What we mean by transparency in the case of institutes and foundations

One of the main peculiarities of the social investment field is the ambiguity of its own nature – the foundations and institutes are private law organizations, but with goals, outcomes and impacts that ought to serve the public interest, the common good. Although many of these organizations have tax benefits and immunities, thus making use of public resources, this fact alone does not turn them into de facto public institutions, which would have required similar treatment to that applicable to the public sector as far as transparency is concerned. On the contrary, many organizations in this field claim their right to remain private and “opaque”.

The question, however, is that the nature of the work of foundations and institutes requires dialogue with a wide range of social actors. The urgency for more transparency is a consequence of the demand for legitimacy and the relationships established with the society, and not from legal requirements. It is a dynamic that concerns the society as a whole and poses the challenge of defining communication strategies that are able to make information more accessible and attractive.

In this sense, transparency is seen as the ability of these organizations to publish and provide important information to its main interlocutors (supported institutions, beneficiary groups of their actions, their peers, partners, suppliers, boards and the State itself) and the general public (European Foundation Centre, 2011). For Transparência Internacional (TI), transparency is a ‘characteristic of governments, companies, organizations and individuals of being open in the clear disclosure of information rules, plans, processes and actions’. The ability of an organization to be transparent, therefore, must go beyond the publication of annual reports with information about projects and financial statements, and is more generally related to the attitude and responsibility put in practice in their daily management, before its internal and external audiences. It means cultivating a culture of transparency, which recognizes the other as an important interlocutor for the self-improvement of the work of the organizations.

This view of transparency is close to the practice of accountability, as points out. Samuel Paul (1992)

Transparency cannot be seen as an end in itself, but as part of a larger system of accountability (Angelico, 2012). Therefore, it implies a relational approach that suggests measures designed to foster opening, communication and accountability. Thus, it is a matter of information sharing, but in order to promote dialogue and relationship-building, “[a] foundation that operates transparently is one that shares what it does, how it does it, and the difference that it makes in a frank, easily accessible, and timely way. It is also a means to greater accountability, and to building relationships between a foundation and other key groups such as grantees, applicants, partners, and other funders.”

Finally, at the same time, greater transparency through communication is able to benefi those who are the object of social investment and the investors themselves as well as their relations with society as a whole. This is so because active transparency actions can:

• Strengthen the credibility of social investors;
• Increase public confidence in these organizations;
• Improve relations with trustees, partners, employees, communities, governments and publics who benefit from social investment;
• Facilitate engagement and collaboration to address collective problems;
• Improve organizations’ own performance;
• Provide the community with knowledge, shared learning and best practices among social investors.

What we have done in relation to transparency

At GIFE, the concern of transparency has always been present, and is one of the strategic themes that guide our action today. In 2010, when we built a vision for the next ten years (Visão 2020), three key aspects were identified: social relevance and legitimacy, scope, and diversity of investors. Transparency was considered then as one of the pillars of legitimacy because transparency practices are intrinsically linked to building relationships with society, to increasing visibility, to presenting results and to fostering dialogue. This aims to ensure the relevance of the sector among organizations and the society as a whole.

Two years later, we published the Charter of Principles for Transparency and Accountability, containing guidelines for action in this direction, which included a list of basic and advanced indicators to be monitored by the organizations themselves to identify their level of transparency.

In addition, publications on the subject were produced or translated, including the issue from the Grantcraft series, by the Foundation Center (USA), which is one of the most accessed materials in the GIFE’s knowledge hub, the Sinapse. The translation of this material was accompanied by a series of communication initiatives and a debate among the GIFE members and key stakeholders.

We were also involved in the launch of the NGO Sector Supplement from the G4 Report by the Global Reporting Initiative – an initiative that has gained ground among companies seeking a full account of their actions regarding sustainability – also an instrument for the civil society organizations to evaluate their structure and actions.

In March 2015, we conducted an online discussion, exploring topics such as: (i) how private institutions with a public interest mandate carry on seeing themselves, and are seen, as exempt from accountability when compared to public organizations; (Ii) how transparency is widespread when it comes to sharing successes and not so popular when it comes to expose failures of organizations; and (iii) how necessary it is to extend and improve the concept of transparency beyond the publication of financial reports.

From the point of view of the research, conducting the GIFE Census every two years has also been a central activity for the production of knowledge about the field, and how the institutions and foundations have been communicating with society by disseminating their data. In addition to this information, the 2014 GIFE Census also included a separate article on the relationship between transparency and communication in private social investment.

Therefore, our actions in this field seek to reduce the gap between theory and practice by disseminating the value of transparency among institutes and foundations that work with private social investment.