Editor's Note: We are very pleased to share a year-long series of blog posts from leadership at The Russell Family Foundation (TRFF)  describing the deep and ongoing work they are engaged in together to better understand the levels and meaning of transparency in their work. Our thanks to the Fund for Shared Insights for supporting NCFP's work in the area of transparency and family philanthropy. If you would like to hear more on this topic please join Richard for two sessions at NCFP’s Forum


Transparency has become a “buzz” word in modern culture, but have you ever noticed how the notion of transparency tends to be transactional? Have you ever found yourself keeping tabs on how much information you share with others? How much they share with you and how freely it is volunteered?

If so, that makes perfect sense: it’s a big part of how we protect ourselves. Most of us link transparency with disclosure as part of an exchange that builds understanding and ultimately trust. But what happens when we separate these standards? Can transparency be redeployed to help build better relationships?

We think it can.

Transparency is a powerful force when used appropriately. The trick is deciding what is appropriateacross a wide range of contacts and interactions. In our prior blog posts, we shared our experience cultivating transparency through the lens of finding balance and sharing knowledge. This time around, we want to concentrate on ways to harness transparency for mutual benefit.

The main benefit, of course, is trust – the foundation of any relationship. Over time, transparency builds trust because it’s how we reveal ourselves and our intentions. We expose certain facts about ourselves, and signal our willingness to be exposed and evaluated. We listen and are listened to.

As an example, taking a principled stand or owning up to mistakes are powerful ways to show transparency. It takes guts to open up this way; but such sincerity can pave the way for new and deeper relationships. It also unlocks the benefits of those relationships, such as networking, advocacy, collaborating, inventing, and co-funding to name a few. That said, research and experience both demonstrate that transparency is not a one-size-fits-all solution. There are consequences to excessive (or imposed) transparency, including lost efficiencies, stymied innovation, and the inability to maintain appropriate confidentiality where necessary. (See The Opacity of Private Philathropy, by Dr. Robert Reid, for a further exploration of this perspective.)

For example, consider a family foundation that is willing to experiment with new programs that traditional governmental funding agencies would see as too controversial or risky. They are better positioned to support innovation given that they are less subject to public scrutiny. However, in cases like this, too much transparency could derail promising projects, resulting in additional expense to get the work back on track; or worse, a forfeiture of investment. This comes back to the transactional aspect.

As many familiar with the expediency of business will attest, opaque practices that impede transparency in the short term, can actually contribute to better outcomes. The private sector understands this and it’s part of the competitive market. Family foundations should take heed too.

The Triple Filter Test

Typically, family foundations rely on their organizational values and managerial skills to determine how much transparency is appropriate or necessary in a relationship. These help us determine when to be proactively or reactively transparent – and to what degree. In addition, tools like our three-dimensional chessboard can help determine where boundaries exist when connecting with various members of the community and, hopefully, facilitate communications across them. 

However, there is another time-honored method that we find useful. It is a variant of the Triple Filter Test attributed to the Greek philosopher, Socrates. According to legend, Socrates devised three filters to screen worthwhile information from rumors. The first filter was truth. Socrates would ask if the news someone wanted to share was absolutely true. The second filter was goodness. Socrates wanted to know if the information was positive or not. The third filter was usefulness. Socrates needed to know if the information would be practical or necessary. If the filters revealed that information was neither true, nor good, nor useful, then Socrates would ask: why share it at all?

He had a point.

In the same spirit, when we engage on a project, we like to ask ourselves a few filtering questions to help us gauge if we need to be more or less transparent. For instance:

  • What is the real objective?
  •  How many stakeholders are involved? What are their roles and points of view
  • What kind of information would be most relevant and/or useful?
  • What additional details would be informative, supportive or encouraging?
  • How much feedback is desired/constructive?

Considerations like these help us find the sweet spot of transparency and avoid “over-sharing.” This process helps us solicit information from our associates, because transparency tends to be reciprocal in nature. Most of all, it helps us perform better. Better communication always leads to better results.

This became abundantly clear when we initiated a strategic refinement process of the Foundations Environmental Program. We had been successful supporting sustainability projects in the Puget Sound region for nearly a decade, but we weren’t satisfied that things were changing fast enough. Our staff and board felt that new ideas were needed.

In 2009, we initiated a comprehensive redesign effort. During the process, some of our focus areas, like Green Business, were phased out. Others were born, like the Puyallup Watershed Initiative.

And still other focus areas, such as Environmental Education and Puget Sound recovery, were narrowed in scope to maximize community impact. All of these changes caused major adjustments in our grantmaking.

From the outset, we knew that the changes we sought would affect members of our network in different ways: not everyone would be happy with the outcomes. Some partners would eventually receive exit grants, and others would have to adjust their funding requests to satisfy updated guidelines. Challenging conversations lay ahead. Therefore, our staff undertook a highly transparent process to demonstrate our commitment to a smooth transition.

As various milestones were reached, we kept grantees and grant applicants informed. As potential new directions revealed themselves, we consulted our partners for their expertise and ideas. Ultimately, when changes were announced, they came with a thorough rationale. On top of that, we shared a detailed summary of all that we had heard and learned during dozens of interviews among grantees, community stakeholders and thought leaders across the Sound. Furthermore, before any changes went public, grantees received personal phone calls or had one-on-one meetings with staff to review the decisions and discuss their impact.

Its tough for nonprofits to hear that they are no longer a fitwith a funders priorities. But it helps when they feel consulted in defining the change process. In the end, even grantees who were no longer eligible for funding expressed their sincere appreciation for being included in the conversation and treated with respect.

Transparency is a two-way street, and not everyone travels at the same speed. In our experience, family foundations can model suitably transparent behavior by delivering what their stakeholders expect – clarity, honesty, and candor. In return, they will be rewarded with deeper, more productive and long-lasting relationships. 

References:
The Opacity of Private Philanthropy, Dr. Robert Reid, Oklahoma State University, 2015