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Transparency: One Size Does Not Fit All

February 09, 2010

(Bradford Smith is president of the Foundation Center. In his previous post, he introduced the center's Glasspockets initiative and made the case for why foundations need to be more transparent.)

Magnifying-glass The Foundation Center recently launched Glasspockets, a free Web portal designed to encourage greater transparency in the world of philanthropy. Among its many features, the one that has raised the most questions is "Who Has Glasspockets?", which profiles the nation's largest foundations according to twenty-two online transparency and accountability criteria. Every one of these criteria was drawn from existing foundation practice: no one foundation meets all twenty-two criteria, but every single criterion can be found somewhere on a foundation Web site.

While we were designing Glasspockets our own staff was the first to ask: "How will a small foundation ever be able to come anywhere near meeting these criteria?" That is a fair question from people who know of what they speak. The Foundation Center staff collects data on 97,000 grantmakers and is more aware than anybody of the difference between the Bill and Melinda Gates Foundation with some $30 billion in assets and the Albert and & Bessie Mae Kronkosky Charitable Foundation with $200 million (though you'd be surprised to see all the great information on their Web site).

When it comes to transparency, one size does not fit all. Many of the tools on Glasspockets measure online transparency, but according to one Foundation Center survey of more than 11,000 foundations, only 29 percent reported having a Web site or issuing publications or annual reports. Communicating what you do, extensively evaluating your projects and programs, using social media, or engaging in community outreach takes people, yet in the same survey 76 percent of foundations said they had four or fewer staff members. In cultural terms there is a long tradition in American philanthropy of not drawing attention to oneself and letting good works speak for themselves. There is also the very real concern of many living donors with protecting their own privacy and the safety of their children and grandchildren.

A considerable number of foundations tell us that their contribution to transparency is to support the Foundation Center, which takes data from their tax returns and other information, adds value, and makes it available to grantseekers through subscription databases like Foundation Directory Online or for free at more than 425 affiliated funding information centers located across the country. In addition to filing their 990-PF forms, nearly 400 foundations send same-year grants information to the Foundation Center electronically, for which they receive free interactive maps and charts for their own use. And more than 150 foundations who have decided to take the online plunge do so by availing themselves of a free Foundation Center service to design and host simple Web sites.

Indeed, this is the raison d'être of the Foundation Center, founded in response to McCarthy-era hearings in which Russell Leffingwell, then chair of the Carnegie Corporation, told congressional skeptics: "We believe the foundation should have glass pockets." Our founders strongly believed that such transparency was the best way to preserve the freedom required by foundations to innovate, take risks, and adopt a long-term approach to addressing the world’s most pressing challenges. In launching Glasspockets, the Foundation Center is highlighting what foundations are already doing to meet the transparency challenge, not defining standards or imposing a code of conduct from on high.

Transparency is an ideal that each foundation has to pursue according to its values and means. It is something to aspire to, beyond compliance with existing regulation, and will be constantly re-defined as foundations experiment, get feedback, and avail themselves of new technologies. However, one thing seems certain: as the practice of philanthropy is being disrupted by the digital revolution, choosing not to be transparent is an option whose days are numbered. If you have a public purpose, and foundations certainly do, the public wants to know: "What are you doing?" Glasspockets shows the many creative ways in which hundreds of foundations are striving to answer that question. But we have only scratched the surface. Let us know what your favorite foundation is doing to tell its story to the world.

-- Brad Smith

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Posted by Phil Buchanan  |   February 11, 2010 at 09:47 AM

Brad: While I agree that one size doesn't fit all when it comes to transparency, I do think there are some basics that any foundation above a certain size threshold should be able to meet. That's why I like your Glasspockets initiative and why I am pleased CEP is a partner in this effort, as I wrote on the CEP blog last week: http://www.effectivephilanthropy.org/blog/2010/02/some-new-trousers-for-foundations-with-glass-pockets/.

The fact is, there is tremendous variation in what even large foundations make available, as Bill McCalpin pointed out in an excellent Chronicle of Philanthropy opinion piece last fall: http://philanthropy.com/article/How-Much-Information-Should/56715/.

I don’t understand how any foundations can argue against the idea that they should be open and clear about what they are trying to achieve, how they seek to achieve it, and how they assess progress. As you point out, “choosing not to be transparent is an option whose days are numbered. If you have a public purpose, and foundations certainly do, the public wants to know: ‘What are you doing?’"

Thanks for being a leader in this effort.

Posted by Bradford Smith  |   February 16, 2010 at 10:57 AM

Phil: With the cost of digital media coming down so drastically, it has become easier and easier for foundations to have an online presence so I suspect that we will see more and more websites in the very near future. Once online, it's a question of how much a foundation chooses to make publicly available apart from the 990-PF, which can already be found through the Foundation Center and others.

For most foundations this is an evolutionary process. I have seen family foundations in particular slowly build an online presence with more and more information as they gain in confidence and see how transparency may actually further their mission.

The variation in what foundations make available can also be seen as a source of creativity. In any sector, organizations and individuals tend to learn from their peers. We have already seen foundations decide to add to their online presence because of something another foundation is doing that they learned about through Glasspockets.

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