Improving Public Understanding of Foundations and Other Nonprofit Organizations
August 31, 2004 | Press Release

MacArthur has awarded five grants totaling $495,000 to groups working to build the public trust in the charitable and nonprofit sectors, enhance accountability and transparency of foundations and other nonprofit organizations, and help expand access to philanthropic resources.

It is important that foundations and nonprofit organizations meet the highest standards of professionalism, be accountable to the public, and easily understood by those who monitor their activities, said Jonathan F. Fanton, President of the Foundation. MacArthur is providing support for efforts to establish and help promote best practices for governance, transparency, and accountability at nonprofits and foundations across the country.

The Council on Foundations, one of the main sources of information and support to the philanthropic community, received a grant of $250,000 for its Building Strong and Ethical Foundations: Doing it Right initiative to strengthen foundations understanding of and adherence to high standards of governance. As a first step, the Council will rewrite its code of ethics to further strengthen and define the legal and ethical standards expected of its constituency, and it will set up an ad hoc Ethics Committee to help deal with those foundations that appear to be operating outside of legal or ethical standards. The Council will also host a series of workshops and launch a certification program for foundation executives to deepen understanding and sharpen skills related to legal and ethical practices, working with the media, and federal and state regulations of the charitable sector. Through the initiative, the Council will make efforts to develop stronger working relationships with federal and state regulators that have oversight responsibility for the charitable sector. This will include helping to educate regulatory officials about foundations and their practices and helping foundations better understand the duties and obligations of regulators.

The Donors Forum of Chicago received a grant of $100,000 in support of the Preserving the Public Trust Task Force, which was created to help maintain public confidence in Illinois-based foundations and nonprofit organizations. The Task Force is made up of members of Illinois-based foundations, nonprofit organizations, associations, and professional advisory services who will develop and help put into action a set of guiding principles and best practices for the nonprofit sector. The Task Force will consider issues such as board composition and board conflicts of interest, legal and regulatory compliance, the stewardship of resources, fundraising, and relationships with grantees, among others. Grant funds will be used to convene the Task Force and to help in the process of implementing the guidelines.

A grant of $75,000 was awarded to the National Committee for Responsive Philanthropy for general operations. The Committee is an independent nonprofit organization that promotes accountability in the philanthropic field and urges greater responsiveness by foundations to the issues and challenges facing the nonprofit sector. It conducts research, does advocacy work on behalf of the nonprofit sector, and provides technical assistance on issues related to public and private foundations, corporate grantmaking, individual giving, and fundraising in the workplace. The goal of the organization is to make philanthropic resources more accessible to a broader spectrum of communities and individuals.

The Center for Effective Philanthropy received a grant of $50,000 for research designed to help U.S. foundations improve their leadership skills, governance practices, and service to grantees. Grant funds will be used to gather information on foundation governance and effectiveness, for case studies of foundation performance and impact, and for outreach to foundations to inform them of the services provided by the Center. The ultimate goal of the Center is to advance the practice of philanthropy and to show the impact foundation giving has on U.S. society and on the problems that foundations address.

A grant of $20,000 was awarded to Philanthropic Research, Inc. to help New York State create an electronic reporting and information retrieval system for the nonprofit sector that can be replicated by other states. Currently, government oversight of the charitable sector is moving from a paper-based system to an electronic one, and New York Statewhich has the second largest registry of charities in the countrycan serve as a model project for developing an electronic system that is convenient for charities, easily accessible to the public, and an effective law enforcement tool for the government. Grant funds will be used for the planning and design of the system.

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