Foundation Transparency: Are Foundations and Nonprofits Seeing Eye to Eye?

Nonprofit and foundation leaders have starkly different views about the importance of foundations being transparent. That’s what we learned when we surveyed nonprofit and foundation CEOs about their attitudes on this issue. Nonprofit CEOs value foundation transparency and believe it contributes to their effectiveness. “Openness, which [foundations] require of us, would be very helpful in creating a good working relationship,” says one nonprofit CEO. But the majority of foundation CEOs don’t see transparency as crucial to impact.  

We found that 91 percent of nonprofits agree that “Foundations that are more transparent are more helpful to my organization’s ability to work effectively” but only 47 percent of foundation CEOs agree that “Foundations would be able to create more impact if they were more transparent with the nonprofits they fund.”

Why might nonprofit and foundation CEOs have such different attitudes toward foundation transparency?

First, foundations may not share nonprofits’ understanding of transparency. To nonprofit CEOs, foundations are transparent when they are “clear, open, and honest about the processes and decisions that are relevant to nonprofits’ work.” Transparency is not only about what information foundations share – which Glasspockets helps to track through its transparency indicators – but how effectively foundations have communicated that information to nonprofits.

Foundations may also think they are transparent enough. But nonprofit leaders’ assessment of foundations’ transparency suggests they could do better: on a scale of 1 to 7, where 1 indicates “not at all transparent” and 7 indicates “extremely transparent,” nonprofit CEO respondents on average rate the overall transparency of their foundation funders a 4.7. One nonprofit CEO says, “I don’t think there is intent to be less transparent, but often times Foundations may assume we know things about their programs, opportunities and goals we don’t really know.”

Nonprofit CEOs also tend to think foundations are not transparent enough about what has not worked in foundations’ experiences – but fewer foundation CEOs see it that way. We found that 88 percent of nonprofit CEOs believe foundations should be more transparent about this, but only 61 percent of foundation CEOs disagree that, “Foundations do a good job of publicly sharing what has not been successful in their experiences.” Perhaps nonprofits see this issue differently because they clearly understand how they could use such knowledge. “One of the best learning tools is to see what has not worked. Learning from foundations and their other grantees would be very instructive,” says one nonprofit CEO.

While there are some examples of foundations actively working to be more open – notably The William and Flora Hewlett Foundation with its “Work in Progress” blog and Darren Walker’s efforts to build a culture at the Ford Foundation where “openness is held in as high regard as our intellectual curiosity, our rigor and our commitment to the values we share” – too few foundation leaders seem to recognize the need, from nonprofits’ perspective, for greater transparency.

Ellie Buteau is CEP’s vice president of Research and Ramya Gopal is an associate manager on the Research team.

(This post originally appeared on the Glasspockets blog Transparency Talk and highlights findings from CEP’s latest research article “Transparency, Performance Assessment, and Awareness of Nonprofit Challenges: Are Foundations and Nonprofits Seeing Eye to Eye?” published in The Foundation Review.)

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