Child questions about core aspects of philanthropy
For many months I’ve been running this little experiment:
Whenever I am approached by a charity when walking in the streets, I grab their flyer and later go to my computer to run this test: how many clicks would I have to spend until I get to their transparency page, and when I get there, how transparent is it?
In my worldview about charity/philanthropy I always thought that transparency was the most crucial thing to focus on since these organizations are heavily dependent on public trust, so I expected to find that only a tiny minority would not met basic standards of transparency.
But when I look around, I feel like I came from another planet when I am simply not able to understand the basic reality of what I am seeing. To this date I haven’t found any organization that meets a good transparency requirement. Unfortunately, most of what I find doesn’t meet even a basic transparency requirements.
OK, much of this confusion could be explained by the fact that I am just a newcomer to this philanthropic universe and I still don’t understand how basic things work here.
But I am not so sure.
Shouldn’t transparency be friendly and easy to access for all lay people? After all, when a charity asks for donations I think they expect it coming from the general public, which includes people who are strange to this organization and also not savvy about philanthropy.
On performing those experiments above I open their websites and in most cases the “transparency page” is nowhere to be found. They just claim that your donations are being spent in a “good way” and lots of them claiming “we are 100% transparent”.
Correct me if I am wrong but for me it seems like the whole philanthropic industry is almost entirely running on a faith based trust. Why?
Why faith based trust if we could easily achieve evidence based trust?
OK, let me breathe for a moment....
I am not clueless here, people. I know I am touching a delicate subject and also know that as a newcomer we would better keep our mouth shut until we understand the terrain, and I would do just that in case we were talking about peripheral problems...
But, I believe that trust is as crucial to philanthropy as light is crucial to daylight and I am having a difficulty time navigating this new terrain when I am not able to understand a core aspect of the industry and it is how the “opaque transparency” is the standard “transparency” and how everyone seems to be fine with that.
I am holding this post for months… I am not the kind of person who likes controversies when entering a new community: this may only put me in isolation when what I want is the opposite.
But can’t hold it anymore… please say I am wrong and I am not seeing the obvious, that most of charities/NGOs are indeed transparent but I was unable to find the right page in their website, even though this kind of page should be easy to find by a monkey.
There is a common argument:
“But why demand so much transparency? If some organization is indeed doing their job honestly, showing or not their detailed finances wouldn’t make their good acts less good”.
I have seen this argument more than a few times on the Internet and I hope that not a lot of people use this rationale to donate or else I would lose my hope in humanity. This argument is so naive and problematic that I don’t even know where to start, so many things wrong with it.
First: if an organization is not publishing detailed financial reports, we should even assume honesty in the first place, so the thought ”… if they are honest ….” is bogus, because we can’t know that.
Moreover, it requires a lot of ignorance about basic human psychology to believe that an organization would behave in the same way regardless of them being transparent or opaque. Lack of transparency fundamentally change human behavior by simply giving enough room for all kinds of questionable stuff that even a reasonable person/organization is capable of doing and are very likely to be doing due to all kinds of pressure, rationalizations and the basic human tendency to find the easiest path.
Transparency brings the honesty inside people. Lack of transparency incentivizes and facilitates questionable “honesty” or no honesty at all. So no, we can’t say things like: “If they are honest anyway why demand transparency?”. Organizations fundamentally change their behavior under public scrutiny, and change for the better.
So, I am sorry to bring this not so positive subject here. There were still a lot to talk about, but I will finish it here with a question:
What are the truly transparent organizations?
Please cite them in the comments (I need hope).
Hi Cesar! You might be interested to check out the transparency page for the Against Malaria Foundation: https://www.againstmalaria.com/transparency.aspx
Hi Zachary,
Yes! I am aware that AMF is considered one of the best examples of transparency in the EA Community. I already glanced at it before but I will now take a closer look at their page. They definitely show a higher standard of transparency when compared to other organizations but I am still not sure they provide what can be called true transparency (one that could be independently verifiable and does not demand faith based trust).
But I may be wrong. I don’t have enough information to build strong conclusions yet… that is why I will spend some time reading their website and hopefully, if I have time, I will share my findings here.
Thanks.
You might be interested in the concept of “minimal trust investigations” (and other posts that mention it)
What are the specific things you’d want to see on a transparency page? I think transparency is important, and I try to maintain BERI’s transparency page, but I’m wondering if it meets your standards.
Hi Sawyer, I looked at your transparency page and I believe that it is somewhat satisfactory for the kind of people who are familiar with the nonprofit structure.
For a potential donor who is totally unfamiliar with the organization and also does not live in the US, they may find it difficult to navigate and understand.
For example:
People outside of US (and probably some people living in the US) may not be satisfied with IRS 990 filings as they may not know how they should interpret that information (myself included) and how much importance they should give to it (in the context of transparency).
There are other documents, for example one called “ByLaws”, which, again, for a non-US person (or US people who are not familiar with those docs) they can’t judge the importance of such document for the transparency of an organization.
Alright, all of this is not exactly a criticism, especially if your organization is only focused on the US audience for donations and contributions.
As to the annual reports I think it is a positive sign that they contain a lot of information. I would suggest though it would make for a more friendly transparent page if some key information was summarized in a neat table of contents shown at the top of the page like: salary of each team member, total donations received per month or year, how much spent (on what), etc., so that someone from outside could have some overall idea of what is going on before they dig deeper on those more technical and dense PDFs.
A note: it is probably there in the annual reports or 990 files, but I couldn’t easily find info about team members and directors salary. I think that is crucial information to be found buried inside PDFs. I know that is a minor thing but if you take a look at the transparency page of Buffer you will have a good illustration of what I am imagining.
I conclude by saying that your page is probably satisfactory for someone well versed in how nonprofit work, its financials, IRS files, etc (and also have a good 30 minutes to sit down and read). Not friendly for the lay people, I have to say.
But again, this would be irrelevant if the lay public is not your target audience or the main source of donations.