The drive for greater foundation transparency has been gaining momentum in the US over the past few years. The Glass Pockets initiative was created by the Foundation Center to promote transparency among foundations. The initiative is based around a website, which Foundations submit a profile to. They are then assessed against two dozen online transparency and accountability practices. They also sign up to have their grants submitted to the site in real time through the Foundation Center’s eGrant Reporting Programme.

Foundations opening up in this way is a big step forward, because it allows greater scrutiny of their grant-making practices. An approach like this in the UK would be very welcome – and much more live, interactive and usable than the dry annual accounts submitted to the Charity Commission.

But how useful is this sort of transparency? Yes, it allows for greater scrutiny, but does it lead to changes in practice? The risk is that  transparency becomes a tick box exercise – a criticism leveled at Glass Pockets. In other words, transparency should be seen as a means to a social end – better grant-making and better outcomes for beneficiaries – rather than an end in itself.

So transparency per se is important, but it’s just the start. We need to find ways to transform this raw information into something useful. Two ways to better use grant-makers’ data stand out:

  • Mapping grants: The TSRC has done some good research into the distribution of charities, and of public sector funding. However, there is still a dearth of knowledge about the geographic distribution of grant-funding in the UK. Anecdotally, we know that grant-makers often flood well-resourced areas with more money, and neglect under-resourced (and often deprived) areas (see Iona’s blog on funding to hospices). The Foundation Center’s Philanthropy In/Sight system attempts to address this issue, through an interactive mapping tool designed for grantmakers, policymakers, researchers, academics. It combines the Foundation Center’s rich data on grantmakers and their grants with familiar Google maps to tell the story of philanthropy. Choosing from a wide range of customization options, you can quickly create maps that reveal patterns of giving and funding relationships. It can be used to target grants on areas that have high needs and where non-profits are under-resourced.
  • Sharing evidence of effective interventions: Relatively few foundations systematically share evidence of effective social interventions they have funded with other funders, policy-makers and academics. The BIG Lottery Fund is increasingly focusing on sharing evidence, andfunders like the Sutton Trust and the Education Endowment Foundation (EEF) are also driving this agenda. Our experience suggests that standard outcome measures are needed to start picking out promising interventions, and then high quality evaluations (like RCTs) are required to prove ‘what works.’ But there needs to be a place where this data is analysed, scrutinised and shared. In some cases this will be a large scale funder, like EEF. But often a sub-sector body is more appropriate. Hence the idea of Sector Evidence Councils that has been discussed by NPC in the past, where for each sub sector (older people, for example) a panel would set standards of evidence and review evaluations to pick out promising and proven interventions. But introducing SECs would be challenging. First, because it would require a lot of collaboration to build the pool of knowledge of ‘what works’. Second, because it would require funders and charities to be more transparent, which brings risks, including having to admit ‘failure’. But if these SECs were widely used by foundations, charities would undoubtedly follow suit.

Kick-starting a transparency movement in the UK would add huge value to the sector, bringing new scrutiny and openness to the debate about foundation effectiveness. But dumping data about grants onto a website is not enough. We need to focus on making data useful if it is to be of social benefit.