The media craze surrounding Susan G. Komen for the Cure’s funding cut for Planned Parenthood serves as a strong reminder to the global donor community: it’s always better to be overly transparent. Whether the hype is a mischaracterization of accountability measures to safeguard donor dollars or a response to right-wing political pressure is irrelevant for the larger grantmaking community. The important reminder is that when supporting social causes, and especially when using public funds, donors must be overly transparent.
Susan G. Komen for the Cure did many things right. With public support and revenue amounting to over $400 million last year and $93 million in community grants, the non-profit makes its annual reports and audited financial statements publicly available online. However, the organization failed to proactively and transparently communicate to the public how their new grantmaking guidelines were about to strike a nerve in one of the most controversial social debates in the United States – public financing of abortion. And now the organization finds itself in the middle of a controversy and with a barrage of negative media attention.
This incident serves as a stern warning for foundations and companies with philanthropic arms, especially those that engage in developing countries: it’s time to be transparent and accountable about what you do and honest about your limitations.
Here’s why companies and foundation supporting projects in developing countries are particularly vulnerable. At the Center for Universal Education, we recently examined several organizations funding education in poor countries and found scores of annual reports with claims of large-scale social impact as well as photographs of children in schools thanks to these efforts. However, we found little information about how much money was going where. Of the 40 foundations we looked at, only half disclosed their total spending on education despite making it a priority in their social investment portfolio. And many of these disclosures were vague at best.
Companies are even less transparent. A recent survey of U.S. companies supporting education in developing countries found that over 60 percent do so for the positive brand identification and over 80 percent see it as a way to improve community relations. We also found that only one-quarter of the largest U.S. companies who make claims about helping children through their educational investments made public the amount they contributed. Even fewer shared where the money went.
In the age of fast-paced social media, companies and foundations must err on the side of being overly transparent about what they are doing and why. Global development also has controversial topics ranging from privatization of schools to reproductive health. To circumvent debacles and embarrassment from what may be very well-intentioned engagement in poverty alleviation, donors should aim to be publicly accountable and earn trust of the public through such transparency. Let this examples serve as a lesson for the global development philanthropy community.