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Does Transparency Make Foundations More Effective?


This post originally appeared on the blog of the Center for Effective Philanthropy as part of the coverage of its 2011 Conference.

The subject of foundation transparency – especially to whom and for what purpose – can sometimes be murky. While there’s no doubt that foundations should be transparent – and I can’t imagine anyone disagreeing with that – to me it’s not simply a question of whether transparency is a good thing. But rather, what additional benefits accrue to foundations that are transparent? Are they more effective? Are they better known? Are they better liked or is their work more appreciated? 

Put another way, is the right starting point for a conversation about transparency a question like, “Does being transparent make foundations more effective?,” or should we be asking, “Is it possible to be an effective foundation without also being transparent?”

At a May 10th panel at the Center for Effective Philanthropy (CEP) conference, a group of wise and experienced foundation and nonprofit hands tackled the question on the role of transparency in foundation operations. The presenter, Brad Smith, president of Foundation Center, was ably backed up by commentators Paul Brest, president, the William and Flora Hewlett Foundation, and Diana Aviv, president and CEO of Independent Sector, and moderator Stephen Heintz, president of the Rockefeller Brothers Fund.

There’s what might be called a moral imperative for foundations to be transparent. As Smith said, “Foundations are created to serve the public good, and they need to explain what they do in terms the public can understand.” That includes being clear about their purpose and demonstrating their performance. Notably, Paul Brest pointed out the risk to foundations that aren’t transparent. Only by being transparent can foundations get meaningful feedback about their work. Not surprisingly, Diana Aviv reminded the audience that one of the benefits of foundations behaving transparently is that it helps grantees understand their standing with the organizations that fund them, and can even be helpful in understanding the reasons why they get turned down for funding.

As a group, they did a valuable service by not limiting themselves to trying to answer that question exclusively about a link between transparency and effectiveness. Instead, in their comments – and in queries from the audience – the session raised many other companion questions that could themselves be individually debated in subsequent sessions. Those questions ranged from:

  • How do you define transparency?
  • What is the relationship between transparency and accountability?
    Is transparency always the most effective strategy?
  • What are the costs as well as administrative burdens to transparent organizations?
    Is there a role for foundation boards in setting parameters of transparency?
  • Whose job is it to ensure a foundation is transparent?

But at the heart of the conversation was an almost a priori belief that the more that foundations openly share information about their work with the public, policymakers, grantees, and other funders, etc., the better they are able to advance their missions.

The ultimate question – Does being more transparent make you a more effective organization? – is one that has to be viewed through the lens of what makes for an overall effective foundation strategy. In other words, transparency can’t be an end unto itself. But, instead, if there is an organizational commitment to behaving transparently and if foundations are willing to share what goes on inside, that can serve as the basis or starting point for all sorts of other activities that would be otherwise impossible without it.

For instance, it’s unlikely that the motivation (not to mention the costs) in creating websites, publishing grant data, sharing CEP grantee perception reports, or tweeting, blogging or having a presence on Facebook – plus all the other means and methods that Foundation Center tracks on its Glasspockets website – is because a foundation decides it wants to be transparent. Rather, foundations that behave that way believe that the information they share (and how they share it) can contribute to advancing their work.

Stated another way, the path to effectiveness comes from a clear and thoughtful foundation strategy that includes the need to share information, communicate strategically, and be open to public scrutiny as an essential way of doing business.

At the outset, I said this topic can sometimes still be a murky one. That point was reinforced by Paul Brest who said his foundation, at times, sees the need to be less open about its strategies. For example, he maintains that there’s no benefit when working in areas such as climate change or family planning to let your opposition know your strategy so they can use it against you.

Similarly, Diana Aviv noted that too much information – especially if it’s not categorized or presented in a useful way – can create confusion.

Once again, it all comes down to identifying your goal and the most effective strategy to get you there.

No harm being transparent about that.

–Bruce Trachtenberg

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