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Opaque, Dishonest, Impenetrable Philanthropy

by Ivan March

“Can we stop perpetuating the transparency weirdness?” asks Marlene Engelhorn, one of the young philanthropists championing the Resource Justice approach among German-speakers, trying to imbue philanthropy with radicality and a deep social justice narrative. “Transparency is about owning conflict and tensions”, she adds. 

Secrecy breeds secrecy and openness breeds openness, it’s up to us to choose what to propagate

This is the primary intention behind the eighth session in our Radical Philanthropy Calling series, to sit with the tensions around transparency in philanthropy and to see how the dated approach of opaque, murky philanthropy that birthed the conspiracies of the Rothschilds, or the shady reputation of the Clinton Foundation, needs to simply now remain as part of the philanthropic fossil record. The Guerrilla Foundation founder, Toni Schwarz, and Robin Oakley from UMI Fund (Urban Movement Innovation) join Engelhorn to answer the question that Krystian Seibert, Policy Adviser to Philanthropy Australia, asked a couple of years ago, ‘Why do we need to actually compel philanthropists to be more transparent? Shouldn’t they be doing so voluntarily?’. 

Essentially not being accountable to anyone, holding immense transformational power and espousing justice and egalitarian ideals, one could expect some walking of the walk. 

Yes, they should be more transparent voluntarily. Are they? Nope (at least the vast majority are not). Instead of being (overly) judgemental and pointing fingers we want to define the obstacles to transparency and spotlight some possible steps towards it.

Like bathroom windows, trusts are often opaque, to hide their statutory shittiness. 

Some of the questions we explored are generally pretty useful questions for any philanthropist to keep considering:

– why is transparency important?

– transparent financials, annual budgets/reports – how detailed is detailed enough?

– deeper financials – where does my wealth come from? What does my investment portfolio look like, where’s my money going?

– transparent communication & decision-making processes: who am i funding, why am i funding, where am i funding, who are my advisors?

– how to be transparent when working with radical activists or conflict zones?

– how do you navigate the line between transparency and privacy as a wealth owner? 

Transparency is a delicate affair, if mishandled or tackled too abruptly it can cause bubbles to burst.

From Fossilised Philanthropists to Frankness Frontrunners

Frankness. Noun. Being open and sincere in expression; straightforward. Not a trait Foundations and their creators are known for. A trait that deserves some radical reconsidering. Family trusts for instance, can be given a directive by the now-deceased wealth owner that the sole purpose of this vast pot of money is just to protect and grow it. “You are born into the trust. However it is impossible for you to use the wealth as you’d like because it needs to be in line with how it was set-out to be used in the beginning. It is prescriptive. So you both own and don’t own the wealth” says Engelhorn, drawing from personal experience and a trust she is currently trying to channel into social justice causes. The legal framework of such trusts stems from UK laws that are very nebulous and their opaqueness is what makes challenging them so laborious. Engelhorn adds analysis behind this prescriptive intent, “Transparency breaks down power patterns. If you increase transparency you break down the power lines.” Schwarz offers more psychological components to the situation, “There is immense stigma around giving money away. We need to remove this stigma. Giving away wealth, especially wealth that you haven’t created is sacrilegious in the wealth class”. The deceased grandfathers and great grandfathers are still clinging to power beyond their graves. One does not need carbon dating to discover that this way of doing things belongs in the Dark Ages.  

Portrait of a 20th century philanthropist

Schwarz continues, “people in the upper wealth echelons are very closed about their assets”, after recently giving half a million to the German Green party, he knows a thing or two about the flipside of donor-privacy. People may inundate you with requests and “there is always an emotional toll to turning someone down”, while there is also sometimes even a question of personal safety since some right wingers have made threatening public declarations. However, to improve the vibe within one’s family and shift away from “dynastic thinking” which Schwarz acknowledges is very much pervasive in the German plutocratic circles, you need to “show your family just how much this mission of giving means to you, this will help”. Engelhorn opens another branch of tension, “I have had people say they find it easier to come out as gay in western societies than as rich
”. With mounting wealth inequality alongside a mounting billionaire-class, extreme wealth is something one actively hides nowadays. 

Discretion, Caution and Reliability  

Robin Oakley is a co-director at the UMI Fund that functions as a regranter, which sees people-powered movements as critical to creating a zero carbon world and so works on strengthening the ‘connective tissue’ between NGOs, policy makers and grassroots groups. Their pooled funding approach helps get more money into the field more easily. Decisions are taken by the donors, and they steer the fund, but the NGO and movement representatives advise on strategy, including the overall approach to how money is spent, even though the donors can choose to veto. Regional movement leaders add expertise on what would add value to movements. Since the fund has to seek resources from philanthropic partners, it has no direct control over the origins of this money. But Oakley highlights that there is “soft and hard power around how this money is used and where it comes from, since the circle of donors gets to choose who else joins. Existing members can also veto who joins. So there is an internal commitment to certain values regarding who becomes a fellow traveler.”

Oakley shares that sometimes a grantee is not willing to sign a grant agreement, something we at Guerrilla are also familiar with. Social movements are often (rightfully) suspicious of philanthropic institutions and a public donation may jeopardise movement reputation especially if it is an anti-classist, anti-plutocratic collective, so “a good work-around is a coalition partner, an official organisation that can receive the grant and simply work with the movement. This produces transparency but also distance with grantees that are hesitant.” Oakley also underscores that “some groups are very sensitive, they could be arrested if they were receiving funding from outside (e.g. activists in India) endangering their lives. ‘The foreign hand’ narrative can be very problematic and cause serious internal reputational damage. This is why discretion should not be seen as the enemy of transparency in such cases but a necessary protector.

Funding activism in some parts of the world like Brazil, India, South Africa is an entirely different ball game and as such, the rules around transparency, discretion, and caution are quite different

Oakley says it is imperative to “recognise that we are developing things as we go along. Wherever we can be, we are transparent. But we are cautious about information rather than actively holding it back.” He offers another example: many UMI partners are city governments and, for instance, in South Africa the relationship between the state and the social movements can be difficult. Even if individual movement members or politicians want to collaborate, they cannot always ‘be seen’ by the rest of their movement/constituencies to collaborate with ‘the enemy’. “Movement of money can also make the relationship visible, so there needs to be very careful facilitation of what is revealed. Actively listening but being discrete”. Discretion rather secrecy, not publishing unless necessary, share if asked directly, but always with the consultation and approval of those who might be exposed or vulnerable, and think how information can be misused. Nevertheless, such moves won’t help curb the ‘shadowy funders’ conspiratorial thinking. 

Oakley sums up his thoughts neatly. “Think of transparency as a closed loop”, he continues “as a funder are you doing all the things you say you are going to do? A grantee might not need to know everything about your operation but they have to know as much as they can about the things that relate to them. Are you getting the full grant or not? Maybe your timeline changes, you are free to amend this but not that.” The deep trust lies here. Transparency becomes reliability. Are you doing the things you promise to do?

Peeling Away the Layers of Opaqueness 

“You need to meet people where they are at” says Schwarz, acknowledging that he was (and is still) on a constantly evolving personal journey through giving, and that one’s comfort level changes over time. “Saying precisely what you fund and how much is step one”, we now can openly state that Schwarz’s input into the Guerrilla annual budget for 2021 is 700,000EUR, and this will be broken down in detail in our annual report. “Stating precisely where your assets are, and what you’re investing in is the next step”. Schwarz smiles and adds, “I’m the first to say I’m a hypocrite, and that I still have many things to work on. Recently I shared the holdings in my private portfolio with the foundation staff, which was an important milestone for me personally. Of course there is always room for improvement”.Confessing is the first step to processing and then perhaps absolution. 

Like an onion, transparency is layered, and the more layers that are peeled away the more cleansing tears are likely to be cried

Kristina Johansson from Solberga Foundation emphasizes that “part of the work of Resource Justice is just this, “destigmatizing the discussion about wealth accumulation, by creating a container of trust and setting of ground rules about what the community is doing and what feels safe to share.” Evidently there is fear and repercussions around being a public-facing donor. There is “the fear of not being liked, and of being judged, and the very human need for validation”. It seems clear that we need to find strategies for combating the toxicity around the lack of transparency. A pooled funding setting is an opportunity to have transformative experiences and conversations, yet sometimes the conversations simply revolve around how much does each donor put into the pot and this is something that is debated excessively. Transparency (or egos) may get in the way of deeper collective journeying. Acknowledging that there are various levels of transparency and that it takes time for people to start playing at the highest difficulty i.e. the ultra-clear-high-visibility-full-clarity-diamond level is the first step for framing this issue as a journey and not a binary state of being that may be more alienating than inviting. 

Pooled funding allows funders to go on deeper, trust-building journeys that can precipitate increased comfort with being transparent

Looking into the Crystal Ball

If I were to peer into a crystal ball and thus into the near-future of philanthropy, I imagine there would be no more opaque trusts that prevent you from redistributing that money as you see fit. There would be no more hang-ups around discussing wealth more openly and channeling it into social justice causes and social movements will abound. Some funders would be cautious, others discrete, other mega transparent with their annual budgets and investment portfolios on billboards. But ideally, there would also be more participatory funds, where funders give up power, and communities decide collectively how the funds will be distributed, and do so with full transparency both in sums and in protocols. In the meantime, Germany is setting one benchmark, as this transparency initiative asks civil society groups to transparently display their donors and the use of their funds – why don’t we ask (demand) that of foundations?

Crystal Ball Disclaimer: images may appear more transparent than they actually are

If season 4 of The Crown taught us anything it is that the truth always comes to light, locking up your family members with disabilities in secret sanatoria is eventually going to end up on Netflix, and what you are funding, where your assets are, and who you are working with will become public knowledge, and so starting your journey into transparency is probably a good call. 

Oakley highlights a crucial point, “transparency is challenging your self-image (or that of your foundation), challenging the intention of why you are a philanthropist in the first place. By being open about your story you must engage with that story and cannot brush it off with any common narrative, it is your story of personal actualisation and how you show up as an individual in the world”. Fittingly, the TV Series Transparent, is a story about peeling away the layers of one’s true self in spite of all the immense societal challenges, it should be mandatory viewing for any journey into philanthropy. Engelhorn adds, “there are transition phases and timeframes for new law compliances to be adopted, and change doesn’t happen overnight, you can’t snap your fingers Mary Poppins style (a spoonful of sugar makes the opacity go down) so maybe start by asking questions and constantly raising the topic of transparency and talking about the money, how it is used and how we can change this. And these uncomfortable topics will slowly become more and more comfortable to speak about and sit with. So lead by example”.

Take a long look in the mirror. Leave dynastic thinking behind. Choose to evolve into an open, honest & transparent mammal. Transparency is sexy. It is a choice. 

Takeaways Summary

1. transparency creates a culture of trust, honesty and openness 

2. in some cases this is an obstacle to safety so caution and discretion are needed

3. transparent financials, annual budgets/reports, how money is spent and where is step one

4. deeper financials – where does the wealth come from? what does the investment portfolio looks like is step two

5. transparent communication: who is funded, why, where, who are the advisors/board, helps create trust

6. it is much harder to be transparent when working with radical activists or conflict zones

7. it is important to do what you say you’ll do and that way transparency becomes reliability

8. we need to shift away from dynastic thinking and get more comfortable with wealth conversations

9. if you increase transparency, you break down power lines & old laws need to be rewritten or overcome

10. sometimes navigating the line between transparency and privacy as a wealth owner is tricky but needs ongoing commitment, as this is a very personal transformation journey

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