A New Ethic of Transparency in Charities: The Shared Goal of Journalists and State Regulators

Transparency for charities is talked about as a core value of the nonprofit sector, but it is a value articulated more often than practiced. Few aspects of the 501(c) tax status are as stridently defended by nonprofits as the provisions that allow nonprofits to keep much of their core information secret from the public, particularly donors, and other information relatively obscure such as investments. In this author’s experience with organizations ostensibly devoted to disclosure, the most virulent pushback came from actually advocating not for disclosure in general terms, but disclosure as applied to specific nonprofit entities, especially when a call for donor disclosure in the operations of the 501(c)(3) foundation arms of public universities unleashed a torrent of criticism that such transparency would work only to the benefit of political reactionaries bent on destroying the nonprofit sector. Confronting a difficult wall of secrecy shielding most nonprofits, regulators must be hard pressed to capture information in anything close to “real time” that can be used to protect taxpayers, donors to nonprofits, and the intended beneficiaries of nonprofits. The case that is suggested in this paper is that state regulators have an opportunity of working with traditional print and online media to promote transparency and to use the tools of journalism to enhance the ability of government to elevate the recognition of nonprofits that are pushing the boundaries of societally productive transparency and uncovering information that nonprofit malefactors are trying to keep hidden from regulators and the public at large