Transparency Talk

Category: "Partners" (16 posts)

Big Philanthropy’s Social Impact Depends on Its Social License
January 14, 2016

(Krystian Seibert is the Policy & Research Manager at Philanthropy Australia and tweets at @KSeibertAu.)

KSeibert2Mark Zuckerberg and Priscilla Chan’s recent pledge to donate 99 percent of their Facebook shares to the Chan Zuckerberg Initiative (CZI) quickly became the subject of criticism from some quarters of the not-for-profit sector.

Some of this criticism focused on how Zuckerberg and Chan decided to establish the CZI as a “Limited Liability Company” (LLC), rather than as a traditional foundation.

There are some advantages to doing this – a LLC has much more flexibility to contribute to the common good by investing in for-profit companies as well as by donating to not-for-profits.

But because a LLC isn’t subject to the same regulatory requirements as a traditional foundation, in theory it could fund things which don’t necessarily further charitable purposes.

“Legitimacy is critical to philanthropy.”

Criticism has also focused on how such a massive pledge, combined with the use of a “less accountable” LLC, could lead to a further concentration of power in the hands of wealthy people such as Zuckerberg and Chan.

This debate has opened up an opportunity to have an important discussion about how philanthropy, particularly “big philanthropy,” relates to the broader community – and what kinds of actions can enhance this relationship in order to maximize both philanthropy’s social impact and the community’s support for its work.

In this context, the concept of a “Social License to Operate” is very relevant. This concept has received more attention within the private sector, particularly within the mining industry, but has received little attention within the not-for-profit sector.

It reflects an increasingly common view that private companies can’t just do what they want and ignore the needs of communities. 

Rather, they need to acquire and maintain a Social License to Operate – which is the level of acceptance or approval continually granted to an organization’s operations or projects by the community and other stakeholders.

Defining the Social License to Operate

It’s not a license in a formal sense – you don’t apply for it and if you tick the right boxes you get it. It’s something a company earns through its actions – it’s an intangible asset which a company builds up and must work to maintain, in a similar way to a company’s reputation (although it’s different to a company’s reputation).

Therefore, Social License is a type of “informal” or “soft” regulation, as opposed to “formal” or “hard” regulation which is determined and enforced by governments and regulators.

It essentially revolves around a question of legitimacy – whether a company’s actions are viewed as “right” – not just by their shareholders, but by stakeholders more broadly. It has various levels, as shown in the diagram below.[1]

 

Krystian Graphic

It’s therefore equally relevant to philanthropy. That’s because legitimacy is critical to philanthropy – if philanthropy is not seen to be contributing to the common good, or acts in a manner which is inconsistent with community expectations and norms, then it will lose its legitimacy. Ultimately that means that philanthropy will stop being philanthropy.

Philanthropy’s Social License to Operate

That’s why it’s important for there to be conscious attention to what philanthropic organizations need to do in order to acquire and maintain a Social License.

Arguably, Social License is easier to acquire and maintain for smaller foundations – for them it could simply come down to adopting a conscientious approach to grantmaking which involves supportive engagement with grant recipients, and being responsive to the needs of the community as they change over time.

It’s particularly important in the case of “big” or “mega” philanthropy such as the CZI – and for these philanthropic organizations the bar will be set higher.

That’s because “big philanthropy” does vest a large amount of power in philanthropists to direct what outcomes are funded. Despite widespread apathy about government, government does still derive legitimacy from the ballot box – but “big philanthropy” isn’t subject to elections or term limits.

Because of its size, the actions of “big philanthropy” will be scrutinized by other organizations within the philanthropic sector, not-for-profits, the media, as well as the communities in which it operates. Therefore, if “big philanthropy” lacks a conscious focus on its Social License, its actions could result in a loss of legitimacy.

So what does acquiring and maintaining a Social License actually require of “big philanthropy”? There are no hard and fast rules, and each philanthropic organization which recognizes the importance of its Social License should examine for itself what it needs to do in its own particular situation.

Transparency

However, operating in a manner which is transparent and shares power would be particularly important in the case of the CZI and other large philanthropic organizations.

“The Chan Zuckerberg Initiative will need to both be open about its work and also share power.”

Transparency means being open about how a philanthropic organization such as the CZI is governed, what it funds, how it funds and what the outcomes are.

If the community doesn’t know what the CZI is doing, how will they be able to make an assessment of that work and its merits in terms of furthering the common good? If the community is unable to do that, then it’s impossible to establish and maintain legitimacy.

A culture of secrecy tends to breed skepticism. On the other hand, by being and transparent and open, a philanthropic organization such as the CZI can actively demonstrate its commitment to the common good, and establish a relationship with the community based on mutual trust and respect.

A good first step would be for the CZI to commit to meeting the full range of transparency measures which are set out as part of the Foundation Center’s Glasspockets initiative.

Sharing Power

The next step would be to think about ways to share power, which means directly engaging with the communities in which a philanthropic organization such as the CZI will be active. Engaging doesn’t mean just listening – it means working in genuine partnership with stakeholders.

Again, there are no hard and fast rules – but at one end of the spectrum, such engagement would involve consulting stakeholders and using their feedback to inform a foundation’s strategy and key decisions. At the other end of the spectrum it could involve more directly including stakeholders in the decision making process, which is what one small foundation in Indiana has done.

I would expect that the CZI will be trying to address some really complex and multi-faceted problems – to do this effectively, it will need to both be open about its work and also share power with subject matter experts, community leaders, not-for-profits and other philanthropic organizations.

Sharing power is an opportunity to leverage expertise, secure stakeholder buy-in and also share responsibility for outcomes.

Ultimately these are just two examples of how philanthropy can go about establishing and/or maintaining its Social License – however every philanthropic organization’s legitimacy will depend on a variety of factors. It’s something “big philanthropy” certainly needs to focus on, but also something which all philanthropic organizations should turn their minds to.

What do you think philanthropic organizations need to do to establish and maintain their Social License?

--Krystian Seibert

 [1] Adapted from: Ian Thomson, Robert G. Boutilier, Modelling and Measuring The Social License To Operate: Fruits Of A Dialogue Between Theory And Practice, 2011. This paper, along with other resources on the topic of Social License, is available at this website.

A Dash of Diversity and a Cup of Reality
December 15, 2015

(Dolores Estrada is director of grant operations at The California Endowment, a health foundation established in 1996 to address the health needs of Californians.)

Editor’s Note: In the near future, our “Who Has Glass Pockets?” transparency assessment will include an additional data element related to diversity. We will continue to track which foundations have values statements related to diversity and inclusion, and we will also be adding a transparency element indicating which foundations openly share diversity data about their staff and board.  Currently, relatively few foundations provide diversity head counts, with only 5 out of 77 profiled foundations sharing that data publicly.  The California Endowment recently completed and posted its annual Diversity Audit, so we invited its team to draft a series of posts explaining why and how they share this information. This is the second post in the series, and the first post appears here.

Estrada-150At The California Endowment (TCE), our commitment to diversity, equity, and inclusion (DEI) is strong.  It is driven by a fundamental belief that we cannot achieve our mission of improved health for Californians unless every segment of our community participates in advancing solutions.  This commitment to diversity created a guiding framework for our organization.  It also set the stage for what we now call an authorizing environment, which means permission to talk about and engage in diversity-related work with the Foundation as leverage.   This space also allows us to gather information on the governance, management, and staff composition of our community partners which, in turn, helps to ensure that TCE holds itself accountable to our diversity and inclusion goals. 

Timing, as they say, is everything. In 2010, TCE transitioned to our 10-year Building Healthy Communities (BHC) strategy.  The planning and implementation of BHC was the perfect time to embrace our values through meaningful collection and use of diversity data.  Our recipe for moving forward had a pinch of confidence, a dash of diversity, doused with a cup of reality. 

Over the course of the last five years, as the manager of grants administration, I have had the task of operationalizing our institutional values of diversity, equity and inclusion into our paperless grantmaking and grant administration.  Although The California Endowment has held to these values since inception, we needed clarity on the mechanics of how collecting data would help us with our mission.  We have the resources and technology to collect the data, but when diversity principles and values meet reality, it gets a little complicated.  We discovered that when it came to incorporating DEI practice in our grantmaking and grant administration, we knew the outcomes we wanted, but had no clear, easy recipe to get there.

Being an advocate of diversity, equity and inclusion has meant being prepared to embrace failure as a pathway for future success.  Promoting and practicing DEI is not simple.  It requires planning, patience, and a willingness to openly share and learn from our failures.  And boy have we shared a lot!

We started with voluntary applicant diversity data questionnaires attached to our online applications.  Our diversity questionnaire was crafted with care to ensure that we were using the correct terminology to capture the information we needed.  We asked for diversity information on the board of directors, executives, and staff of our grantee organizations and stored it in our grants database. 

Being an advocate of diversity, equity and inclusion has meant being prepared to embrace failure as a pathway for future success.

Bam!  Our first clue that something wasn’t working?  In a grouping of over 600 applications submitted less than 400 provided diversity data.  More importantly, the data points submitted didn’t make sense given what we knew about the grantees.  We decided to give the data collection process more time and see what happened. 

We considered the phrasing of the various questions, terminologies used, and online format as possible culprits.  Were those the reason for this data desert?  No, what we failed to do was to explain to our grantee organizations and community stakeholders why we were asking for diversity data and what we intended to do with this information.  In addition, we realized that we had assumed “everyone” had the data and did not factor in barriers or challenges that applicants might have in collecting this information themselves. 

Our team convened, determined to clearly communicate our values and goals and the importance of the data.  Our CEO, Dr. Robert Ross, then penned a message for our online applications and communicated our intent for collecting diversity data, stating: 

"The data collected will serve multiple purposes: to help us understand how we reflect the communities we serve, equip our staff with critical data to assistant nonprofits to better serve the needs of California's diverse communities and to track our progress with our Board and our grantees and communities."

For the next couple of months, our goal will be to create opportunities to learn, share and have open dialogue about DEI data pertaining to the foundation and that of our grantees organization wide.  Our benchmark for success is not about collecting data from everyone, but rather an understanding of how diversity data is incorporated into our grantmaking and allow us to engage our communities and partners in meaningful ways. 

A dash of diversity and a cup of reality make the best recipe for success.

Beyond Money: Foundations Can Create Change by Building Communities
December 3, 2015

(Mark Schmitt directs the political reform program and is director of studies at New America, an independent think tank and civic enterprise. He is a former editor of The American Prospect and has been a program director at the Open Society Foundations and worked on Capitol Hill. Follow him on Twitter at @mschmitt9. This post originally appeared on Philantopic. It is the 10th and final post in a series about U.S. democracy and civil society.)

Schmitt headshotThe world of foundations and the work they fund has for too long been shrouded in obscurity. While many foundations boast a commitment to transparency and release lists of their own grants, it has been far too difficult to see who funds an entire field, or understand how a foundation-backed policy idea made it onto the agenda. Given that foundations can be at least as influential as big political donors, driving policy initiatives such as charter schools and health reform, there should be resources that open up the sector to journalists and activists, as well as grantseekers interested in understanding the often mysterious question of who got what.

But that’s only part of the question. Even the most complete list of grantees and grant dollar amounts tells us only so much about the work and the vision: What does restoring American democracy mean, in practice? Can this mapping resource help answer that question?

Foundations do more than just give money to worthy projects. At their best, they make at least two other vital contributions: They help build a community — that is, the whole network of sustainable, adaptive organizations, from research projects to grassroots activists, that can further a cause — and they create connections, across issues and communities, in order to make each one stronger and more vibrant. So in looking at the Foundation Funding for U.S. Democracy tool, I wanted to ask those questions: Where have foundations built strong communities around democracy issues? And have they created the kinds of connections — between, for example, nonprofit journalism and efforts to reduce the role of money in politics — that strengthen these communities and the cause?

Schmitt_blog_image
The “constellations” section of the tool doesn’t fully answer these questions — to do so would require much deeper analysis and for foundations to provide more complete and plain-English descriptions of the “why” of their grantmaking — but it provides some useful clues. For example, one can see a distinct community of organizations working on election administration and access-to-the-ballot issues — a relatively small number of sizable organizations, with reliable support over several years, often in the form of general-support grants. Closely aligned to these core groups is a larger group of smaller organizations focused on a single state or a particular constituency. (This community would be even larger if the substantial and central contribution to the field made by the Pew Charitable Trusts were included. While grants to its elections project from other foundations are listed, its self-financed work is not.) It is probably no accident that despite the partisan acrimony over voting and significant setbacks to the voting rights movement, there has been significant progress and consensus on ideas such as early voting, online voter registration, and other aspects of election reform.

In a 2013 article in Democracy, Nick Penniman and Ian Simmons argued that the $45 million a year that foundations and other donors were investing in efforts to reform the role of money in politics was too little, and that if they wanted to advance progress on the causes they care about, individual and institutional philanthropists ought to commit one percent of total private giving, or $3 billion annually, to causes such as fixing the corrosive role of money in politics. This tool extends the point made by Penniman and Simmons to show that not only is total funding for campaign reform inadequate to the challenge, the community engaged in that effort is diffuse, the core organizations comprising that community are hard to identify, and the grants awarded in support of that cause are relatively small and often for specific projects rather than general support.

Moreover, in neither case does there seem to be much connection to other issues of democracy or to efforts such as improving journalism or civic education. Each of these issues, such as funding for innovations in public service journalism or for the Newseum in Washington, DC, seems to attract a unique set of funders who do little or no giving for other democracy issues.

Foundation Funding for U.S. Democracy is not the definitive answer to the questions about how funding works and whether it has built effective communities around democracy issues. To really see foundation funding for democracy and how it has worked requires a deeper investigation and the kind of real journalistic scrutiny that foundations rarely get. But much like the databases we rely on to understand the influence of money in democracy, this tool is a start and provides valuable clues and an outline for those who want to follow the money.

--Mark Schmitt

Capacity Building Session Livestream Available for Viewing
May 19, 2015

On April 29, we held a session at our San Francisco office on Capacity Building and Foundation Maps Professional 2.0. Our presenters included Foundation Center’s own Lisa Philp, vice president for strategic philanthropy, and Jen Bokoff, director of GrantCraft. Lisa gave a demo of Foundation Maps, taking us on a cross-country road trip in philanthropy. Jen presented on GrantCraft’s most recent publication, Supporting Grantee Capacity: Strengthening Effectiveness Together. She also spoke with Jamaica Maxwell, a program officer at the Packard Foundation about best practices in capacity building grantmaking.

If you didn’t get a chance to attend the session in person or as part of our virtual audience--even if you did join us and you want to rewatch it--we’ve got you covered. We recorded and edited the session, which you can view here

The McKnight Foundation’s Strategic Framework, Updated for 2015-2017
March 27, 2015

(Kate Wolford is the president of the Mcknight Foundation, and Meghan Brown is the board chair of the Foundation.) 
””

Kate Wolford

””

Meghan Brown

With 2015 now in full swing, we are pleased to share with you The McKnight Foundation’snew Strategic Framework, updated and refreshed for 2015-2017. This is the second iteration of this important document, the first of which was developed in 2011 and implemented for 2012-2014. We got good mileage out of our inaugural framework during the first three years; we are excited to put the new one — a slightly streamlined model which retains the parts that worked well and revises those that needed some tuning up — to use during the next three.

McKnight’s Strategic Framework is very much a living document, which — like our work — must evolve in response to a changing environment if it is going to remain useful and relevant. We intentionally took an open and collaborative approach to the framework update process, inviting input from stakeholders connected to McKnight’s mission at all levels. Naturally, our board and staff were highly engaged; but we took a further step this time around, turning to our network of grantees, peers, and other partners for ideas on mapping our strategic course based ontheir unique contexts.

We intentionally took an open and collaborative approach to the framework update process, inviting input from stakeholders connected to McKnight’s mission at all levels.

I want to thank everyone who responded to my earlier blog post inviting input as we updated the previous framework. It was gratifying to hear affirmations of McKnight’s embrace of adaptive action in addressing complex challenges and changing external conditions. There were also comments specific to individual program areas and suggestions for new issues we should consider, all of which were shared with relevant staff. I also heard from several foundation and nonprofit colleagues that they had used the framework format for their own reflection and planning efforts. Thank you for contributing to our process; your input helped make the final product relevant and useful to us, our peers, and our partners.

McKnight-Foundation-LogoMcKnight’s Strategic Framework 2015-2017 commits the Foundation to optimize the use of all of our resources to advance our mission. It reflects continuity in our conviction that our ability to achieve deep impact depends not only on what we do, but also how we do our work. It is intentionally broad, reflecting the diverse set of program interests and goals which we pursue. (More detailed information about specific program goals, strategies, and guidelines is available here.) Importantly, this iteration also embraces the Foundation’s recent full and robust implementation of impact investing.

As board and staff developed this document, we followed an adaptive action process framed by the questions:

  • What? What is the external context in which we pursue our mission and goals? What data, trends, and patterns do we see?
  • So What? What are the implications of these trends and patterns for our work as a Foundation and across our diverse program areas and operations?
  • Now What? How do we best deploy our resources to optimize our impact?
Naturally, our board and staff were highly engaged; but we took a further step this time around, turning to our network of grantees, peers, and other partners for ideas on mapping our strategic course based ontheir unique contexts.

The principles of adaptive action support an approach we use across the Foundation and within each program area to adjust our strategies over time in response to changes in cultural, economic, environmental, political, scientific, and technological landscapes. For example, trends relevant to multiple program strategies range from the continuing rise of greenhouse gas emissions and growing pressures on life-sustaining natural resources globally, to changing demographics and persistent disparities across race and ethnicity in our home state of Minnesota. In subsequent posts on our blog throughout this year, I anticipate that McKnight staff colleagues will examine in greater detail key trends that are influencing directions and shifts within specific program areas and how we are responding. Stay tuned!

Meanwhile, please don’t hesitate to share any thoughts or questions as you read through the document, which you might think of as a pocket guidebook for McKnight’s upcoming three years. And, as always, we are grateful to grantees and partners for the work we do together on our shared journey to improve the quality of life for present and future generations.

--Kate Wolford and Meghan Brown

Webinar TOMORROW: The PDF is the Enemy
December 1, 2014

Pdf-enemy-icon1Join us tomorrow—Tuesday, December 2, 1:00pm EST—for the Communication Network’s webinar, The PDF Is the Enemy. Speakers include Amy Ngai, partnership and training director at the Sunlight Foundation, and Foundation Center presenters,  Janet Camarena, director of  the Center's San Francisco regional office and leader of the Glasspockets initiative, and Gabi Fitz, director of the Center’s knowledge management initiatives and co-founder of IssueLab.

Presenters will weigh in on the shortcomings of this file format, which because it “locks” content, is not conducive to data sharing or usability. The program will also demonstrate how to make PDFs more usable and reasons why we should share, make open, and reuse data in the social sector.

This webinar is the second in the Communication Network’s Open Data for the Social Sector series. Please register here. The webinar will last an hour and is free. 

Share This Blog

  • Share This

About Transparency Talk

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

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

    Questions and comments may be
    directed to:

    Janet Camarena
    Director, Transparency Initiatives
    Foundation Center

    If you are interested in being a
    guest contributor, contact:
    glasspockets@foundationcenter.org

Subscribe to Transparency Talk

Categories