Towards Greater Transparency in Philanthropy

(Mary Glanville joined the Institute for Philanthropy in May 2012 and was appointed managing director in the organization's UK office in February 2013.)

The Institute for Philanthropy has released a new report, Towards Greater Transparency in Philanthropy, that looks at the attitudes of individual donors toward sharing information about their giving. Information sharing is already seen by large foundations as a good way to increase their effectiveness -- the Bill and Melinda Gates Foundation, for example, recently announced its decision to join the International Aid Transparency Initiative (IATI), making it one of the first private foundations to do so -- and we wanted to see whether the same inclination existed among donors in our networks.

To that end, we asked thirty-three donors from the United States, the UK, Canada, Lebanon, and Mexico a range of questions about the perceived value and challenges of "open" philanthropy. After their responses had been collected and analyzed, four key findings emerged:

First, the thing most of them felt would help to make their philanthropy more effective (19 out of 33 donors) was "sharing evaluations with other foundations." Second, most respondents thought the greatest benefit of sharing more information about their giving was that it "facilitates collaboration (21 out of 33 donors). Third, 24 out of 33 donors said they would be interested in further discussing the possibility of a standard for sharing information about their giving with other donors. And fourth, several donors made it clear that despite seeing the value in sharing more information about their philanthropic activities, the main reason they hadn't done so was to safeguard their family's privacy.

These results are consistent with the conversations we've had with donors who attend the Philanthropy Workshop (TPW), our international donor-education program. In those sessions, donors often emphasize the importance of peer-to-peer learning, of collaborating and sharing ideas with other donors to improve their giving strategies. Marcelle Speller, an alumna of TPW and Spear's Wealth Management's Philanthropist of the Year for 2013, has highlighted the need for transparency in non-traditional forms of grantmaking. "Social investing is a new area and the measurement is more complex, so donors need as much information as they can get," says Speller. "To not share information makes it even more difficult to know whether you are making a difference."

And yet, wealthy donors frequently say they need to balance openness with a desire to maintain a certain amount of privacy. One UK-based respondent to our survey noted that the emphasis on privacy is "cultural...In the UK, although this is changing, it's not the done thing to show that you are wealthy. There are also donors who really don't want you to know which causes they support. Grantmaking charities in the UK are not obliged to declare who they make grants to, and there's more of a sense here of 'that's my business'."

This idea that individual donors in the U.S. and Canada are generally more comfortable with their wealth -- and less reticent about public displays of charity -- was challenged by one of our North American respondents, who wrote that "the trust is our family trust, and our concerns are about attracting unwanted publicity to ourselves, which we work very hard to avoid; we are very low key....Publishing or releasing any personal or financial information is really something we avoid as much as possible. We would rather let our light shine under a bushel."

The picture that emerges, then, is of a group of wealthy, philanthropically minded individuals who are keen to share information within their own networks, but for whom the concept of acting philanthropically to raise their public profile is, generally speaking, a bridge too far. At the same time, it is encouraging that more than three-quarters of those surveyed said they would welcome more formal standards for sharing information with other foundations -- a development that could be of considerable benefit to the global philanthropic sector. It will be interesting to see how this all develops in the months and years to come.

-- Mary Glanville