Transparency Talk

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

 

Glasspockets Find: Philanthropic Leaders Join Ban the Box Movement to Address Inequality
October 26, 2016

(Melissa Moy is special projects associate for Glasspockets.)

A growing number of foundations are becoming more comfortable taking public stands on issues, rather than just offering behind the scenes support. One recent example is the Ban the Box movement, whereby public and nonprofit employers, and more recently foundation leaders are taking a public stand designed to draw attention to the employment discrimination of people with arrest and conviction records.

2016-10-26Ford Foundation CEO Darren Walker is one such foundation leader, who recently highlighted Rashad Robinson, executive director of Color of Change, and his video promoting the Ban the Box movement.  The video is part of Ford Foundation’s #InequalityIs campaign, which engages the public to share its thoughts around inequality, from a motel housekeeper’s perspective about immigration to writer/activist Gloria Steinman’s on gender inequality and reproductive rights.   

Foundations are generally known for their role and leadership in funding and supporting nonprofits and organizations that address societal and socioeconomic issues, and not known to be on the front lines of movements themselves.  Perhaps the success of the Civil Marriage Collaborative is creating a change in awareness - that when foundations are visible partners, they can actually accelerate change.

“When foundations are visible partners, they can actually accelerate change.”

Through the Ban the Box Philanthropy Challenge, 42 foundations are using their influence and communications expertise to spur movement and action to eliminate barriers to employment for people with arrest and conviction records.

Organizers note that a prior history of convictions or arrests is a form of employment discrimination that has a “disproportionate impact on men of color, who are more likely to be incarcerated as a result of rampant over-criminalization,” according to the Ban the Box website.

In 2015, foundation leaders affiliated with the Executives’ Alliance for Boys & Men of Color submitted a letter to President Obama urging him to issue an executive order to “Ban the Box” in federal government and federal contractor hiring, which would open employment opportunities in the private sector.

Ban the Box Logo

Foundation leaders also recognized that a wide spectrum of stakeholders needed to be involved to address this employment barriers, including employers in the philanthropic sector.

The collaborative is challenging foundations to adopt fair hiring policies so that foundations will play their part as employers “to remove the stigma associated with a record, and (set) an example for other foundations and their grantees to follow.” Such actions will help advance opportunities to assist formerly incarcerated individuals and reduce recidivism.

The Ban the Box movement has attracted a bevy of prominent foundations across health, economic and social welfare focus areas, including The California Endowment, Ford Foundation, Robert Wood Johnson Foundation, Kresge Foundation, and the W.K. Kellogg Foundation.

The group is calling grantmakers and other organizations to action.  The current social media campaign is asking supporters to #BanTheBox and promote #FairChanceHiring.

Since transparency is still a challenge for the field of philanthropy, seeing foundation leaders step forward on the pressing social issues of the day could be an encouraging signal that some are growing more comfortable with more public facing and influencing roles.  Transparency Talk looks forward to tracking the impact this movement will have on the philanthropic sector’s hiring practices, as well as its influence on encouraging other foundations to take more visible roles on the issues and causes they care about.

--Melissa Moy

Eye On: Giving Pledger Mohammed Dewji
October 20, 2016

(Melissa Moy is special projects associate for Glasspockets. For more information about Mohammed Dewji, and the other Giving Pledgers, visit Foundation Center's Eye on the Giving Pledge.)

Mohammed-dewji photoA Tanzanian businessman and philanthropist hopes a family legacy of giving will continue in future generations.

Spurred by his parents’ philanthropic example and his Muslim faith, Mohammed Dewji is one of the latest to join the Giving Pledge, whereby wealthy individuals have pledged to give away most of their wealth during their lifetime.

“I hope that my children and grandchildren inherit this ethos and lead by example in years to come,” Dewji said in his Giving Pledge letter. He described his “deep responsibility” to give back to his community and called it a “moral obligation” to help the less fortunate.

 Mohammed Dewji:

  • Richest man in Tanzania (Forbes #21 in Africa)
  • Businesses: manufacturing, finance, real estate, beverages and edible oils
  • Founder of Mo Cola soft drink
  • B.S. in Business Administration, Georgetown University
  • Former member of Tanzania’s National Assembly
  • Net worth: $1.1 billion

Big Business

Dewji is CEO of MeTL, a Tanzanian conglomerate that includes manufacturing, financial services, real estate, and beverages and edible oils. His father started the business in the 1970s.

“Dewji’s strategic giving is designed to stimulate socio-economic development.”

After graduating from Georgetown in 1998 - and a brief, unsatisfying turn on Wall Street - Dewji's father urged the 23-year-old to join the family business and give up "chasing pennies in New York when there was a fortune to be made in Tanzania."

Within 10 years, the skillful Dewji grew a $30 million business into a pan-African conglomerate with revenues of $1.5 billion. Under his leadership, the company now has 31 industries in 11 countries, and also includes cellular phones, finance and real estate. In 2014, Dewji launched Mo Cola, a soft drink beverage brand that Dewji hopes will one day rival the popularity of Coca-Cola, which has dominated the market for decades.

Dewji, 41, is a key influencer in African philanthropy and politics. A former member of Tanzania's National Assembly, Dewji is the nation’s wealthiest man, and among the 50 richest in Africa.

Strategic Giving

Motivated to address the severe poverty in Tanzania, Dewji not only focused on philanthropic efforts but also served as Member of Parliament in his home region of Singida to effect change. From setting up Singida Yetu in 2005, a charity that focused on sustainable socio-economic development to establishing his family foundation, Dewji has passionately sought philanthropic opportunities to improve lives in Tanzania.

Dewji’s strategic giving is designed to stimulate socio-economic development. In 2014, he established the Mo Dewji Foundation to align with his “philanthropic vision of facilitating the development of a poverty-free Tanzania.  A future where the possibilities, opportunities and dreams of Tanzanians are limitless.” In a statement, Dewji noted: “I have been blessed and I am very proud of the success of my company, MeTL, but with this success and the subsequent wealth comes responsibility…it is the duty… to redistribute this wealth to less fortunate people.”

Childrens-Cancer-Unit-hostel-and-school
National Children’s Oncology Center at Muhimbili National Hospital

His foundation focuses on health, education and community development. The foundation targets increased access to education and supporting existing health care facilities and contributing to healthcare infrastructure that includes better nutrition, drilling water wells, adaptive hygienic practices such as building latrines in schools and providing mosquito nets.

Dewji is also seeking tangible opportunities to help and invest in Tanzanians, from personal mentoring and interest-free start-up loans to four-year university scholarships to high-achieving high school students. Through the Mo Entrepreneurs Competition, Dewji offers personal mentoring, support and training, and a $4,584 interest-free loan for entrepreneurs who have “high-potential start-ups but lack further support in the form of growth capital, networks and mentoring.”

“When God blesses you financially, don’t raise your standard of living. Raise your standard of GIVING.”

In collaboration with the University of Dar Es Salaam, the Mo Scholars program selects outstanding high school students and provides four years of undergraduate college to “create a community of passionate students and provide them with the capacity to achieve their greatest potential.”

The businessman has received multiple recognition and awards for his philanthropy from African magazines and business leadership organizations.

He recently Tweeted, “Success shouldn’t be solely defined by your wealth. It should be about the positive impact and influence you have on your community.”

What’s Next?

Dewji remains committed to philanthropy and the betterment of his country. By signing the Giving Pledge, Dewji wants to motivate his fellow Africans and global citizens to consider “the funds they truly need to maintain their families versus their ability to give.”

“We all have a moral obligation as the more affluent in society to give back as best we know how,” Dewji said in his Giving Pledge letter. “When God blesses you financially, don’t raise your standard of living. Raise your standard of GIVING.”

-- Melissa Moy

The Annual Report is Dead. Long Live the Annual Report!
October 13, 2016

(Neal Myrick is Director of Social Impact at Tableau Software and Director of Tableau Foundation, which encourages the use of facts and analytical reasoning to solve the world’s problems. Neal has served in both private and nonprofit senior leadership positions at intersection of information technology and social change.)

Neal Myrick photoMaybe it is the headlines from the campaign trail, but I’ve spent a lot of time lately thinking about philanthropy, impact, and accountability.

As the head of Tableau Foundation, I’m responsible for ensuring that we embody the values our employees have entrusted us to uphold. My team and I are accountable to the thousands of people who make up Tableau, and to the tens of thousands of Tableau customers and partners who are passionate about using data to drive change.

The question I’ve been wrestling with is not if we should tell our story, but how. How can we share what’s been accomplished in a way that is both timely and true without taking credit for someone else’s work? Moreover, how can we do all of this while still being a good steward of the company’s resources?

Annual_Report_Open_ThumbnailThat’s why I’m pleased to share the Tableau Foundation’s brand new Living Annual Report. We’ve ditched the traditional, glossy printed annual report for a live report so anyone can get near real-time information on what we’re doing around the globe.

The Living Annual Report gives our stakeholders better, more timely information while reducing the investments of staff time and resources of a traditional printed report. It pulls information from the same data sources we use every day. The report updates weekly, and most pages have interactive capabilities that allow anyone to explore the data.

The Report doesn’t just take look back at what we’ve done, either. It is also helping us chart the course ahead.

Earlier this year we adopted the UN’s Sustainable Development Goals (SDG) as a framework for setting our priorities and measuring progress. While the 17 Goals themselves are expansive, the 230 underlying indicators help us organize our activities and approach partnerships with a clear sense of what we’re trying to achieve.

SDG breakdown

Page 3 of the report shows the latest breakdown of Tableau Foundation grants by goal.

We recognize that we’re capacity builders, and that the issues we’re trying to effect require much larger collaborative efforts. After all, the problems we’re trying to solve are multidimensional, so why should the solutions be different?

Almost immediately, real-time transparency around priorities led to more relevant and constructive conversations with potential partners.  We are finding more opportunities to deploy our two most valuable resources - our products and our people – to help people around the globe use facts and data to solve some of the world’s toughest challenges.  

And somewhere in putting the report together, it became about something bigger. We started to see the Report as a model that shows foundations and nonprofits that they don’t have to spend substantial resources printing reports that are outdated the moment they are printed.

The purpose of a foundation or nonprofit’s annual report is to persuade decision-makers – funders, board members, partners, lawmakers – to take action. But if the information in the report is outdated, how can those people make choices that lead to real impact?

“We’ve ditched the traditional, glossy printed annual report for a live report with near real-time information on what we’re doing around the globe.”

This is not to say we should sacrifice storytelling. On the contrary, interactive charts and graphs sitting seamlessly alongside photos, videos, testimonials, and one-click calls-to-action can create a holistic engagement experience far beyond what a static printout might do. 

My real hope is that our report will inspire others to ditch the glossy paper and to get on board with the real purpose of the report – sharing actionable, up-to-date information with those in a position to take action. Some already have. Heron Foundation has been reporting on their portfolio through data visualizations for several years now. The Foundation Center’s Glasspockets transparency assessment tools and Foundation Maps are bringing sector-wide insights to grantmaking. And after seeing our Living Annual Report, others tell me they’re not far behind.

Imagine talking to a Development Director, for example, and being able to explore an interactive, near-real-time annual report to help you understand how your investment in the organization is having impact?  Not “as-of last May” when a traditional annual report would have been printed, but as-of last week? As a funder, we can and should lead by example.

Which brings me back around to the idea of impact and accountability. To do our work well, we have to share timely information. This means sharing what we are doing, showing how our resources are being spent, and being responsible for the progress… or possibly lack thereof.

This level of accountability can be uncomfortable sometimes, but is necessary to establish more constructive partnerships based on trust, set ourselves up to learn from the data, and ultimately do more impactful work.

As the work grows and changes, this report will change with it. And we’re continually making improvements and all suggestions are welcome – feel free to email us anytime at foundation@tableau.com with any feedback.   

--Neal Myrick

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

Free Webinar: What Story Does Your 990 Tell About Your Foundation?
September 22, 2016

What does your foundation’s 990 say about the organization? 

Now that the IRS has started releasing e-filed Forms 990 and 990-PF as machine-readable, open data is available to the public. While this move will spur transparency and openness in the philanthropy field, foundation leaders may be uncertain of how open data and potential public scrutiny of philanthropy may impact foundation programs, staffing and investment management. 

Glasspockets recently partnered with the Communications Network to offer an insightful webinar on the Form 990’s potential risks and vulnerabilities, as well as how to use Form 990 to share the work of your organization. 

The webinar highlights the types of information included on the 990-PF, how the 990-PF data is being used now and in the future, and recommendations on how to communicate your foundation’s work through the 990-PF.

Check out this great webinar!

A Brief Analysis of the Clinton and Trump Foundations
September 13, 2016

(Jacob Harold is GuideStar president and CEO.  He has written extensively on climate change and philanthropic strategy; his essays have been used as course materials at Stanford, Duke, Wharton, Harvard, Oxford, and Tsinghua. This post first ran on the GuideStar blog.)

Nonprofits are a cornerstone of American democracy. They reflect the political diversity of the American people. That diversity is well illustrated by two institutions currently in the news: the Bill, Hillary and Chelsea Clinton Foundation and the Donald J. Trump Foundation.

GuideStar takes no position on elections and we will not comment on Hillary Clinton or Donald Trump as candidates for the presidency. We have, however, been repeatedly asked about the Trump and Clinton Foundations. Accordingly, we would like to offer a few notes of analysis on their structure, size, strategy, and transparency practices.

Clinton_GuideStar-1.jpg

Structure

Let us begin with a comparison of the basic facts. The Trump Foundation is legally categorized as a “private non-operating foundation” whereas the Clinton Foundation is a “public charity.” In simple terms that means the Trump Foundation is meant primarily as a vehicle for distributing grants from the Trump family fortune—although it also accepts funding from other donors. The Clinton Foundation is meant primarily as a vehicle for directly operating programs for the social good—while also making some grants to other organizations. 

Despite these differences, both organizations are, in a (non-legal) sense, “celebrity foundations.” They are seeded by money donated by their founders and also serve as a vehicle for members of the public to demonstrate their support of a prominent person. At their worst, celebrity foundations are vanity projects with negligible impact. At their best, such organizations channel fragmented resources and yield extraordinary impact for society. For example, the Michael J. Fox Foundation is known as one of the most sophisticated players in the fight against Parkinson’s Disease.  

Both the Trump Foundation and the Clinton Foundation are filed under section 501(c)(3) of the U.S. tax code, meaning they legally cannot engage in electoral activity. In general, they appear to have followed this requirement. There is at least one exception, though. The Trump Foundation made one donation to a political action committee associated with Florida Attorney General Bondi. It is not legal for a foundation to make a donation to a PAC; the Trump Foundation has paid a $2,500 IRS fine for this infraction. The the Trump Foundation characterized this as a clerical error although others have described it as a case of "pay-to-play politics." At the very least, this incident indicates insufficient controls and lax managerial oversight.      

Size

One thing is indisputable: the Clinton Foundation is far larger than the Trump Foundation. The latest comparable data from December 31st, 2014 shows the Clinton Foundation with assets of $354 million, compared with the Trump Foundation’s $1 million. The Clinton Foundation had total expenses of $91,281,145, versus $596,450 for the Trump Foundation. The Clinton Foundation had 486 staff compared to zero staff at the Trump Foundation.  

The Clinton family’s tax returns suggest that the majority of its charitable giving has been through the Clinton Foundation. Without access to Mr. Trump’s tax forms it is difficult to know the scale of his charitable activities outside the Trump Foundation. But it does appear that the dollars have not matched the pledges. An investigation by the Washington Post has not been able to validate that Trump has actually donated the money he pledged, instead finding, “Trump promised millions to charity. We found less than $10,000 over 7 years.” In addition, the last donation to the Trump Foundation by any of its trustees—family or otherwise—was in 2008. Indeed, David Farhenthold of the Post has suggested that the Trump Foundation has transformed over the last decade from "standard-issue rich person’s philanthropy into a charity that allowed a rich man to be philanthropic for free."

All told, the data at hand would suggest that the Clinton family has—at least over the last several years—donated more money (and at a far higher proportion of their wealth) than the Trump family.

Similarly, it appears clear that the Clintons have out-raised Trump. The Clintons’ fundraising for their foundation is one aspect of a broader fundraising portfolio totaling $3 billion over the last four decades. This is a remarkable number but they are not alone operating at this level: the Bush family raised $2.4 billion over a similar period. Trump has certainly helped raise money for both charitable and electoral efforts, but the total is undoubtedly less than the Clintons’. 

Fundraising at this scale takes place in a rarefied social circle. Each of these families—the Clintons, the Bushes, and the Trumps—must navigate a tangle of relationships with wealthy individuals. These relationships have caused some to claim that fundraising for the Clinton Foundation compromised Clinton’s role as Secretary of State. There appears, though, to be little evidence to support this claim. The Clinton Foundation signed an MOU in 2008 clarifying that Hillary Clinton would not have a role with the Foundation during her tenure at the State Department. And, indeed, funding for the Clinton Foundation decreased significantly during that period (2009-2013). A fair argument can be made that the Clinton Foundation should have been more aggressive in dealing with the perception of potential conflict. To its credit, the Foundation now proactively shares its key legal and audit documentation and has built a tool on its website to provide an additional layer of transparency about its donors (including both Donald and Ivanka Trump). 

Transparency and Strategy

Transparency is not a guarantee of effectiveness—but, in general, we believe that transparency is correlated with excellence in nonprofits. Transparency indicates an openness to questions and accountability. And, importantly, the act of transparency can force an organization to be clear about its goals and strategy.

Most nonprofits—including the Trump and Clinton Foundations—are required by law to file a regulatory document with the IRS, the Form 990. The 990 provides important baseline information but does not give a full view of the nuances of nonprofit work. Accordingly, GuideStar invites nonprofits and foundations to share additional data. Approximately 128,000 have done so. Some 34,997 organizations have provided enough to get one of GuideStar’s four “transparency seals”; of those, 1,061 have earned the highest level, Platinum. The Clinton Foundation is one of them. The Trump Foundation has provided no additional information and so has not earned a transparency seal. 

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As a part of achieving a Platinum seal, the Clinton Foundation has provided a set of quantitative metrics about its programs. For example, one metric, “number of farmers benefitting from access to improved agricultural practices, increased yields, and enhanced market access,” rose from 66,124 in 2014 to 114,825 in 2015. Another, the “number of girls and women provided access to job skills training and livelihood support,” rose from 35,587 in 2014 to 48,696 in 2015. The fact that the Clinton Foundation provides such metrics makes it far easier for donors and citizens to meaningfully analyze the institution’s value to society.

The Trump Foundation provides no such metrics. Any analysis must therefore be based on the content of publicly available tax forms. These forms appear to indicate an unfocused generosity. For example, the below sample from the Trump Foundation's 2014 tax return includes grants to the Orthopaedic Foundation, the Palm Beach Opera, the Police Athletic League, Protect our Winters, and the Ronald McDonald House of New York. There is nothing inherently wrong with sprinkling many small grants in unrelated areas. But the Trump Foundation’s approach would certainly not meet the standard of focused, proactive grantmaking commonly called “strategic philanthropy.” 

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Conclusion

Both the Clinton and Trump Foundations have been the subject of controversy while seeking to contribute to social good. They are undoubtedly different from each other in size, structure, and openness. Indeed, the two organizations reflect the perceived styles of the two candidates: one systematized, the other improvisational. Donors regularly decide which approach they prefer for their giving. Later this year voters will decide which approach they prefer for their leadership.

--Jacob Harold

Join Us for a Special Webinar: What Story Does Your 990 Tell About Your Foundation?
September 9, 2016

First impressions count.  What does your foundation’s 990 say about the organization?  The IRS recently started releasing e-filed Forms 990 and 990-PF as machine-readable, open data. This move will spur transparency and openness in the philanthropy field. 

It also means that open data is available to the public.  Anyone – from journalists to researchers – can aggregate this open data and make comparisons and correlations about philanthropy at lightning speed.  How will this impact the work of foundations, such as programs, staffing and investment management?

Glasspockets is partnering with The Communications Network to offer a free Sept. 14 webinar.  Through this insightful and engaging webinar, we will teach you about Form 990 sections that present potential risks and vulnerabilities, as well as opportunities to better share your institution’s work. 

You’ll learn:

  • How open data works
  • What the IRS is doing in relation to Forms 990
  • How the 990-PF data is currently used and could be used in the future
  • The types of information included on the 990-PF
  • How to analyze the story your current 990-PF tells about your foundation
  • Recommendations for better communicating your foundation’s work through the 990-PF

Don’t miss out on this free 2 p.m. EST, Monday, Sept. 14, webinar!   RSVP and sign up today.

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

About Transparency Talk

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

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

    Questions and comments may be
    directed to:

    Janet Camarena
    Director, Transparency Initiatives
    Foundation Center

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