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Monday, April 24, 2017

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PHILANTHROPY 2173 - Governance in the 21st Century
Lucy Bernholz

April, 2012

"Remember the public pressure on the Komen Foundation that led the organization to change a board decision? I said back then this was a harbinger of a new expression for public accountability that foundations need to understand. It is an early edge of a new kind of governance capacity for which most foundations (and most nonprofits) are not prepared. If you think it's about a social media strategy, you're wrong. 

The Gates Foundation is experiencing this right now. The Foundation provided grant funds to the American Legislative Exchange Council (ALEC). ALEC works on many policy issues. In the wake of the killing of Trayvon Martin ALEC's support for "stand your ground" laws has drawn outrage and calls for boycotts from many directions, including from a group called the The Progressive Change Campaign Committee (PCCC). The Gates Foundation has said it will continue to meet its current grant obligations to ALEC (which run over another 17 months) but won't make further grants

Put aside what you think of Komen, Gates, ALEC, or PCCC for a moment. This is not about any of these organizations per se. It is about public pressure, organized and otherwise, on nonprofits and foundations, about their decision making. It is about making decisions that will be challenged, and striking the right balance between legitimate board governance and respecting people's right to agree or disagree with you. 

The kind of organizing that led Komen to change its decision and that is now calling for change from Gates to change is easier than ever. It can be turned on in an instant and reach unprecedented scale at unprecedented pace. Boards of directors of nonprofits and foundations need to know this, they need to expect it, and they need to engage with both critics and supporters. They need, in other words, to govern in a new landscape in which each and every decision they make may be the one that transforms supporters into critics (see Komen) or turns educational policy grants into part of national outrage about gun laws and racial justice (see ALEC). 

Is this about a social media policy? I don't think so. Is it about governance, engagement, conversation, accountability, structural consistency, clarity of mission, and a willingness to remain civil while participating in difficult areas of work riven with disagreement? Yes. Nonprofits are part of civil society which thrives only when it is filled with multiple points of view and diverse approaches to problem solving. The "public" will not agree with every decision a foundation or nonprofit makes and they have a right to express that disagreement. Foundations and nonprofits have a right (and a responsibility) to make their decisions and expect a public response to them. 

What we need civil society organizations to do is discuss, civilly, their points of view, their decisions, and their goals. And to structure themselves to be able to do so. This requires thinking about the constitution and skills of their staffs, boards, and advisors, the way they provide access to their key decision makers, and the ways they engage with critics and supporters in the real context in which those things will happen, not in some nostalgic early 20th century institutionally-bound model. 

Business has already learned that there is simply too much information for one organization to hold it all. As Bill Joy has said, "the smartest people are always going to work for someone else." The MIT Media Lab has an interesting chart to show the relationship between information and organizations.The point of these ideas is to encourage businesses to build networks that will be better able to manage information and generate new ideas. But the power of networks and permeable organizations applies not just to generating new ideas. In the case of nonprofits and foundations, generating ideas with the public, communicating ideas and theories and strategies with the public, and civilly debating with the public - especially the public that disagrees with you - is going to be a critical attribute in the future. See this article (pp 14- 15) from Darin McKeever of Gates Foundation on "embracing the scrutiny of the crowds." 

This may involve new kinds of constituent representation on boards. It could involve an ongoing advisory board role or meaningful, regular discussion of issues with stakeholders. There are many forms and tactics that institutions can try to be more conversational.  But first, they need to recognize that the days of "broadcast" and "isolation" are over and structure themselves accordingly. What is at stake is not individual grant decisions, but public trust in and the legitimacy of these organizations as a whole."

Read more interesting thoughts by Lucy Bernholz at


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