July 17th, 2017
It has been a great pleasure, and very gratifying indeed, to see that a number of organizations in our field have recently embraced that ethics is a crucial underpinning to responsible grantmaking and philanthropy. Seminars I have conducted on ethics have been popular at many regional association and national conference gatherings for over a dozen years, and have been integral to our education initiatives for over 15. The question is not whether there is something to learn or embrace – that is clear, especially once it is presented. The real issue is why our field needs to be reminded that it matters.
1. Grantmaking behaviors:
Power matters. Yes, there has been a very welcome surge in developing effective and responsible relationships between funders and grantees [sometimes called partners or investments]. The very need to develop good practices, levels of shared honesty and transparency, and respectful interaction are indicators of how hard it is.
We funders have the money. Organizations want and need some of it. That very fact conveys the inherent imbalance. When one has power, it is all too easy to think we are being open, inclusive, accepting, and making it safe. But ask your grantees? [Or better yet, have someone else like CEP or NCRP or firms like ours do so]. Our words as funders may convey openness but our affect often shuts folks down.
Thus, the reason for ethics based practices for dealing with grantees. Matters such as conscious use of self, not penalizing failure, sharing processes openly, paying grantees on the promised schedule, asking for proportionally appropriate information and reporting, and not surprising grantees with new expectations or deliverables are just some of the ground rules for ethical best practices.
The ethical principles underlying this most basic of grantmaking practices is to be aware of the imbalance of power, be straightforward in your dealings, and responsible in your expectations. It is the basis on which honest information will flow to us in ways that allow us to achieve what we wish through our grants and contracts.
2. Internal practices
Abuses of foundation and philanthropic dollars and self-dealing indulgences have dropped significantly over the years. Thank goodness. But that doesn’t mean that it no longer happens. Some people still assume that if their name is on the door, the money is theirs to do with as they wish. Most of us know that it isn’t ours any longer. Oh, we can control how we invest it, where to give grants, who works there, and all sorts of other things. But once we have written that check to a DAF or to a Foundation or irrevocable trust, it isn’t ours. And there are rules and laws that govern all of this. Many funders, even long-term funders, are often surprised by what they didn’t know. That isn’t ethics – that is simply following the rules.
However, upholding the law is less of our issue than upholding its purposes and the ethics behind it. Just because it is legal to hire one’s attorney with lifetime tenure on a foundation board doesn’t make it ethical or good practice. Just because one can employ anyone wishes doesn’t mean it is always the wise or judicious choice. Just because it is legal to sit on the boards of favored grantees doesn’t mean it may not be a violation of conflict of interest best practices. Just because one can conduct a site visit whenever one wishes doesn’t mean that it isn’t an imposition and inappropriate disruption. The reason each of these examples represent an ethical matter is that they are all contextually dependent, and the why and when can make the difference about whether it is the right thing to do or not. Ethics challenges typically represent times when there are competing values that have to be weighed. Sometimes each of these situations is exactly right; other times, they may be absolutely wrong.
The reason it is so crucial for a foundation to go through the discipline of formal conflict of interest statements and practices, investment and spending policies, compensation and reimbursement systems, whistle blower protections is to protect it from itself. No written policy guarantees that everyone will behave ethically or legally. Someone committed to violating these parameters will certainly find ways to do so [and I assure readers that I can give real life examples. But written board endorsed policies make it much less likely that unethical and illegal behavior will occur, especially among those who might do so naively or inadvertently. And it is awfully difficult to insist on good governance from grantees if we aren’t modelling it.
3. Equity and Equitability
At the end of the day, we exist to make a difference. That is not a slogan, it is a mandate. Our good behaviors as discussed in #1 and #2 are important because they signal that we take our charge seriously. That charge is that we have made some part of the world better because of our resources. [Resources are usually money, but they are also influence, advice, participation, empowerment.]
If something is different, it is, by definition, a challenge to the status quo. That change may not necessarily be a challenge to values but it does mean that funders want something to have been changed because of his/her/their funding. Some funders want the change to be to living conditions, or health care, or access to education, or other basic life needs. It is a matter of building or restoring equity. One would like to think that those changes are desired by all and not a challenge to basic values, but, in many countries around the world, the pursuit of equity within a society have been perceived as a challenge to the government policies, systems, and those in power. Indeed, the pursuit of equity is often met with legal and extra-legal challenges. There are places where the third sector is outlawed or severely proscribed. Funders are severely tested when they are defined and perceived as an antagonistic presence rather than a force for good.
In the USA, inequity remains a persistent reality for too many and a national shame. Funders have devoted substantial resources to addressing and redressing that inequity with mixed results. However, in the past, on the whole, the attention to redressing inequity, devoting funds and resources to a more equitable society, has not been defined as at odds with national values. In fact, with a government all too reluctant to do what most other developed countries do, private philanthropy was encouraged to step in and do what our government wouldn’t. [That it was a naïve and impossible expectation was largely recognized by those in our field.] People were in need of housing, health, security, stability, education, food, climate… [name at least one] It was felt that together their needs would be taken care of. Private voluntary philanthropy along with public support would or could solve the problem.
Today, let it be said once again, and it has been said by many others as well, there is a deep mean-spiritedness in the public square. It is not simply about how we speak about one another, although that is shameful. It is not simply about the systematic transfer of wealth from the middle and poor to the rich, although history will surely judge us harshly. It is not simply about the enthusiasm of the ruling party and president to deny responsibility, any responsibility, for the well-being of the citizenry, although that is beneath contempt. Underlying all of this is a profound rejection of the rights and aspirations guaranteed by our Constitution and what it means to be the United States. How else to explain the unconscionable challenge to voters’ rights, the shocking attempts to limit the right of peaceful protest in many states, the overt attempts to intimidate the press, the attempted mockery of the role of law and the judicial system….?
Suddenly those in the philanthropy world are not simply put in the role of providing what government chooses not to, but rather to be a counter force to tendencies in the government to deny legitimacy to those very claims. The pursuit of equity has always been a challenge to the status quo; now the pursuit of equity can easily be understood to be a challenge to the very values that inform the governing party. Equity therefore cannot just be a program priority choice for funders who so choose; it is a mandate for the many who wish their resources to make a difference.
A slight caveat: there is great room for debate about what constitutes support for equity: Does it include the arts or not? Does it stop before the gates of richly endowed universities and museums? Is it wrong to support very local initiatives even if they are less efficient than another larger one? Should there be limits on funding advocacy? Does diversity on boards, committees, and panels constitute tokenism or breakthroughs?
For those of us on the philanthropy side, the commitment to equity and equitability is by no means simple. It requires both good behaviors and gutsy decisions. But complexity does not exempt us. Many, many of us believe that these are not normal times. If so, therefore, as the famous Talmudic dictum reminds us “…if not now, when?”