Bill Gates recently hosted an Ask Me Anything (or AMA, for
those in the know) over on reddit. During the session,
he discussed a wide range of topics including, his favorite band (U2),
Microsoft, and of course, his foundation and philanthropy. For those new to
reddit, the site frequently hosts AMA sessions featuring notable people whereby
reddit members can post questions to the interviewee and receive responses in
(pretty much) real time.
For those who know Bill Gates and the work of the Bill and Melinda Gates Foundation well, there aren’t too many surprises about the second wealthiest man in the World -- except that he tours power plants, garbage dumps, the Large Hadron Collider, Antarctica, and missile Silos (!) with his family during his free time. There are definitely more than a few nuggets of information that would be of interest to potential Gates grantees. Eradicating polio remains a primary concern for the foundation. Other causes discussed throughout the thread include climate change, education, global health, and terrorism.
The Gates Foundation has been using technology to increase transparency in some very innovative and proactive ways. We have featured many of these efforts here on Transparency Talk: The 2011 Grantee Community Call, the Gates Annual Letter, and the Inside the Gates podcast series. This latest experiment is another window to the world’s largest private foundation, one that uses technology as a means to humanize the man behind the institution. The formal conversation is over, but the thread will live forever on the front page of the Internet.
-- Natasha Isajlovic-Terry
(Alan S. Divack is Senior Project Manager for Archives and Knowledge Management at the Ford Foundation International Fellowships Program. He was a guest at the recent Philanthropy New York forum, "How Will Your Foundation's Story Be Told in 100 Years: Why Archives Matter," which was chronicled in a blog post here.)
Transparency
Talk (TT): You mentioned at the forum that electronic data presents new
challenges and opportunities for archival preservation, including the challenge
of capturing data generated with changing hardware and software. How have these
changes affected the functionality of archives in relation to the transparency
of information for researchers?
Alan Divack (AD): The changes affect every aspect of records preservation and use of the material. I think that impact on transparency depends on these other fundamental issues. In order to keep electronic records available over time, institutions have three basic options: 1) the hardware and software platforms necessary for their use must be preserved; 2) the records must be converted to a more generic format more likely to be useable in the future (migration); or 3) systems must be developed that will enable future hardware and software systems to imitate the functionality of the original systems (emulation). Of these, 2 and 3 are the most promising, but each requires substantial planning and investments. If these investments are not made, the records will not be usable in the future and they become completely opaque to researchers.
TT: Based on your work to create the Global Archives at the Ford Foundation International Fellowships Program, how can archives enable foundations to further their international human rights work? What documents or data are most important for facilitating a successful archival system in this area, and what are the risks involved with preserving and providing access to this information?
AD: I would actually flip this around and encourage foundations interested in human rights work to consider funding archival programs. A lot of human rights work depends on accurate documentation of offenses. When states or non-state actors commit offenses, it is often up to the non-governmental organization (NGO) sector to document what has happened, and then to preserve this documentation so that it can be used for both mobilization and individual redress. The Ford Foundation has worked with many grantees, particularly in Latin America, on this and I think that there is room for such programs in other regions as well.
TT: According to a new study by The Commonwealth Fund, “The Archives of U.S. Foundations: An Endangered Species,” 80 percent of foundations with archives are not keeping important e-mail messages, and more than half are not preserving Web site information. As a specialist in digitization and electronic records, what value can be gained by archiving e-mail and Web site data and what is lost by deleting it?
AD: I think that the full record format in most organizations is actually e-mail plus attachment. A report or memo may be saved in electronic format, but it leaves a lot of questions. Why was it written? For whom? How was it received? I once cataloged a hard-copy report recommending a new line of work for a foundation. It turns out the recommendations were set aside, but it was impossible to determine this from the documentary record. I only found this out later from talking to some of those involved. A thread of e-mails can provide a tremendous amount of information about the documents that they convey. E-mails tend to be less formal and controlled than other organizational records and therefore present particular challenges, more for cultural than technological reasons. While they are certainly valuable for internal use, organizations may want to be more cautious about their use by the research public. One possible approach is to restrict their use to on-site in research archives, rather than making them available with other electronic resources over the Internet.
Web content is sort of the flip side in that the challenges are more technical than cultural. Because most of it is vetted and designed for public consumption, Web content presents few access/confidentiality problems. The problems with Web content arise because it is changed rapidly and because of the networked nature of the document. What a user sees on a Web page may come from several different sources, and the result may be unusable unless all of the sources are transferred to the archives and linked appropriately. One resource worth exploring is Internet Archive, which tries to archive Web sites and would probably not only be happy to archive a foundation’s Web content, but would also do it better.
TT: According to John Craig, Executive Vice President and Chief Operating Officer of The Commonwealth Fund, most institutions do not archive declined proposals. Can foundations or researchers gain knowledge from these proposals, and should they be preserved?
AD: I think that for the most part, foundations are making the right decision on this. In my experience, most large foundations fund very few unsolicited proposals. However, they often get large numbers. I don’t see the long-term value in preserving inquiries that are often tangential to a foundation’s work. In general, proposals and partners are actively solicited by program staff in their fields. These proposals are the end-product of long conversations and interactions, and are very different from most received by a foundation. There are two exceptions to this: responses to Requests-For-Proposals, which are likely to be related to specific foundation initiatives, and cases where foundations actually do fund a large proportion of unsolicited proposals.
TT: Can you give us an example, or tell a story, about how foundation archives have been used to improve philanthropic work in the U.S. or abroad?
Just as, due to the complexities of social change, it can be difficult to attribute specific instances of change to foundation programs, it is difficult to cite uses of foundation archives with specific impact. However, I can refer to a number of research projects from my time at the Ford Foundation where the use of the archives may have helped change how the foundation approached its programming: an evaluation of programs in international relations, which included significant archival research, led to a reorientation of the foundation’s international programs. In a similar field, but with a narrower geographic focus, I believe that a highly critical report questioning the impacts of the foundation’s programs on dialogues between India and Pakistan led the foundation to redirect its resources there. More broadly, on the topic of evaluation and reflection, few foundations have the resources or the attention span to reflect on the long-term impact of their programs. By making their records available to the research public, there are scholars who will do that for them and contribute to knowledge in the fields that foundations continue to care about.
TT: Do you think that archives help foundations to tell their own stories versus having others tell their stories for them?
AD: It is not an either/or but rather a both. When I worked at the Ford Foundation archives, I think a majority of our research use was for foundation staff. Although communications staff were major users (telling the story), the largest group were program staff. There was little institutional memory, and this was a niche that the archives occupied. With broad availability of a robust intra-net within the foundation, this has changed. Most program staff information needs are for relatively recent information (let’s say the past decade) and enough of this is available electronically from the intranet, rather than from the archives, to meet these needs.
TT: What are the best access policies to balance the needs of both researchers and foundations?
AD: There is no single best policy. I think that foundations, as public trusts, are under an obligation (still undefined) to make their information public. The 990s alone just don’t cut it. However, I think that just because information or records should be made available, they do not have to be made available immediately and without restriction. In fact, if there are no restrictions and the presumption is that all records should be open to researchers at once, I think that records creators are less likely to create, capture, and maintain the kinds of information that will be of use to researchers, even in the near future. Access policies should balance the needs of the public and researchers to know in the medium term with the necessity of organizations to conduct business and make decisions in the short term.
One way in which I think electronic records will complicate this going forward is the extent to which they might be made universally available over the internet. The access challenges may be more cultural than technological. Institutions had a certain degree of comfort with historical records being used in analog form in a controlled setting. The open frontier of the internet is something else entirely.
-- Alan Divack
The Bill & Melinda Gates Foundation, in partnership with
Liquidnet for Good, is looking for groundbreaking ideas to help improve data in
the social sector. Data and information are critical tools for
making change in our world, but they are tools that are currently difficult to
access and use.
Applications will be accepted online from March 4, 2013 through May 7, 2013, 11:30 AM PST. Each challenge winner will receive a grant of $100,000.
For updates on the challenge, subscribe to email updates from Markets for Good or follow #MFGchallenge on Twitter.
(Bradford K. Smith is the president of the Foundation Center.)
They said that the Giving Pledge was "made in America," they said that Bill and Melinda Gates and Warren Buffett didn't understand other cultures, and that their brand of philanthropy was inappropriate for (substitute the country of your choice). They were wrong: on Tuesday, February 19, the ranks of the 93 American billionaires who have already signed the Giving Pledge - a public commitment to dedicate more than half of their fortunes to philanthropy - were joined by a dozen more representing 8 countries. In one fell swoop, the Giving Pledge has gone global.
How could the skeptics have gotten it so wrong? Since the Giving Pledge launched in 2010, wherever my travels have taken me, I have heard Brazilians, Mexicans, Europeans, and Chinese go to great lengths to explain why it would never catch on in their countries. On the eve of the Gates/Buffett visit to China, I was interviewed on CCTV2 (the English language channel of China's state-controlled media conglomerate) by a reporter who bombarded me with question after leading question to prove that theirs was a fool's errand. It was all I could do, in vain I suppose, to tell her that as hyper-developed as philanthropy may be in the America, it is alive and well and growing in China.
Here's what the skeptics fail to understand about the Giving Pledge:
Bill Gates is not (only) American - While the world has struggled to come to agreement on standards for just about everything else that matters, Bill Gates created and proliferated a standard operating system - Windows - that came to be used in every corner of the globe where there was a desktop and a computer. He led a second revolution when he and his wife Melinda turned their personal wealth and vision to creating an internationally-minded philanthropic institution. For both of these enormous achievements, Bill Gates represents a unique example of private success and public altruism on a global scale that many seek to emulate.
Billionaires are a culture unto themselves - As much as they may be African, Asian, European, or Latin American, the wealthiest billionaires are also part of a growing, global culture of the ultra-rich. They are densely networked through business and investment ties and "hang" together in places like Davos, Aspen, and at the Clinton Global Initiative. In deciding to join something like the Giving Pledge they are more likely to look to the example of their fellow billionaires, wherever on the globe they may be from, than to pay credence to the skeptics in their own backyard.
Philanthropy is an aspiration - Whether the Giving Pledge billionaires started out poor or were born into wealth, they see their fortune as a form of immense privilege. And, as their public pledges reflect, they recognize that they are in a position to do something about things in the world they feel could be better. As the ranks of the world's billionaires grow, we have the Giving Pledge to thank for elevating philanthropy to the level of a higher calling to which they can aspire.
The Giving Pledge is a social movement - When the Giving Pledge was first announced, I blogged about it being akin to a billionaire social movement. Several years later it has become one. Its ranks have swollen to over 100, it has its own web site, an independent resource in the Foundation Center's "Eye on the Giving Pledge," and periodic gatherings where pledgers share their experiences in philanthropy. As a movement, the Giving Pledge provides identity, recognition, and - above all - a network through which philanthropists can learn from one another. When you think about it, as wealthy as they are, the only place Giving Pledge members can turn for advice without being sold a service or pitched a project is probably to each other.
The most surprising thing about the globalization of the Giving Pledge is that anyone should be surprised that it is happening. Information is global, technology is global, many of the world's most pressing challenges are global, and ultra-wealth is global. Welcome to Giving Pledge 2.0, to be followed by future upgrades. I for one am eager to see where it will take philanthropy.
-- Brad Smith
A press release, announced on February 19, 2013, that 12 additional families have joined the Giving Pledge, the effort launched by Warren Buffett and Bill and Melinda Gates in 2010 to encourage the wealthiest Americans to commit the majority of their assets to philanthropic causes. The new pledgers are all from outside the United States, marking a global expansion of the Giving Pledge effort and bringing the total number of signatories to 105 individuals, spouses, and their families.
The new pledgers include:
Since August 2012, Glasspockets has been keeping an Eye on the Giving Pledge, providing an in-depth picture of the participants and their publicly known charitable activities. Profiles for the new signatories are now available.
Explore the Eye on the Giving Pledge»
-- Daniel Matz
Mark Hager is associate professor of nonprofit studies in the School of Community Resources and Development at Arizona State University. He teaches a graduate course in philanthropy each spring semester.
Tradition dictates that board members work for free in most quarters of
the nonprofit sector, but that isn’t necessarily true for grantmaking
foundations, especially independent ones.
In a new paper
(open access available until late March) published in Public
Integrity, the ethics journal sponsored by the American Society for Public
Administration, Elizabeth
Boris and I consider the question of what varieties of grantmaking
foundations compensate their board members for governance duties. It reboots and reframes an earlier analysis
conducted by the Urban Institute, the Foundation Center, and GuideStar.
In the paper, we point to several interesting examples, including a very large foundation’s generous policy of trustee compensation spelled out in its organizing documents, another with seven-figure annual compensation paid to a bank to act as a very part time “institutional trustee,” and another that underwent IRS investigation for eye-popping compensation that essentially amounted to trustees looting a charitable trust. These cases aren’t typical, but they are part of the big picture of how work gets done in grantmaking foundations and how much insiders gets paid to do it. In more typical cases, foundations might have justifiable reasons to compensate board members, including to ensure representation from beneficiary populations or to extend health insurance benefits to family founders. It’s the extreme cases, however, that threaten to color all of philanthropy.
Compensation for governance duties is perfectly legal, so long as it falls under the IRS’ broad standard of “reasonable and necessary.” The practice is pretty rare in community foundations, partly due to the fact that they rely so heavily on public contributions and are therefore subject to public scrutiny. It also appears to be fairly rare in corporate foundations, but that may largely be due to the fact that many corporate foundation trustees get paid as corporate executives, making their compensation invisible on the foundation side. About one in five independent foundations, however, appear to report compensation of their board members for governance duties, as reported on Form 990-PF.
The practice is always concentrated in larger foundations. Of the 10,000 largest U.S. foundations that are the subject of the study, more than half compensate no one, including any staff. Most foundations are small and get their work done by family volunteers. Foundations that compensate staff members are more likely to compensate their board members. However, for the typical foundation, board compensation levels are imminently reasonable. The median individual board member compensation in independent foundations is only about $8,000. That’s not an indication of a rampant problem.
However, a few bad apples always threaten to spoil the bunch. The median may be $8,000, but the mean was $15,700 due to a number of well-compensated apples. When a board member’s one-year compensation reaches $200,000 (this happens), or a bank trustee is compensated $1,000,000 to spend a few hours a month managing investments (noted above), or aggregate board compensation in a given foundation exceeds its grants in a given year (this happens too), we might rightly ask whether compensation has exceeded what is “reasonable and necessary” for governing the foundation’s mission. Also, $1,000 here and $100,000 there adds up to real money, to the tune of more than $100,000,000 paid out to foundation board members in a given year. People hear that and start asking why that money isn’t being allocated to community nonprofits instead.
Who is going to check to see if board compensation is reasonable and necessary? For many organizations in the nonprofit sector, the general public is the first regulator. Service providers and advocates, especially those that rely on public contributions, reign in compensation and overhead costs due to public pressure. This is not the case with independent foundations, however, since they are not beholden to public contributions. Since the general public has no skin in the private foundation game, that public tends to ignore them.
A second regulator candidate, then, is government. Certainly, the IRS can prosecute private foundations that exceed the vague “reasonable and necessary” standard. Thing is, they don’t, at least not very often. For one thing, identification of board member compensation is very difficult on Form 990-PF. For 2008, the IRS revamped Form 990 for public charities so that compensated individuals are identified as board members or employees. No similar revamp happened to Form 990-PF, where administrative and governance duties are conflated. Picking out board members working on governance duties is tricky; board compensation must be inferred from titles or numbers of hours worked, if reported. So, board compensation is not always obvious on the federal form. Even when unreasonable or unnecessary compensation appears evident, the IRS is often unwilling to take on community elites with deep pockets.
The third regulator, maybe, is private foundation executives and board members themselves. That’s one of the ideas underlying Glasspockets: private foundations will regulate themselves when practices are transparent. Private foundations certainly do not need to eradicate the practice of compensating board members for governance duties. However, when outliers cause observers (like me) to raise their eyebrows, the whole field can get painted as out-of-touch with community needs. Maybe Glasspockets can plant a stake in the ground on this issue to encourage foundation leaders themselves to openly disclose this information as a best practice. Voluntary and widespread disclosure of board member compensation, venues for discussion, and bright lights on questionable practices can help stem criticism of compensation that is “reasonable and necessary” for carrying out the exempt purposes of grantmaking foundations.
Everyone benefits when somebody, somehow, enforces the “reasonable and necessary” standard. Grantmaking foundations will keep better faith with their local communities. Regulators will be able to concentrate on more worthy offenses. Nonprofits will benefit from resources that are otherwise diverted into trustee pockets. Win, win, win.
-Mark Hager
Jim Canales is the President and CEO of the James Irvine Foundation. This post first appeared February, 13 on the foundation's Web site.
Within the past few weeks, I have read
with interest the observations of a number of active bloggers in the
arts field whom I have come to respect and admire: Nina Simon, Diane Ragsdale, Clay Lord and Barry Hessenius. Each of them has blogged on aspects of the Irvine Foundation’s new arts strategy and, in doing so, has contributed to a robust dialogue that has played out on their respective blogs as well as on Twitter.
And that’s what prompts my contribution to this discussion: I will comment only lightly on the substantive issues they have raised related to our Arts strategy as my colleague, Josephine Ramirez, who directs our Arts program, plans to post a more substantive comment on those issues in the next week or so. There is another aspect of this discussion that I do want to comment upon and invite others to engage on with me and my colleagues in philanthropy.
From my early days as Irvine’s CEO, and with great support from our Board of Directors, I have placed a premium on transparency, both with regard to our work at Irvine and for the broader field of philanthropy. I have certainly not been alone in this quest (Brad Smith at the Foundation Center is probably our field’s leading champion), and I think it’s a fair observation to say that the field has come a long way in the past decade.
At the same time, I would characterize much of the progress under the headline of “Transparency 1.0”: creating useful and information-rich websites; describing in detail the strategic priorities of the foundation; sharing results of evaluations and learning; posting results of surveys that offer feedback, such as the Center for Effective Philanthropy’s Grantee Perception Report. All of these have been positive developments, aimed toward shedding more light on what is often an opaque and impenetrable field. At the same time, these efforts at transparency are primarily one-way, aimed at information transmission. In “Transparency 1.0,” we decide what to be transparent about and then put it out there for you to digest.
Today, the advent of social media, to which philanthropy is still a bit of a newcomer, combined with the recognition that foundations certainly do not have all of the answers, offers opportunities for the field to embrace and practice what I will call “Transparency 2.0,” oriented toward dialogue, debate and shared learning.
And that’s what has struck me about this recent dialogue related to Irvine’s Arts strategy. Whether people agree or disagree with the choices we have made, we are now discussing it, publicly, intelligently and forthrightly. I admire those who have stepped forward to criticize aspects of our strategy, whether they believe it is wrong on its merits or they view it as yet another example of “strategic philanthropy” gone awry, where we are dictating and imposing our solutions upon the field.
That is certainly not our intention. What is different for us in our new Arts strategy is that rather than continuing with a broad-based approach that funded projects across multiple objectives, we made the strategic decision to direct our finite resources in a way that, in our view, will best position the arts field for future viability and success. In doing so, we are openly expressing a point of view about how we think the field must evolve to ensure its dynamism and relevance. Yet, we are very clear about our willingness to learn with our partners in this effort, to refine our approach accordingly, and to help to advance the field’s understanding of the many ways to engage a broader cross-section of Californians (in our case) in the arts.
To draw from Diane Ragsdale’s very thoughtful analysis, I suppose one person’s coaxing might be another person’s coercion, but I hope what we will be able to do via this work is to co-create. In the end, we care about impact. And we believe that to maximize our ability to have impact requires a clear, focused and coherent strategic direction. That’s what we are aiming for in the Arts, similar to what we have already been committed to in our other core program areas of Youth and California Democracy.
Just as we lament the fact that the arts are too often (and wrongly) viewed by funders as discretionary or recreational, so must we demand that arts grantmaking be guided by the same level of rigor and strategic direction as other program areas. That’s what we are striving for at Irvine, and we know that we have much to learn along this journey. And that’s why I have been inspired and pleased by the active engagement from others, demonstrative of the evolution of transparency in philanthropy. So, please keep the ideas, observations and critiques coming. It’s the best way to ensure we can achieve the end we all agree upon: a vibrant, relevant and successful arts field. And in doing so, we might just model new ways for foundations and their partners to engage, debate, discuss and learn together.
-Jim Canales
In previous annual letters, Bill Gates has highlighted the power of innovation to reduce global hunger, poverty and disease, and improved educational outcomes in the U.S. In the fifth Annual Letter from Bill Gates, he notes that any innovation will fall short if it cannot reach the people who will benefit from it. That’s why he shifts his attention this year to examine how innovations in measurement are essential to discover better ways to deliver the solutions that the Bill & Melinda Gates Foundation seeks to push forward.
Throughout the letter, Gates provides examples from the foundation’s experience that may inspire others to think critically and honestly about choosing the proper measurement to better gauge whether progress is happening—and, if not, what adjustments might make sense. In northern Nigeria, he describes how digital technology has vastly improved the ability to map the distances between villages so that polio vaccine can more effectively be distributed to children at risk for the disease.
In Ethiopia, well-stocked health clinics have been set up in the vast rural stretches where most of the people live, enabling, among other successes, a significant reduction in the rate of child mortality and an increase in vaccination coverage. Unlike ten years ago when it was unusual to document a child’s birth or death in rural Ethiopia, today there are much better official records that provide data to track progress and allow for adjustments to be made in order to address remaining—or new—needs.
In Colorado, the foundation initiated a project in 2009 to better understand how to build an evaluation and feedback mechanism to help teachers improve. Final results of this project were announced last month, concluding that there are “observable, repeatable, and verifiable ways of measuring teacher effectiveness.” The lessons learned may be used to improve teacher education which may open doors to re-creating a much more effective education system in this country.
Gates, in closing, expresses an overall sense of optimism, but shares two challenges that most concern him for accelerating progress over the next 15 years: the possibility that sufficient funds will not materialize for essential global health and development projects and that agreement will prove elusive in identifying clear goals to help the world’s poorest.
The 2013 Annual Letter from Bill Gates serves as a reminder to us all of both the importance of measurement and the challenge of determining the right things to measure to make transparent the difference we are making in the world.
To read or download the letter, click here.
-- Mark Foley
Transparency Talk, the Glasspockets blog, is a platform for candid and constructive conversation about foundation transparency and accountability. In this space, the 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 or comments may be directed to:
Janet Camarena
Director, San Francisco Office
The Foundation Center
If you are interested in being a
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glasspockets@foundationcenter.org
