Does Transparency Make Foundations More Effective?
Bruce Trachtenberg is the executive director of the Communications Network. 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 the 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: