Nonprofits and Transparency

Lucy Bernholz, in her usual smart and insightful way, has written a terrific post on philanthropy and transparency, Downsides of Transparency. She is riffing on an article that Larry Lessig wrote for the New Republic entitled, Against Transparency.

Lessig’s arguments are more provocative than right. There is, of course, nothing inherently bad with opening up the black hole of government and sharing data with the public. And the Sunlight Foundation, of which Lessig is oddly an adviser, has led the charge in making data available to the public to enable it to connect the dots of connections between contributions, lobbyists and legislation. Ellen Miller and Mike Klein, the co-founders of the Sunlight Foundation, make a terrific counter argument to Lessing writing, “we argue that more transparency in politics will enable a healthy dynamic of rising public attention and engagement in demanding more accountability from government.”

As one would imagine, there was considerable pushback against Lessig’s take around the web. You can see different opinions here, by Patrice McDermott a long-time advocate for government openness, and David Weinberger here, and in the incomparable way that only he can, Micah Sifry here.

I don’t buy Lessig’s argument that there is such as thing as too much transparency in government. But I do buy Lucy’s concern that requiring too much transparency of foundations may drive them into the dark, back rooms without any sunlight of donor advised funds. The difference is that government is public and foundations are private entities. Even with their enormous tax breaks, foundations are private entities that more than any other kind of  institution has very little incentive to make their operations and programs more open and transparent except out of a noble assumption that by doing so they will be more effective.

My area of interest is in nonprofit organizations, which I think in some ways are harder to get our hands around in regards to transparency (does everyone thing that their sector is the most important?)  because nonprofits aren’t public entities and aren’t as private as foundations. We’re somewhere in between. Esther Dyson was right when she said at Transparency Camp a few months ago, “You cannot be fully transparent all the time because you need to give people a safe place to have the discussion without disrespecting others.” And, of course, no one would want a social service agency to reveal the private files of their clients or a clinic to reveal their health records. So, where is the transparency middle ground for nonprofits?

We need to begin from one fundamental premise: Transparency is not a technology tool. It is aided by technology. At its core, a value that creates organizational norms. The default setting for too many nonprofit organizations, to date, has been to the closed, proprietary side of the dial. We need a new transparency default setting and err on the side of openness, or sunlight as Ellen would say!

Nonprofits need to begin to ask themselves questions about transparency to guide their work. These questions include:

1. Will sharing this information advance our mission of benefiting our community?

2. How can others build on our content and make it better?

3. Will revealing this information improve morale and make staff feel better informed and able to make decisions on their own?

4. Will sharing this information better connect us to our network and help us to build relationships that we need to be successful?

Nonprofits spend too much time worrying about things that could go wrong or how they might be able to create a new revenue stream with their content. Both conversations are time spent putting up big walls between organizations and their communities. Take the walls down, make transparency the default setting.


About the author

Allison Fine

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