Transparency for Impact, Not Just Compliance

Greater transparency is coming to the social sector—and that’s a good thing. But I’m concerned with the way “transparency” is being touted in our sector as well as with the public and in the public sector.

Recently, I read a wonderful blog post on The Economist’s website that hit the nail on the head. The post focused on the way transparency is being pushed in the corporate sector, but the authors’ insights apply equally well in a nonprofit context:

Our mothers told us that lying is a bad thing; what we now call transparency is merely the embodiment of that advice. But just sharing ever more information will not save society from business malpractice and corporate psychopaths…. Customers and governments are not interested in more information, more numbers, more reports or more sophisticated press briefings. What civil society is seeking is trustworthy, relevant and understandable information about how a company runs its business and the features of the products and services it offers to the market.

I couldn’t agree more. Transparency is about our value set and how we act on it—not about checking a set of boxes or posting a set of documents on a website. It is far more important for an organization to be open and transparent in the way it functions and manages its internal actions—how it plans, executes, makes decisions, engages, and assesses—than for the organization to do most of the things that typically fall under the rubric of “transparency.” True transparency is culturally ingrained in the DNA of the organization. It encourages constructive questioning and honest probing focused on mission and guided by core beliefs.

Skin-Deep Transparency
I have had some familiarity over the years with several nonprofit institutions that have made great strides in transparency—at least on the surface. They’ve done a thorough job of reporting on results and complying with the letter of the law on public disclosures. Yet, in spite of these trappings of transparency, I’ve found myself at times questioning the substance or “realness” of their transparency.

Let me share some real-life examples and ask you to recall times you may have seen similar versions of these “innocent” scenarios:

• A board member and the head of the organization clash hard over differences of opinion.  The board member resigns in frustration. The rest of the board and management team hear only that the board member’s resignation is due to an increasing workload. 
• At every board meeting, the founder of the organization tells an evocative story about how the organization’s services are helping those it serves. When the board asks for results on the organization’s overall and collective impact, the founder can’t present any substantive information, beyond individual anecdotes, to illustrate that the organization is making a difference for those it serves. 
• An organization reports on the number of youth its programs “touch” each year, giving the impression it serves 5,000 youth each year. The organization does not have the ability to say which youth actually engaged in which programs, for how long, and to what benefit. When the numbers are probed, it turns out that the organization serves fewer than 1,000 youth in a meaningful way.

We Can Handle the Truth
One of the biggest challenges that I see in the social sector is the fear of confronting the unvarnished truth. How many times have boards of nonprofits allowed the executive director to “run the place” as if the ED is the sole proprietor and the board is along for the ride? How often would just one question that probed a little deeper, pressed a little harder, or called out opaque answers stimulate the organization to confront the real issues? As board members, executives, and staff, we too often want to keep everything positive and moving forward. We don’t want to hurt people’s feelings. We’re afraid to “rock the boat.”

At Venture Philanthropy Partners, we made plenty of mistakes as we navigated our way into the social sector. But we were not (and still aren’t) afraid to acknowledge our mistakes or recognize areas where we needed to improve. Carol Thompson Cole, VPP’s President and CEO, has commissioned two effectiveness assessments on VPP’s work. While the findings were affirming in aggregate, there was also tough feedback that was hard to hear because it told us where we didn’t do so well and needed to be better. The truth hurts, as the saying goes. But don’t we have to dig for the truth and ferret out the facts as to what is (and, equally important, is not) working so we know how to improve?

Transparency is inevitable. New tools and often well-deserved suspicion of our key societal institutions make that so. But we must not allow skin-deep, compliance-driven transparency to become an acceptable substitute for values-driven, culturally ingrained efforts. We must use our society’s focus on transparency to encourage a broader ethic that will build and reward the kind of organizational introspection and openness that enables greater impact across business, government, and the social sectors.

Note: This blog is excerpted from a longer article on this topic. If you are interested in further insights, you can read the full article here.

Read more stories by Mario Morino.