This post originally appeared on Philanthropy News Digest’s PhilanTopic blog. PND and PhilanTopic are services of Foundation Center. The original article can be found here>
A fundraising foundation has two world-famous founders, a global network of generous donors, and a track record of grantmaking success. One of the founders plans to run for higher office, and the foundation makes the decision to be highly transparent about its donor base to ensure that there can be no suspicion of undue influence on the potential candidate. End of story.
Steven Lawrence
Unless your founders happen to be Bill and Hillary Clinton.
Over the past several weeks, Foundation Center has been approached by numerous reporters asking — in some cases literally — “There’s smoke, right? What about a fire?” Our response has been an immediate “No,” followed by an explanation as to why the Bill, Hillary & Chelsea Clinton Foundation in fact represents a model of transparency when compared to other grantmaking public charities. (Unlike private foundations endowed by a single donor or donor family — think Ford Foundation — grantmaking public charities like the Clinton Foundation sustain their work by raising funds from a variety of donors.)
So, let’s start with why a fundraising organization might not want to share information on its donors — especially its largest donors. The answer: competition. While public benefit organizations are focused on serving the needs of their constituents, they need to raise money to do so and indirectly compete with one another for support. In this marketplace, an organization’s major donors and the amounts they’ve contributed may be considered akin to a “trade secret.”Does it have to be this way? Clearly, the Clinton Foundation believes that its work will not come to a halt because its donors have been voluntarily made public. And the high profile of some of these donors may well encourage their well-heeled peers to also consider supporting the foundation. Of course, organizations lacking former President Clinton as chief fundraiser may feel less confident about the impact of making this type of information public. But the Clinton Foundation should be commended for its donor transparency, particularly in a field in which anonymous giving is often the norm.
And this leads to another question: why do some donors choose anonymity? It’s important to consider in any discussion of disclosing donors that not every donor wants to be recognized for their generosity. Some donors may have personal or religious beliefs that announcing their gifts is a form of unseemly self-aggrandizement. Others may come from cultural contexts where announcing donations is considered distasteful. And some donors live in countries where any show of wealth, including their generosity to others, could increase the threat of kidnapping and harm for themselves and their families.
These valid concerns notwithstanding, the digital age is bringing ever more voluntary and involuntary transparency to all aspects of our lives. Public benefit organizations and their donors would be well served by considering how they can be models of transparency who take the lead in telling their own stories, rather than having them told by others. The Clinton Foundation may be on to something.
Steven Lawrence, director of research at Foundation Center.
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