Pete Manzo is President and CEO of United Ways of California. Despite being significant grantmakers in many communities, the 900+ United Ways in the U.S. are seldom discussed when it comes to philanthropy, "democratizing philanthropy," or philanthropic reform. We're glad we had a chance to learn some surprising facts and strong views from Pete.
Q: Pete, not long ago the top three nonprofits by revenue were United Way, Red Cross and Salvation Army. Today the biggest three are Fidelity, Schwab, and the National Philanthropic Trust. What do you make of that?
Pete: A primary concern is that it is difficult to see where funds in DAFs go, and even whether they are spent at all. Nonprofits are frustrated that such a large pool of funds is invisible to them, they are unable to identify and seek funding from them
The large commercial funds you mention are really investment firms – finance companies – they're not taking a strategic approach to philanthropy. Commercial donor-advised funds provide a valuable service, but in my view, they are not really charities with a mission, advancing a point of view about strategic goals, so much as they are financial firms providing services to their investment clients.
Foundations and DAFs talk about payouts of 5% or even 8%. United Way has a payout rate of 80% within 18 months. Various complications make it hard to get out everything quickly, but we work at it!
Q: 80% in grants out? So is the United Way a type of foundation?
Pete: We are a grantmaker, but not a foundation. Pledges we get this year tend to go out next year as the money comes in. United Ways are not endowed organizations, which brings both advantages and disadvantages. United Ways put their funds to work within 12–18 months of raising them, so the time-value of money means contributions to United Ways can have greater impact than if they were held and spent from an endowment. An endowed foundation would need something like $80 billion in assets to make a similar scale of philanthropic investment as the $3-4 billion or so the United Way drives in the U.S. every year. Without endowments, though, the year-to-year prospects of United Ways are much more uncertain, and they certainly are more vulnerable to economic fluctuations.
It's odd that although we give out more in grants than many local foundations do, we aren't typically included in foundation dialog. For a long time we weren't able to join associations of grantmakers.
Q: United Ways of California backed a recent bill to bring transparency to donor-advised funds in California. The foundation community and the DAF sponsors opposed it strongly. Why did United Ways break from the crowd and support it?
Pete: We care about resources going out to the people that need it. And they need it in real time. The near-complete invisibility of donor-advised funds makes it possible for them to be abused, stay inaccessible, and keep the public from understanding where public money goes. We believe in more transparency for all of philanthropy.
Q: Several years ago some United Ways around the country were experimenting with being donor-advised fund sponsors. Where did that go?
Pete: As far as I know, no one is doing that anymore. For some it was just an accounting thing: they would get a donor-restricted pledge and they would create a donor-advised for it. When the donation came in, they would empty that DAF. They realized this accounting method was unnecessarily complicated. In a few cases United Ways talked with their major donors about creating DAF accounts at their local United Way. But most United Way donors weren't interested; they wanted to see their money have an impact as soon as possible.
Q: The federal budget bill (June 2025) looks like it will mean very large cuts to Medicaid and other health and human services. How do you think funders in health and human services could be responding?
Pete: Too many are remaining silent, so far. Funders and nonprofits need to be speaking out against the cuts, and foundations should be funding nonprofit advocacy.
For many years now foundation assets have grown much faster than the 5% payout rate. For all their billions, foundations can't make up for those federal government cuts if they go through, but they could easily be giving out four or five times what they are giving now, and they should, in unrestricted grants, to organizations fighting the cuts and also working to reduce their harmful impacts.
United Ways are non-partisan, but we are not neutral about our values. We know these cuts would be devastating to working families, so across the country, United Way has been working hard to find Republicans who see the importance of maintaining Medicaid [called Medi-Cal in California] and SNAP food assistance (CalFresh).
Funders need to be organizing to make government fund the basic human needs that their communities need – the communities they say they are committed to serving. The "Big 10" universities are creating a mutual defense fund, pooling resources to support whichever of them may be attacked; funders should be looking at similar strategies together, and also should offer to help defend nonprofits, too.
Q: So many nonprofits and nonprofit associations say they strongly support philanthropic reform, but they won't say so in public. Your thoughts on this?
Pete: Well, nonprofits are overly cautious of offending any funder about anything. Some hope that a big DAF holder will someday give them a lot of money, and unfortunately, at times that includes community foundations, who also rely on DAFs and DAF donors, and like other funders, they likely aren't used to hearing any criticism at all so they may overreact to any hint of it. The commercial DAFs have far outpaced everyone in acquiring funds under their management, they are crushing everyone in competing for donors’ funds, so it’s hard to see why community foundations wouldn’t welcome more regulation of commercial DAFs.
Associations of grantmakers understandably want everyone to be happy. They don't want to take a stand that make any member unhappy. So it can stall from being effective on behalf of who their members serve.
With so much wealth flowing to the top, and with commercial DAFs growing so quickly, if nonprofits, nonprofit associations and funder associations won't take stands for government funding and philanthropic reform, then who will stand for the people in our communities?
Q: Thank you Pete!
You can reach Pete Manzo and the United Ways of California here.
Two years ago, Candid (formerly the Foundation Center and GuideStar) closed down its ten-year initiative on making foundations more transparent. The initiative had a great name, "Glasspockets," referencing Carnegie Foundation board chair, Russell Leffingwell’s testimony before Congress during McCarthy-era hearings that the "Foundation should have glass pockets."
We never felt that Glasspockets got the attention it deserved and its closure got even less. We'd like to give both aspects some attention today, and give Candid a chance to talk about what they are doing today on transparency. We are fortunate that Janet Camarena — one of the project's creators and its ten-year director — was happy to reflect on the project with us.
Q: Janet, what is the single most interesting thing that came out of Glasspockets' work?
Janet: What probably surprises people the most is how few private foundations can be found online. When the initiative started, only 6% to 7% of foundations had websites. Now it's perhaps 10% to 12%, which is where it was hovering when Glasspockets wound down two years ago.
This means that foundations have very limited ways to learn about what other foundations are doing, what they’ve learned from their work . . . and nonprofits should realize how limited web information is on foundations.
10 - 12% of foundations have websites
Q: Even 10% or 12% seems shockingly low! But how valuable are foundation websites, really? Many of them seem to be more about public relations than talking about what they are doing in candid enough terms to be useful.
Janet: Well, having a website is a good start towards transparency. And of course we want to encourage foundations to improve the quality of the information on their sites, which was a big part of the Glasspockets effort to provide a roadmap to how to do that.
Q: Example?
Janet: In the grant descriptions published on their websites, too often we just see "general support." That isn't helpful to researchers studying where funding is going, for grantseekers trying to determine if a particular funder may be a good partner, or for other foundations to identify peers, possible collaborators, and more.
Q: Glasspockets invited foundations to publish their "transparency self-assessments" and to be a recognized participant in Glasspockets. Over the ten years, how many foundations signed up?
Janet: 112. I know it sounds like a small number! [There are about 103,000 private foundations in the U.S.] But many did use the criteria to prompt discussions about what transparency might mean in their foundation.
Q: What are some of the types of information that Glasspockets promoted as transparency priorities?
Janet: Of the 20+ indicators, many were straightforward, such as do you publish a list of your board members, do you have a whistleblower policy. [Editor's note: you can find the Glass Pockets Self Assessment Tool here.]
And at the time Glasspockets was founded, foundations were beginning to place greater emphasis on evaluation of grantee performance. When Glasspockets started, the focus for most sector conversations about transparency seemed to be about grantees but not about foundations. GlassPockets combined donor education, peer pressure, and incentives to make it more of a priority.
Q: What was the most common reason foundations gave you explaining their reluctance to be part of Glasspockets, or to be more transparent in general?
Janet: They were usually afraid that if they were more visible -- say, having a website -- they would be inundated by grant proposals. We were able to identify funder case studies that where having clear priorities and processes on their websites, the result was proposals that were good fits.
Q: Under the Trump Administration, many nonprofits have become worried about how transparent they are. We hear fears about language that could flag them as targets for the government or that foundations would be nervous about funding something that could make them a target. For example, I know one nonprofit that has the word "ethnic" in its name. They are thinking of changing that to "American" so as not to create a barrier for some funders.
Janet: Transparency is certainly changing! But it’s important to remember that there are risks to both transparency and opacity, and the risks of opacity are often overlooked. That’s why I’m glad you asked me to reflect on Glasspockets at this particular time because it’s a good reminder that during a period of crisis, when foundations found themselves spending most of the 1950's testifying before Congress, they learned the hard way that if you don’t tell your story, then others will tell it for you.
New option to suppress data
Q: What concrete steps is Candid taking on transparency/opacity in this new period?
If [foundations] are not willing to tell what they do to serve the public good, then as far as I am concerned, they ought to be closed down….The Foundation should have glass pockets.” — Russell Leffingwell, Chair, Carnegie Foundation, 1952Janet: We recognize that nonprofits need the space to evaluate risks regarding public-facing data. So, we have worked quickly over the past weeks to give nonprofits the option to suppress contributed data that might pose risks to their organizations or individual staff. New at Candid is that nonprofits can now suppress data that they are no longer comfortable sharing.
For example, if there are concerns due to language in their mission statements or program activities, they can suppress their contributed data without permanently deleting it. While the data is suppressed, it will not appear in Candid’s products or be shared with any third parties. Once they’re ready to do so, nonprofits can request that Candid restore suppressed information to their profile. Even when data is suppressed, it still exists in Candid’s data systems. During that time, data points may still be used anonymously for aggregate research and statistics about the sector to shed light on key trends and provide context to our collective work. (Editor's note: Forms 990 are still accessible through Candid.)
Q: Yes, transparency seems to be becoming weaponized.
Foundations do need to be thoughtful as well and there are some best practices to keep in mind in terms of grantee data. For example, often the list of published grants comes directly from their grants management system. You need to let your grantees know what will appear about their grant and give them the option not to make it public. They can easily add an opt-in in the grant agreement or award letter that says, "Here's where we typically share this data. If you would prefer not to have this information published, please let us know." (This blog post from Candid shares best practices in using grantee data responsibly.)
Q: How much of a difference would foundation transparency make, in the big picture? Suppose 75% of foundations had joined Glasspockets. What would be different today?
Janet: Endowed foundations have the power to be insular. They don’t need to do marketing to sell anything to contribute to their bottom line, they don’t need to campaign to get votes to stay in office, and they don’t need to fundraise to support their work. As a result, most don’t prioritize the kind of transparency that is a basic fact of life in most other industries.
So, if suddenly 75% of foundations had websites that they were actively working to improve, this kind of transparency would represent a big culture shift to give up some of the power of insularity. And remember that the culture of philanthropy moves slowly, so we need multiple approaches to improve sight lines in the field.
To this end, later this year Candid will be launching an improved search function, for the first time combining foundation grantmaking and nonprofit operations data to provide a full view of the work of the charitable sector.
Transparency and the Philanthropy Project?
Q: As you know, the Philanthropy Project is concerned with lack of transparency in foundations, in donor advised funds, in the business models behind donor advised funds, and more. Do you see an alignment there with the ideals of Glasspockets?
Janet: Yes, we believe transparency benefits all kinds of donors, and once donors understand those benefits, they are more likely to embrace an open approach.
Like endowed foundations, donor-advised funds are another giving vehicle available to donors and represent a fast-growing part of the field, but they don’t have the same disclosure requirements as private foundations. And, as we know, some donors believe it’s helpful to make anonymous gifts, and again, may not pause to consider the pitfalls of this approach.
We found that donor education is important to motivate donors with the benefits to them of working more openly. By understanding the connection between transparency and trust-based approaches, some donor-advised funds used Glasspockets to assess and improve their transparency, establish and improve their websites, and be public about their giving and strategies. Today, we are also working to profile more types of giving vehicles in our database, so they can be discoverable to grantseekers.
Q: Thank you, Janet! We look forward to seeing where transparency in philanthropy goes from here.
Janet Camarena
Janet Camarena serves as director of partnerships for Candid where she works to lead campaigns and coalitions aimed at shaping norms and practices related to the most pressing issues in our sector, such as transparency, equity, and impact. She previously served as the director of transparency initiatives for Foundation Center, and provided leadership for Glasspockets.org, which she helped to found and build in 2010.
