Transparency in Family Foundations: The Strength of Glasspockets

(Jean Whitney is former executive director of the Carl and Ruth Shapiro Family Foundation and a current board member of Associated Grant Makers.  She has decades of experience in working with family foundations. A version of this post appeared earlier on Family Giving News.)

Jean-whitney-150x150Family foundations, by their very nature, are complex. With significant involvement of family members on the board and sometimes in operations as well, there can be layers of generations, widely divergent views, and the need to preserve positive family relationships.  This complexity is a challenge but not an excuse for avoiding transparency or openness about how family foundations do their work.

At the recent National Forum on Family Philanthropy in Cambridge, MA sponsored by the National Center for Family Philanthropy, a session on Transparency in the Family Philanthropy Context did much to illuminate the continuum of viewpoints on the issue as well as to provide valuable resources to improve practice.

With advances in technology and social media, the question today is not whether or not to be transparent, but how to be transparent – and how far to take your efforts to be fully transparent.

Why worry about transparency?  On one end of the spectrum of views is the argument that many families prefer to do their philanthropic work quietly, with some degree of privacy for their choice of interest and funding decisions.  Humility is, after all, part of the tradition of American philanthropy and too much transparency can bring interest from parties ranging from friends and business colleagues to government regulators.  On the other end of the spectrum is the belief that all foundations have an obligation to be accountable to the public and that being accountable requires some degree of openness.  The conversation about foundation accountability also includes the question of foundation impact.  Can a foundation establish trust, create partnerships, and achieve the outcomes it desires without being transparent? With advances in technology and social media, the question today is not whether or not to be transparent, but how to be transparent – and how far to take your efforts to be fully transparent. “The data is out there…,” they say, and the most effective families invest in managing how information about their giving and practice is shared.

Best practices for foundations aiming for greater transparency include basics like having a web site, posting guidelines and listing grants. As someone who has worked in the field of family philanthropy for many years, I think my colleagues in the field will find the Foundation Center and its Glasspockets web site to be a great resource.  Glasspockets resources include a helpfullist of 23 indicators of transparency and accountability for foundations and also a wealth of practical resources to assist any foundation in becoming more transparent.  The site even includes a “Foundation Web Builder” service to help foundations get started if they lack a web presence.  The name of the web site comes from a quote by Russell Leffingwell, a banker and Carnegie Foundation board member, testifying in 1952 before a Congressional Committee investigating foundations for the support of un-American activities.  He said, “So far as there is a justification -- and I am sure there is -- for the existence of these institutions, it is that they serve the public good. If they are not willing to tell what they do to serve the public good, then as far as I am concerned they ought to be closed down.” And one of his most quoted statements is that "We think that the foundation should have glass pockets."

A key distinction discussed by the session participants was  between transparency about the “product” of a foundation’s work (e.g., grants, results against strategies, etc) and the “process” it uses (meeting deliberations, criteria for funding, internal planning documents, board selection and terms). Many family foundations would agree that sharing much of the process publicly can be difficult.  And that it’s unnecessary.  While younger family members who are used to sharing everything in their lives on Facebook, Twitter, and Instagram may disagree, more experienced family members say that intentional dialogues and training can help tap the best of both perspectives and encourage a practice that lies somewhere in between.

Whether or not a foundation makes an effort to share information publicly about its work, there is already plenty of information out there. The 990s have been accessible to the public for some time, but the next few years will bring the advent of mandatory online tax filing.  In addition, new web sites have sprung up that invite public ratings of foundations and invite feedback from stakeholders to assess foundations.

Brad Smith, president of the Foundation Center, advises that the best way for the field of philanthropy to be responsible and to protect itself is to be proactive and to frame its work. For a family foundation, this starts with developing a web site where it can tell its story, talk about its interests and share its aspirations.  The unique stories of families are often both compelling and inspirational. Why leave information about the family’s history, passions and work for others to interpret when you can communicate this most clearly yourselves?  This takes some work, but so many resources exist and a lot can be accomplished in short order.

Many foundations may find that the path to being more open leads to thoughtful discussions on present efforts and future directions.  This can only translate into becoming more effective and spur greater collaboration.  Who knew that having glass pockets could add such strength?

-- Jean Whitney

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