A Transparency Mindset in the Foundation Boardroom

With its recent report, Foundation Transparency: What Nonprofits Want, the Center for Effective Philanthropy examines the nonprofit perspective, outlining the benefits of foundation transparency to the partners we support. As we continue to explore the merits of greater transparency in philanthropy, I propose we add another dimension to the discussion by asking: What about transparency in foundation boardrooms?

In my view, one of the fundamental duties of a foundation CEO is to construct time with the board in ways that engage trustees in substantive ways and that add value to the work of the foundation. Information sharing certainly deserves its place on board meeting agendas, but it should not comprise the majority of the board’s time together. Rather, we should be building into our board agendas opportunities for strategic dialogue, robust engagement, and, yes, even debate and disagreement. And, as we do so, a transparency mindset is essential.

In the decade I have been privileged enough to lead a foundation, philanthropy as a sector has come a long way with respect to transparency. But, as the CEP report points out, we have much more work to do, especially when it comes to providing more insight into our internal processes, the ways we make decisions, and how we measure and assess our performance as foundations.

We also have more work to do with our boards, so let me offer three questions that we should be asking in order to bring greater transparency to foundation boardrooms:

  • What’s not working?
  • How can the board learn more?
  • Who are our partners, allies, and critics?

What’s Not Working? Reading any business publication or blog these days reminds us of the accepted conventional wisdom that we learn a great deal from failure. Indeed, in some circles, failures are trumpeted with pride and viewed as badges of honor. Alas, this is a much more nascent trend in philanthropy.

Paul Brest, former president of the William and Flora Hewlett Foundation, often spoke of engaging his program colleagues in robust discussions each year of failed grants—and even failed grantmaking strategies—at Hewlett. He reported that the staff found these discussions to be especially engaging and instructive. What if we brought this kind of conversation and candor to our boardrooms?

There is often a fear in exposing the board to failure for a variety of reasons, including the prospect of having them wonder whether they have the right staff. But, it has been my experience that talking about failures counter-intuitively lowers the stakes because the board appreciates the openness by the staff and honestly doesn’t want to hear that everything is going just fine (they are smart enough to know it’s not). By engaging the board in constructive conversation about what’s not working, we collectively solve problems and engage them in the real (and challenging) work of the foundation. This not only contributes more usefully to the foundation’s work itself, but it leads board and staff to work more effectively as partners.

How Can the Board Learn More? In preparing for our board meetings, we often aim to provide sufficient information for the board to understand the context for the decisions we ask them to make. This is what leads to the voluminous board books that do their share of damage to the environment.

Today, technology enables board members to learn much more about the subjects we discuss together, and a transparency mindset can harness this technological power to great effect. At Irvine, we will introduce a new grants database this summer, powered by a Salesforce platform. This is not only going to provide our staff with much greater functionality, but now we will be able to provide our board members with greater insight and background on our grant recommendation. We made the transition to electronic board materials a few years ago, which has served as a useful first step. Now, with this new database, we intend to provide our board with access to background documents, proposals, budgets, and other materials that will help them to have the necessary context for our work together. They can explore as much as they want, and we can presume that they have the necessary background information to inform substantive and strategic discussions at our meetings.

Who Are our Partners, Allies, and Critics? Another way to advance transparency in the boardroom is to bring more voices to the discussion. Without having done a scientific review of our board agendas at Irvine, I suspect that 80 percent of board meeting time each year is spent with one another or with our staff. In retrospect, this may not be the right balance.

Exposing the board to other voices and perspectives—those of our partners, allies, and even critics—should be a higher priority. Doing so enables the board to understand the context and even complexity of our work. And if we are able to structure these conversations in a way that encourages candor and downplays the power dynamic between a funder and grantee, then the conversations can be even richer. While we have not done enough of this at Irvine, we have invited guest speakers, both to broaden the board’s understanding of our context and to have them meet key partners in the field. We have also brought other foundation colleagues to meet with the board, so they could understand how our peers approach their work and strategies. And we have made an effort to bring other Irvine staff, both formally and informally, to our meetings so that the board can meet and engage with the broad diversity of the Irvine team. These are good first steps, as bringing these other voices and perspectives may serve to enrich our discussions.

***

I am not necessarily arguing here that transparency equals philanthropic effectiveness. Indeed, some have thoughtfully questioned whether we are making that conceptual leap too quickly. (On that note, for a careful articulation of this argument, I commend John Tyler’s Transparency in Philanthropy: An Analysis of Accountability, Fallacy, and Volunteerism, published by The Philanthropy Roundtable.)

What I am arguing, however, is that adopting a transparency mindset in the boardroom does engender greater authenticity in the relationship with our boards.  And such authenticity—and the honesty and trust that comes with it—can only be an asset as the boards and staffs of our country’s foundations grapple with some of the biggest challenges facing our society today. Those we aim to serve by our philanthropy deserve no less, and our institutions will be healthier as a result.

 

Jim Canales is President and CEO of The James Irvine Foundation. You can find him on Twitter @jcanales.

Hear Jim speak about getting the best from foundation boards at our national conference, Pursuing Results, tomorrow and join the discussion at #CEP13.

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