It probably isn’t’ any surprise to you that I’m a big fan of accountability. I’ve often said that the most precious asset of the Community Foundation, even beyond our endowment, is our integrity and the trust we’ve earned from the donors, grantees, and the community we serve. If we lose that, we’ve lost everything.
I know that earning the trust of our constituents is increasingly difficult as public scrutiny has increased along with the number of public charities and the massive dollars being socially invested by our nation’s foundations and nonprofit organizations. Both supporters and critics alike want charitable dollars spent wisely for results and we often hear calls for nonprofits to be “more business-like”, or to measure the impact of our actions, and we are seeing indications of growing interest in legislative regulation. Paul Light had a great discussion of this in his book Pathways to Nonprofit Excellence.
Within the foundation, staff and board, have worked hard to hone our back-office business practices so that things like a 24-hour turnaround on gift receipts, accurate accounting on 500 individual funds, and timely grant processing all happen without the public being aware of the considerable work involved. But not all business practices work in a public charity; in fact I contend that running a for-profit company is easier than running a nonprofit, because the outcome of our work isn’t a widget with precise specifications and quality standards. Being business-like, mission focused and values driven means that sometimes the wisest decision doesn’t result from a cost benefit study.
We are trying to gauge the effect of our grantmaking and community involvement to help us better utilize our monetary and human resources to truly lead our community to a better future. But having spent the first one-half of my professional career in research and evaluation, I know too well the fallacy of relying on evaluation for “the definitive answer”. Evaluation is an important tool for learning what seems to work and what doesn’t and it is part of the business-mission-values equation. It is critical to know what your trying to accomplish and why you believe you can accomplish the desired results. It’s similarly critical to evaluate your actions and results, but the learnings are often less than crystal clear, especially in the difficult work of public charities.
I greatly prefer self-regulation over external regulation that derives is sanction from suspicion and punishment. We’ve seen only too clearly the unintended consequences of this form of external regulations with the implementation of the Pension Protection Act of 2008. That’s why I’ve advocated and worked for National Standards for Community Foundations since 2001 as a rigorous tool to promote quality and consistency among the 700+ Community Foundations in the United States. But National Standards mean nothing if the organization has no value for what they represent.
In the final analysis, I’m convinced that earning trust all about balance and dealing with the many shades of gray that color our day-to-day work in this field. It’s about being professional but not forgetting that we’re a publicly supported charity. It’s about doing your best to be accountable but doing so with honest transparency even if the picture is sometimes blurred. And it’s remembering that what we are trying to accomplish is sometimes illusive.
Warren Buffet described it well in 2003. “The nature of the problems that a foundation tackles is exactly the opposite of business. In business, you look for easy things, like very good businesses that don’t have very many problems and that almost run themselves. In the philanthropic world, you’re looking at the toughest problems that exist. The reason why they’re important problems is that they’ve resisted the intellect and money being thrown at them over the years and they haven’t been solved. You have to expect a lower batting average in tackling the problems of philanthropy than in tackling the problems of business.”
