Trust and Transparency are a Two Way Street

The mutual responsibility for ensuring a transparent grants process resides with both the government agency granting the funds and the organizations that receive them. Let's start with the organizations.
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In a recent national Gallup poll measuring public trust in state governments, Illinois did not fare well. Out of all fifty states, our residents trust state government to help solve their problems the least. That's not good news for government and that's not good news for nonprofits, which are often perceived as instruments of government. The work of nonprofits is often the work that state government can no longer do and we do it in partnership with government.

But lately that partnership is under some serious strain.

Last month, columnist Mark Brown of the Chicago Sun-Times rebuked the state of Illinois for its shoddy record-keeping and management of state-wide grants programs. He called out the grants programs for their lack of transparency and haphazard oversight:

Unlike the state payroll, which is pretty much right out in the open these days thanks to public databases, the names of those getting paid under state grants are hidden from the prying eyes of citizens and the news media.

Often, even the state agencies paying out the grants don't have easy access to that level of information -- or the manpower to review it. Of course, that assumes the people running the agencies want to know.

Associations of nonprofits like the one I lead and others across the country are strong advocates for allowing the public access to information so taxpayers can easily understand how tax dollars are being spent through government grants programs. Taxpayers must have faith in government and in the nonprofits receiving grants in order for the programs to be truly effective.

The mutual responsibility for ensuring a transparent grants process resides with both the government agency granting the funds and the organizations that receive them. Let's start with the organizations.

For the past few years, Illinois Attorney General Lisa Madigan has pointed to my organization's publication, Illinois Nonprofit Principles and Best Practices, as a blueprint for nonprofits to preserve the public trust. The principles cover a wide-range of important issues -- board governance, legal compliance, responsible stewardship, and communication, and go beyond the minimum standards established by law.

Some of the recommendations include:
  • An organization should have a clearly stated mission approved by a governing body
  • The role of the governing body is clearly and publicly stated
  • Members of the governing body act ethically at all times and are compliant with federal, state, and local laws
  • The governing body is active in its oversight of an organization's financial affairs and assures resources are used to further its mission
  • An organization makes information about its mission, programs, and finances public available and available upon request

What we have learned over the years being an advocate for the nonprofit community is that when organizations fail to behave ethically or fall out of compliance with the law, all nonprofits are smeared with the same brush. Organizations don't just hurt themselves when their boards act improperly, they breed skepticism among the public about the sector as a whole.

But state governments also have a duty to run their grant programs efficiently. Ensuring the public trust isn't the sole burden of nonprofits, especially in a state where only twenty-eight percent of the population have trust in state government. One way to truly strengthen ethical and legal compliance among nonprofits who receive state grants is for state government to modernize the way its grant programs operate. Currently, different agencies track their grant programs through different legacy systems, if at all. The high turnover in state government also means state agencies lack consistent internal processes and historical knowledge of programs, grants, and outcomes. Neither are there consistent standards for how grant programs operate, agency to agency.

There is also little transparency of the grant programs and how recipients are spending the funds. As Mark Brown states in his column, salaries of public officials are easily obtainable through state databases, but it is much harder to trace the flow of grant funds through the state's labyrinthine maze of red tape.

With these systemic problems, what is the solution? My organization remains a strong advocate for a set of partnership principles and reforms that would make the Illinois state grant process more consistent and transparent. But in addition to seeing the creation of a set of consistent guidelines for proposal submission and grant reporting across all state agencies, we would urge government to actively engage nonprofits in the creation of these guidelines and standards from the start. Without this kind of partnership, reform is less likely to be transparent, efficient, accountable, or responsive.

When Gallup probed why Illinois residents trusted their state the least, our state's history of corruption topped the list. So it's no wonder that the public meets proposals for reform (i.e, performance-based budgeting or "Budgeting for Results") with skepticism. It may be a great idea to ensure the state is getting the best possible return on public dollars invested in contracts with for-profits and nonprofits. But the challenge will be to design a transparent enough system of evidence-informed metrics that can be used to evaluate state programs.

Perhaps these common-sense reforms will go a long way toward cleaning up what is now a broken system of grant distribution in Illinois and bring much needed transparency to the process and, as a result, the profile of both state government and its partners will begin to lift. After all, our communities and the people in them will depend on that.

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