Through A Glass Darkly: How Transparent Should Foundations Be?

The tides have turned in education philanthropy, as the last decade has seen public opinion shift from indifferent acceptance to critical inquiry. How did this wave come about, and why? This story is told in my new book, Policy Patrons: Philanthropy, Education Reform, and the Politics of Influence. Over the course of six years, I examined how four of the largest and most powerful education funders in the U.S. — Gates, Broad, Kellogg, and Ford — have sought to influence public education policy.

Ten years ago, critical discussion around philanthropy was limited. In one survey, nearly 60 percent of civic leaders could not name a single foundation, and another study found that 98 percent of press on foundations was neutral or positive in tone. In 2006, Warren Buffett’s $30 billion gift to the Gates Foundation was described in the press using almost exclusively celebratory terms. In the perpetually crisis-oriented narrative surrounding education, foundations represented admirable sources of hope and levers into the logjam of K-12 policy. A former student of mine summarized the general ethos of the time: “I trust the billionaires.”

Starting around 2012, however, this trust began to erode — echoing a pattern that has repeated itself in three distinct waves over the last century in which foundations have faced scrutiny with regard to their political involvement: in the early 1910s, early 1950s, and late 1960s. This most recent wave was triggered as national foundations became more vocal and visible in federal education reform efforts, and several high-profile philanthropic experiments began to be challenged.

In my book, I use interviews with philanthropy insiders as a primary source of data, providing a rare glimpse into foundations’ internal dynamics. Access to these private institutions is typically tightly controlled, and very few foundations have allowed outsiders to explicitly explore their employees’ reflections and perspectives on their work. In fact, most research on philanthropy is historical, rather than contemporary, in nature. In order to enable foundation staff to feel comfortable speaking with me, I chose to protect the anonymity of my informants.

While this decision expanded my access, it also came at a price. With anonymous interviews, I could not be granular in my descriptions of informants’ contexts, particularly regarding their professional roles and expertise, which ultimately required the exclusion of a significant amount of relevant information. The tension between securing access and avoiding obscure or obtuse descriptions of institutional contexts — the problem of seeing “through a glass darkly” — was palpable.

This challenge, however, extends beyond concerns of research methodology and into ethical questions, as well. In a recent review of Policy Patrons, Maribel Morey, a professor at Clemson University and scholar of elite philanthropic history, weighs the dilemma from a normative perspective:

Foundations are publicly subsidized and they try to socially engineer the public, so arguably, they should remain accountable to the public in the present day. And what better way to remain accountable than to make not only their past, but also their contemporary material open and accessible to the public and its scholars?

If this scenario became a reality, what would being “open” and “accessible” actually look like? Foundations have long faced calls for greater transparency and accountability, and have responded with mechanisms including annual reports and searchable grants databases. These gestures toward transparency, however, are often ceremonial. At many large foundations, staff members are not listed on websites, and their emails and phone numbers are obscured from public view; some foundations do not even make their addresses available to the public. The average citizen, by and large, cannot gain access to decision-makers within elite philanthropy — a reality that is highly problematic for democracy, as Morey argues.

In the last 40 years, however, foundations have rarely been challenged on this issue, and as a result, are in a double bind as they fundamentally aim to engage deeply and shape policy discourse, but remain shielded from greater democratic input or even disclosure of internal deliberations. This tension stems from an age-old rationale for the existence of foundations as sources of innovation and risk capital outside the constraints of government and the median voter. John Simon, professor emeritus at Yale Law School, makes this case in the following way: “…If private foundations, as the Treasury wrote in 1965, ‘enrich the pluralism of our social order,’ it is largely because the foundations are private, freed from the very constituent controls that would provide ‘accountability.’”

With all due respect to Simon, I argue that the terrain has changed, and that the American public has good reason to be concerned about the effect of private philanthropy within a liberal democracy. While foundations have been involved in policy since their origins in the early 1900s, many scholars argue that the current influence of mega-foundations represents an unprecedented development. One informant I interviewed, a professor, compared Gates’ largess in federal education policy to Ford’s efforts in the 1960s, remarking on their qualitative differences:

We have a very successful attempt to set public policy — not just influencing, but purchasing public policy. If you compare this to the reaction against the Ford Foundation around 1969, what’s interesting is that Gates is strong-arming public policy in a way the Ford Foundation never would have thought of doing…there is a certain asymmetry in how the folks who are trying to promote reforms today are being discussed contrary to how say the Ford Foundation or Annenberg were…The Gates people make Mac Bundy [the controversial president of the Ford Foundation in the 1960s] look like a midget.

Another source echoed this statement:

I am a believer in encouraging a wide variety of initiatives within a society. I don’t think relying solely on government structures to do that is a good idea…it is important to have another source of initiatives. I believe [foundations] create multiple points of influence…[but with] a disproportionately sized [foundation] you create draft and essentially you help create the problem.     

Reflecting these concerns, informants suggested a number of potential solutions for better incorporating public opinion into philanthropy, ranging from a Freedom of Information Act-like process for requesting information from foundations, to including community members on foundation boards, to a democratic vote on grant portfolios. Several sources called for a bureaucratic mandate to make foundations more accountable, an idea that has emerged in Congress at regular intervals in the last century. One informant argued that without enforceable mechanisms, foundations are unlikely to voluntarily change:

All foundations should be doing evaluations and publishing them for public critique and consumption. Why don’t we insist on some independent evaluation of the really big foundations on a long- term basis and present those results for interrogation by members of the public, even by members of Congress?…No system of internal accountability or peer pressure is good enough when you have large organizations with large amounts of money.

A recent report by the Center for Effective Philanthropy, which surveyed 145 philanthropy leaders about their views on issues of transparency in the field, illustrates a significant disparity on this topic. Whereas the vast majority of private foundation leaders believe that foundations should be transparent with donors and grantees (98 percent and 96 percent, respectively), fewer believed that it was important to be transparent with other external stakeholders, such as government policymakers, journalists, and the broader public (57 percent, 46 percent, and 45 percent, respectively). While 94 percent of leaders indicated that transparency was a priority for their organizations, 33 percent shared that their staff members “do not have the time to invest in being transparent.”

Taken together, these findings are quite striking — fewer than half of private foundation leaders view the public as a legitimate audience for transparency, and nearly a third do not invest in structural mechanisms to make transparency a core institutional priority due to other constraints on their resources and time. Furthermore, according to the Philanthropy Roundtable, foundations believe that transparency should be voluntary, not regulated, beyond the government’s basic interest in ensuring charitable purposes.

Given the gap between my informants’ perceptions and foundation leaders’ expressed ideas, a broader conversation about the role of transparency and accountability to the public is crucially important for the field of philanthropy engage in. Ultimately, trust in foundations is tenuous and may erode without proactive efforts from foundations to be more authentically open and accessible to the public.  As Morey eloquently puts it:

In the world Tompkins-Stange wishes at the end of the book (and that I hope becomes a reality), foundations would be aware of their duty to remain accountable to a democratic public…. A researcher such as Tompkins-Stange would not need to tiptoe around and meet with “informants” in order to offer the public some glimpse of who they are and what they do on behalf of the public.

Megan E. Tompkins-Stange is Assistant Professor of Public Policy at the Gerald R. Ford School of Public Policy at the University of Michigan. Follow her on Twitter at @tompkinsstange.

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