Gift to Gates Foundation Underlines Need for Accountability, Professor Says

Foundations need to become "relentlessly and thoroughly transparent" in their operations if they are to avoid government regulation, says Joel Fleishman

As the recipient Monday of the largest philanthropic gift in history, the Bill and Melinda Gates Foundation has an extraordinary opportunity to do good in the world but also a heightened obligation to be accountable to the public, says a Duke University expert on philanthropy.

"I hope the Gates Foundation will lead the way in showing foundations how to be effective and accountable," said Joel Fleishman, a professor of public policy and law and the founding director of Duke's Terry Sanford Institute of Public Policy. "The greater the wealth, the greater the responsibility."

Billionaire investor Warren Buffett Monday announced he would donate $31 billion to the Gates Foundation in increments of about $1.5 billion a year. The gift doubles the foundation's assets, making it by far the world's wealthiest charitable organization. Bill Gates recently announced -- not coincidentally, Fleishman suggested -- that he would relinquish active management of Microsoft Corp. to focus on leading the foundation.

Foundations need to become "relentlessly and thoroughly transparent" in their operations if they are to avoid heavy-handed government regulation that would hamper their ability to be creative in solving societal problems, Fleishman said. The Gates Foundation is "off to a good start" in that it targets problems of great concern internationally, which historically foundations have done better than governments.

"The Gates Foundation has been self-conscious and focused in its grantmaking and rigorous in measuring results, but so far it has not taken the further step of sharing its evaluations publicly," said Fleishman, whose book on foundation accountability, "The Foundation: Secret -- and Secretive -- Engine of Social Change in America," is slated for publication by Public Affairs Press early next year.

Because foundations enjoy government subsidies in the form of tax exemptions and tax deductions available to their donors, they have a great duty to be transparent, Fleishman added.

"Transparency is the only effective substitute for added government regulation that might otherwise come about as a result of public suspicion of the rapidly growing size of foundations. Accountability based on transparency would enable foundations to retain the flexibility they now enjoy and which is crucial to their ability to function creatively and effectively in doing good for society," he said.