Rob Reich recently wrote a very compelling essay about foundations and accountability. Not subject to market forces, or any strict transparency regulation, “foundations are often black boxes, stewarding and distributing private assets for public purposes, as defined by the donor.” Should we, he asks, worry? It may be not only our ethical responsibility but also our business to do so, given that subsidies for foundations “cost the U.S. Treasury an estimated $53.7 billion” in 2011.
In the end he argues that the relative lack of accountability actually undergirds the positive role foundations can play — allowing them to experiment with public initiatives and interventions that are too risky or lack political payoff for governments, or operate on too long of a time horizon to do so.
It’s an important argument but one aspect he does not dwell on is the relative lack of accountability foundations may have in the communities in which they work. This is particularly true for foundations working in marginal (poor, rural or urban) communities internationally. Serious evaluation work can address this accountability gap, but must ask the right questions. Not simply, are we providing a good “social return” for our donors’ investments, but what are both the benefits and the costs of our grant-making for the communities in which we work?
What stands in the way of doing this? Many reasons are cited — cost, lack of initiative, lack of capacity, perhaps even hubris. But none of these would be insurmountable in the face of changing norms around evaluation practice. For now, the most important reason may simply be that too many foundations aren’t in the habit of it. Liam Black provides a slightly more scathing take in a posting which originally directed me to Reich’s essay.