Foundation Transparency: We Ain’t Seen Nothin’ Yet

(Marie Deatherage has directed communications at Meyer Memorial Trust since 1996. She has also worked as a program officer, college professor, researcher, disability rights advocate, journalist, editor and publisher. She has degrees from the University of Chicago and University of Oregon and has never met a disruptive technology she didn't like. Her previous post on Transparency Talk reflected on the Trust's becoming transparent.)

In 1998, I had a singular point/counterpoint experience that changed the way I see the world and directly affects the way I view foundation transparency today.

Point

A few years earlier, I had been appointed by Oregon's governor to the Oregon Health Services Commission, (OHSC) the public body that created the prioritized list of medical conditions and treatments for the Oregon Health Plan (and gained national notoriety as "rationing health care.") At the time I was appointed, the Plan had just been turned down for a Medicaid waiver by the federal government because the Department of Human Services said the process that created the list violated the Americans with Disabilities Act. I was working in disability rights and was added to the Commission to ensure that views of people with disabilities were represented.

OHSC was and is subject to Oregon's rigorous public meetings law, which requires that all decision-making be conducted in public. We were forbidden to even talk about matters as a group in private. Meetings were all open to the public, including, of course, the press.

On this life changing day, the Commission was considering whether and where to place in the prioritized list the recently voter-approved "Death with Dignity" legislation that had become law in Oregon. (In a nutshell, if you have a terminal illness with less than six months to live and meet other eligibility requirements, you can get medication to self-administer to end your life on your own terms and time.) Oregon was first in the land to pass this legislation, as it had been the first state to legislate a prioritized list. Our hearing took place not long after vigorous and sometimes acrimonious debate leading to the election, before a standing-room-only crowd, which included very vocal protesters. Print and broadcast media were out in force.

After listening to testimony and discussing and debating the issue, each of us had to declare our position and give reasons for voting the way we did. Explaining our views was awkward, even gut-wrenching. I would call it one of the hardest things I've ever had to do in public, not only because I was the only dissenting vote, for reasons that were hard to explain. Our votes were reported in the media, and I subsequently got a number calls at home from people I didn't even know.

Counterpoint

When that meeting ended, I literally walked two blocks to the foundation office where I had begun working. Another meeting was underway there, with trustees deciding whether or not to fund grant proposals that were up for review that month. But this meeting was being held behind closed doors. Often there were no specific reasons given about why some proposals were funded and others not.

The contrast stunned me. The philanthropy decisions weren't more important. They weren't more difficult. They weren't more uncomfortable. In fact, they seemed much less so on each count than what I had just experienced.

So why this difference? At one time, of course, public bodies made decisions behind closed doors too. But at some point, the Oregon public demanded accountability and transparency, pointing out that sunlight is the best disinfectant. But foundation decisions were and are, for the most part, still happening in the dark.

Taxpayer-enabled resources

Foundation assets are, of course, IRS-approved resources. For the special treatment of not paying taxes, people are permitted to direct money for the public benefit. Who decides what constitutes "public good" and/or whether resources are actually benefiting the public? Well, in the past it's pretty much been the people with the money.

The pace of the move to accountability and transparency we've seen in government settings has greatly quickened with the Internet, because above all else, the net shifts the balance of power by eliminating gatekeepers and obstacles that have restricted communication and information exchange. More and more, people take for granted they have a right to look inside institutions and organizations. See, for example, recent moves toward more accountability for the nonprofit sector through legislation and questions about exemptions from property taxes.

Lately we've seen that the public expects foundations to exercise fairness and to be able to provide rational reasons for their grantmaking decisions. See under: Susan G. Komen Foundation.

The emergence of Glass Pockets in 2010 has been a crucial part of that shift, and much openness (e.g., making public user surveys, third party evaluations, governing and tax documents, etc.) has been achieved at Meyer Memorial Trust and other Glass Pockets-participating-foundations since the meeting I described above in 1998. But I believe a whole lot more transparency - and disruption it will cause - is coming.

One reason I've heard for foundation secrecy is the same reported by Sean Stannard-Stockton in a Tactical Philanthropy blog post:

• "...Foundations tell me that they are not transparent about their grantee analysis because they do not want to risk hurting the nonprofit."

Sean went on to show what happened when the nonprofit FORGE opened itself entirely to public scrutiny in the face of a fiscal crisis, resulting in financial solutions and pro bono donations that made the organization stronger.

Sean held its executive director up as an example of leadership because she recognized that "criticism can only make her stronger. She wants to learn and get better because she cares about her cause more than she cares about her organization...Even if that means publicly taking advice from people who might tell her she should do some things differently."

Here's the thing: no matter what reasons foundations give for secrecy, even if philanthropy finds ways to justify it internally, doesn't the secrecy itself invite the public to wonder if the real secret is that the foundations can't defend their processes? Or that it's just easier and more comfortable for them to keep it on the down low. Do foundations want to invite those suspicions?

Democracy Needs Transparency

In addition to making corruption much more difficult, one of the most valuable rewards that has come from public meetings laws is that it has shown us we are courageous enough and tough enough and collectively wise enough to go through a process that is awkward, clumsy - even painful - and emerge stronger than ever. Even though that public discussion and vote was one of the most tortured things I've ever done because it was in public, I came out of the experience with a much greater appreciation for the delicious taste of democracy. I felt it made me a better person. I felt it made Oregon a better place. It gave me more trust in humanity.

We the people can handle messiness, clumsiness, embarrassment, complications, making mistakes and some chaos now and then. Seeing inside builds trust. Trust is directly and immutably linked to transparency. Foundations have a more secure future if they earn the people's trust.

Imagining the transparent future that is now possible reminds me of the scene in Back to the Future when Marty McFly sees the audience reaction after he does an epic guitar solo on stage: "You might not be ready for this, but your kids are gonna love it." So if you doubt me, read the We, the Web Kids manifesto.

Foundations can resist these inevitable future changes or we can welcome them. I can't wait to discover which foundation will utterly embrace the future and be the first to livestream trustee meetings. In my next Transparency Talk installment, I'll share a few more dreams about how open and trustworthy foundations might become.

A foundation director once told me that grantmaking and sausage-making are two processes I didn't want to witness. Prior to his declaration, I had heard it as law-making and sausage-making.

Government down, foundations next? And I'm pretty sure it's no longer safe to bet the farm on sausage either.

-- Marie Deatherage