Sunday, March 28, 2010

A New Website, Glasspockets, Encourages Foundations to Fully Disclose, Too

The Foundation Center, a pillar among excellent resources available to professionals and volunteers, alike, working in the American nonprofit sector; has created a brand new website called Glasspockets. About Glasspockets The Foundation Center explains, on the site's home page, "We're showcasing the online transparency and accountability practices of the largest foundations."

As we each know, one of the clearest ways for an individual to determine if a company is worth investing in any type of corporation (when considering either buying stock of for-profit companies or considering donating to a nonprofit) is for the potential investor to review that organization's recent financials and other pertinent organizational documents. This is where the issue of transparency stems from (in both sectors); and after the '90's the issue came out of real frustrations. If we remember, Americans, whether a company's stock holder or a nonprofit organization's regular donor were, by 2002, even after reviewing financials, not certain that they were getting extant, complete, or fully truthful snapshots of the potential investments' operations (for profit or nonprofit) . The news, at that time, indicated how difficult it was becoming to get that snapshot. After President George W. Bush signed the Sarbanes Oxley Act of 2002, operations transparency and full disclosure were each demanded more often by American for-profit companies' investors, but also nonprofit organizations' donors, volunteers, and other kinds of supporters (as Sarbanes Oxley requires that board members overseeing U.S. corporations, whether nonprofit or for-profit operations are personally accountable for their organization's fiscal reporting and complete disclosure. This law, among other best practices obligations, is why it's so critical that board members understand accounting and all of their legal responsibilities).

The Foundation Center is a nonprofit itself. It's one of the best resources that exists anywhere in the world, for nonprofits (and also individuals), to research for grant opportunities to apply for. In creating Glasspockets they have decided to take the spirit of increased public demand for full disclosure and organizational transparency and apply it to another type of U.S. nonprofit corporation, foundations which are often grant donors, themselves.

To quote the Glasspocket's website's About Us page,
"With Glasspockets, the Foundation Center and its partners are working to:
  • Inspire private foundations to greater openness in their communications.
  • Increase understanding of best practices in foundation transparency and accountability in an online world.
  • Illustrate how institutional philanthropy is relevant to the critical issues of our time.
  • Highlight the many stories of philanthropy that show how private wealth is serving the public good.
  • Illuminate successes, failures, and ongoing experimentation so foundations can build on each other's ideas to increase impact."
As each of us working in the nonprofit sector often hears, it is imperative that nonprofits (including foundations) understand that their supporters, today, expect results. How does any supporter know if, after their contribution or investment results have been achieved? By having access to real outcomes (quantifiable defensible outcome data sets). Again, outcomes data studies' results should be accessible, too, to current or potential investors. Along these lines, lessons learned are not negatives against the organization but rather a real indication, to supporters, that the organization is listening to outcomes enough to make improvements. This is exactly why transparency is such a buzz word in the nonprofit sector (and has been since the late '90's). It's actually American foundations, themselves, through their grant application processes that have increased the demand for disclosure and accountability. Like any donor, grant donors have more often given, now, to nonprofits that can demonstrate how well run they are, how efficient they are, how successful their work is, that they offer the potential necessary to continue to succeed in the future, and that the applicant organization really meets the need in the community that it's set up to. Foundations' grant applications do differ but on the whole have more often, now, required similar information from applicant nonprofits which, together, give a fairly good snapshot of potential grant recipient organizations' operations and how sound of an investment that organization is for the foundation. The benefit of more transparent nonprofit operations is that nonprofits' communities (the folks who are both helped by but also the donors, volunteers, etc. of these nonprofits) can more easily know what these organizations are doing successfully in their community. This helps the organization because supporters are clearer about which nonprofits are successful at their missions but also run, managed, and planned well. These are the organizations more likely to raise more support, more often, more easily (than lesser run or less successful organizations). This is why in American nonprofit best practices efficiency, honesty, evaluations built into programs and conducted regularly, etc. are so critical in nonprofit operations.

If you go to the Glasspockets website and click on the far right tab, Looking Inside Foundations, there is a blue search box on the right side of the page that allows users to search for foundations (without a subscription, at no fee). This features uses a Google Custom Search Engine to conduct its search which searches both the Glasspockets website and also the Internet for the search term. It has been customized by The Foundation Center for the Glasspockets webiste's goals. In the middle of the Looking Inside Foundations tab's web page they have a feature called "Who Has Glass Pockets" listing many foundations already involved in their project providing the information Glasspockets asks of its participant foundations (to fully disclose their operations to the public).

I find Glasspockets an interesting project. The intention is a good idea on the face of it. As a professional fundraiser, I am often prospecting for potential donors (including grant donors), for clients, or researching major donors prior to clients approaching them, etc.; so I am clear about the value of having complete snapshots of potential donors of all kinds (whether organizations or individuals, etc.). For example, there have been a few instances where I was researching a potential grant donor before applying to them for a grant only to find that their donating had waned in recent years, so it was no surprise when I followed up and discovered that they were not funding at the current time or where conducting less funding cycles than prior years. Also, foundations, themselves, are fundraisers sometimes (if the foundation is not a private foundation or a family foundations, for instance) and this information will no doubt assist their potential donors in deciding to give to them or not.

I am not sure how necessary a website uniquely focused on disclosing foundations' financials and operations is, right now, as this information was always available from The Foundation Center, or the foundations, themselves (either from their office or their recent tax filings). Also, the nonprofit sector is being completely impacted by this economy like all other American sectors are. While it remains very important that nonprofits research potential large increment donors, such as grant donors; they are in a position of the utmost need for support right now and not likely to worry how transparent the operations are of any donor they are going to apply to for a grant. Nonprofits have other fish to fry, first. Glasspockets attempts to close the transparency circle, by asking the entities who have traditionally required transparency, the donors (including grant donors), to also fully disclose.

In the spirit of the importance of transparency, though, including even the foundations in the legal requirement, by virtue of this Foundation Center's new site (and their own reputation) for the benefit of American communities, is not a bad idea. We expect results of foundations' work, too.

[Disclosure: I was neither asked to review the Glasspockets website, nor was I paid or in any way compensated for this review.]

1 comment:

Mazarine said...

Dear Ms. Spencer,

I think you're right. Nonprofits aren't so concerned with foundation transparency. Glasspockets is a nice idea, but this information is already available in other places.

It would be better if we could aggregate all nonprofit sources of funds, and program metrics, to see how many were helped, so that we could see where our money goes, for what programs, and what our donated dollars actually accomplished.

This would be a more useful service for nonprofits.