Power and Light

Power & light: grappling with transparency and effectiveness. Video. Foundation Centre, USA, 26 January 2012

The tension between transparency and effectiveness is often not well understood by those outside the philanthropic sector. Like many of the sensitive issues around philanthropy, while engendering often quite passionate differing positions, the transparency and effectiveness tension is often not discussed publicly.

In this video, panel members Brad Smith of the Foundation Center, Phil Buchanan of the Center for Effective Philanthropy, Emmett Carson of the Silicon Valley Community Foundation, Christy Pichel of the Stuart Foundation, with Chip Edelsberg of the Jim Joseph Foundation as the moderator, discuss these tensions with disarming honesty.

As President of the Foundation Center in the US, Brad Smith is responsible for the GlassPockets Foundation Transparency Initiative and believes “the best way to preserve philanthropic freedom is not to hide behind it; rather, foundations increasingly need to tell the story of what they do, why they do it, and what difference it makes”.

He believes transparency is important for foundations for four reasons:

  1. It is required for foundations in the USA.
  2. It is the right thing to do – as tax benefit for public benefit needs some form of explanation.
  3. It can increase the effectiveness of foundation work.
  4. It is inevitable – in the digital age, no sector: government, church, business, or charitable, gets a free pass in the world of 24/7 media, blogs, YouTube, Twitter, crowdsourcing, social media and digital everything.

Phil Buchanan is the CEO of The Center for Effective Philanthropy (CEP), a consulting firm that provides foundations and other philanthropic funders with comparative data to enable higher performance.

Fascinatingly, Buchanan began by stating that he believes in transparency but he is not a transparency absolutionist.

If nothing else, he believes that just to take the step on the transparency track, anyone or organisation needs to be brave to do it. By demanding total public transparency we only make people defensive. He feels it is much better to allow people some sense of control, and the choice to make their results public.

However, Buchanan believes it to be morally indefensible to know that something you funded isn’t working and know others are trying to do the same thing and not to share your results. For Buchanan, this is where transparency and effectiveness come together.

Christy Pichel, is Acting President of the Stuart Foundation, a private foundation. From her point of view, for the allocation of foundation resources to be more transparent and effective it would have implications on both money and staff time. While there is no requirement for foundations to be effective, she believes being passionate and caring is not enough. Foundations also need to be effective.

She wondered aloud whether effectiveness reviews of a one year grant, even two, three and five year grants, are really going to reveal much when the issues foundations are tackling are big, long-term, social, environmental and behavioural issues. She questioned whether information we are asking for is actually helpful to recipients – or even to funders?

In many ways Emmett Carson had a very different perspective on questions of transparency and effectiveness. As the CEO of the Silicon Valley Community Foundation he pointed out that in the USA, community foundations already face a very high level of transparency and, unlike the rest of the philanthropic sector, are rated by Charity Navigator. From his point of view the link between effectiveness and transparency is tenuous at best because most foundations aren’t transparent and we really don’t have a good handle on measuring effectiveness.

The panel wrestled with the whole question of transparency. The discussion was fascinating for the very different views held and the implications.

On the issue of transparency of family foundations, Smith felt that issues of transparency are linked to privacy and take on a different dimension for two reasons:

  1. Firstly, the general privacy of the donors.
  2. Secondly, the safety of family members.

He believed these to be legitimate concerns especially if the family foundation chose to tackle difficult issues such as child trafficking, and sexual abuses, where bad actors are involved.

Carson disagreed. As the CEO of a community foundation, the safety of his staff is of paramount concern. Despite the high level of transparency, they still tackle controversial, complex and tough issues and as a consequence attract their share of threats.

Buchanan noted that if foundations take on difficult, unpopular issues while it is general good to be clear to be about your funding choices, it might not be smart from an effectiveness point of view to be transparent. His point being, that transparency is good but we need to be context specific.

However, it was pointed out that ironically if you are working on something controversial, the more impact you make, the more profile you will attract, irrespective of your appetite for transparency. Carson pointed out that if you undertake something controversial then you need to prepare for a firestorm, media attention and attacks on your website.

The panellists discussed whether large individual donors should be prohibited from being anonymous.

Smith felt there is a big divide between institutionalised philanthropy and the creation of foundation, and individual donors. While sometimes the use of a foundation can be more private because the foundation has the relationship with not-for-profit organisations, he also raised the spectre of the anonymous donor – the one that everyone knows.

While we struggle with the whole issue of transparency and the inherent tensions, generational change, technology and transparency are inevitable. The philanthropic field came late to communications, late to technology and late to social networking – partly as a result of being private and independent.

The next generation of philanthropists and those working in the philanthropic sector will no doubt have a very different relationship with privacy and transparency.

For my part, the moral ambiguity of some anonymous donors is best exemplified by Larry David and Ted Danson in their YouTube clip on Anonymous Donations. In this hilarious skit, Larry is upset that Ted made a donation anonymously and then told everyone about it! Using comedy, they explore some of the most delicate questions around philanthropists and how we treat them. It’s an oldie but a goodie!

Comments are closed.