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Foundation Transparency: What Nonprofits Want
The Center for Effective Philanthropy

June, 2013

In a report released today by the Center for Effective Philanthropy (CEP), nonprofit organizations call for greater transparency from the foundations that fund them. What’s more, they have very specific views about what transparency means and why it matters.

Foundation Transparency: What Nonprofits Want, by CEP’s Andrea Brock, Ellie Buteau, and Ramya Gopal, is based on a survey of 138 nonprofit leaders, representing organizations large and small (1 staff to 1,300 staff), young and old (5-160 years), from around the nation. The survey sample is representative of nonprofits that receive support from large foundations.

“When we analyzed all the data, some clear points emerged,” said Vice President-Research Ellie Buteau.

“Overwhelmingly, the leaders of these nonprofits say they want foundations to be more transparent about what foundations are learning through their work,” said Buteau. “Nonprofit leaders also want foundations to be more transparent about how they assess performance and impact of both the grantees they fund and the foundations themselves. Finally, nonprofit leaders want more transparency about processes for selecting nonprofits and changes that affect the funding that grantees will receive,” she said.

“The survey data is sobering,” said CEP President Phil Buchanan. “There’s a lot of well-intentioned talk about the importance of sharing information, and that’s a good start. But it’s time to be serious about what we mean by ‘transparency.’ Foundations that share staff contact information or post their Form 990 on their website can congratulate themselves for being transparent. Nonprofits know better. Our survey clearly shows that for a nonprofit leader, foundation transparency means being clear, open, and honest about the processes and decisions that are relevant to nonprofits’ work,” he said.

According to Buteau, only 29 percent of nonprofit leaders report having a clear understanding of how foundations use the information the nonprofit is required to provide. Forty-four percent of nonprofit leaders are unclear about how their work fits into their funders’ overall work. Fifty-one percent of the nonprofit leaders surveyed want “a lot more” transparency about what foundations are learning. And more than 75 percent say they want more transparency about the impact that foundations themselves are having.

“It’s clear that foundations have a lot of work to do when it comes to their communications with grantees,” said Buchanan. “But the good news is that there’s an important payoff for foundations who deliver the sort of transparency that helps grantees. The data shows that foundations that are more transparent are perceived to be more helpful to nonprofits, easier to develop good relationships with, and more credible. That’s the basis of a great relationship with the folks who use your foundation’s resources to carry out your mission,” he noted. 

Buchanan noted that transparency is an achievable goal for any foundation.

The report is a result of CEP’s The Grantee Voice: a panel of 300 nonprofit leaders from across the country who have agreed to share their experiences working with foundation funders.

“Through research like this, CEP intends to provide an overview of nonprofits’ experiences and perspectives. We aim to contribute data, as well as new questions, to further important conversations about how foundations and grantees can work most productively together,” said Buteau.

 

ABOUT THE CENTER FOR EFFECTIVE PHILANTHROPY

The Center for Effective Philanthropy (CEP) is a nonprofit organization with a mission to provide data and create insight so philanthropic funders can better define, assess, and improve their effectiveness and impact. CEP received initial funding in 2001 and has offices in Cambridge, Massachusetts and San Francisco, California. For more information on CEP's work, including its research, publications, programming, and assessment tools, visit www.effectivephilanthropy.org.



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