Bradford K Smith, President of the Foundation Center, was in Australia in 2014 to talk about transparency in philanthropy and the Glasspockets project and the future of philanthropy.

He is back again, to launch a report developed in collaboration with Philanthropy Australia and the United States Studies Centre at the University of Sydney, examining what funding flows into Australia from foundations in the US.

One of the key goals of the Foundation Center is to understand who is funding what and where.  This is very helpful for philanthropists who wish to engage in an issue, and not need to re-invent the wheel, but to learn from others already working in the same areas.  The Foundation Center was established in 1956 after some foundations were accused of un-American activity in the McCarthy hearings.

The then President of the Carnegie foundation, John Gardner, saw that “opaqueness” led to vulnerability, and that transparency in the philanthropic sector with sound standards for reporting would be of benefit in strengthening the sector.  The Foundation Center endeavours to understand philanthropy through transactional activities – that is, what grants are distributed – by whom, to whom, and their size.

Which brings us to the report.  U.S. Foundation Funding for Australia looks at grants of at least $10,000 from 1000 US foundations which direct their money to Australia or elsewhere in relation to Australia or Australia/US relations from 2011 – 2013.  Seema Shah, Director of Knowledge Services at the Foundation Center gave the following summary: In that period, 71 foundations distributed $95.1 million (US) to 208 recipients, mostly in health with $29 million coming from the Bill and Melinda Gates Foundation.  Half of the grants were for economically disadvantaged populations (for example $1.3 million to indigenous programs) and one quarter of the grants not for a specific population or cohort (ie arts or environment) and12% of the grants went to organisations within the US who have an Australian focus or program.

The report outlines the top ten donors to Australia, key motivators for US donors to contribute in Australia (such as personal connections, corporate interests, regional interests or issue interests) and also notes that there is not yet much collaboration between US and Australian foundations.

The report also gives a state by state distribution spread – 25% of funding to Victoria, 23.8% to New South Wales, 23% to Queensland 5.3% to the Northern Territory and 3% or less to each of the other states and the ACT.

Stephen Heintz, President of the Rockefeller Brothers Foundation, whom I wrote about in my previous post, concluded the launch of the report with a strong argument for transparency in philanthropy.  Beyond general accountability, foundations receive the privilege of a tax benefit, so the public has a right to know what has happened to these funds.  Transparency is also useful for communication to grantees so that they can know who is funding in their areas, and transparency is good for philanthropists so that they can cooperate and collaborate with each other on common interest areas – it is helpful for them to know who their potential partners are.

Stephen noted that transparency is a journey, and donors, philanthropists and foundations can be transparent without being self-promoting, or immodest.  While there is some argument and push back in Australia, particularly from Private Ancillary Funds about the need to maintain privacy and anonymity, transparency can be helpful for grantees even to know when their applications will not be accepted.  Communicating what is funded and what is not funded can help reduce irrelevant requests and will enable grant seekers to not waste time on applications and proposals which will not be funded.

Transparency doesn’t have to be all at once, and it doesn’t have to be all or nothing.

Here are a few notes from the panel discussion and Q and A which followed the launch of the report.

Transparency adds to the “potential of philanthropy as an industry for good” – and enables the retention of knowledge held by individuals within organisations.

Most “causes” have no idea how much money is being contributed to them across the board – transparency can help with this.

Philanthropists want company, they don’t like to be alone on issues for too long – so transparency can help everyone see who is doing what.

Some of the larger foundations see transparency as a way of promoting their grantees and the work they are doing, rather than promotion of the foundation.

The journey from privacy to transparency needs to move at a pace that people are comfortable with.  It would be difficult for the regulator (the ACNC) to impose transparency requirements on foundations – information is currently held by the Australian Tax Office as a custodian for the community.  This last led to the idea of Philanthropy Australia acting as an honest broker of information (and for a representative of a PAF who wants privacy to agree that they might be comfortable sharing their granting information in an anonymous setting).

There are two immediate tangible outcomes of this report:

1. for Australian philanthropic organisations to identify potential funding partners
2. for grantseekers to find new sources of funding

The only downside to this report on US funding in Australia is Sarah Davies’ (CEO of Philanthropy Australia) comment: “The fact is we know more about the granting practices of US foundations and their Australian grant recipients than we do about Australian foundations.”

Let’s hope that work of this nature will stimulate the appetite for Australian donors, funders and foundations to embrace the idea of transparency and information sharing, for the benefit of the whole sector.

What do you think? Is our culture of giving so different to that of the US that we can’t stomach the idea of replicating this kind of data collection, or is there an opportunity for us to share more information?

I look forward to your comments.