 2017

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

Janet Camarena PhotoAs Foundation Center's director of transparency initiatives, one of the most interesting parts of my job is having the opportunity to play "transparency scout," regularly reviewing foundation websites for signs of openness in what is too often a closed universe. Some of this scouting leads to lifting up practices that can be examples for others on our Transparency Talk blog, sometimes it leads to a new transparency indicator on our assessment framework, and sometimes we just file it internally as a "trend to watch. "

Today, it's a combination of all three; we are using this blog post to announce the launch of a new, "Trend to Watch" indicator that signals an emerging practice: the use of the Sustainable Development Goals to improve how foundations open up their work to the world.

Sustainable Development GoalsThe United Nations' Sustainable Development Goals (SDGs), otherwise known as the Global Goals, are a universal call to action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity. There are a total of 17 goals, such as ending poverty, zero hunger, reduced inequalities, and climate action. Written deliberately broad to serve as a collective playbook that governments and private sector alike can use, they can also serve as a much needed shared language across philanthropy and across sectors to signal areas of common interest, and measure shared progress.

And let's face it, as foundation strategies become increasingly specialized and strategic, explaining the objectives and the nuances can become a jargon-laden minefield that can make it difficult and time consuming for those on the outside to fully understand the intended goal of a new program or initiative. The simplicity of the SDG iconography cuts through the jargon so foundation website visitors can quickly identify alignment with the goals or not, and then more easily determine whether they should devote time to reading further. The SDG framework also provides a clear visual framework to display grants and outcomes data in a way that is meaningful beyond the four walls of the foundation.

Let's take a look at how some foundation websites are using the SDGs to more clearly explain their work:

Silicon Valley Community Foundation (SVCF)

One of my favorite examples is from a simple chart the Silicon Valley Community Foundation shared on its blog, because it specifically opens up the work of its donor-advised funds using the SDGs. Donor-advised funds are typically not the most transparent vehicles, so using the SDGs as a framework to tally how SVCF's donor-advised funds are making an impact is particularly clever, refreshing, and offers a new window into a fast-growth area of philanthropy.

A quick glance at the chart reveals that quality education, good health and well-being, and sustainable cities and communities are the most common priorities among Silicon Valley donors.

GHR Foundation

A good example of how the SDGs can be used as a shared language to explain the intended impact of a grant portfolio is from GHR Foundation in Minnesota. I also like this example because it shows how the SDGs can be effectively used in both global and domestic grant portfolios. GHR uses the SDG iconography across all of its portfolios, as sidebars on the pages that describe foundation strategies. GHR's "Children in Families" is a core foundation grantmaking strategy that addresses children and families in need on a global scale. The portfolio name is a broad one, but by including the SDG iconography, web visitors can quickly understand that GHR is using this program area to address poverty, hunger, as well as lead to outcomes tied to health and well-being:

GHR is also able to use the SDG framework to create similar understanding of its domestic work. Below is an example from its Catholic Schools program serving the Twin Cities:

Through the visual cues the icons provide, I can quickly determine that in addition to aligning with the quality education goal, that this part of GHR's portfolio also addresses hunger and economically disadvantaged populations through its education grantmaking. This could also signal that the grantmaker interprets education broadly and supports the provision of wrap-around services to address the needs of low-income children as a holistic way of addressing the achievement gap. That's a lot of information conveyed with three small icons!

Tableau Foundation

The most sophisticated example comes to us from the tech and corporate grantmaking worlds--the Tableau Foundation. Tableau makes data visualization software, so using technology as a means to improve transparency is a core approach, and they are using their own grantmaking as an example of how you can use data to tell a compelling visual story. Through the interactive "Living Annual Report" on its website, Tableau regularly updates its grantmaking tallies and grantee data so web visitors have near real-time information. One of the tabs on the report reveals the SDG indicators, providing a quick snapshot of how Tableau's grantmaking, software donations, and corporate volunteering align with the SDGs.

As you mouse over any bar on the left, near real-time data appears, tallying how much of Tableau's funding has gone to support each goal. The interactive bar chart on the right lists Tableau's grantees, and visitors can quickly see the grantee list in the context of the SDGs as well as know the specific scale of its grantmaking to each recipient.

If you're inspired by these examples, but aren't sure how to begin connecting your portfolio to the Global Goals, you can use the SDG Indicator Wizard to help you get started. All you need to do is copy and paste your program descriptions or the descriptive language of a sample grant into the Wizard and its machine-learning tools let you know where your grantmaking lands on the SDG matrix. It's a lot of fun – and great place to start learning about the SDGs. And, because it transforms your program language into the relevant SDG goals, indicator, and targets, it may just provide a shortcut to that new strategy you were thinking of developing!

What more examples? The good news is we're also tracking SDGs as a transparency indicator at "Who Has Glasspockets?" You can view them all here. Is your foundation using the SDGs to help tell the story of your work? We're always on the lookout for new examples, so let us know and your foundation can be the next trend setter in our new Trend to Watch.

-- Janet Camarena

The Power of Narrative: Philanthropy and Storytelling
August 31, 2017

Nicole Richards is Chief Storyteller at Philanthropy Australia

Nicole Richards photoWhen it comes to storytelling, philanthropy generally gets a failing grade.

It’s not that we’re short on great stories—they’re everywhere. We hear, see and experience them every day in our work to catalyse positive social change. The story opportunities in philanthropy flow as bountifully as the chocolate river in Willie Wonka’s chocolate factory.

But who has the time to capture them so that they become more than just a feel-good anecdote? Who has the capacity to tell them in a way that might influence others to act? Most of us are too busy with the business of grantmaking and measuring impact to share more than the occasional story at a board meeting or conference. Thousands of stories slip away.

Willy Wonka & RiverThat’s to our detriment. Humans are hard-wired for storytelling—stories are what connect us.

Three months ago, I stepped into the newly created role of Chief Storyteller at Philanthropy Australia, the national industry association for giving in Australia. The position, which is directly aligned with the organization’s strategic plan, has been backed for three years by five local funders who believe in the power and potential of storytelling to grow giving in this country.

The stories I tell span the spectrum of philanthropy, with a view to increasing transparency for a diverse cast of philanthropic actors. From collective giving groups and newly established private ancillary funds to the country’s oldest philanthropic foundations—the stories and the protagonists are distinct but the intent is the same: to make a difference.

Some of those are human interest stories that profile funders and their giving journeys case studies that showcase good practices, and opinion-style narratives designed to challenge the status quo.

From what we’ve seen, the appetite for these stories is boundless—philanthropists of all sizes and persuasions love learning from the collective experience of their peers. Telling these stories, or better yet, passing the mic so that the stories can be recounted firsthand by the funders, their nonprofit partners and the communities they serve, is a powerful form of knowledge sharing, of connecting people with new ideas and networks.

While it’s easy enough to find  and package the stories for ready consumption by those already practicing philanthropy, the bigger challenge is to send the stories beyond the echo chamber and put them before would-be philanthropists and aspiring social change makers. 

That’s as much about opening up philanthropy to demystify it for the uninitiated as it is about sharing stories of philanthropic impact for other philanthropy insiders. Philanthropy is too often viewed as the closed-door, exclusive domain of the ultra-wealthy. As agents of philanthropy, we have a responsibility to bust that myth and lift the veil.

Not all the stories we choose to tell should gleam like candy—the authenticity of the story is critical to its impact. We need more cautionary tales such as stories of failure, of missteps and strategies that went awry. By sharing the stories that aren’t sugar-coated, we make philanthropy less opaque, more accessible and ultimately more effective. By making storytelling a part of our process, we begin to normalize a culture of openness.

While crooning about pure imagination beside his chocolate river, Willie Wonka intoned: “Want to change the world…there’s nothing to it.”

We know he’s wrong on that front, but his golden ticket giveaway of the chocolate factory was a great story.

There’s a story behind every act of giving. For the sake of more and better philanthropy, it’s time we took those stories beyond the chocolate factory gates.

--Nicole Richards

 

How to Make Grantee Reports #OpenForGood
July 20, 2017

Mandy Ellerton and Molly Matheson Gruen joined the [Archibald] Bush Foundation in 2011, where they created and now direct the Foundation's Community Innovation programs. The programs allow communities to develop and test new solutions to community challenges, using approaches that are collaborative and inclusive of people who are most directly affected by the problem. 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.

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Mandy Ellerton

When we started working at the Bush Foundation in 2011, we encountered a machine we’d never seen before: the Lektriever. It’s a giant machine that moves files around, kind of like a dry cleaner’s clothes rack, and allows you to seriously pack in the paper. As a responsible grantmaker, it’s how the Bush Foundation had meticulously tracked and stored its files for posterity - in particular, grantee reports - for decades.

In 2013, the Bush Foundation had the privilege of moving to a new office. Mere days before we were to move into the new space, we got a frantic call from the new building’s management. It turned out that the Lektrievers (we actually had multiple giant filing machines!) were too heavy for the floor of the new building, which had to be reinforced with a number of steel plates to sustain their weight.

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Molly Matheson Gruen

The Lektrievers symbolized our opportunity to become more transparent and move beyond simply preserving our records, instead seeing them as relevant learning tools for current audiences. It was time to lighten the load and share this valuable information with the world.

Even with all this extra engineering, we would still have to say goodbye to one of the machines altogether for the entire system to be structurally sound. We had decades of grantee stories, experiences and learning trapped in a huge machine in the inner sanctum of our office, up on the 25th floor. 

Learning Logs Emerge

We developed our grantee learning log concept in the Community Innovation Programs as one way to increase the Foundation’s transparency. At the heart of it, our learning logs are a very simple concept: they are grantee reports, shared online. But, like many things that appear simple, once you pull on the string of change – the complexity reveals itself.

“Every Community Innovation project is an opportunity for others to learn and the learning logs are a platform to share this learning.”

Before we could save the reports from a life of oblivion in the Lektriever, build out the technology and slap the reports online, we needed to entirely rethink our approach to grantee reporting to create a process that was more mutually beneficial. First, we streamlined our grant accountability measures (assessing whether the grantees did what they said they’d do) by structuring them into a conversation with grantees, rather than as a part of the written reports. We’ve found that conducting these assessments in a conversation takes the pressure off and creates a space where grantees can be more candid, leading to increased trust and a stronger partnership.

Second, our grantee reports now focus on what grantees are learning in their grant-funded project. What’s working? What’s not? What would you do differently if you had it to do all over again? This new process resulted in reports that were more concise and to the point.

Finally, we redesigned our website to create a searchable mechanism for sharing these reports online. This involved linking our grant management system directly with our website so that when a grantee submits a report, we do a quick review and then the report automatically populates our website. We’ve also designed a way for grantees to be able to designate select answers as private when they want to share sensitive information with us, yet not make it entirely public. We leave it up grantee discretion and those selected answers do not appear on the website. Grantees designate their answers to be private for a number of reasons, most often because they discuss sensitive situations having to do with specific people or partners – like when someone drops out of the project or when a disagreement with a partner holds up progress. And while we’ve been pleased at the candor of most of our grantees, some are still understandably reluctant to be publicly candid about failures or mistakes.

But why does this new approach to grantee reporting matter, besides making sure the floor doesn’t collapse beneath our Lektrievers?

Bushfoundation-Lektriever photo
The Lektriever is a giant machine that moves files around, kind of like a dry cleaner’s clothes rack. The Bush Foundation had meticulously tracked and stored its files for posterity - in particular, grantee reports - for decades. Credit: Bush Foundation

Learning Sees the Light of Day

Learning logs help bring grantee learning into the light of day, instead of hiding in the Lektrievers, so that more people can learn about what it really takes to solve problems. Our Community Innovation programs at the Bush Foundation fund and reward the process of innovation–the process of solving problems. Our grantees are addressing wildly different issues: from water quality to historical trauma, from economic development to prison reform. But, when you talk to our grantees, you see that they actually have a lot in common and a lot to learn from one another about effective problem-solving. And beyond our grantee pool, there are countless other organizations that want to engage their communities and work collaboratively to solve problems.  Every Community Innovation project is an opportunity for others to learn and the learning logs are a platform to share this learning, making it #OpenForGood.

We also want to honor our grantees’ time. Grantees spend a lot of time preparing grant reports for funders. And, in a best case scenario, a program officer reads the report and sends the grantee a response of some kind before the report is filed away. But, let’s be honest – sometimes even that doesn’t happen. The report process can be a burden on nonprofits and the only party to benefit is the funder. We hope that the learning logs help affirm to our grantees that they’re part of something bigger than themselves - that what they share matters to others who are doing similar work.

We also hear from our grantees that the reports provide a helpful, reflective process, especially when they fill it out together with collaborating partners. One grantee even said she’d like to fill out the report more often than we require to have regular reflection moments with her team!

Learning from the Learning Logs

We only launched the learning logs last year, but we’ve already received some positive feedback. We’ve heard from both funded and non-funded organizations that the learning logs provide inspiration and practical advice so that they can pursue similar projects. A grantee recently shared a current challenge in their work. It directly connected to some work we knew another grantee had done and had written about in their learning log. So, since this knowledge was now out in the open, we were able to direct them to the learning log as a way to expand our grantee’s impact, even beyond their local community, and use it to help advance another grantee’s work.

Take, for example, some of the following quotes from some of our grantee reports:

  • The Minnesot Brain Injury Alliance's project worked on finding ways to better serve homeless people with brain injuries.  They reflected that, "Taking the opportunity for reflection at various points in the process was very important in working toward innovation.  Without reflection, we might not have been open to revising our plan and implementing new possibilities."
  • GROW South Dakota addressed a number of challenges facing rural South Dakota communities. They shared that, “Getting to conversations that matter requires careful preparation in terms of finding good questions and setting good ground rules for how the conversations will take place—making sure all voices are heard, and that people are listening for understanding and not involved in a debate.”
  •  The People's Press Project engaged communities of color and disenfranchised communities to create a non-commercial, community-owned, low-powered radio station serving the Fargo-Moorhead area of North Dakota. They learned “quickly that simply inviting community members to a meeting or a training was not a type of outreach that was effective.”

Like many foundations, we decline far more applications than what we fund, and our limited funding can only help communities tackle so many problems. Our learning logs are one way to try and squeeze out more impact from those direct investments. By reading grantee learning logs, hopefully more people will be inspired to effectively solve problems in their communities.

We’re not planning to get rid of the Lektrievers anytime soon – they’re pretty retro cool and efficient. They contain important historical records and are incredibly useful for other kinds of record keeping, beyond grantee documentation. Plus, the floor hasn’t fallen in yet. But, as Bush Foundation Communications Director Dominick Washington put it, now we’re unleashing the knowledge, “getting it out of those cabinets, and to people who can use it.”

--Mandy Ellerton and Molly Matheson Gruen

What Will You #OpenForGood?
July 13, 2017

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

Janet Camarena Photo

This week, Foundation Center is launching our new #OpenForGood campaign, designed to encourage better knowledge sharing practices among foundations.  Three Foundation Center services—Glasspockets, IssueLab, and GrantCraft are leveraging their platforms to advance the idea that philanthropy can best live up to its promise of serving the public good by openly and consistently sharing what it’s learning from its work.  Glasspockets is featuring advice and insights from “knowledge sharing champions” in philanthropy on an ongoing #OpenForGood blog series; IssueLab has launched a special Results platform allowing users to learn from a collective knowledge base of foundation evaluations; and a forthcoming GrantCraft Guide on open knowledge practices is in development.

Although this campaign is focused on helping and inspiring foundations to use new and emerging technologies to better collectively learn, it is also in some ways rooted in the history that is Foundation Center’s origin story.

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A Short History

Sixty years ago, Foundation Center was established to provide transparency for a field in jeopardy of losing its philanthropic freedom due to McCarthy Era accusations that gained traction in the absence of any openness whatsoever about foundation priorities, activities, or processes.  Not one, but two congressional commissions were formed to investigate foundations committing alleged “un-American activities.”  As a result of these congressional inquiries, which spanned several years during the 1950s, Foundation Center was established to provide transparency in a field that had nearly lost everything due to its opacity. 

“The solution and call to action here is actually a simple one – if you learn something, share something.”

I know our Transparency Talk audience is most likely familiar with this story since the Glasspockets name stems from this history when Carnegie Corporation Chair Russell Leffingwell said, “The foundation should have glass pockets…” during his congressional testimony, describing a vision for a field that would be so open as to allow anyone to have a look inside the workings and activities of philanthropy.  But it seems important to repeat that story now in the context of new technologies that can facilitate greater openness.

Working Collectively Smarter

Now that we live in a time when most of us walk around with literal glass in our pockets, and use these devices to connect us to the outside world, it is surprising that only 10% of foundations have a website, which means 90% of the field is missing discovery from the outside world.  But having websites would really just bring foundations into the latter days of the 20th century--#OpenForGood aims to bring them into the present day by encouraging foundations to openly share their knowledge in the name of working collectively smarter.

What if you could know what others know, rather than constantly replicating experiments and pilots that have already been tried and tested elsewhere?  Sadly, the common practice of foundations keeping knowledge in large file cabinets or hard drives only a few can access means that there are no such shortcuts. The solution and call to action here is actually a simple one—if you learn something, share something

In foundations, learning typically takes the form of evaluation and monitoring, so we are specifically asking foundations to upload all of your published reports from 2015 and 2016 to the new IssueLab: Results platform, so that anyone can build on the lessons you’ve learned, whether inside or outside of your networks. Foundations that upload their published evaluations will receive an #OpenForGood badge to demonstrate their commitment to creating a community of shared learning.

Calls to Action

But #OpenForGood foundations don’t just share evaluations, they also:

  • Open themselves to ideas and lessons learned by others by searching shared repositories, like those at IssueLab as part of their own research process;
  • They use Glasspockets to compare their foundation's transparency practices to their peers, add their profile, and help encourage openness by sharing their experiences and experiments with transparency here on Transparency Talk;
  • They use GrantCraft to hear what their colleagues have to say, then add their voice to the conversation. If they have an insight, they share it!

Share Your Photos

“#OpenForGood foundations share their images with us so we can show the collective power of philanthropic openness, not just in words, but images. ”

And finally, #OpenForGood foundations share their images with us so we can show the collective power of philanthropic openness, not just in words, but images.  We would like to evolve the #OpenForGood campaign over time to become a powerful and meaningful way for foundations to open up your work and impact a broader audience than you could reach on your own. Any campaign about openness and transparency should, after all, use real images rather than staged or stock photography. 

So, we invite you to share any high resolution photographs that feature the various dimensions of your foundation's work.  Ideally, we would like to capture images of the good you are doing out in the world, outside of the four walls of your foundation, and of course, we would give appropriate credit to participating foundations and your photographers.  The kinds of images we are seeking include people collaborating in teams, open landscapes, and images that convey the story of your work and who benefits. Let us know if you have images to share that may now benefit from this extended reach and openness framing by contacting openforgood@foundationcenter.org.

What will you #OpenForGood?

--Janet Camarena

Bringing Knowledge Full Circle: Giving Circles Shape Accessible and Meaningful Philanthropy
June 21, 2017

Laura Arrillaga-Andreessen is a Lecturer in Business Strategy at the Stanford Graduate School of Business, Founder and President of the Laura Arrillaga-Andreessen Foundation, Founder and Board Chairman of Stanford Center on Philanthropy and Civil Society and Founder and Chairman Emeritus of the Silicon Valley Social Venture Fund. This post is part of the Glasspockets’ #OpenForGood series done 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. View more posts in the series.

Laura Arrillaga-Andreessen PhotoNathalie Morton, a resident of Katy, TX, was passionate about giving back to her suburban Houston community. However, she felt her lack of philanthropic experience might hinder her effectiveness. 

After initial conversations with her friends and neighbors, she discovered that they shared her desire to give locally and, like herself, lacked the financial ability to make the large contributions that they associated with high-impact philanthropy. After initial online research, Nathalie learned that a giving circle is a collaborative form of giving that allows individuals to pool their resources, knowledge and ideas to develop their philanthropic strategy and scale their impact. Nathalie then discovered the Laura Arrillaga-Andreessen Foundation’s (LAAF.org) Giving Circles Fund (GCF) initiative, an innovative online platform that provides an accessible and empowering experience for a diverse group of philanthropists to practice, grow and scale their philanthropy by giving collaboratively.

“Philanthropists have an imperative to share the research and rationale behind their philanthropic decisions for the greater good.”

With LAAF support, Nathalie was inspired to create the Cinco Ranch Giving Circle to pool her community members’ resources for the greater good. In its first year, this circle of over 30 families has come together to invest thousands of dollars in local nonprofits — all through donations as modest as $10 per month. Every member found that sharing time, values, wisdom and dollars not only deepened their relationships with one another but also that the measurable impact they could have together far exceeded that which they could achieve alone. This experience empowered Nathalie and her fellow giving circle participants to see themselves as philanthropists and develop their practice in a collaborative environment.

Nathalie’s story is just one of myriad ways that the giving circles model has made strategic philanthropy more accessible. Two years ago, I wrote a post on this same blog about how funders should have not only glass pockets but also “glass skulls,” underscoring that philanthropists have an imperative to share the research and rationale behind their philanthropic decisions for the greater good of all who are connected to the issue.  Or put another way, giving circles can help donors of all sizes become #OpenForGood. GCF allows philanthropists, like Nathalie, to do just that — by empowering givers at any level to make their thinking and decisions about social impact more open and collaborative.

LAAF logoA lack of financial, intellectual and evaluation resources are barriers to entry for many people who want to give in a way that matters more. That’s why I’ve committed the past two decades to not only redefining philanthropy — I believe that anyone, regardless of age, background or experience, can be a strategic philanthropist — but also to providing highest quality, free educational resources (MOOCs, teaching materials, case studies, giving guides) to empower anyone to make the most of whatever it is they have to give. Although most GCF individual monthly contributions are in the double digits, the impact of our giving circles is increasingly significant — our circles have given over $550,000 in general operating support grants to nonprofits nationally. By design, giving circles amplify individual giving by providing built-in mechanisms for more strategic philanthropy, including increasing

  • Transparency: Giving circles are effective because they are radically transparent about their operations, selection processes, meeting etiquette, voting rules, etc. We have found that giving circles grow and flourish when members understand exactly how the circle works and their role in its success. In addition, all of our circles publish their grants on their GCF pages, so that current and prospective members have insight into each circle’s history, portfolio and impact.
  • Democracy: GCF giving circles have a flat structure, in which everyone has an equal vote — regardless of their respective donations’ size. With LAAF support and a comprehensive portfolio of resources, group leaders facilitate meetings — ranging from casual meetups to knowledge sharing and issue ecosystem mapping gatherings to nonprofit nomination and voting sessions. Even in multigenerational giving circles where members are able to give at different levels, all of their members’ voices, perspectives and opinions hold equal weight.
  • Accessibility: Giving circles require a lower level of financial capital than other philanthropic models. A 2014 study has shown a higher rate of participation in giving circles for Millennials, women and communities of color — reflecting the spectacular pluralism that makes philanthropy beautiful. [1] On our GCF platform, we host multiple college and high school circles that have started teaching their members to carve out philanthropic dollars even on a minimal budget. Additionally, most of our circles are open to the public, and anyone can join and actively participate (yes, that includes you!).
  • Risk-tolerance: With more diverse participants and lower amounts of capital, GCF giving circles are more likely to give to community-based or smaller organizations that typically struggle to secure capital from more established philanthropies, thus meeting a critical social capital market need.

The power of collectively-pooling ideas, experiences and resources, as well as sharing decision-making, inspired me to found Silicon Valley Social Venture Fund (SV2) in 1998. What began as a small, local giving circle has grown into the second largest venture philanthropy partnership in the world. More importantly, its experiential education model — grounded in the principles listed above — has influenced the philanthropic practice of hundreds of now highly strategic philanthropists who respectively have invested hundreds of millions of dollars globally.  To this day, being a partner-member of the SV2 giving circle continues to inform how I give and evolve my own philanthropic impact.  Now, powered by the GCF platform, technology gives all of us the ability to scale our own giving by partnering with like-minded givers locally, nationally and globally so we can all move toward an #OpenForGood ideal. The mobilization of givers of all levels harnesses the power of the collective and demonstrates that the sum of even the smallest contributions can lead to deeply meaningful social change.

--Laura Arrillaga-Andreessen

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[1] https://www.philanthropy.com/article/Giving-Circles-Popular-With/150525

Why Evaluations Are Worth Reading – or Not
June 14, 2017

Rebekah Levin is the Director of Evaluation and Learning for the Robert R. McCormick Foundation, guiding the Foundation in evaluating the impact of its philanthropic giving and its involvement in community issues. She is working both with the Foundation’s grantmaking programs, and also with the parks, gardens, and museums at Cantigny Park. This post is part of the Glasspockets’ #OpenForGood series done 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. View more posts in the series.

Rebekah Levin photoTruth in lending statement:  I am an evaluator.  I believe strongly in the power of excellent evaluations to inform, guide, support and assess programs, strategies, initiatives, organizations and movements.  I have directed programs that were redesigned to increase their effectiveness, their cultural appropriateness and their impact based on evaluation data, helped to design and implement evaluation initiatives here at the foundation that changed the way that we understand and do our work, and have worked with many foundation colleagues and nonprofits to find ways to make evaluation serve their needs for understanding and improvement. 

“I believe strongly in the power of excellent evaluations."

One of the strongest examples that I’ve seen of excellent evaluation within philanthropy came with a child abuse prevention and treatment project.  Our foundation funded almost 30 organizations that were using 37 tools to measure treatment impact of treatment, many of which were culturally inappropriate, designed for initial screenings, or inappropriate for a host of other reasons, and staff from these organizations running similar programs had conflicting views about the tools.  Foundation program staff wanted to be able to compare program outcomes using uniform evaluation tools and to use that data to make funding, policy, and program recommendations, but they were at a loss as to how to do so in a way that honored the grantees’ knowledge and experience.   A new evaluation initiative was funded, combining the development of a "community of practice" for the nonprofits and foundation together to:

  • create a unified set of reporting tools;
  • learn together from the data about how to improve program design and implementation, and the systematic use of data to support staff/program effectiveness;
  • develop a new rubric which the foundation would use to assess programs and proposals; and
  • provide evaluation coaching for all organizations participating in the initiative.

The evaluation initiative was so successful that the nonprofits participating decided to continue their work together beyond the initial scope of the project to improve their own programs and better support the children and families that they are serving. This “Unified Project Outcomes” article describes the project and established processes in far greater detail.

But I have also seen and been a part of evaluations where:

  • the methodology was flawed or weak;
  • the input data were inaccurate and full of gaps;
  • there was limited understanding of the context of the organization;
  • there was no input from relevant participants; and
  • there was no thought to the use of the data/analysis;

so that little to no value came out of them, and the learning that took place as a result was equally inconsequential.

Mccormick-foundation-logo_2xSo now to those evaluation reports that often come at the end of a project or foundation initiative, and sometimes have interim and smaller versions throughout their life span.  Except to a program officer who has to report to their director about how a contract or foundation strategy was implemented, the changes from the plan that occurred, and the value or impact of an investment or initiative, should anyone bother reading them?  From my perch, the answer is a big “Maybe.”  What does it take for an evaluation report to be worth my time to read, given the stack of other things sitting here on my desk that I am trying to carve out time to read?  A lot.

  1. It has to be an evaluation and not a PR piece. Too often, "evaluation" reports provide a cleaned up version of what really occurred in a program, with none of the information about how and why an initiative or organization functioned as it did, and the data all point to its success.  This is not to say that initiatives/organizations can’t be successful.  But no project or organization works perfectly, and if I don’t see critical concerns/problems/caveats identified, my guess is that I’m not getting the whole story, and its value to me drops precipitously.
  2. It has to provide relevant context. To read an evaluation of a multi-organizational collaboration in Illinois without placing its fiscal challenges within the context of our state’s ongoing budget crisis, or to read about a university-sponsored community-based educational program without knowing the long history of mistrust between the school and the community, or any other of the relevant and critical contextual pieces that are effect a program, initiative or organization makes that evaluation of little value.  Placed within a nuanced set of circumstances significantly improves the possibility that the knowledge is transferable to other settings.
  3. It has to be clear and as detailed as possible about the populations that it is serving. Too often, I read evaluations that leave out critical information about who they were targeting and who participated or was served. 
  4. The evaluation’s methodology must be described with sufficient detail so that I have confidence that it used an appropriate and skillful approach to its design and implementation as well as the analysis of the data. I also pay great attention to what extent those who were the focus of the evaluation participated in the evaluation’s design, the questions being addressed, the methodology being used, and the analysis of the data.
  5. And finally, in order to get read, the evaluation has to be something I know exists, or something I can easily find. If it exists in a repository like IssueLab, my chances of finding it increase significantly.  After all, even if it’s good, it is even better if it is #OpenForGood for others, like me, to learn from it.

When these conditions are met, the answer to the question, “Are evaluations worth reading?” is an unequivocal “YES!,” if you value learning from others’ experiences and using that knowledge to inform and guide your own work.

--Rebekah Levin

How Engaging Conversations Build Better Strategic Plans
April 11, 2017

(Michelle Hunter is Director of Strategy and Alignment for The Chicago Community Trust. A version of this blog first appeared in The Chicago Community Trust’s blog.)

MichelleMartinHunterBW-150x150“How did The Chicago Community Trust create its strategic plan?”

This is a question we hear frequently from our colleagues in the nonprofit and philanthropic sectors who are working on their own strategic plans, and it’s easy to see why.

Strategic planning can be a complex business: cumbersome, messy and time-consuming. In fact, the very words “strategic planning” are often enough to draw sighs of despair from the most dedicated staff and board members.

Despite the challenges, though, it is critical for organizations to have clarity of vision for what they want to accomplish and how they’ll know if they’ve succeeded. And when creating a strategic plan, process is almost always as important as the final product.

For the Trust, our highest priority as we developed our new plan was to ensure that we were listening to the voices of our diverse body of stakeholders as much as possible.  We viewed opening up the Trust’s work as an opportunity to cultivate transparency, participation, learning and dialogue. 

“Opening up our work has helped build trust and collaboration with our stakeholders, and served to improve our processes.”

As a community foundation, the Trust exists to improve the quality of life for all who call the Chicago region home. If we were to create a plan that had a strong chance of succeeding, we needed to find a way for our process to include the input of many, not just a few.

Fortunately, we didn’t have to wait long for an opportunity to present itself: the year that we launched our strategic planning process was also the year of the first On the Table. 

On the Table is an annual Trust initiative. On one day a year, we invite residents of our region to come together with friends, colleagues and acquaintances to share a meal and to talk about what matters most to them and their communities.

How it works is simple: individuals and organizations sign up to host conversations on any topic of their choosing. The Trust provides a host toolkit  and a follow-up survey to learn what participants discussed.

The inaugural On the Table on May 12, 2014 drew about 11,500 participants from throughout metropolitan Chicago. We knew that the conversations would have a significant impact, not only on our region and the people who participated, but also on the direction of the Trust’s strategic plan. We eagerly awaited the results of the survey to learn what community members saw as the most pressing issues facing Chicago.

When the survey responses had been fully compiled and analyzed by the University of Illinois at Chicago’s Institute for Policy and Civic Engagement,  we saw that the most frequently discussed topics at that year’s On the Table were:

  1. Education & youth development
  2. Community engagement
  3. Equity and social inclusion

It was uplifting to see that these and other topics that had been top of mind for us up to that point in our strategic planning process were also high priorities for community members.

Trust_logo_horizontal_CMYKIn addition, On the Table gave us the essential feedback from nonprofits we serve that the Trust’s grant application process was overly complicated, burdensome and derailing nonprofits from their missions. This input directly contributed to the launch of the Trust’s general operating grants program also known as GO Grants. The GO Grants program features a streamlined application process so that nonprofits can spend less time on the administrative work of seeking grants and more time on the vital services they provide to our region.

The experience of On the Table gave us the assurance that we needed to continue on our path of creating a strategic agenda for the Trust through 2020. And as many On the Table participants told us, the initiative provided a critical opportunity to tell their community foundation what was important to them. Opening up our work has helped build trust and collaboration with our stakeholders, and served to improve our processes.

No matter how you choose to engage your stakeholders in strategic planning, the important thing is that you engage them. It’s much easier to build full understanding and buy-in for a strategic plan among stakeholders by including them in the process as early as possible. And the plan itself will be much richer and stronger because of their contributions.

On May 16, the Trust will host its fourth On the Table and once again invite thousands of Chicagoans to engage with one another around mealtime conversations.

On the Table is a terrific opportunity to build deeper connections with your supporters and clients and to make progress together on shared priorities. If your organization is going through any kind of strategy development, you might consider using On the Table as a tool for connecting with your stakeholders. Visit www.onthetable.com to learn how.

--Michelle Hunter

Warren Buffett Has Some Excellent Advice for Foundations That They Probably Won't Take
March 16, 2017

(Marc Gunther writes about nonprofits, foundations, business and sustainability. He also writes for NonprofitChronicles.com. This post also appears in Nonprofit Chronicles.)

This post is part of a Transparency Talk series, presented in partnership with the Conrad N. Hilton Foundation, examining the importance of the 990-PF, the informational tax form that foundations must annually file. The series will explore the implications of the open 990; how journalists and researchers use the 990-PF to understand philanthropy; and its role, limitations, and potential as a communications tool.

Marc GuntherWith a collective $800 billion in assets under management, America’s big foundations spend vast sums of money to buy investment advice. They’re getting little, if anything, of value in return.

Their own investment offices, and the Wall Street banks, hedge funds, private equity firms and consultants they hire, when taken together, deliver investment returns that lag behind market indexes, all evidence indicates.

These foundations would do better to call an 800 number at Vanguard or Schwab and buy a diversified set of low-cost index funds.

So, at least, argues Warren Buffett, one of the great investors of our time. In his latest letter to investors in Berkshire Hathaway, Buffett writes:

When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients. Both large and small investors should stick with low-cost index funds.

The limited data available about foundation endowments bears him out.

It’s not possible to prove that Buffett’s advice would enable foundations to improve their returns–and thus have more money to devote to their grant-making. Most foundations don’t disclose the financial performance of their endowments.

Of the 10 largest grant-making foundations in the US, only two — the MacArthur Foundation and the W.K. Kellogg Foundation — publish investment returns on their websites. MacArthur’s disclosure is exemplary. (So is its performance, perhaps not coincidentally.) I emailed all ten and got nowhere with the rest.

The best evidence about how foundations are managing their endowments comes from an annual study published by the Council on Foundations and Commonfund, a nonprofit asset management fund that serves foundations, colleges and nonprofits. Their most recent survey, which covers the 10-year period from 2006 through 2015, found that returns averaged 5.5 percent per year for 130 private foundations and 5.2 percent per year for 98 community foundations.

Further insight can be gleaned from Cambridge Associates, an investment firm whose clients include foundations, universities and wealthy families. Cambridge tracked the performance of 445 of its endowment and foundation clients and found they generated average annualized returns of 4.97 percent for the 10-year period ending June 30, 2016. (These returns should not be considered Cambridge’s performance track record, a spokesman told me.)

High pay for money managers does not necessarily translate into superior returns for foundations.

By contrast, Vanguard’s model portfolio for institutional investors, a mix of passively invested index funds, with 70 percent invested in stocks and the rest in fixed income securities, delivered 5.81 percent over the 10-year-period through 2015, and 6.1 percent for the 10-year period ending on June 30, 2016, according to Chris Philips, head of institutional advisory services at Vanguard. (All figures for investment returns are net of fees, meaning fees are taken into account.)

That may appear to be a small edge for Vanguard. But when institutions are investing hundreds of millions, or billions of dollars, small gains compounded over time add up to big money. Money, again, that could be better spent on programs.

Actually, it’s worse, because the figures reported by the Council on Foundations and CommonFund do not include the salaries that foundations pay to their in-house investment offices. The chief investment officers are often the highest-paid executives at foundations, and their deputies do well, too.

Why, then, do foundations continue to pay high salaries and high fees in the pursuit of market-beating returns, when so many fail?

They should know better. It’s no secret that passive approaches to investing outperform most active money managers, once fees and trading costs are taking into account. In 2005, Buffett wrote that “active investment management by professionals – in aggregate – would over a period of years underperform the returns achieved by rank amateurs who simply sat still.”

Taking aim at hedge funds, with their high expenses, Buffett then offered to bet $500,000 that no investment professional “could select a set of at least five hedge funds – wildly-popular and high-fee investing vehicles – that would over an extended period match the performance of an unmanaged S&P-500 index fund charging only token fees.”

Only one — one! — investment pro took the bet. Not surprisingly, Buffett will win the bet, by a very comfortable margin. And yet foundations and those who advise them are pouring more, not less, money into hedge funds.

Everyone Wants to Be Special

Buffett has a theory about why those in charge of foundations entrust their endowments to active money managers and hedge funds:

The wealthy are accustomed to feeling that it is their lot in life to get the best food, schooling, entertainment, housing, plastic surgery, sports ticket, you name it. Their money, they feel, should buy them something superior compared to what the masses receive.

In many aspects of life, indeed, wealth does command top-grade products or services. For that reason, the financial “elites” – wealthy individuals, pension funds, college endowments and the like – have great trouble meekly signing up for a financial product or service that is available as well to people investing only a few thousand dollars.

Vanguard’s Chris Philips has a similar theory:

There is this perception that by going index you are ceding that you do not have any skill and you are going to be average in the marketplace. That doesn’t feel good. As humans, we want to be good. We don’t want to be average.

Foundation executives may be especially prone to believe that they deserve better than “average” investment advice. By dint of their position, they are often told that they are wiser, funnier and better-looking than average.

Jeffrey Hooke, a senior lecturer at the Johns Hopkins Carey Business School and a former investment banker, says the trustees of foundations who serve on their investment committees are likely to favor active asset management.

The people on the boards tend to be in the business. They’re private equity executives, they’re stockbrokers or they’re in hedge funds. They’re totally biased in favor of active managing because that’s how they’ve made their living.

Hooke has researched public pension funds and found that they, too, underperform the markets by choosing active managers. Investment officers don’t want to talk themselves out of a job, he says:

They are never going to walk into the boardroom and say, ‘Hey, it just isn’t working.’ They’ve got wives, they’ve got mortgages they’ve got kids.

These investment officers aspire to be the rare bird who can consistently outperform the market, like David Swensen, the storied portfolio manager at Yale. (I profiled Swensen in 2005 for the Yale Alumni Magazine.) But Swensen, like Buffett, says that identifying the best asset managers is exceedingly difficult. In a 2009 interview, Swensen told me that investors who rely on “low-cost, passively managed index funds” and rebalance regularly will “end up beating the overwhelming majority of participants in the financial markets.” Buffett has said that in the course of his lifetime he has identified only about 10 investment professionals who can beat the markets over time; there are about 87,000 foundations in the US.

Pay for Performance?

In fairness, the foundation trustees and investment officers labor under a peculiar burden. They are obligated by law to give away five percent of their assets every year. So if they want to exist in perpetuity, they must earn in excess of five percent on their investments, which is a tall order. Of course, no foundation is entitled to live forever. If some spend down their assets, well, new foundations come along all the time.

Most foundations, though, aim to survive in perpetuity, and chase superior returns, at a cost. Consider, for example, the Ford Foundation, which, with assets of $12.2 billion (as of 12-31-2015), is the second-biggest foundation in the US, behind the behemoth Bill & Melinda Gates Foundation.

In 2015, the Ford Foundation’s highest-paid employee was vice president and chief investment officer Eric Doppstadt, who was paid $2.1 million. He was followed by  director of public investment Michael Walden at $1,017,061, director of private equity Sherif Nahas at $972,362 and director of hedge funds William Artemenko at $955,479. All were paid more than Darren Walker, Ford’s president, whose compensation was $788,542, according to Ford’s Form 990-PF filing,

Then there were Ford’s outside asset managers. In 2015, they included Silchester International Equity Management which was paid $2.2 million, Wellington Energy Investment Advisor, which collected just under $2 million and Eagle Capital Management, which got $1 million.

How did they perform? “Sharing the investment returns is outside of our policy,” says Joshua Cinelli, Ford’s chief of media relations, by e-mail.

In this, Ford is typical. At the David and Lucille Packard Foundation, chief investment officer John Moehling was paid $2.3 million, and three other investment professionals earned more than $1 million. All were better paid than Packard’s chief executive, Carol Larson. Packard, too, will not disclose its returns.

The Robert Wood Johnson Foundation, William and Flora Hewlett Foundation, Gordon and Betty Moore Foundation and MacArthur Foundation all pay their chief investment officer more than their top executives. The argument for doing so, presumably, is that these investment professionals could make as much money or more in the private sector.

But, again, with the exception of MacArthur and Kellogg, the foundations won’t say whether their investment officers and their outside asset managers are delivering market-beating performance.

What we do know is that high pay for money managers does not necessarily translate into superior returns. Interestingly, when pension-fund critic Jeff Hooke analyzed data from 33 state pension systems, he found that the 10 states with the highest fee ratios achieved lower return rates than those that spent the least.

Transparency and Accountability

Foundation endowment returns could probably be calculated by going through years of IRS filings. Unfortunately, the Form 990-PF tax form for foundations is “seriously flawed,” “unwieldy” and “unintelligible to the many lay readers, including trustees and journalists,” according to longtime foundation executive John Craig.

In a 2011 blog post for the Foundation Center, Craig lamented the fact that investment performance is not solicited on the Form 990:

Since their endowments are the only source of income for most foundations and effective endowment management is a challenge for many foundations, this is an egregious omission—equivalent to not requiring for-profit corporations to report their earnings on tax returns and financial statements.

I asked Brad Smith, president of the Foundation Center, which promotes transparency through its laudable Glasspockets initiative, why foundations won’t disclose their investment returns. “They don’t report it because it’s not required,” he said, “to state the obvious.”

Smith went on to say that foundations may be “worried about perverse incentives that could be created by a ranking.” If foundations compete to generate the best investment returns, he explained, they could feel pressured to take on risky investments. During the Great Recession, some foundations that pursued aggressive investment strategies had to sell highly-leveraged, illiquid investments at a loss. 

Still, I wonder if there’s a simpler explanation for the lack of disclosure: Foundation staff and trustees don’t want to be held accountable for mediocre results.

If MacArthur and Kellogg are exemplary in their disclosure — Kellogg kindly arranged a phone interview with Joel Wittenberg, its chief investment officer —  the Gates and Bloomberg foundations are unusually opaque. Gates Foundation money is housed in a separate trust and is reportedly managed by Cascade Investments, which also manages Gates’ personal fortune. (Buffett is a trustee of the Gates Foundation, and presumably keeps an eye on the endowment.) Bloomberg’s philanthropic and personal wealth are reported to be managed by Willett Advisors. Cascade and Willett have access to some of the world’s top money managers, and may have a shot at outperforming the averages.

This isn’t a new issue. Testifying before Congress in 1952, Russell Leffingwell, the chairman of the board of the Carnegie Foundation, famously said:

We publish our investments. We have to be very careful about our investments because we know that others, some others, take investment advice from our list of investments. Well, that is all right. We think the foundation should have glass pockets.

The bottom line: America’s foundations, as a group, are taking money that could be devoted to their programs – to alleviate global poverty, to improve education, to support medical research or promote the arts — and transferring it to wealthy asset managers. They should know better, and they do.

--Marc Gunther

Apocalypse Later? Philanthropy and Transparency in an Illiberal World
March 6, 2017

(Brad Smith is president of Foundation Center. As recently reported by Nonprofit Quarterly, the National Council of Nonprofits has launched a campaign to get nonprofits to sign a Community Letter in Support of Nonpartisanship that calls for preservation of the Johnson Amendment in its current form. This blog also appears in PhilanTopic.)

This post is part of a Transparency Talk series, presented in partnership with the Conrad N. Hilton Foundation, examining the importance of the 990-PF, the informational tax form that foundations must annually file. The series will explore the implications of the open 990; how journalists and researchers use the 990-PF to understand philanthropy; and its role, limitations, and potential as a communications tool.

Brad Smith PhotoHow long will it be before nonprofit transparency takes its place alongside diceros bicornis on the endangered species list? Hopefully never, but in a world that's growing more technologically sophisticated and more illiberal, I'm beginning to think that if it's not Apocalypse Now, maybe it's Apocalypse Later.

The value of transparency

Transparency has been a boon to the philanthropic sector, making it possible for organizations like Foundation Center, Guidestar, the Urban Institute, Charity Navigator, and others to create searchable databases spanning the entire nonprofit and foundation universe. Our efforts, in turn, contribute to responsible oversight, help nonprofits raise funds to pursue their missions, and fuel online platforms that enable donors to make better giving choices. Transparency also enables foundations to collaborate more effectively, leverage their resources more efficiently, and make real progress on critical issues such as black male achievement, access to safe water, and disaster response. The incredibly rich information ecosystem that undergirds the American social sector is the envy of others around the globe — not least because it gives us a clear view of what nonprofit initiative can accomplish, how it compares and contrasts with government, and how social, economic, and environmental issues are being addressed through private-public partnerships.

Where we are today

Federal law — U.S. Code, Title 26, Section 6104 — stipulates that public access to Form 990, a federal information form that tax-exempt organizations are required to file annually, must be provided promptly on request at the exempt organization's office or offices, or within thirty days of a written request. However, exempt organizations don't have to provide copies of their Forms 990 if they make these materials broadly available through the Internet, or if the IRS determines that the organization is being subject to a harassment campaign.

“ The social sector is about hope and the unshakable belief that the world can be made better by our efforts.”

In 2015, Carl Malamud, the Don Quixote of open data, dragged transparency into the digital age when he brought suit against the Internal Revenue Service to force it to make the 990s of a handful of organizations that had been filed electronically available as machine-readable open data. Malamud won, and, somewhat surprisingly, the IRS then did more rather than less to comply with the order: as of June 2016, all Forms 990 filed electronically by 501(c)(3) organizations are available as machine-readable open data through Amazon Web Services. As such, they can be downloaded directly in digital form and processed by computers with minimal human intervention. The development represents a victory not only for Malamud but for the Aspen Institute’s Nonprofit Data Project, which has toiled for years to make 990s more accessible. The idea, of course, is that free, open data on nonprofits will enable more innovators, researchers, and entrepreneurs to use the data in ways that help make the sector more effective and efficient. Since Malamud won his case, the IRS has posted some 1.7 million Forms 990 as machine-readable open data.

Philanthropy in a shifting world

The increasingly illiberal world in which we find ourselves was not made in America: it is a worldwide phenomenon born of globalization, income inequality, technology-driven unemployment, the unprecedented movement of migrants and refugees, and the specter of terrorism. The democratization of information driven by social media and the Internet also has been accompanied by distrust of traditional media, the narrowing of the space in which civil society organizations operate, and growing attempts to restrict thought and behavior. Author William Gibson (credited with inventing the term "cyberspace") presciently (if darkly) described a world we probably all recognize today in his 2003 reflections on George Orwell: "A world of informational transparency will necessarily be one of deliriously multiple viewpoints, shot through with misinformation, disinformation, conspiracy theories and quotidian degrees of madness. We may be able to see what's going on more quickly, but that doesn't mean we'll agree on it any more readily." Indeed.

The bitter, divisive 2016 presidential election in the United States saw information from the 990s of the Clinton and Trump foundations used to support allegations of influence peddling, self-dealing, and the like. The resulting bad press and subsequent investigations by the New York State Attorney General's office caused both foundations to eventually announce that they planned to wind down their activities.

At the same time that foundations are being subjected to more scrutiny, we see a growing number of high-net-worth individuals turn to alternatives that require little or no transparency in exchange for the tax advantages they receive for their charitable giving. The most common of these are donor-advised funds administered by community foundations or investment firms such as Fidelity, Vanguard, and Schwab. Community foundations do file 990 tax returns, so information about each grant they award is reported and made available to the public, though without the identity of the donor. With the charitable gift funds sponsored by investment funds, however, information on individual grants remains invisible. Then there are newer, hybrid structures like the Chan-Zuckerberg Initiative, the LLC formed by the co-founder of Facebook and his wife, Priscilla Chan, to "advance human potential and promote equal opportunity." There is no public disclosure requirement for the tax returns of LLCs, which means that any details we learn about the grants made by CZI will be what Zuckerberg, Chan, and their colleagues choose to tell us.

The first step?

So what are the implications of all this for the social sector in the Unites States? The media (traditional and social) has been on fire with stories about the Trump administration's intent to remove information on issues like climate change from government websites. In response, universities and others are rushing to download as much of that data to non-government servers as possible. In the same vein, it would not be difficult for the IRS to suddenly stop posting 990 tax returns as open data, especially given all the "trouble" they caused during the presidential campaign. This might be met by another Malamud-style legal challenge but that would take time to unfold. And if successful, this time around the IRS might comply by releasing only a handful of specific 990s rather than all those that have been digitally filed.

"Destroying" the Johnson Amendment

President Trump also has announced his intent to "destroy" the Johnson Amendment, a 1954 provision (named after then-Sen. Lyndon Johnson) in the U.S. tax code that prohibits all 501(c)(3) non-profit organizations from endorsing or opposing political candidates. Repeal of the provision could open the way for huge amounts of so-called dark money — donations from corporations, unions, and individuals aimed at influencing the outcome of elections — to find its way into 501(c)(3) organizations. Unlike 501(c)(3) nonprofits and foundations, the current recipients of such funds — primarily 501 (c)(4) and (c)(6) nonprofits — are not required to disclose their donors.

I am not a lawyer and may be out on a limb here, but overturning the Johnson Amendment would require an act of Congress, and would not be easy. Yet, if Congress decides to do so, it is not inconceivable that the administration, with the assent of Congress, could then remove the public disclosure requirement for Forms 990 in order (depending on your point of view) to: 1) protect donor privacy as an exercise of the First Amendment right to free speech; or 2) make it more difficult to "follow the money" when it comes to political campaigns.

If this were to happen, it is not entirely clear which constituencies would emerge to fight for the continued provision of Forms 990 as public information. Foundations, in particular, are not universally enthusiastic about having their grants and other information in the public domain for a variety of reasons (including privacy, journalistic scrutiny, and wariness of being swamped by applications for funding). What's more, in recent conversations with foundation leaders, I've heard concerns that when it comes to controversial issues such as immigration or charter schools, having their information made more visible could make them targets for harassment. And, of course, neither nonprofit organizations nor foundations enjoy filling out 990s, which like a lot of tax forms are long, time-consuming, and expensive to complete. Yes, organizations like the National Council of Nonprofits, Independent Sector, the Council on Foundations, and the Philanthropy Roundtable might rally to defend broad public access to Forms 990, but only if their members were firmly behind them.

Transparency and hope

Born in 1956 out of hostile McCarthy-era hearings accusing foundations of supporting "un-American activities," Foundation Center has worked for many years with the Internal Revenue Service and other organizations to build a public information system for philanthropy. GuideStar has done much the same for nonprofit organizations. The cornerstone of these systems has been data contained in the Forms 990. If access to these forms were reduced or eliminated, the transparency of the entire social sector — and with it the promise of greater efficiency, effectiveness, and innovation — would be an obvious casualty. It also would strengthen the position of those in government and the social sector, both here and abroad, who, for whatever reason, believe the need for donor privacy outweighs the value of transparency. Russell Leffingwell, a Republican banker and trustee of the Carnegie Corporation of New York, said it best in 1952 in his testimony to the Cox Commission declaring that his foundation "should have glasspockets." Leffingwell went on to say:

"I think [foundations] are entering into the most difficult of all fields....They are going right straight ahead, knowing that their fingers will be burned again, because in these fields you cannot be sure of your results, and you cannot be sure that you will avoid risk. If the boundaries of knowledge are pushed back and back and back so that our ignorance of ourselves and our     fellow man and of other nations is steadily reduced, there is hope for mankind, and unless those boundaries are pushed back there is no hope...."

At the end of the day, the social sector is about hope and the unshakable belief that the world can be made better by our efforts. We live in an age, illiberal or not, in which our mission to serve the public good to the best of our ability is powered by technology that allows us to share knowledge as never before. And knowledge is rooted deeply in transparency. Apocalypse later? We can't let that happen.

-- Brad Smith

Soulful Innovation: Increasing Diverse Tech Entrepreneurship
February 22, 2017

SAVE THE DATE: April 13, 1:30-3:00 p.m. EST.  Like this blog series?  Attend our Look Inside Innovation Funding event in person or via livestream in San Francisco.  More details and registration info coming in March.

C-Brown-Photo(Cedric Brown has been a leader in philanthropy and the civil society sector for nearly two decades. He is currently the Chief of Community Engagement at the Kapor Center for Social Impact, in Oakland, California. The Kapor Center won the 2017 Crunchies Social Impact Award.)

This post is part of the Funding Innovation series, produced by Foundation Center's Glasspockets and GrantCraft, and underwritten by the Vodafone Americas Foundation. The series explores funding practices and trends at the intersection of problem-solving, technology, and design. Please contribute your comments on each post and share the series using #fundinginnovation. View more posts in the series

Frankly, I get tired of talking about innovation. Sometimes discussions about innovation come across as Sisyphean pursuits, where style is greater than substance, and preening is greater than practice. I’m looking for conversations about innovation with soul. With gravitas. With a conscience. Ones that advance uplifting solutions that make this Earth more habitable or help more people meet their hierarchy of needs (or as of late, that strengthen the fast-unraveling social contract necessary for humankind to co-exist).

Three years ago at the behest of our benefactors, the then-Kapor Foundation began to explore how to move away from our traditional responsive grantmaking. The benefactors had begun to invest in seed-staged tech startups that aim to address and mitigate equality gaps. They witnessed the power of designing solutions for markets - "communities" - that operate at scale. They saw how different and disruptive ways of approaching problem solving can create a culture shift. They came to us, the foundation staff, and requested that we start thinking about this intersection of tech-for-good and our grantmaking work.

“Are we overlooking the resourcefulness that resides in the 'hood, favela, sticks, and bush?”

In the ensuing years, we experimented with different approaches, borrowing from our new knowledge of Lean Startup principles. Through a clunky, iterative learning process - which in hindsight I would like to label as our R&D - we decided to lead the way by doing our part to expand access to the tech sector and innovation economy.

Van Jones has shared that his dear friend Prince said we need to create a "Black Zuckerberg." While I take issue with that particular mold (pattern recognition and Ivy league degree-as-entry-barrier are part of tech's diversity problem), I get The Purple One's point, echoed by Mitch Kapor: "Genius is evenly distributed across zip codes, but opportunity is not." Working with a variety of partners in this ecosystem, we seek to plug leaks in the tech talent pipeline while sharpening the skills and talents that reside in all of our diverse communities.

To this point, I’ve judged a number of youth hackathons and design sessions, mostly attended by low-income, “low opportunity,” or similarly-labeled young people. These youth are participating in these activities as an initial exposure to tech skill-building and careers, and I am consistently impressed by how these young teams create apps that address information and resource gaps: student loan payment platforms; mentoring matching; anonymous bully identification; and safe passage routing among them.  

Our premise is that as the high-tech industry becomes more inclusive, companies and teams will become better at problem solving, will create better products and solutions that serve a wider market, and will utilize tech-driven platforms to solve pressing problems that are informed by their lived experiences. Our backup? Heavy hitters like  McKinsey, Catalyst, Kellogg and Stanford have found this to be true.

How are we benefiting from the terrific brainpower, scrappiness, and necessity - as the mother of invention - that resides in nonprofit leaders, in low-income communities, with people who are "making a way out of no way" as my church folks used to say?  Are we overlooking the resourcefulness that resides in the 'hood, favela, sticks, bush?

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You've heard these questions before, I'm sure. So what are we doing about it?

We're catalyzing and strengthening tech innovation, in line with the theme of this blog, by introducing and preparing more people to lead its creation. Tech shouldn't be an insular economy; now more than ever, we need thinkers, tinkerers, designers, and dreamers who are motivated by the pursuit of a significantly positive impact rather than a sinfully profitable buyout.

In 2017, the Kapor Center - including our sibling organizations, Kapor Capital and Level Playing Field Institute - are committed to increasing diverse tech entrepreneurship, access to capital, access to tech and STEM education, and building strong community institutions to promote a more diverse tech ecosystem in the Bay Area, with a special focus on Oakland, our home.

We’re employing a range of old tools for new outcomes - convening key partners to coordinate around systems-level goals (kind of collective impact-ish), providing financial support to select roundtables to support this coordination work, and utilizing the visibility of our benefactors and brand to raise awareness about the issues at hand and to channel resources to efforts aligned with our work, helping to create a larger, stronger network of collaborators. And we’re using our brand-spankin’ new building on Oakland’s Broadway corridor to host events that welcome, validate, leverage, and enrich diverse talent - namely people of color and women - as they pursue their entrepreneurship, technical, and impact goals. We see this work as a powerful overlay between the ubiquity of tech, the possibility of entrepreneurship, the integrity of fairness, and the necessity of economic mobility and empowerment for a just society.

But back to the issue at hand - innovation. I think that soulful, meaningful, conscientious innovation is rooted in a nagging question: “What can we do to be more effective?” It’s organic; a quest to find the bull’s eye of effectiveness en route to real impact. It requires experimentation, evolution, and even a bit of envy - as a competitive motivator to be top of class, of course. And while so many of these variables are present in innovation economy practitioners, I’d like to see them more firmly rooted in addressing real world issues informed by and for real people.

--Cedric Brown

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  • 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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