Giving Compass' Take:

• Fast Company reports on a new survey that shows how little funders know about their own organizational flaws, despite their need for transparency from their grantees.

• Are enough foundations being honest with themselves when it comes to self-evaluation? How can they improve on the accountability front, especially in governance?

• Here's how to embrace the power of transparency through open-book management.

In order to earn funding from foundations, nonprofits typically have to prove their strategies are working — and if not, justify why they are making changes. But many foundations don’t have the same levels of accountability inside their own organizations.

As a result, over half of foundation leaders don’t have a very good understanding of what’s not working with their own programming, according to a new report from the Center for Effective Philanthropy (CEP). In a survey of 119 CEOs from private and community funders who give out $5 million or more annually, CEP found that 57% of respondents had only little to moderate understanding of their group’s own shortcomings.

When that question was asked a different way, the answer looked equally troubling: A little more than one-third of CEOs actually don’t have a very good understanding of what is already working either, a factor that seems obviously crucial to replicating success.

Many foundation leaders now say they’ve undervalued the whole idea of setting up processes and benchmarking to make sure they’re meeting their own goals. “[M]ore than 40% say their foundation is not investing enough time and money in developing this understanding,” the report notes. As one CEO shared in an anonymous interview that CEP highlights: “We don’t yet have the infrastructure and the clarity in our own systems and ways of working that would give me the learning that I want for my role as the CEO, for making strategic decisions, and for sharing information with the board.” The majority of CEOs surveyed also admitted that their understanding of what’s happening inside their organization relates directly to how much effort is put into such internal assessments.

Read the full article about foundations lacking self-accountability by Ben Paynter at fastcompany.com.