Should Foundations be Transparent?

First, let me say right off the bat that I don’t know the answer to that question. However, I heard Chris Gates from Philanthropy for Active Civic Engagement speak on Friday and he proposed that philanthropy might be the last “sector” that hasn’t yet bought into transparency. I’m not sure that I agree with that statement. While “transparency” is certainly a buzzword of recent years, and while the average American wants to hear about the transparency of companies and government, and while our society is more transparent in general, I’m not convinced that we’re as transparent as we say. And I’m not certain that we need to be. However, I digress.

For the sake of argument, let’s say that we wake up tomorrow and all of the typical foundations in the U.S. are suddenly truly transparent about how they award their grants. What would we gain from that knowledge? Surely, we would have a better sense of what nuances are involved when making funding decisions. We would understand their scoring or rating system and we’d have a lot better grant writers with a targeted message. I bet that there would be a few brainy folks who, empowered with technology, could help us figure out exactly how to better pool all those resources to truly solve a social issue.

But here’s the question that I can’t answer just yet: what we would lose if, all of a sudden, foundations were totally transparent? A transparency that went beyond assets, total giving, annual reports, social media, etc.? I’m talking about a transparency that allows the rest the world to see and understand how a foundation makes decisions are made about strategy, focus areas, partners and collaborators, and grant awards? What harm could come of it?

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