I recently have seen charities willing to disclose outcomes that are less than flattering, and I applaud them. I hope it’s the beginning of a trend. I wonder if it grows out of the pressure from regulators for mandatory transparency and increased accountability from the sector.
My awareness was first raised by Stephanie Strom’s coverage of FailureFaire, sponsored by The World Bank. Charity:water’s video “Live Drill: It Doesn’t Always Work,” about a failed project in Central African Republic came to me shortly after, as did the Case Foundation blog post “The Painful Acknowledgement of Coming Up Short.”
Ms. Strom and I discussed openness about failure on the August 27th broadcast of Tony Martignetti Nonprofit Radio. As she explained, it’s been almost unheard of among nonprofits, probably because they fear a donor backlash. Presumably, the conventional wisdom goes, no donor (or donor nation) wants their name and money associated with an unsuccessful outcome. But no less than The World Bank and Case have gone very public. The charity:water video was a celebration of its fourth anniversary.
Not all disclosures are willing and voluntary. The Seattle Foundation website now discloses its data and research on almost 700 local charities, in a user-friendly format. It’s open to any visitor to their Giving Center without registration.
I see simple honesty and I admire it. I hope we see more of it. I have faith in donors and I believe the vast majority will accept a straightforward outcomes assessment that is accompanied by a sensible plan for what to do next.
Charity:water has long been recognized for its culture of accountability, but its video nearly boasts about the trying failure–as CEO Harrison assures donors the quest for clean water in that village will continue. As the title hints, Jean Case’s post is a refreshingly heartfelt account of how, “Reality doesn’t always play out like the business plan calls for.”
I think a lot about regulatory oversight and there’s no question charities face a considerable amount brought on by federal and state authorities. We have the intense IRS Form 990; the Red Flags Rule from the Federal Trade Commission; state privacy protection laws; state charitable gift annuity regulations; and state Charity Registration requirements for solicitations, to name but a few.
Meanwhile, watchdog groups like Charity Navigator and Better Business Bureau Wise Giving Alliance are revamping their analyses and a few, including GuideStar, may standardize their reporting format, as reported by The Chronicle of Philanthropy. Many nonprofits adjust practices to achieve high ratings or “approved” status.
Might our culture of involuntary disclosure and forced accountability be stimulating charities to voluntarily trumpet shortcomings?
I hope my college and law school professors are paying attention. 
