What is this Thing Called Transparency Anyway?

In a call for ideas from the folks at Tactical Philanthropy regarding how to help foundations more transparent and accountable, I sent the posting below ("Can Philanthropy be Citizen-Centered?" -- scroll down) as something that might be considered. Two lines were pulled from my post:

Essentially, foundations need to start exploring new ways to develop stronger partnerships between the professionals that staff foundations and “real people” on the ground living in real communities. And that means going beyond simply hiring consultants to interview those people for “input” that usually gets fed back to the foundation experts who ultimately decide what they’re going to do. It means working with people to figure out how foundations can best to address the issues they say are important to them and their communities.

Sean Stannard-Stockton, the host, responded:

I think that for foundations that want to try this approach, it might lead to exciting results. But I also want to be clear about my continual urging for a broader philanthropic conversation and more foundation transparency. I do not think that foundations should be required to be transparent. The concept of private foundations having a right to “privacy” is not something I disagree with at all. I think that foundations should be free to pursue whatever course of action they desire and that they should not be obligated to take any direction from the public. This distinction is why I talk about transparency as an issue of philanthropic effectiveness, not public accountability.... I think that we will find that transparency is good for foundations, good for nonprofits and good for the public. But at the end of the day, I think that the transparency decision is completely up to each individual foundation. This is why I make the distinction between "public accountability" transparency and "philanthropic effectiveness" transparency. I'm interested in the second type.

This is an interesting delineation, and one I've heard before. And it's certainly a legitimate one, given that most foundations are private institutions. But I’m not convinced the larger public would view it as entirely acceptable, given that they're not getting much feedback about what's actually done with the millions foundations dole out and how "effective" they are. Yes, there seem to be lots of evaluation reports floating around, but how many of these are actually conducted by third parties that sample beneficiaries randomly and over time? The latter are the three most important questions to ask of any evaluation, according to William Cotter, former president of Colby College, Oak Foundation, and the Africa-America Institute, in a recent Chronicle of Philanthropy article.

In lieu of more formal regulatory or accountability structures (is there really such a thing as "self-regulation"?), perhaps foundations might consider alternative steps toward public accountability, beginning with involving the latter more in their decision-making processes. Will doing so enhance institutions' effectiveness? Other institutions are slowly realizing that it may--not only in their ability to address specific issues but also in increasing people's interest and involvement in their larger community and the institutions that support it. While the jury may still be out as to whether public involvement in foundations' work is cost-beneficial in terms of concrete outcomes, perhaps the most valuable "outcome" of such efforts may simply be increasing the levels of civic engagement in communities that are starved for it.