(Laura Arrillaga-Andreessen is a Lecturer in Business Strategy at the Stanford Graduate School of Business, Founder and President of the Laura Arrillaga-Andreessen Foundation, Founder and Board Chairman of Stanford Center on Philanthropy and Civil Society and Founder and Chairman Emeritus of the Silicon Valley Social Venture Fund. She is also author of the New York Times Bestseller, “Giving 2.0: Transform Your Giving and Our World.” Find her on Twitter @LAAF.)
In recent decades, philanthropic funding has been driving remarkable social impact whether by seeding new organizations, scaling proven ideas, or providing essential capital for the development of innovative models such as microfinance, social impact bonds, and impact investing. Despite these notable successes, however, the philanthropic sector is failing to perform in a critical area, one that’s needed to take overall philanthropic impact to the next level: providing transparency around decision-making processes.
Under the leadership of Brad Smith, Foundation Center has developed a powerful concept that could help move the sector towards a new era of transparency. By asking philanthropic institutions the question: “Does Your Foundation Have Glass Pockets?” the Foundation Center is helping organizations to peel back the layers that obscure everything from the value of their total assets and their list of board directors, to their grantmaking strategies. In short, the Glasspockets initiative is championing philanthropic transparency and empowering organizations to communicate openly.
From Glasspockets to Glass Skulls
With a keen sense of the need for greater philanthropic accountability, I plan to build on the important work of Brad Smith and Janet Camarena by taking the Glasspockets concept even further. In philanthropy, the notion of accountability must extend beyond transparency around decisions on what we choose to fund. True transparency goes much further by revealing the processes we use to think through our grantmaking decisions. Essentially, it’s providing a window into the very brain of the foundation. I call this having a “glass skull.”
For foundations, creating this window is no easy undertaking. It involves discussing openly and honestly how they arrived at the decision to say “yes.” And, more importantly, it means grappling publicly with the reasons behind the decision to say “no,” however much foundations would like to celebrate any organization that is acting with good intent to create social value.
The reality, however, is that the magnitude of the social problems we face today demands investments far exceeding the financial resources of the sector as a whole. If we act alone and fail to share our intellectual and human resources, we will never be able to deliver the solutions needed.
This means the onus is on us, as individuals and institutions, not only to direct our funds to the most efficient and effective organizations, but also to share with other philanthropists what we are learning along the way and how this shapes the choices we make. It means operating with both glass pockets and glass skulls. And it’s a strategy I aspire to put at the heart of my work when I launch the Marc and Laura Andreessen Foundation in the coming years.
Opening the Doors to Knowledge
In pushing for greater knowledge sharing and transparency, I believe we can prevent the constant and inefficient reinvention of the philanthropic wheel and avoid forcing other stewards of charitable funding to waste their valuable time and intellects on research, analysis and assessment that has already been carried out by others. Additionally, we can help inform where other funders—both institutional and individual alike—do and do not invest their social change dollars.
Cari Tuna, the visionary co-founder and head of Good Ventures, uses radical transparency in all aspects of the foundation’s operations by publicly sharing what the team has learned from its grantmaking and research processes. While in the past philanthropists often spent countless hours studying social issues and crafting foundation processes and ideas, Good Ventures—through an innovative partnership with charity evaluator GiveWell—has created the Open Philanthropy Project.
The Open Philanthropy Project works to select promising focus areas for large-scale philanthropy. It then makes grants and discusses publicly the process, the results and the challenges it has faced in managing these grants. The idea is not only to give more effectively, but also to increase the quality of information available to others about how to give effectively.
At LAAF (the Laura Arrillaga-Andreessen Foundation), our mission is to add to this knowledge pool.
Through ProjectU, an online hub of philanthropy education resources, and Giving 2.0: The MOOC, a free online course, the idea is to empower all givers to be effective philanthropists. We do this by providing them with the background knowledge and skills they need not only to have an impact through their own giving activities, but also to help others increase their impact.
The good news is that extraordinary opportunities exist for all of us to advance transparency in philanthropy. Moreover, a number of pioneering organizations are leading the charge. First, Foundation Center and its Glasspockets initiative have done much to draw attention to the importance of transparency in the philanthropic sector. And in recent months, others have been working to make knowledge sharing a philanthropic norm. These include the Hewlett Foundation, which has been discussing its transparency journey via its blog Work in Progress, and the Knight Foundation, which is establishing best practices for funding transparent academic research.
So What Next?
This progress is exciting, but it is merely the tip of the transparency iceberg. We are at the beginning of a new stage in philanthropy where, through online and digital technology, the tools required to share institutional knowledge are at our fingertips.
However, harnessing technology is only part of what’s needed. Now we must break down the organizational and cultural barriers that prevent transparency from spreading rapidly. For some, this means overcoming fear. Moving towards full transparency can be an intimidating prospect. Many of us are happy to share our successes but are uncomfortable exposing our mistakes, vulnerabilities and outright failures.
Yet the potential benefits of doing so are tremendous. By increasing transparency and knowledge sharing, we can ensure that every philanthropist, even those relatively new to the process of giving, can increase their effectiveness immediately. We can also make it easier for any philanthropist—whether institutional or individual; whether giving time, money, expertise or networks—to experience the joy and satisfaction that meaningful giving brings (meaningful giving means when you understand specifically how your investment translates into social good).
So how do you get started on this journey? I encourage you to explore my Stanford GSB case studies (including a new case profiling Cari Tuna and Good Ventures) along with other philanthropic resources, all of which are available online and free of charge at ProjectU (made possible through both LAAF and the incredible generosity of Stanford Graduate School of Business for making my philanthropy case studies available for free). This growing body of research (currently at 28 cases with another eight currently underway) presents analysis of foundations of all sizes, geographies and focus areas whose strategies, operating principles and grantmaking practice are examples of philanthropic best practice.
The case portfolio includes detailed content on foundation transparency, measurement and evaluation, corporate philanthropy, effective use of technology, investment and grantmaking strategy, and more. These cases provide the frameworks, tools, and examples to help institutions to strengthen their knowledge and to support anyone who is embarking on the journey towards becoming a transparent philanthropist— both glass pocket and glass skull.