March 10, 2014 From the President

Transparency: Hurting or Helping Foundations?

There is an ongoing conversation within the PFC network about how open (transparent) to be as a foundation. In the course of this conversation, I have heard some reasons for not choosing more transparency that might fall into the category of commonly-held “myth”, such as the idea that the more open a foundation is, the more vulnerable it is to unwanted approaches from grantees or to criticisms from the media. I was interested therefore to read a recent blog post by Janet Camarena of the Foundation Center titled Demystifying and Demythifying Foundation Transparency.

Camarena names five myths that in her experience surface often in discussing foundation commitments to transparency. I thought it would be useful to reflect on how these myths might or might not apply in the Canadian context. It is important to note first of all that what is being discussed is openness about information that is appropriate and relevant for public sharing, for example charitable purpose, data on grants, granting guidelines, and knowledge that has been collected from evaluation and summary grants reports.

Myth #1: Transparency takes too much time away from the real work of the foundation. At PFC we believe that being public about granting purposes, guidelines and which grants and activities have been funded will save time, not take time away. Our Guide to Good Grantmaking includes many examples of guidelines, and suggestions for making grants and guidelines easily available on a website, even if it is only a single page. More information will draw better applications, and deter inappropriate ones.

Myth #2: Internal reports should stay internal forever. Many foundations receive grant reports on outcomes or commission evaluations to learn from their philanthropic investments. With certain provisos about privacy, such reports could certainly be shared with others in the field. Such sharing would improve grantmaking effectiveness well beyond a single foundation’s walls. In the PFC member area, we already share grant report formats and policies. Why not share the actual reports?

Myth #3: Since my foundation annually submits a report to the government, which is available to the public, I can check transparency off our foundation’s “to-do” list. It is true that the annual T3010 report is posted online by the Canada Revenue Agency for all to see. But this is not done in a timely or particularly user-friendly way. It can take over a year for CRA to post a report. And those trying to understand more about a particular foundation have to search through each annual report individually.  The situation is certainly changing, with both CRA and Imagine Canada focusing on creating more transparency and accessibility for the data collected from charities. But it makes sense to be more proactive and to decide for yourself when and how people learn about your current grantmaking activities. Why not take apart your public report and present your data the way you want, not the way the government wants it?.

Myth #4: Foundation transparency mainly benefits those outside the foundation world. Not so. There is much advantage to transparency among peers. At PFC we launched our new Member Hub recently to help our members see what their peers are doing, where and with whom. We plan to add more to the Hub to permit data visualization, and cross-linkages to see which foundations are supporting the same grantees or similar projects. This should help open up options for PFC member collaboration.

Myth #5: Our foundation will lose respect if we publicly discuss mistakes or flawed strategies. Quite the opposite. The movement to share and learn from failures is gathering ground. At the PFC conference in Calgary last fall, Ashley Good of Fail Forward shared many good reasons for being open about failures, whether small or large. As she says, failure happens…you can learn, innovate and build resilience from reflecting on and sharing the stories. Being open about what works and what didn’t will help the field, not hurt the funder.

For a timely how-to guide on becoming more transparent, see Grantcraft’s new guide Opening Up: Demystifying Funder Transparency.

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