Philanthropreneurship Forum Alert

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Distrust of the “one percent” is so widespread these days that the wealthy and powerful face scorn even when they give away their money.

Witness the backlash generated by the decision by Facebook founder Mark Zuckerberg and his wife, Priscilla Chan, to devote 99 percent of their Facebook shares, worth $45 billion, to projects that “advance human potential and promote equality for all children in the next generation.” Or the ongoing, persistent criticism (this book, this report) directed at the $41-billion Bill and Melinda Gates Foundation.

Some of the nay-saying is inevitable. And some criticism is healthy–foundations need to listen to outside voices. But some is unnecessary, and it’s partly caused by the fact many foundations operate in the dark.

Secrecy breeds suspicion. Foundations that want to earn the public’s trust—trust they will likely need, to accomplish their charitable goals–can start by becoming more open about the work they do.

This isn’t a new problem. Groups such as the Foundation Center’s Glasspockets, the Center for Effective Philanthropy, Grantmakers for Effective Organizations, the National Committee for Responsive Philanthropy and the Fund for Shared Insight have advocated for more openness for years. They haven’t made much headway.

“Darkness is growing in the philanthrosphere,” David Callahan, the founder and editor of Inside Philanthropy, said in a long essay last year. “The momentum toward more transparency has not only stalled in recent years, things have become markedly worse.”

Consider these examples:

* The $800-million Hess Foundation has no website and refused to respond to watchdogs at the National Committee for Responsive Philanthropy, leading to an amusing video.

* The Susan Thompson Buffett Foundation, with $3.1 billion in assets (the latest reported figure, as of Dec. 31, 2014) says on its singularly uninformative website that it will communicate about an award for teachers and a college scholarships program but “does not respond to other inquiries.”

* The Open Society Foundations, which plans to give away $930 million this year, support good governance, accountability and transparency. But the website does not include a list of current grantees.

* The Druckenmiller Foundation, with more than $1 billion in assets, has no website.

At worst, the absence of transparency makes it easier for foundations to hide unethical behavior. Last month, a The News-Press, a small newspaper covering southwest Florida, reported on insider dealings and questionable expenditures at the John E. and Aliese Price Foundation.

More often–and more important–foundations that are unwilling to be open about what they do and share what they know simply make life more difficult for grantees and potential grantees.

Perhaps most of all, they are missing an opportunity to do good by sharing their evaluations of the programs, projects and grantees. These evaluations could help others understand what works and what doesn’t when dealing with social and environmental problems.

As Learning Together, a 2015 report from Grantmakers for Effective Organizations, puts it:

“When we stay in our offices and boardrooms and try to learn in isolation, we miss out on crucial information and perspectives of others, including the expertise of those closest to the issues. And when we hold onto the knowledge we gain through our learning activities, instead of sharing it with the outside world, we deprive grantees, fellow grant-makers, community members and other partners of information that could be useful as everyone works to get better results on the issues we all care about.”

To be sure, some prominent foundations are eager to share what they know. The Robert Wood Johnson Foundation and the William and Flora Hewlett Foundation are exemplary. The Gates and Ford foundations are better than most.

Robert Wood Johnson has long been “one of the leaders in philanthropy around evaluation,” according to Alonzo Plough, the foundation’s vice president for research, evaluation and learning, and with that has come a culture of openness. Perhaps because of its focus on health and medicine — scientific fields that depend on public, peer-reviewed research to make progress — the foundation publishes results and lessons learned from its grant programs in a searchable database.

Hewlett, too, publishes  a searchable library of reports and research papers. Its Work in Progress blog is insightful and occasionally self-critical. Better yet, it has  invested in programs to encourage other foundations to be transparent, notably the Fund for Shared Insight. (The fund has core supporters, all of whom deserve credit for trying to improve the impact of philanthropy.) Among other things, the supports Issue Lab, a service of the Foundation Center that makes research and evaluations easier to access and share, and it is underwriting an upcoming report on Transparency from the Center for Effective Philanthropy.

Interestingly, much of the criticism of the Zuckerberg Chan Initiative focused on transparency. The decision to use a limited liability corporate, or LLC, to manage their donations sparked protests that their efforts would be hidden from view. Some of the suspicions could be easily defused by pledging to be open about how the Zuckerberg Chan Initiative will be governed, what it funds and what effect it is having.

Imagine what would be the reaction in foundations went even further and invited outsiders to attend meetings where they discuss their strategy, or held public hearings to seek feedback about what they do.

Foundations exist to serve the common good, and along with their money, they should share their knowledge. It’s the charitable thing to do.