The Age of Transparency in Philanthropy
For foundations, being more open and visible doesn’t have to mean sacrificing humility.
By Deroy Peraza, Partner at Hyperakt
“We don’t need a brand; we’d rather stay behind the scenes.”
“The work we fund speaks for itself.”
When we work with foundations, we often hear comments like these. Some of these funders prefer to remain anonymous, investing quietly to achieve their goals and vision.
Illustration by Merit Myers
Many foundations choose anonymity not because they have something to hide. Sometimes, leaders are simply laser-focused on the work at hand, and it hasn’t seemed necessary to invest energy in clearly defining themselves to the public. Others have benefactors who are deeply humble, altruistic individuals who believe good work should be done quietly, without seeking recognition.
Whatever the reason, the path of anonymity is at odds with how the public expects institutions to show up today. The willingness to trust in their good intentions has been shaken by the global economic, health, climate, and political crises we’ve all endured over the last few decades. Today’s social impact landscape demands greater transparency from institutions to earn trust.
The Case for Transparency in Philanthropy
A study by the Council on Foundations and the Center for Public Interest Communications found that 86% of people don’t understand how foundations operate. For organizations working to create social change, that’s a lot of untapped potential.
When foundations embrace transparency—which the study defines as a commitment to telling nuanced stories about how foundations actually work, how decisions are made, and how the money is spent—it brings significant benefits to grantees, the field of philanthropy, and social impact at large.
Transparency makes it easier for nonprofits to access funding, insights, and influence. Unless a foundation has a rigid mandate to fund only specific organizations indefinitely, it would benefit grantees by clearly explaining what it funds and how funding decisions are made. This openness would increase opportunities for more diverse grantees and save time and effort for all involved.
Money is not the only resource foundations can offer. Funders can also share their influence to lend visibility to good work, and share valuable insights they see across the field. These contributions help grantees reach their full potential by raising their credibility and providing access to knowledge they might otherwise lack.
Being open can build understanding and goodwill. Nathan Washatka, writing in Philanthropy Daily, reminds us: “There is something to be said, particularly in a democracy, for setting a virtuous example. It’s good when upstanding individuals are publicly upstanding. It puts a healthy kind of pressure on other people to do the same.”
Transparency Ensures Continuity
Foundations are often heavily reliant on their founders or leaders. They hold crucial knowledge, make key decisions, and have valuable connections. Clear, transparent communication is what allows other staff members to take on greater responsibility, contribute to the organization’s work, and build on institutional knowledge. After all, social change is the work of many, not one.
As organizations evolve, and as the world changes, they will face new challenges. To meet these challenges, a shared understanding of who they are, what they stand for, how they operate, and how they show up in the world will better prepare them to adapt and thrive. Transparent communication helps attract the right people and enables them to work together effectively. It plays an essential role in keeping an organization’s mission alive, even as leadership changes.
The Council on Foundations agrees. Their report on the state of trust in philanthropy recommends that funders become more transparent about who they are and how they operate. Transparency reduces the distance between foundations and the people they aim to serve. It’s the key to earning public trust.
Why Branding Matters
Transparent communication can be made more powerful through branding. It is your DNA: what you stand for, how you speak, how you look, how you behave, how you explain what you do, and how you relate to others. If organizational strategy is the game plan, branding is the everyday reminder of your commitment to that plan.
Some foundations approach branding with trepidation and skepticism, mostly because it hasn’t previously been seen as a priority. But branding is not a frivolous distraction—it is a strategic exercise. Transparency and branding are not at odds with humility. In fact, they allow you to define and communicate your values and narrative rather than allowing others to define your brand for you. As Heather McGhee wrote in her book The Sum of Us, “Everything we believe comes from a story we’ve been told.” Time and time again, we’ve seen how our clients’ doubts dissipate as they start seeing how owning their own story through their brand can build alignment and trust within their teams and with their grantees.
Building a coherent brand will allow you to strike the balance that feels authentic to you and your people. When you have a well-defined brand, those who matter most will recognize you for who you truly are. There’s great courage in choosing not to be invisible.
Get in touch if you’d like to learn more about how your brand can help your foundation become more transparent.
