Shining a light on foundations

Transparency may be the reform theme of our time regarding the booming non-profit sector -- it keeps coming up both generally and specifically and is the primary driving impulse of new watchdog efforts like Charity Navigator. Now a well-known veteran of the institutional-philanthropy realm is focusing the transparency spotlight onto foundations.

Joel Fleishman in his about-to-be-published book argues that "although foundations play a vital role in the country's civic life, they must act quickly to mend their arrogant and secretive ways or risk increased public skepticism and government regulation....The only way for foundations to protect the freedom, creativity, and flexibility they now enjoy — and which they need if they are to serve society to their fullest potential — is to open their doors and windows to the world so that all can see what they are doing and how they are doing it."

That quote is from a Chronicle of Philanthropy article; Fleishman also did a live online chat with foundation and non-profit staff members which mostly seemed to find agreement with his thesis. It will be interesting to find out whether his prediction of agreement from industry-trade groups like the Council on Foundations and Independent Sector turns out to be correct. It does seem logical that the spate of foundation-related front-page news recently will attract or enable more attention from Capitol Hill for good or ill. (And some stories which are primarily about other issues include an element of questionable foundation practices, such as the big Princeton donor-intent lawsuit.)

Fleishman's prediction of full-on federal legislation aimed at foundations seems at least premature and I haven't found any actual political pros who expect it. But the overall direction seems clearly right; his specific ideas sound mostly sensible and if anything overdue. As Elizabeth Keating of Harvard notes when talking about non-profit overhead reporting, broadly the concepts on the table amount to simply requiring of tax-exempt entities the same sort of transparency which is the price of forming a legal for-profit corporation in this country.