Transparency Talk

Category: "Grantmaking" (98 posts)

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.

What Do We Know About…Disconnected Youth?
December 13, 2016

(Bob Giloth is vice president of the Center for Economic Opportunity at the Annie E. Casey Foundation.  This post first ran on Philantopic.)

Bob Giloth HeadshotOver six million Americans between the ages of 16 and 24 are not in school or working. Often known as disconnected or opportunity youth, they are among the upwards of fourteen million young adults who are only marginally or periodically in school or working. At the same time, several million young people have had almost no labor market or educational experience in the past year.

Youth and young adults represent the future of our country — our economy, our communities, our democracy — and it is in our best interest to help ensure that they’re engaged with and connected to school and jobs.

Special collection_disconnected youth

To that end, the Annie E. Casey Foundation asked Foundation Center to create a special collection on IssueLab about the group of young people known as disconnected youth. This new online resource houses nearly one hundred and forty recent reports, case studies, fact sheets, and evaluations focused on the challenges confronting youth today, as well as lessons and insights from the field.

The Casey Foundation's interest in these issues began in 2012, when we published Youth and Work: Restoring Teen and Young Adult Connections to Opportunity, signaling its recognition of the crisis facing young people and the need to create stronger pathways to education and jobs. The foundation's commitment mirrored a national reawakening to the needs and aspirations of youth, including the White House Council for Community Solutions, the Aspen Forum for Community Solutions, and the Obama administration's My Brother's Keeper initiative to improve opportunities for boys and young men of color.

Casey acted on this expanded commitment to opportunity youth by launching two new initiatives — Generation Work and Learn and Earn to Achieve Potential — and by strengthening our longstanding Jim Casey Youth Opportunities Initiative. All three focus on enabling more youth and young adults to succeed in school, secure good jobs and a steady paycheck, and become financially stable. More recently, we have invested in increasing access to summer learning and employment opportunities for young people in our hometown of Baltimore, as well as in research and evaluation aimed at identifying the most effective programs and strategies. In addition, we've supported the youth-focused efforts of our national policy and civic partners.

What has become clear over the past five years is that advocates for opportunity youth need to build on existing evidence, program models, and policies, even as we wrestle with new questions related to young people with firsthand experience of the child welfare and juvenile justice systems, not to mention trauma; young parents; the role of social and family ties in the lives of disconnected youth; youth leadership; and the dramatically different outcomes we see among youth by race and ethnicity.

In this spirit of gathering lessons and asking new questions, we hope this collection on IssueLab will help promote the dissemination of promising practices in the field of opportunity youth and, eventually, grow to include more technical evaluation studies that build our overall evidence base.

Youth are our future. And we in the philanthropic, public, private, and nonprofit sectors must help them realize their aspirations by building multiple, effective pathways that enable them to succeed in school and in the labor market.

But this will only happen if we share and synthesize our knowledge in real time to create better investment strategies and choices.

Given its overall interest in building capacity and strengthening the field, philanthropy is well positioned to gather practice and research literature about programs and policies that support opportunity youth. Doing so will help ensure that nonprofits and other stakeholders have access to accurate, up-to-date information about what works for whom and what targets should guide future investment — while paving the way for the application of that knowledge on a broader scale benefiting many more young people.

The Casey Foundation is committed to continuing its youth initiatives and sharing lessons about promising strategies that promote tangible results and progress. We invite others to join us in this endeavor and look forward to contributions from our peers and partners in this work.

--Bob Giloth

The Case for Opening Up Foundations Meetings to the Public
December 6, 2016

(Caroline Fiennes is Director of Giving Evidence, and author of It Ain't What You Give. She co-authored a recent report investigating the role open meetings play in increasing transparency. A version of this post was originally published on Giving Evidence, and has been reposted here with permission.)

Caroline FiennesAll charities and charitable foundations exist to serve the public good. Most of them are subsidized by the public through various tax breaks. Any publicly-listed company must have a meeting at least annually at which the directors are held accountable to the people whose capital they deploy. In over 15 years in this "industry," we’ve only encountered two charities/foundations in the UK which have meetings at which the public – or the intended beneficiaries – can know what goes on. The 800-year-old fund, City Bridge Trust in London, lets anybody observe its decision-making meetings, and Global Giving UK has an annual general meeting (AGM) at which anybody can ask anything. Why don’t more?

It’s hard to be accountable to people, or to hear from people, if they’re not in the room. So we wondered how many charities and foundations have public meetings.

Giving Evidence simply telephoned the 20 largest charities and foundations in each of the UK and the US and asked whether they ever have any meetings which are open to the public, and whether the public can ask questions. Of the 82 organizations we asked, only two have any meetings in public. None allows the public to ask questions.

Open-meetings-coverThis is about accountability and transparency to the people who provide subsidy and to the people the charities and foundations exist to serve.

Suppose that a nonprofit is treated poorly by a grantmaking organization. How can you tell the management of that funder of your experience? Or suppose that the foundation’s strategy could be strengthened by knowledge that you have about a particular population group or region? How can you offer your expertise? Or suppose that the grantees that a foundation is supporting are not providing the services they are supposed to be providing? How can you provide the foundation with your beneficiary feedback? For most foundations, you can’t. This seems to us not good enough.

Hence it’s not the norm elsewhere. For instance, all UK local authorities have their decision-making meetings in public, as does the National Institute of Health and Care Excellence which decides what treatments can be funded from public money.

What’s to hide? One foundation representative perhaps gave the game away by saying outright: “We are accountable to ourselves, not [to] the public. They do not fund us.” Given the tax subsidy, that just isn’t true.

Our purpose here is not to moan or cast blame, but to raise the issue and suggest some ways that charities and foundations can be more accountable and transparent to those who fund them. We are not suggesting that every single charitable entity be required to hold them; most of the 180,000 registered charities in the UK and a million in the US have zero staff. Rather, we suggest requiring organizations with budgets over a certain threshold to hold such events – that threshold might be £1m or $1m, and it might rise over time.

--Caroline Fiennes

The Foundation Transparency Challenge
November 2, 2016

Janet CamarenaI often get asked which foundations are the most transparent, closely followed by the more skeptical line of questioning about whether the field of philanthropy is actually becoming more transparent, or just talking more about it.  When Glasspockets launched six years ago, a little less than 7 percent of foundations had a web presence; today that has grown to a still underwhelming 10 percent.  So, the reality is that transparency remains a challenge for the majority of foundations, but some are making it a priority to open up their work. 

Our new Foundation Transparency Challenge infographic is designed to help foundations tackle the transparency challenge. It provides an at-a-glance overview of how and why foundations are prioritizing transparency, inventories common strengths and pain points across the field, and highlights good examples that can serve as inspiration for others in areas that represent particular challenges to the field. 

Trans challenge_twitter1-01

Using data gathered from the 81 foundations that have taken and shared the “Who Has Glass Pockets?” transparency assessment, we identified transparency trends and then displayed these trends by the benefits to philanthropy, demonstrating the field's strengths and weaknesses when it comes to working more openly.

Transparency Comfort Zone

Despite the uniqueness of each philanthropic institution, looking at the data this way does seem to reveal that the majority of foundations consider a few elements as natural starting points in their journey to transparency.  As we look across the infographic, this foundation transparency comfort zone could be identified by those elements that are shared by almost all participating foundations:

  • Contact Information
  • Mission Statement
  • Grantmaking Priorities
  • Grantmaking Process
  • Key Staff List

Transparency Pain Points

On the flip side, the infographic also reveals the toughest transparency challenges for philanthropy, those elements that are shared by the fewest participating funders:

  • Assessments of Overall Foundation Performance
  • Diversity Data
  • Executive Compensation Process
  • Grantee Feedback
  • Open Licensing Policies
  • Strategic Plans

What’s In It for Me?

Community of Shared LearningOnce we start talking about the pain points, we often get questions about why foundations should share certain elements, so the infographic identifies the primary benefit for each transparency element.  Some elements could fit in multiple categories, but for each element, we tried to identify the primary benefit as a way to assess where there is currently the most attention, and where there is room for improvement. When viewed this way, there are areas of great strength or at least balance between strengths and weaknesses in participating foundations when it comes to opening up elements that build credibility and public trust, and those that serve to strengthen grantee relationship-building.  And the infographic also illustrates that philanthropic transparency is at its weakest when it comes to opening up its knowledge to build a community of shared learning.  For a field like philanthropy that is built not just on good deeds but on the experimentation of good ideas, prioritizing knowledge sharing may well be the area in which philanthropy has the most to gain by improving openness. 

“The reality is that transparency remains a challenge of foundations, but some are making it a priority to open up their work.”

And speaking of shared learning, there is much to be learned from the foundation examples that exist by virtue of participating in the “Who Has Glass Pockets?” assessment process. Our transparency team often receives requests for good examples of how other foundations are sharing information regarding diversity, codes of conduct, or knowledge sharing just to name a few, so based on the most frequently requested samples, the infographic links to actual foundation web pages that can serve as a model to others.

Don’t know what a good Code of Conduct looks like?  No problem, check out the samples we link to from The Commonwealth Fund and the Alfred P. Sloan Foundation. Don’t know how to tackle sharing your foundation’s diversity data?  Don’t reinvent the wheel, check out the good examples we flagged from The California Endowment, The Rockefeller Foundation, and Rockefeller Brothers Fund. A total of 19 peer examples, across seven challenging transparency indicators are offered up to help your foundation address common transparency pain points.

Why did we pick these particular examples, you might ask?  Watch this space for a follow-up blog that dives into what makes these good examples in each category.

#GlasspocketsChallenge

And more importantly, do you have good examples to share from your foundation’s transparency efforts? Add your content to our growing Glasspockets community by completing our transparency self-assessment form or by sharing your ideas with us on Twitter @glasspockets with #GlasspocketsChallenge and you might be among those featured next time!

--Janet Camarena

 

How the Lack of Market Feedback Puts Foundations At Risk and What Some Funders Are Doing About It
October 7, 2016

(David La Piana is the founder and managing partner of La Piana Consulting, which helps nonprofits and foundations achieve their mission and accelerate their impact. This post first ran in PhilanTopic.)

David La Piana Company PhotoQuick: What's the difference between a private foundation and a public charity? To answer, you could consult the Internal Revenue Code, or you might just as easily say: "One has money, and the other needs it."

This simple truth carries profound consequences for foundation decision-making and culture, through the impact of market feedback — or the lack thereof. A private foundation (generally an independent, endowed grantmaking entity) has a fundamentally different and weaker market feedback loop than either a for-profit business or a public charity (generally an operating nonprofit). Even the smallest business receives regular feedback from its market in the form of changes in sales. In order to maintain its tax status, a public charity must constantly attract public resources to put toward its mission — and the response to these efforts is a very real, ongoing, and often painful example of market feedback. A nonprofit unable to attract sufficient funds faces an existential crisis. Negative market feedback in the form of inadequate resources presents the organization with an imperative: either change in ways that will attract the necessary resources, or risk economic failure.

In a striking contrast, no such feedback loop exists for a private foundation. Because its resources were provided by a donor in an endowment at the outset of its existence, there is never a question of economic failure. Put more simply: to survive, a private foundation need not operate successful programs or make effective grants; it need not manage its staff well, engage its board in generative thinking, or meaningfully participate in larger conversations about its work. So long as it achieves the low bar set by the law (meeting payout requirements, paying excise tax, etc.), it has nothing to fear. The only external measure of its success is whether it remains in good standing with the IRS and the state in which it is incorporated. Beyond that, accountability begins and ends with itself.

“Philanthropy has a more difficult time than other industries getting honest feedback from customers.”

This unique situation is a source of jealousy, impatience, and frustration among nonprofit leaders, who find it hard to imagine a world not dominated by their continuous need to fundraise. For the foundation, however, this insularity removes one of the most valuable inputs for any organization: frequent, timely, and accurate market feedback.

What is "the market" for a private foundation, anyway? If we think of a market as, collectively, those who consume (or might consume) an organization’s products and services, the market for private foundations is composed of those public charities that comprise its current, past, and potential future grantees.

One oddity of this situation is that it reverses the usual market dynamic. Businesses sell to customers in exchange for money. The private foundation’s product is money, which it gives toits customers. Given this counterintuitive arrangement, philanthropy has a more difficult time than other industries getting honest feedback from customers. For one thing, at a private foundation it is always boom time: whether the economy is up or down, "customers" continuously clamor for its product, money!

Not only do grantees besiege the foundation with requests for money, they do so by a more or less sophisticated application of that essential grant-seeking trait: fawning. Grantseekers commonly validate the foundation's ideas as nothing short of genius, thanking their program officers for sharing their wisdom, when in fact the nonprofit’s own people are likely to know far more about the work their organization does than the staff of a foundation. Potential grantees will acquiesce to the funder's demands, no matter how onerous or outrageous, ill-informed, or careless. They will endure duplicative requirements, inefficiencies, multiple layers of bureaucracy, and stultifying decision-making delays designed for the foundation's convenience, not the needs of its grantees. If the foundation sets up hoops, the nonprofit willingly (although unhappily) jumps through them. After all, it needs the money.

This understandable dynamic, and the power imbalance it creates, further exacerbates the lack of honest feedback that is the norm for foundations. Unless it is careful, a foundation can find itself living in a self-referential bubble of its own making. Its finances are assured, its ideas (both well-considered strategies and idiosyncratic whims) consistently validated by customers, its mildest suggestions received  as nuggets of wisdom, its burdensome bureaucratic requirements followed without  complaint.

None of this is trivial. The private foundation must work against this powerful wave of empty validation or risk intellectual death internally and doing more harm than good in the field.

Over the past 20 years, some private foundations have taken steps to address this troubling dynamic. Some large foundations offer their program staff term-limited positions as a way to ensure a steady inflow of new ideas (and an equally steady outflow of veteran staff before they begin to believe they are as brilliant as grantees say they are). At the William and Flora Hewlett Foundation, for example, program directors and program officers serve eight-year terms.

Voter ImageOther foundations undertake anonymous, third-party-administered grantee surveys to gauge  how well they treat grantees, often committing to share the results with the field as an external metric of success. The Center for Effective Philanthropy has provided such assessments for more than three hundred foundations, receiving feedback from more than fifty thousand grantees. Impressive, except for the fact that there are 110,000 private non-operating foundations in the U.S. that have not availed themselves of CEP's service.

Still other foundations place grantees or recipients of the services supported by the foundation on their governing or advisory boards. The California Wellness Foundation includes a number of past grantees whose experience provides "ground-truthing" for the foundation.      

These and other well-intentioned steps are commendable, but they do not fully address the lack of market feedback that gives nonprofits a general read on how they are doing. Strikingly, two simple but powerful questions most nonprofits monitor diligently are just not translatable to the foundation world:

  1. Are more or fewer people using our services/joining as members?
  2. Are we attracting the dollars we need to support our work?

The lack of market feedback is not without consequences in the area where it matters most — a foundation’s engagement with its grantees. Recently, foundations have congratulated themselves on taking steps in the right direction, but philanthropy, collectively, still routinely makes  mistakes that hurt its intended beneficiaries, and those beneficiaries are still loath to bite the hand that feeds them. Grantee engagement is a popular approach to the problem.Stanford Social Innovation Review, in partnership with Grantmakers for Effective Organizations, recently organized a whole series on the topic. The fact remains, however, that even the most engaged grantee is still at a huge power disadvantage in any conversation with a grantmaker. Careful grantee engagement may lead to positively-framed constructive feedback for the foundation (itself a huge step forward), but it  seldom leads to a grantee telling a philanthropic emperor that he or she has no clothes.

Accurate market feedback within predictable bounds may be the best we can hope for, given the huge, unavoidable power differential between grantmaker and grantseeker. The world is not a fair and equitable place, but talent and character do seem to be randomly dispersed. The people making funding decisions are no more likely to be brilliant, ethical, compassionate, or “right” than the people seeking grants — yet one group holds all the cards. Thoughtful grantee engagement strategies are our best hope of balancing what will never be a level playing field. But authentic engagement requires a fundamental shift in private foundation thinking grounded in the lived reality of their grantees.

--David La Piana

California Foundation Data—Now Available At-a-Glance
September 27, 2016

Did you know…

  • California is home to 7,755 foundations that collectively give more than $7 billion?
  • In the last 10 years, giving by California foundations has increased by 90% and assets have increased by 70%?
  • Education, Health, and Environment & Animal Welfare are the top funding priorities favored by California foundations?
  • Statewide, across all regions, Children & Youth is the top population group supported by California foundations?

CA blog image 200x200v2-01The longer I work at Foundation Center, the more I realize how difficult it is for those of us in the social sector to understand the ecosystems in which we work.  Grantmakers and nonprofits evolve their areas of focus, public reporting of current activities takes longer than it should, and keeping up with the latest information takes time.  As a result, all of us, from those with innovative solutions but little experience with fundraising, to those with years of experience who are convinced we are always working with the usual suspects, all at some point realize we could use some current, authoritative data to inform strategies and decisions.

Not surprisingly, the most frequent questions we get from grantseekers and grantmakers alike relate to getting a lay of the overall philanthropic landscape and responding to queries about who are the top funders in a particular field or region, or where a particular foundation ranks in the big scheme of things. 

Thanks to support from The James Irvine Foundation, researching these kinds of key statistics for California institutional philanthropy just got a lot easier with the launch of Foundation Center’s new California Foundation Stats dashboard, which is a free, online tool that allows anyone to access hundreds of charts and tables on the size, scope, and giving priorities of California foundations, as well as giving to California-based recipients by those outside California, lists of top funders by region and issue area, and also includes access to nearly 900 research reports about California-based initiatives, sortable by regional focus. Data about trends in funding specific support strategies and population groups is also included.

California Foundation Stats provides statewide data, as well as regional data tables for nine different regions: Bay Area, Central Coast, Central Valley, Inland Empire, Los Angeles, North Coast, Orange County, Sierra Range, and South Coast and Border.

An exciting aspect of these data tables is that as Foundation Center receives updated grants information from grantmakers as part of the “Get on the Map” campaign effort or as a result of newly available 990 forms, the dashboard will be a living data set that changes to reflect up-to-date information about giving priorities and giving to the state or regions.

Everyone from grantmakers, grantseekers, to academics, advocates and journalists will find the dashboard to be a useful tool to support their work, and one which they will want to bookmark to come back to as the data changes.  The highlighted facts shared at the top of the blog are just an example of the data you can uncover by taking some time with this new tool.  

--Janet Camarena

YouthGiving.org: Opening Up the Power of Youth as Grantmakers
September 7, 2016

(Sarah Bahn is a former Foundation Center knowledge services fellow. She is currently pursuing a Bachelor of Arts in peace and justice studies at Tufts University. A version of this blog first ran on the GrantSpace blog.)

SarahbahnWhen I enrolled in the “Experimenting with Philanthropy” course at my college, I had the opportunity to work with a board of my peers to distribute $10,000 to local nonprofits. After so many years of being a dedicated supporter of the nonprofit sector—from childhood bake sale fundraising to volunteering at homeless shelters and completing summer internships—I finally felt like I was playing a real, powerful role in the social sector. I only wish I had known to get involved with grantmaking sooner.

Engaging youth in grantmaking increases their agency and leadership skills while also bringing much needed fresh perspective to the field. After the course, I became passionate about the need for young people, even children and teens, to act as real leaders in philanthropy.

BREAKING NEWS: They already are! When I started interning at Foundation Center this summer, I dove in to help with the launch of YouthGiving.org, a website that gathers and shares information about the youth giving movement so that young changemakers, and the adults who support them, can access amazing tools for youth grantmaking, like:

  • A funding map tracking youth-driven grants around the world
  • A program directory with over 800 youth grantmaking programs
  • Hundreds of resources about engaging youth in philanthropy
  • News about the movement, upcoming events, blog posts from experts, and LOTS MORE!

If this information had been easily accessible in this way when I was younger, I would have known that there are at least 14 youth grantmaking programs where I grew up (Washington state), 35 in Massachusetts where I attend school, and hundreds more around the world! It turns out that there are A LOT of people who are also passionate about young people being leaders in the social sector. Check out the Program Directory to find youth giving programs where you live.

“ Youth grantmaking is not just a cute group of kiddos running a lemonade stand for charity, although that's great, too!”

Thanks to YouthGiving.org making this philanthropic movement more transparent, the whole world can now see that there are tons of young people who are making real, tangible change in their communities. In fact, youth have made more than $14 million in grants since 2001 (check out grants data on the Funding Map) -- youth grantmaking is not just a cute group of kiddos running a lemonade stand for charity, although that's great, too!

YouthGiving.org connects members of the youth giving movement, elevates the stories of incredible young leaders, and  serves to make the field of grantmaking more inclusive as more young people can now see themselves as active leaders in philanthropy.  By expanding knowledge and collaboration about youth giving, more young people can access grantmaking opportunities and those who do will see the impact their peers are making across the globe. 

Transparency for the youth giving movement is critical because it illuminates the ways in which young people have been raising their voices to move the needle on the issues they care about. As this resource gains traction, I hope that other young people like me will know that they’re not alone in thinking that youth deserve a space at the grantmaking table.

-- Sarah Bahn

Eye On Sports Philanthropy: Serena Williams Courts Equity in Education
August 31, 2016

(Melissa Moy is special projects associate for Glasspockets.)

Serena Bio PhotoSerena Williams dominates the tennis court but few may know about her philanthropic efforts that target social justice issues.  

As one of the world’s greatest tennis players, Williams tied Stefi Graf’s record earlier this year with 22 Grand Slam singles titles.  Among active male and female players, Williams holds the most major singles, doubles and mixed double titles with a record 38 major titles: 22 in singles, 14 in women’s doubles and two in mixed doubles. 

Now the Olympian philanthropist is focused on winning the U.S. Open title after an unexpected upset at the Summer Olympics in Rio de Janeiro, where she had hoped to defend her 2012 gold medal victory in London.  Williams and her older sister Venus Williams also lost the first round in doubles – another upset because the duo had a 15-0 Olympic record and three gold medals in doubles.

Serena Game - Slate
Source: Slate

 Breaking Barriers

The Williams sisters grew up in Compton, CA, where poverty and gang violence is common.  Their father Richard Williams coached the young girls at some of the city’s roughest public parks where gang members hung around the courts. 

“I’m a black woman, and I’m in a sport that wasn’t really meant for black people.”

The Williams family eventually moved to Florida in search of better training opportunities for the girls.  In 1992, Richard Williams shared his hopes that his girls would one day win at the U.S. Open and Wimbledon and inspire other Compton children and gang members that “they could do it.”

The sisters have broken barriers as female, African American athletes from a poor community who have exceled in a sport that is not known for its diversity.  White athletes, especially men, typically have more recognition, money and star power.  Additionally, sports like tennis and golf are often perceived as exclusive due to the cost of equipment, court and tee fees.  This financial disparity is consistently identified as a significant barrier that impedes multicultural players from getting into the sport, according to the United States Tennis Association.

Powerful and Personal Philanthropy

Off the court, the 34-year-old tennis star has focused her philanthropy on equal access to education and helping individuals and communities impacted by violence. 

Serena & Students - StandingAn opportunity arose when she first visited Africa in 2006 as part of a UNICEF health campaign, and in 2011, Williams became a UNICEF Goodwill Ambassador.  Over the years, she has participated in multiple education initiatives that build schools in Africa and improve global education opportunities for disadvantaged children. 

The Michigan native has supported several UNICEF campaigns, including the World’s Largest Lesson, an initiative launched in 2015 to teach children in more than 100 countries about the Sustainable Development Goals; the 1 in 11 campaign that focuses on extending educational opportunities to marginalized children since 1 out of 11 children globally are not in school; and the Schools for Africa program, which raises awareness about UNICEF’s mission to provide quality education for the most vulnerable children. 

Through the Serena Williams Fund (SWF), Williams has also partnered with Hewlett Packard to build a school in Kenya as well other local organizations in Africa to open schools in Uganda, Zimbabwe and Jamaica.

Williams has made it a priority to fight for equity in education. “Now, sometimes in Africa they send only the boys to school,” Williams wrote in her Wired guest editorial. “So we had a strict rule that our schools had to be at least 40 percent girls. It was impossible to get 50-50 boys to girls, and we really had to fight for 60-40. But we got it… And hopefully my next school will be 50-50.”

Serena Kids Group Photo Africa
SWF also gives education grants to Serena Williams Scholars through a partnership with Beyond the Burroughs National Scholarship Fund, which gives scholarships to students “who have the drive to succeed but even with loans and other grants still fall short of reaching their dream to attend college.”

Another SWF priority – and perhaps the most personal one – is supporting victims and families of gun violence through The Caliber Foundation.  Williams has a personal stake in ending senseless violence since it is a “cause close to her heart.”  In 2003, Williams’ older half-sister Yetunde Price was shot and killed in Los Angeles.

Making Her Mark

Williams was the Sports Illustrated’s 2015 Sportsperson of the Year.  She was #55 on Forbes Magazine’s Power Women list in 2010.  In 2016, Forbes named her #40 on its World’s Highest-Paid Athletes list with $8.9 million salary/winnings and $20 million in endorsements, up from #47 in 2015.  For the last 12 months, she has also been the world’s highest-paid female athlete.  Over her career, she has earned $78 million.

Serena Wired COVER PhotoThe elite athlete continues to be a trailblazer.  In Wired Magazine, Williams shared her hopes for seeing “more women and people of different colors and nationalities” in sports as well as the Silicon Valley.  She added, “I’m a black woman, and I’m in a sport that wasn’t really meant for black people.”

Beyond philanthropy, Williams is leveraging this celebrity and influence to address issues she cares about.  She has spoken out against racism and pay disparity for minority athletes, and along with other African American athletes, she has vocally supported the Black Lives Matter movement. 

For Williams, philanthropy is personal.  She is focused on giving back in ways that address the inequities she experienced first-hand.  If her passion for philanthropy is anything like her focused drive and talent in tennis, she will leave a great footprint and an even better blueprint for future generations.

--Melissa Moy

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About Transparency Talk

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

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

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