The Transparency Revolution

Picking up where I left off yesterday, I want to sketch out some of the ways the Transparency Revolution is changing fundamental dynamics in the public, private, and nonprofit sectors.

Public Sector

Recovery.org, a website created by the Seattle-based information aggregator Onvia, is holding the federal government’s feet to the fire. “The President and the federal government are asking the American people to trust them with an unprecedented level of funding to address the economic emergency. . . . This site will help you track these funds to see how and where recovery dollars are spent and allow you to vote if a project is worthwhile or wasteful.” The user-friendly site is putting constructive pressure on the federal government’s own initiative to track recovery dollars. A similar, beneficial competition can be seen in efforts by Washington Watch, Open Secrets, and the federal Office of Management and Budget to catalog congressional earmarks, the pet projects of individual members of Congress.
 

New tools that build on the Recovery.org model will give taxpayers far greater visibility into the workings of government—with and without the active cooperation of government. Dozens of great examples can be found on a promotional website Adobe launched to highlight its role in helping to open government up.
 

“Eventually we could see more clearly not just what the government is doing, but also how well what it’s doing is actually working,” Charles Homans wrote in a recent issue of The Washington Monthly. “For instance, [we could track] education reforms through a matrix of crime and employment data to gauge the rippling effects of policy decisions in something like real time, and [adjust] them accordingly.

Private Sector

Consumers will gain more and more information to help them make more-educated decisions about what to buy and from whom. In a recent article titled “Transparency Triumph,” the consumer-trends firm trendwatching.com concludes, “Think ‘transparency’ is an established, maturing theme? You ain’t seen nothing yet.”
 

Amazon, the pioneer of online customer reviews, has advanced and profited from this trend for many years. But now more traditional businesses are embracing it as well. This past summer, Walmart announced that it will work with independent researchers at Arizona State and the University of Arkansas to create a “Worldwide Sustainable Product Index,” a one-stop shop for information on how Walmart’s products rate in four key areas of sustainability: energy and climate, material efficiency, natural resources, and people and community. “Increasingly [customers] want . . . to know that the materials in the product are safe, that it was made well and that it was produced in a responsible way,” according to Walmart CEO Mike Duke. “We do not see this as a trend that will fade.” Although the index has not yet been unveiled, here is an admirably transparent and detailed description of Walmart’s methodology and goals.

Nonprofit Sector

In light of these developments, it would be hard to argue that foundations and charities will remain a world apart. Today, according to GuideStar’s first annual report on nonprofit transparency, only a small fraction of the 1,800 nonprofits surveyed post the basic information they are required to make available for public inspection on their websites. But as social media and open-source models, such as Great Nonprofits, Philanthropedia, and many other new sites, start to generate information about these nonprofits, they will be forced to share more of what they do and how well they do it.

Foundations will come under pressure to open the kimono as well. We’re starting to see anonymous blogs that watch and scrutinize every development at large foundations, such as the Gates Keepers blog. It is only a matter of time before we see sites that make it easy for grantees, prospective grantees, beneficiaries, and community stakeholders to rate foundations, just as entrepreneurs now rate venture capitalists on the site The Funded. And we will see sites that provide a wealth of anonymous insights from foundation personnel, just as for-profit employees are doing on the website Glass Door.
 

Of course, we won’t like all the feedback. Some of it will be vituperative, ill-informed, or downright silly. But on the whole, the process of opening our windows and doors will make us and our sector far more effective. The truth is, these new online tools provide grantmakers and grantseekers alike a remarkable way to collect the information they need—if they’re willing to listen and then adapt and respond to what they hear.
 

Comments

transparency

It is great to see a focus on transparency, and the many ways it is beginning to transform the world of philanthropy. Thanks for putting a spotlight on this topic, and giving some great examples of where it is unfolding in real time. The concluding observation about funders not liking all the feedback, but the overall value by making the sector more effective, prompts an additional idea. It is that we should begin to see effectiveness as the reason for transparency, as well as the consequence of it. Effectiveness and transparency can be a virtuous circle. Without transparency, the ability to leverage and network and have greater impact is constrained. And as the philanthropy awareness project has documented (www.philanthropyawareness.org) the public overwhelmingly thinks foundations should be more open about activities, lessons, and mistakes.