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“Mysterious and remote?” The arguments for greater transparency for foundations

ACF’s Stronger Foundations initiative aims to open challenging discussions about foundation practice and identify what it means to be a ‘stronger’ foundation. As part of the project, we are publishing a series of provocations offering personal views on the initiative’s themes.
This contribution comes from Paul Ramsbottom, chair of the working group on transparency and engagement. The final report on this theme was published in June 2020. Share your thoughts on Twitter using #StrongerFoundations

 

A report from the Nuffield Foundation in 1956 noted that "foundations are still to the general public mysterious and remote organisations." And, while such a bold statement might not fully apply to UK foundations over six decades later, an oft made criticism of foundations is that they remain relatively opaque.

In June, ACF published what is the first major report in the UK on transparency, engagement and foundations. I had the great privilege of serving as the chair of the working group connected to the report. One of these reasons that it was a privilege was that the working group had neither responsibility for writing this report, nor a need to come up with a set of consensual conclusions.

But, nonetheless, it is true that there is increasingly a degree of consensus about transparency emerging among staff teams running foundations in the UK. And that was certainly true of our working group.

The report could hardly be more timely. In recent years, there have been significant debates about transparency - in all its varying shapes, definitions and forms – across public and commercial life in the UK, as well as in the charitable sector.

But, in a very specific sense, philanthropy is under the spotlight and scrutiny as never before. If you need any evidence that sources of wealth, power structures and philanthropy are lightening rod topics in Western societies then you need look no further than the events of the last few months.

Indeed the report was launched at almost the exact moment when the statue of Bristol’s most famous philanthropist (Edward Colston) was toppled and dispatched to the bottom of the Avon river.

So, there is a powerful argument for foundation transparency simply in terms of responding to the debates about transparency on the one hand; and debates around wealth and inequality and justice and philanthropy on the other. And the architect of the report, Emma Hutchins, made that case powerfully in a blog published earlier this year.

But I think it is fair to say that the firmest ground for arguments in favour of transparency moves away from simply being defensive. For practioners, the strongest arguments are based around a recognition of the benefits of transparency and engagement to an effective foundation. Transparency is an antidote to that great enemy of the foundation: complacency. Or, as Pamela Dow (one of the working group’s guest speakers) memorably said, "no system was ever made worse by shining a light on it."

Clearly the way in which transparency drives better practice is complicated and nuanced. Among other discussions, the working group debated whether transparency was better as a voluntary or mandated act (I am, for the record, firmly on the side of voluntary action). In doing so, we considered the various audiences to whom a foundation speaks: ranging from fellow funders, to applicants, to the wider public.

The questions of transparency also took us into some of the wider issues facing the foundation sector: that question about the nature of our audiences expanded out into questions of accountability and legitimacy. Indeed, it inevitably led to the most fundamental questions of all: why do we exist - and who do we exist for?

A lot of the fruitful discussion lay around this working group of practioners attempting to apply some of these grand principles to everyday working practices.

The working group also spent considerable time teasing out some of the challenges surrounding drives towards transparency, including when opaqueness can be helpful rather than something malevolent. The group examined moments when transparency can be damaging or even dangerous – for example when funding human rights groups in troubled parts of the globe. On a practical note It is, of course, always important when discussing foundation practice to recognise that the large majority of foundations do not have significant administrative teams to enact grand strategies.

There is clearly still much work to be done in the foundation sector on transparency. But – and this is a crucial caveat – it remains the case that foundations are the single and sole part of UK’s philanthropy ecosystem that is transparent and indeed are subject to each of the regulations related to this area of any registered charity.

So was it possible to draw out any conclusions beyond the intrinsic interest, importance and complexity of the subject? One key point of consensus is that, in effective organisations, ‘transparency’ is less a series of actions or processes and more of a mindset.  This does not mean that every piece of data or decision-making is inevitably public. But it does mean that an effective organisation is thoughtful and intentional about what it does not publish as well as what it does put in the public domain.

Crucially, genuine transparency also means more than simply broadcasting information. It is a mindset that makes engagement with key external stakeholders central: listening, reacting and adapting accordingly. If knowledge is indeed power, then transparency and engagement are key tools in breaking down the traditional power dynamic between ‘funder’ and ‘recipient’.

So let me end on a positive note. There is a clear direction of travel for foundations – towards greater transparency. Transparency does require a degree of bravery and honesty in leadership. But increasingly there is a recognition that traditional power structures need to be subverted and a recognition that transparency - alongside thoughtful engagement - are key tools in that subversion. And, if that is the direction of travel for many foundations, then this report from ACF will surely be a key milestone on that journey.

 

Paul Ramsbottom, CEO of the Wolfson Foundation and Chair of the Stronger Foundations Transparency and Engagement working group

As with all blogs published as part of this series, views in this series are the personal views of the author, and do not necessarily reflect the views of the working group, ACF, or its wider membership. More information about Stronger Foundations can be found here

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