Transparency Talk

Category: "Foundations" (125 posts)

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 new Transparency Talk series devoted to putting the spotlight on the importance of the 990PF, 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 990PF 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

Glasspockets Find: “Dear Warren” Accounts for Impact of His $30 Billion Gift to the Gates Foundation
March 3, 2017

Buffet Bill MelindaBill & Melinda Gates recently posted their foundation’s annual letter, sharing progress from their work.  This year's letter had a personal twist, revealing how the world's largest private foundation accounts for its progress to a key stakeholder.  The letter, a great example of donor stewardship at the highest levels, details the impact of Warren Buffett’s historic gift to the Gates Foundation. 

In 2006, Buffett’s $30 billion gift to the Gates Foundation was the largest single gift ever made, and it was intended to fight disease and reduce inequity.  Buffett’s gift doubled the foundation’s resources, and helped expand its work in U.S. education, support smallholder farmers and create financial services for the poor.

In “Dear Warren,” Bill and Melinda Gates personally let the Berkshire Hathaway Inc. Chairman know how the Gates Foundation was using his money. 

“To make sure your investment keeps paying higher returns, the world has to save more lives in the future than we’ve saved in the past.”

The couple jokingly reminded Buffett of his penchant for wise spending, such as the time Buffett treated Bill Gates to a Hong Kong McDonald’s meal and used coupons.  With handwritten notes, photos and infographics, the couple showed Buffett that they too were wisely investing Buffet’s money to make an impact on global health and improve childhood mortality rates, which contributes to healthy families and stronger economies.  

The letter shows how data and metrics can be used to tell a powerful narrative.  The Gates are careful to say that they are not doing this work alone, and that most of the numbers reflect how many global organizations, including the Gates Foundation, are contributing to saving and improving lives.

“If we could show you only one number that proves how life has changed for the poorest, it would be 122 million—the number of children’s lives saved since 1990,” Bill Gates said in his letter.

Economist1
Source: The Economist via the Bill and Melinda Gates Foundation

Over a 20 year-period since 1990, the rate of childhood mortality has been cut in half, Melinda Gates said.  The Gates Foundation has helped contribute to improved global health through its investment of increasing access to vaccines in poor and developing countries. 

“For every dollar spent on childhood immunizations, you get $44 in economic benefits. That includes saving the money that families lose when a child is sick and a parent can’t work,” Bill Gates said.  

The foundation’s other global health initiatives include reducing newborn mortality, ending malnutrition, family planning and ending poverty.

Bill and Melinda Gates shared how they felt both inspired and compelled by Buffet to wisely and strategically make a philanthropic impact of Buffett’s life earnings.  They affectionately called him the most generous person they know, as well as one of the most competitive people.

Melinda Gates said the Gates are not using Buffet's money for “a grant here and a grant there.”  Rather, the Gates are using Buffett’s gift to build “an ecosystem of partners that shares its genius to improve lives and end disease."

"[You are] counting on us to make good decisions.  That responsibility weighs on us,” Melinda Gates said.  “To make sure your investment keeps paying higher returns, the world has to save more lives in the future than we’ve saved in the past.”

--Melissa Moy

Innovation at the Speed of Change: Exploring Knight’s Tech Innovation Portfolio
March 1, 2017

SAVE THE DATE: April 13, 1:30-3:00 p.m. EST.  Like this blog series?  Attend our Inside Innovation Funding event in person in San Francisco, or virtually via livestream in San Francisco.

(John Bracken is vice president for technology innovation at Knight Foundation.)

This post is part of the Funding Innovation series, produced by Foundation Center's Glasspockets and GrantCraft, and underwritten by the Vodafone 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

John Bracken - Knight PhotoIt’s become a truism to say that the world is changing, and that the pace and scale of change is ever accelerating. “It’s not just technology that’s moving at an exponential pace, but change itself;” write Joi Ito and Jeff Howe in Whiplash.

Even the world of grantmaking, often criticized for its slow pace, is adapting to these rhythms. For example, last month, we at Knight Foundation helped launch a fund on ethics and artificial intelligence. The fund itself came together quickly over the course of a few weeks, and we plan to announce our first grants in the coming weeks, but more on that later. As I talk to people involved with the creation of the tools, a single note keeps coming up: the technology is developing faster than we had anticipated even a year ago.

The recent news of Libratus, an artificial intelligence created at Carnegie Mellon that defeated four champion humans in Texas Hold ‘Em poker, demonstrated that “the best AI’s ability to do strategic reasoning with imperfect information has now surpassed that of the best humans,” said Libratus’s co-creator Tuomas Sandholm. This feat of reasoning, coming on the heels of Google Deep Mind’s victory over the world’s preeminent Go player last year, came much earlier than most in the field had anticipated.

These developments are happening at a rate that outpaces our ability to process them, and yet it’s becoming the new normal. Millions of us are now living with smart personal assistants like Amazon Echo and Google Home in our living rooms and Internet-connected televisions and thermostats. As a society, we’re still not sure just how to handle these devices, as the debate over how to use audio evidence collected by Amazon Echo during a 2015 murder and the hacking of unsecure home appliances to take down much of the Internet last fall demonstrated.

Knight Foundation Logo
Our inability to appreciate the depth of the change even as we experience it reminds me of how the French military struggled to adjust to modern warfare at the outset of World War I. As described by Barbara W. Tuchman in her classic The Guns of August, French generals prepared for German tanks and aerial bombings by sharpening their swords and donning their traditional brightly colored uniforms adorned with plumage. Even after the battle was joined, and a decade after the emergence of modern warfare in the Russo-Japanese War, the French leaders stuck to their old tactics. Tuchman wrote, “The impetus of existing plans is always stronger than the impulse to change.”

Part of our mission at Knight Foundations is to ensure that the civic institutions upon which our democracy depends-- libraries, museums, news organizations, cities-- do not follow in the footsteps of those 1914 French commanders. How do new and old civic enterprises sustain themselves as traditional fundraising approaches like mass mailings hold less appeal for new donors? How do organizations adjust their cultures to attract and retain talent and audiences who bring with them different expectations and needs from their predecessors?

Given this new world of accelerating technological advancement, and the expectation that all of our work at Knight will be impacted by future advancements, our grantmaking will focus on the ways in which digital technologies could impact our fields. Knight has always been interested in technology’s potential for strengthening the ways in which Americans learn about and participate in community. In the ’80s, the Knight brothers’ company, Knight Ridder, invested in and experimented with early interactive tools such as Viewtron and Dialog Information Services. A decade ago, we built on this interest by creating the Knight News Challenge in an attempt to better understand the potential of the Internet for transforming journalism. This year, we’re focused on two topics:

  • We are co-founders of a fund on the ethical aspects of artificial intelligence. AI has shifted from a future prospect to a present reality, and has the potential to impact every aspect of society. That’s why we’ve helped to craft the Ethics and Governance of Artificial Intelligence Fund to take an applied, multidisciplinary approach to AI, exploring its potential benefits and ill effects.
  • As part of the NetGain Partnership, a collaboration between five foundations to explore public interest issues around new technologies, we are exploring how connected devices (the Internet of Things) might impact cities. In the coming months, we’ll be making some grants designed to strengthen cities through technology.

The change we have been living through is only going to increase-- adjusting our work incrementally isn’t going to cut it. To thrive, we as individuals and institutions need to develop our comfort with insecurity, with failing, with risk, and be ready to pursue routes we may not anticipate.

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

Tips from the Tech Sector on How Philanthropy Can Scale Impact
February 15, 2017

(Shannon Farley is the Co-Founder and Executive Director of Fast Forward, the accelerator for tech nonprofits. Prior to Fast Forward, she was the founding Executive Director of Spark, the world's largest network of Millennial philanthropists. Earlier in her career, Shannon co-founded The W. Haywood Burns Institute, a MacArthur Award-winning juvenile justice reform organization. Reach her on Twitter: @Shannon_Farley.)

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. 

Shannon Farley - Fast ForwardThree years ago, my co-founder Kevin Barenblat asked me why there weren’t more Khan Academies and Wikipedias. He wanted to know why more nonprofits weren’t building software to create social change at scale. At the time, my answer was that the nonprofit startup universe didn’t look anything like the tech startup landscape. Tech startups have founder meetups, online training portals, and investors hankering to go all in on the next big tech solution. Meanwhile, tech nonprofits (organizations with software or hardware at the core of their impact model) were weirdos, stuck at the juncture of the tech and nonprofit worlds. Only a few existed and they operated with little support from either sector.

Kevin and I thought this was a missed opportunity. In the last 10 years, the cost of launching a tech startup dropped from millions to thousands of dollars. With cloud-computing, digital networks, and the ubiquity of mobile, the marginal cost for return on impact decreased drastically, making the business case for tech nonprofits very compelling.

“ We’ve found that one of the biggest hindrances to innovation in the nonprofit sector is restricted funding.”

Determined to empower more nonprofits to leverage tech for social impact, Kevin and I took some cues from the tech playbook and launched Fast Forward. Our accelerator program equips tech nonprofits with seed stage funding, training, mentorship, and connections to the entrepreneur and investor community. While we take a sector agnostic approach to our portfolio, we look for organizations building tech solutions for social issues like education, healthcare, human rights, and the environment. We are able to invest in these early stage tech nonprofits thanks to philanthropic funding from philanthropists familiar with tech models like Google.org, BlackRock, Omidyar Network, and AT&T. Our approach and funding model have been strongly influenced by the tech sector in four key ways:

1. Accelerator Programs

Philanthropists have used leadership programs to train emergent social entrepreneurs for decades. Technologists apply a similar model in a program called an accelerator or incubator. We combined the best of both into the Fast Forward program. We call the Fast Forward program an accelerator because it occurs over an accelerated period of time – 13 weeks. Equal parts leadership development and startup boot camp, our curriculum is built around defining and measuring impact, board development, product design, and hiring technical talent. Our cadre of over 100 mentors for our cohort come from both worlds – nonprofit leaders and philanthropists as well as engineers and leading startup founders.

2. General Support Funding

Each tech nonprofit in our cohort is granted $25,000 in unrestricted funding. We’ve found that one of the biggest hindrances to innovation in the nonprofit sector is restricted funding. Could you ever imagine a VC telling a startup they will fund a new version of the app, but not the Chief Technical Officer (CTO) and tech team required to build it? No. Sadly, that’s often the case in philanthropy. Too often, the technology for a nonprofit is thought of in terms of software licenses rather than as a staffed role integral to achieving impact. For a nonprofit to build programs and products that can impact millions, they need the same general support money considered the norm in the for-profit sector. This type of funding enables a nonprofit to hire the required tech team. As tech development becomes an essential component of impact, nonprofits need CTOs to drive this work. Foundations need to double down on general support if we want to see innovation at scale.

3. Growth Funding

Early stage funding is not a short-term partnership in venture capital. VCs typically invest a small amount in the beginning and then increase their investment when a product hits a growth inflection point. Philanthropists, however, tend to fund in terms of projects or annual timeline versus a long-term trajectory. As a result, nonprofits struggle between launch and the point at which they are ripe for mezzanine capital, larger gifts granted by foundations once a nonprofit hits an impact inflection point. The design phase is ongoing, and product launch is just the start of that journey. Donors should recognize philanthropy as the ultimate risk capital and make bets on people and teams building products with the potential to scale.

4. Timing

Philanthropy is slow paced. Tech development and product iterations progress quickly. If it takes six or more months to process a grant, the technology will have advanced beyond the proposal. At Fast Forward, follow-on funding is released as soon as the books are closed on a donation. We don’t wait, because tech doesn’t wait.

So has implementing tech methodologies helped Fast Forward and our cohorts achieve impact? Absolutely. Take our alumnus CareerVillage, a platform that crowdsources career advice from professionals for students in low-income areas. Since the Fast Forward accelerator in 2015, CareerVillage has scaled from reaching 500,000 students to over 1.5 million.

In three years, Fast Forward has accelerated 23 tech nonprofits. These organizations have impacted over 18.4 million lives and raised over $26 million in follow-on funding.

Technology has the power to achieve unprecedented impact in the social sector. Philanthropists have a lot to learn from the tech world.

--Shannon Farley

From Good Idea to Problem Solved: Funding the Innovation Means Funding the Process
February 8, 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 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.

Mandy Ellerton

Molly Matheson Gruen

Good ideas for solving our toughest social problems come from a variety of places. But, we need more than just good ideas – we need transparent and thoughtful ways to get community buy-in and a wide variety of perspectives to make those ideas a reality.

For a cautionary case in point, take the origin story (later chronicled in the book The Prize) of the ill-fated attempt to transform the failing Newark public schools. A prominent governor, mayor and, later, an ultra-wealthy tech mogul, hatched the idea to radically transform the schools in the back of a chauffeured S.U.V. Commentary suggests that these leaders did not consult community stakeholders about the plan, only half-heartedly seeking community input much later in the process. As one community member put it to these leaders, "You have forced your plans on the Newark community, without the

measure of stakeholder input that anyone, lay or professional, would consider adequate or respectful." To some observers, it's no surprise that without initial community buy-in, nor a transparent process and over $100 million later, the plan ultimately crashed and burned.

But, let's not throw stones at glass houses. The Newark example is indicative of a larger pattern especially familiar to those of us in the field of philanthropy. We've learned that lesson the hard way, too. Many of us have been involved in (well-intentioned) backroom and ivory tower deals with prominent community leaders to magically fix community problems with some "good ideas." Sometimes, those ideas work. But a lot of times, they don't. And unfortunately, we often chalk these failures up to innovation simply being a risky endeavor, comparing our social innovation failure rates to the oft-discussed (maybe even enshrined?) business or entrepreneurship failure rates. What's more, we almost never actively, sincerely discuss and learn from these failed endeavors.

But social innovation failure often comes at a cost, leaving behind disillusioned community members, bad outcomes for some of our most vulnerable, and lots and lots of wasted dollars that could have gone to something better. Take the Newark example: the failed attempt to transform the schools created massive civic disruption, re-awakened historic hurts and injustice and will likely leave community members even more skeptical of any future efforts to improve the schools.

Through our work at the Bush Foundation, we've learned that truly good ideas–those that will really have a sustainable impact–are often created in deep partnership and trust between organizations, leaders, and–most critically–the people most affected by a problem.

But, that kind of deep community partnership and transparency takes a lot of work, time, and attention. And, most everything that takes a lot of work takes some funding.

Community-innovation

That's why we created our Community Innovation programs at the Bush Foundation in 2013: to fund and reward the process of innovation–the process of solving problems. While the emphasis in innovation funding is often on "early stage" organizations or projects, we joke that we are a "pre-early" funder or that we fund "civic R & D." We provide funding for organizations to figure out what problem to address in the first place, to get a better understanding of the problem, to generate ideas to solve the problem, and then, after all that work (and maybe having to revisit some of the earlier stages along the way), the organization might be ready to test or implement a good idea. See how we depict that "pre-early" problem solving process here.

Most importantly, throughout the innovation or problem-solving process, we also look for particular values to drive the organization's approach: Is the organization genuinely and deeply engaging the people most affected by the problem? Is the organization working in deep partnership with other organizations and leaders? Is the organization making the most of existing resources?

Let's bring it to life. Here are three examples of the 150+ organizations we've funded to engage in a process to solve problems in their communities:

  • World Wildlife Fund's Northern Great Plains initiative is bringing ranchers, conservationists, oil business developers, and government officials together to create a vision for the future of North Dakota's badlands and a shared energy development plan that protects this important landscape.
  • PACT for Families Collaborative engaged truant youth, their parents, education staff, and service providers to understand barriers to school attendance and redesign services and test strategies for positive, sustainable solutions to truancy in western Minnesota.
  • Pillsbury United Communities is using human-centered design processes to engage North Minneapolis residents to address their neighborhood's food desert and create North Market: a new grocery store managed in partnership with a local health clinic that will also be a clinic, pharmacy, and wellness education center.

"We've learned that truly good ideas–those that will really have a sustainable impact–are often created in deep partnership and trust between organizations, leaders, and...the people most affected by a problem."

Our grantees and partners are teaching us a lot about what it takes for communities to solve problems. One of the biggest things we've learned is that collaborative projects often take far more time than anyone initially expects, for a variety of reasons. Over the past few years nearly a third of our grantees have requested more time to complete their grants, which we have readily agreed to.

For example, the Northfield Promise Initiative is a highly-collaborative, cross-sector, community-wide effort to address education disparities in Northfield, Minnesota. The initiative utilizes action teams composed of diverse stakeholders to drive its work. Early on in the project they decided to stagger the rollout of the teams rather than launch them all at once. That allowed them to take more care in composing and launching each team and allowed interested stakeholders to engage in multiple teams. In addition, later teams could learn from the successes and challenges of the earlier ones. As the grantee put it, "Partners felt strongly that it is important to give the process this extra time to ensure that all the different community voices and insights have been included (thereby maintaining this as a community-owned initiative)." We gladly extended their grant term from two years to four years so that they could spend the time they believed necessary to lead the problem-solving effort thoughtfully and inclusively.

Bush-altlogo-colorFor more helpful examples, here are a couple of resources to explore:

  • One of our innovation programs is an award for organizations that have a track record of solving problems with their communities, called the Bush Prize for Community Innovation. Together with our evaluation partner Wilder Research, we created a report about some of our Bush Prize winners that digs into specific conditions, methods and techniques that appear to help organizations innovate.
  • We believe storytelling and transparency inspire innovation. Our grantees openly share what they're learning as they pursue solutions to community problems in grantee learning logs. The learning logs also include references to specific techniques and methods the organizations use to pursue innovation.

As funders, we also have a role in the innovation process that goes beyond writing the check. By virtue of our relationships and portfolios, we have a bird's eye view of the field. By opening up what we are learning, we hope to build trust with our stakeholders and help others build on our work, hopefully leading to more and better future innovations.

-- Mandy Ellerton and Molly Matheson Gruen

From Early Stage Funding to Lasting Impact: The Venture Philanthropy Approach to Funding Innovation
February 1, 2017

(Christy Chin, Managing Partner at Draper Richards Kaplan Foundation [DRK], is instrumental in finding, funding and supporting DRK entrepreneurs, as well as cultivating and engaging DRK’s network of donor partners. As a venture philanthropy firm, DRK provides critical early stage capital to social enterprises tackling some of society's most challenging issues.)

This post is part of the Funding Innovation series, produced by Foundation Center's Glasspockets and GrantCraft, and underwritten by the Vodafone 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.

Christy Chin Photo - DRKWow! How time flies by when a partnership works so well.  As I prepared for my final Watsi board meeting, I reflected on how much Chase and his team had accomplished and what a joy it is to be part of their quest to make healthcare accessible to all. 

In July 2013, we first met Chase Adam.  It was only a few days after he had pitched Watsi, the first nonprofit to be accepted into Y-Combinator.  In no time, Ron Conway, Tim and Billy Draper were urging DRK to take a look at Watsi.  Chase was ready to make the case for Watsi to be in the DRK portfolio, and he had a few questions of his own.  From the first meeting, there was a constructive and respectful exchange because we were aligned on the end goal – healthcare for all.  As a venture philanthropy firm, DRK conducts rigorous due diligence, not unlike the way in which a venture capital firm evaluates a for-profit investment.  These are our key questions:

Is it addressing an important social issue?

Definitely. A large percentage of our work at DRK is focused on global health, so we know that access to medical care, especially surgical treatments, is a critical problem.

Watsi, the first global crowdfunding platform for medical treatments, leverages scalable technology to solve a substantial need for patients abroad.

Chase’s commitment to radical transparency was distinctive. From the very beginning, Watsi allowed anyone and everyone to see how the money was moving and how the patients’ treatment, with their consent, was progressing.  Transparency of funding increased accountability from the moment a patient’s profile was shared to the delivery of the medical procedure. There was an elegance to Watsi that was extremely appealing.  

“ We firmly believe that multi-year, unrestricted funding is precious capital that nonprofits need to build organizational capacity.”

Is the solution being proposed likely to create meaningful change?

Yes, early results were promising.  In the first seven months after launch, Watsi processed more than 3,700 donations and funded medical treatments for more than 250 patients abroad. DRK has seen many success stories of how technology can enable rapid transformation of an ecosystem, and we truly believe in the power of technical innovation to make an impact on vulnerable populations.

Does the leadership team have potential?

Even though Watsi was still in its early stages, I was confident that Chase had what it takes to be a successful entrepreneur. His passion for the mission was contagious, and he was clearly a resource magnet. Chase was able to attract both financial and human capital to support his vision.  

Is the solution scalable?

At the time, Watsi was already operating across 13 countries and working diligently to identify new partners to scale this model. Today, Watsi operates in 24 countries globally.

DRK bet on Chase in 2013 because we saw the potential for this model to dramatically shift the way governments and institutions fund healthcare treatments abroad, with real-time data collection and complete transparency. I had the privilege of joining Watsi’s board for those three years; DRK requires a DRK representative serve on all grantee boards. As part of DRK’s portfolio support and board service, we openly share our networks to help connect our entrepreneurs with people we believe can catalyze their efforts. In return, we ask for a three-year projection of the organization’s metrics and milestones that demonstrate the impact the entrepreneur hopes to achieve while s/he is an active member of the DRK portfolio. We also expect that the entrepreneur will regularly engage with DRK through written progress updates and in-person check-ins, as well as ongoing conversations with the board representative and, as needed, other key members of our finance, operations, and development team.  

I was fortunate to be joined on the Watsi board by Premal Shah, President of Kiva (an early DRK grantee), and experienced firsthand the power of the DRK network coming full circle.  In December, as my final board meeting with Watsi approached, I reflected on what made Watsi a great example of why we at DRK are so passionate about our work and strongly believe in this investment approach.  

DRK stacked logoDRK was founded in 2002 by Bill Draper and Robin Richards, two highly successful venture capitalists who chose to leverage their success in the venture capital world, applying their skills, expertise, and resources to solve complex social issues. DRK’s venture philanthropy model has been shaped by Bill and Robin’s legacy – we find, fund, and support early stage social entrepreneurs whose ideas have the potential to drive systems-level change.

Since our founding, we’ve raised $110 million in private capital and funded over 100 social enterprises – and we’re aiming to double that number over the next five years. We seek out entrepreneurs with qualities that we know are critically important – vision, energy, determination, courage, passion, and empathy. Our entrepreneurs are tackling important challenges across the globe, including healthcare, education, social justice, poverty alleviation, and the environment.

In the 15 years that DRK has been involved in this work, we’ve learned some powerful lessons that we hope to share with the funding community.  We firmly believe that multi-year, unrestricted funding is precious capital that nonprofits need to build organizational capacity.

We’ve also learned that handing over grant dollars alone isn’t enough. At DRK, the biggest difference we can make for our grantees is providing them with unrelenting support and serving as an advocate on behalf of their organizations.  We’re one of the first institutions to believe in their vision, and we never stop asking the tough questions. As a team, we’ve developed pattern recognition from sitting on many diverse boards and have gained a deep understanding of the challenges our entrepreneurs are likely to face. However, there is always a level of risk we have to account for, and not every DRK portfolio organization becomes a successful endeavor. We are incredibly fortunate to have a supportive board and a community of donor partners that not only accept, but encourage our team to take those risks and explore new possibilities with the potential for great impact.

I can’t emphasize enough the importance of our entrepreneurs’ efforts across the globe, and I encourage you to take a moment to visit DRK’s website (www.drkfoundation.org) to learn more. For any institutions interested in exploring the venture philanthropy model, please contact us and we would be more than happy to share our learnings. We have seen the difference that early-stage funding can make for social entrepreneurs. I hope the next time your organization comes across an entrepreneur like Chase, an extraordinary leader with a big idea, you too will make that bet.

--Christy Chin

 

Fueling Innovation Through Competition
January 25, 2017

(June Sugiyama is director of Vodafone Americas Foundation, leading programs for social impact innovation.)

This post is part of the Funding Innovation series, produced by Foundation Center's Glasspockets and GrantCraft, and underwritten by the Vodafone 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.

June Sugiyama PhotoInnovation is a word used so frequently that perhaps it has become almost trivial. Globally, we use innovation to describe many things, from new technologies, to new processes, to disruptive ideas, but the action of innovation itself becomes harder to define, and harder still to execute. Countless ideas are abandoned because entrepreneurs could not find the proper funding or mentorship to build their idea from a mere thought to a reality.  

Many entrepreneurs and startups will turn to venture capitalists (VCs) to try to gain funding and support, but it is a challenge in and of itself to get a meeting with a VC, much less secure VC money. This is where foundations and philanthropies, which might be more poised to take risks, can help fill the gap by providing grants to new social impact ideas and start-ups. At the Vodafone Americas Foundation – whether through grants or competition – our goal is to support organizations that use wireless technology to impact change, spark innovation, improve lives, transform the global development sector, or empower women and girls.

“ Countless ideas are abandoned because entrepreneurs could not find the proper funding or mentorship to build their idea from a mere thought to a reality.”

One avenue we take to support organizations – whether a nonprofit, university project, or start-up – is to provide traditional grants earmarked to help develop their product or service to drive social good. However, traditional grants are not the only model for supporting innovation; companies and foundations big and small are developing competition programs to help good ideas develop and move forward. A competition with specific criteria and parameters becomes a refined filter to find driven and passionate individuals - not an arbitrary search. Both commercial and philanthropic organizations host competitions to find the perfect match for unique, effective, innovative, and sustainable solutions to rise to the surface.

Specifically, for us, since Vodafone is a telecommunications service provider, we focus on the ability of mobile technologies to drive innovation for those in need. Because mobile technology is ubiquitous, with over 7 billion mobile subscribers worldwide, it is one of the most effective tools for social change. Innovative mobile solutions have already started to change economies through mobile money, mobile micro-loans, delivery of healthcare through mHealth, education through mobile platforms, and so much more.

VAF_WIP-w-o-winner-block_3inEach year we look for new ideas that leverage mobile for a better world through our Wireless Innovation Project, (WIP) a competition.  The competition is designed to promote innovation and increase the implementation of wireless-related technology. The competition recently opened its ninth annual call for submissions. In March 2017, we will select the winners, with first place receiving $300,000; second place $200,000; and third place $100,000. The winners can receive both the funding and potential mentoring they need while we can invest in the causes and services that are important and meaningful to our mission.

We are excited each year for the WIP competition because it provides unique opportunities for entrepreneurs and the Foundation alike. For example:

  • We get to see their passion firsthand. Each year, we ask the finalists to pitch their project in person at our California offices. This provides us the opportunity to meet new entrepreneurs (and for them to meet one another) to witness their drive and passion for the project. Although there are costs for the Foundation to hold in-person competitions and get everyone under one roof, we feel strongly about getting to know the person behind the innovation; we need to know that they are as committed as we are to ensure a good partnership.
  • Competition brings out the best. In a competition format, naturally there are winners. Driven by a prize and inspired by their peer competitors, all participants are compelled to perform at their very best. A competition sometimes forces people to think outside of the box and go beyond their original concept to differentiate themselves throughout the competition. Within just the competition period itself, entrepreneurs and their ideas may undergo multiple evolutions to arrive at a distilled, quality product or service. The competition format also allows participants to become inspired by one another’s work in a way that is not often possible in traditional grantmaking in which grantees blindly compete against one another.
  • Focus more on potential than current status. What happens when you have a great idea and not much to show for it yet because it’s simply a little early? While it may not be true for all competition models, our Wireless Innovation Project makes it easier for entrepreneurs to highlight the potential of a product or idea and win the competition based on the future impact it can drive versus actual business results seen to date. This allows a greater range of companies, especially start-ups, to gain funding where they may not have been able to otherwise. Our prize money might be just what they need and just at the right time to propel them to where they need to go, like completing a prototype or testing a market.
  • Gather multiple ideas at once. Our annual competition seeks innovations in more than one issue area so it allows us to tap into a diverse source of information and ideas, all at the same time, as well as support these ideas in a bigger way. While we work with different organizations throughout the year for traditional grants, the WIP competition opens up the possibility for us to witness an individual solution or organization to grow and evolve. In one year, we may have a winner that has a solution for the environment and another for financial inclusion. It is truly an engaging experience to learn about, guide, and finally support so many novel and potentially valuable ideas. The WIP competition allows us to generate new connections that we previously may not have made through the traditional grant-giving route. We can break out of our own network to create larger, more integrated networks with entrepreneurs and startups across multiple industries as we make connections with almost all the applicants – not just the winners. We hope that with these partnerships that we create and foster, we continue to make sustainable and dynamic discoveries for solutions that impact great change. 

There are many competition models across the industry, but our model has already identified outstanding innovations that have gone on to win more accolades and additional funding, which has allowed them to reach market and even expand their solutions to create greater impacts. Two of the many notable examples are Mobile ODT, which uses a phone camera for colposcopies, and Nexleaf, which makes a vaccine monitoring platform. Each has been able to turn their ideas into scalable solutions that are revolutionizing healthcare capabilities in emerging markets.   

Finding what was never imagined possible is why so many foundations, companies, and even governments take advantage of the competition model. The model allows brilliant ideas to come forward and help solve specific, important issues in our world today.

--June Sugiyama

 

Learn from the Transparency Challenge Highlights Reel
January 19, 2017

(Janet Camarena is director of transparency initiatives. A version of this post first appeared on the James Irvine Foundation blog.)

Janet Camarena PhotoWho doesn’t love a challenge? Marathons and Olympic events spur individual athletes to break records, mountaintops invite climbers to scale greater heights, and moonshot challenges motivate innovators to aim for the impossible. Could transparency pose similar challenges and opportunities for philanthropy?

Last November, Glasspockets launched a new feature designed to inspire foundations to greater transparency heights. Using data gathered from 81 foundations that have taken and shared the “Who Has Glass Pockets?” transparency assessment, the Glasspockets team identified transparency benefits and trends in a new Foundation Transparency Challenge infographic.  Since it’s often easier to learn by example, the infographic serves as a highlights reel showcasing foundations that are succeeding where most fear to tread, and this post digs in a little deeper to help other foundations learn from some of the selected examples.

Less Pain, Much to Be Gained

The Foundation Transparency Challenge reveals the toughest challenges for philanthropy — those elements that are shared by the fewest participating funders.

The infographic curates the hundreds of documents we have aggregated in Glasspockets to highlight those that can serve as good examples, including pain points for the field such as providing assessments of overall foundation performance, codes of conduct, and grantee feedback mechanisms. Below are observations about each of these based on some good examples from our collection of participants, along with an explanation of why these particular examples were selected.

Assessment of Overall Foundation Performance

Opening up how a foundation measures its own progress develops a culture of shared learning across the field. Despite the fact that many foundations emphasize impact assessment for their grantees, few lead by example and share how they measure their own progress.

Transparency Challenge - Shared Learning Infographic
Only 22 percent (18 foundations) of the 81 Glasspockets participants use their websites as a vehicle to share an overall foundation performance assessment though some do (The James Irvine Foundation, the Robert Wood Johnson Foundation, and the New York State Health Foundation.)

Irvine’s assessment is also unique because it is updated annually, aligned to the rhythm of a foundation annual report — a good tip for those considering how to make the ritual of the annual report a more beneficial exercise.

Another common pitfall is foundations often focus all of their assessment efforts on the grantmaking side. Dashboard metrics in these three examples of performance assessments include things like social media, reputational capital, communications and learning, staffing, financial performance, and funding in diverse communities, in addition to programmatic dashboards. In other words, they look at the institution as a whole.

Grantee Feedback Mechanism

Providing a way for grantees to provide a foundation with ongoing feedback serves to strengthen relationships with stakeholders and creates a culture of continuous improvement, yet only 31% of our sample do so. Most foundations have a contact form of some kind, but few take the step of creating a form specifically for feedback year-round. Opening up a foundation’s website in this way helps break down the insularity of philanthropy.

“Learn from a new Transparency Challenge infographic, which serves as a highlights reel showcasing foundations that are succeeding where most fear to tread.”

Because it is difficult for foundations to receive unvarnished feedback, the David and Lucile Packard Foundation uses a neutral third party service to collect confidential feedback, in addition to giving the option of providing the foundation with direct feedback at any time.

Another obstacle for feedback is grantee time. A good step taken by both Packard and the Barr Foundation is to provide prompts that make it easier for the grantee to consider areas in which they might have advice for the foundation.

In the case of Barr, its online form resembles a Yelp review format that allows a star rating and offers a quick multiple-choice survey in addition to the ability to provide an open-ended response.

Code of Conduct

Finally, posting a Code of Conduct is a small but simple way to build credibility and public trust by demonstrating an institution’s commitment to professional and ethical conduct. Many foundations do not post a code of ethics or guiding principles, but even for those who do, surprisingly few explain what happens if the code is violated.

The codes of conduct offered up by Commonwealth Fund, the Alfred P. Sloan Foundation, and the Rockefeller Foundation are good examples for peers; they include rules of engagement that one might expect, and they also have rare but important details about the consequences of a code violation.

These are just a few of many examples in “The Transparency Challenge” infographic, so take a look to see which examples might inspire you to the next mountain peak on your journey to openness. In a future post I’ll review the remaining examples we highlighted and why.

How Philanthropic Is the Trump Cabinet?
January 11, 2017

(Brad Smith is president of Foundation Center.)

Here are the facts, decide for yourself. That may sound like a radical proposition in what some–after a bitter election season dominated by spin, lies and fake news–are calling a "post-truth world," but it is what we do at Foundation Center. In releasing "Eye on the Trump Cabinet" as the newest feature of Foundation Center's Glasspockets website, our goal is track the charitable giving related to Cabinet nominees and their nonprofit Board service.

Explore Eye on the Trump Cabinet

Eye on the Trump Cabinet shows that, taken as a whole, the Cabinet nominees are by no means strangers to philanthropy.

There has been a lot of speculation among philanthropic foundations about what the new Administration might mean for the sector. Will lower tax rates reduce charitable giving? If government retreats from social programs will foundations be expected to take up the slack? Will new regulations be introduced to somehow influence the kinds of priorities foundations support? At the extremes I have heard people assert: "these people (the new Administration) don't know anything about philanthropy," and fielded a question from a Danish reporter who wanted to know if the controversy over the Clinton and Trump foundations would lead to the end of transparency in the sector. But what do the data tell us?

Explore Eye on the Trump Cabinet

"Eye on the Trump Cabinet" shows that, taken as a whole, the Cabinet nominees are by no means strangers to philanthropy. Between them, they are related to 25 different foundations. By "related" we mean foundations run by cabinet nominees or family members, in addition to ones in which they might have been affiliated or served as Board members. To learn more about those foundations, click on the links to their profiles in Foundation Directory Online and their 990 tax returns to learn about their operating expenses, specific grants and investments. Similarly, the data show that Cabinet nominees have served on the boards of nearly 50 nonprofit organizations focusing on education, veterans' affairs, health, and children, to mention a few.

Explore Eye on the Trump Cabinet

Through this lens, perhaps most notable among the Cabinet nominees is Betsy DeVos, someone who comes from a strong family tradition of philanthropy and has a significant foundation (the Dick and Betsy DeVos Family Foundation) together with her husband. Moreover, until recently, she served as Board Chair for the Philanthropy Roundtable, a membership organization of foundations and donors that is a critical part of the infrastructure that upholds institutional philanthropy. Among the core beliefs of the Roundtable are that philanthropic freedom is essential to a free society and that voluntary private action offers solutions for many of society's most pressing challenges.

Explore Eye on the Trump Cabinet

Foundations and nonprofits cannot (and should not) take the place of government primarily because their resources, while significant, are dwarfed by federal and state budgets in addition to those of the business sector. On the contrary, their limited resources are valuable precisely because it is their non-profit, independent status that gives them the freedom to innovate, take risks, support controversial causes, stick with tough challenges for the long term, and provide core support to critical societal institutions.

Explore Eye on the Trump Cabinet

The relationship between government and the philanthropic sector can be one of collaboration, disagreement, or both, but it has been part of the fabric of American democracy for more than 100 years. Foundation Center, itself a nonprofit, was born in 1956 out of McCarthy-era hearings accusing foundations of supporting un-American activities. The sector's response was to create Foundation Center as a trusted public information service that could prove it had nothing to hide. We believe that transparency will, in the long run, always prove its value. How philanthropic is the new Administration? Explore Eye on the Trump Cabinet, come to your own conclusions, wait, watch, and, above all, participate.

-- Brad Smith

About Transparency Talk

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

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

    Questions and comments may be
    directed to:

    Janet Camarena
    Director, Transparency Initiatives
    Foundation Center

    If you are interested in being a
    guest contributor, contact:
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