Untransparent Philanthropy: The Frustrating Case of the Hess Foundation

Written by: Caitlin Duffy

Date: July 02, 2015

Freda, Sharnette and Gary. I interacted more with these three Post Office workers than our entire team did with the Hess Foundation over the last ten months.

I remember their names from last September, when I tried to track down a lost letter that we had sent to the elusive Hess Foundation, an $800 million institution based in Roseland, New Jersey. It was one of our multiple attempts to engage with the grantmaker for Philamplify, the National Committee for Responsive Philanthropy’s (NCRP) initiative to bring honest feedback to improve philanthropy. Our foundation assessments, which rely on grantee feedback, are conducted with or without foundation participation. However, transparency is a growing trend in today’s philanthropic sector, and each of the foundations we’ve assessed has participated in some capacity. All except the Hess Foundation.

The Hess Foundation does not have a website or any other direct contact information. After phone calls and emails to the trustees through their other organizational affiliations failed, we resorted to snail mail. Weeks passed and we heard nothing from the foundation after sending our first letter. We sent a second letter through certified mail, with a return receipt to track whether it had been received. Strangely, the Post Office could not confirm whether the envelope had been delivered, despite the safeguards we purchased and the two claims we filed for the lost mail. No response. Was the Hess Foundation’s address a black hole?

While numerous Hess Foundation grantees were happy to talk to us, our many requests for interviews with the foundation’s board members and other stakeholders with direct knowledge of the family’s grantmaking have been blatantly ignored. This includes our attempts to get in touch with the foundation’s accounting firm, CohnReznick, which shares its mailing address with the foundation. We also sent certified, return receipt requested copies of NCRP’s draft report to publicly available addresses for four of the foundation’s five long-time trustees. While we did receive confirmations of delivery from the Post Office, the foundation’s silence continued.

In a last ditch attempt, NCRP Executive Director Aaron Dorfman headed north to try and speak with the foundation’s representatives in person. Our videographer documented his journey in the Garden State and the Big Apple. Aaron was turned away at CohnReznick and Hess Corporate, and no one would answer the door at one trustee’s consulting firm.

It’s because of cases like this that David Callahan at Inside Philanthropy calls the sector a “black box.”

Our experience with the foundation is not unique. In our report on the Hess Foundation, author Elizabeth Myrick writes that this “unresponsiveness correlates with feedback from long-time grantees and well-connected peers who described the foundation as mysterious and invisible.”

The Hess Foundation exemplifies a transactional grantmaking approach known as “checkbook philanthropy.” Compared to the other foundations NCRP has examined for Philamplify, this style “represents the bare minimum in terms of philanthropic strategy, transparency, payout and impact.” The grantmaker has no online presence, employs no staff, nor engages in philanthropic associations in the tristate area. Its relationships with grantees are comparable to those of an individual donor, despite being an institution with hundreds of millions of dollars in assets.

After all of this, you may ask: Why is it important that the foundation respond? I previously dedicated a blog post to the significance of transparency in philanthropy, but here are three more reasons that the Hess Foundation should be less insular:

  1. The Hess Foundation, and the charitable lead trust that sustains it, receive enormous tax breaks. The foundation has a responsibility to let the public know what it is doing as stewards of tax-exempt resources – what NCRP refers to as partially-public dollars. It gave out nearly $30 million dollars in 2013, but we know nothing of its goals or strategy.
  2. Our assessment found that Hess Foundation grantees are eager to grow a relationship with the foundation, with particular interest in increased communication, dialogue and partnership with its leaders.
  3. In order to maximize its potential and that of its grantees, the Hess Foundation should pursue strategic impact. NCRP’s Philamplify report presents a unique opportunity for the foundation to receive constructive stakeholder feedback and begin a dialogue.

To embrace NCRP’s recommendations, the Hess Foundation doesn’t have to look far for support and inspiration. I recently attended an event at Exponent Philanthropy – an outstanding organizational resource for foundations like Hess with few to no staff – to hear a talk by Anne Gunsteens, executive director of the J. Willard and Alice S. Marriott Foundation, a $630 million grantmaking institution also funded by the success of a corporate empire. She shared how her staff has grown from one to five during her tenure, and that the foundation’s first website is in the works. These strides made by the Marriott Foundation stand in stark contrast our findings on the Hess Foundation.

There may be good intentions behind the Hess Foundation’s lack of transparency – perhaps the trustees are keeping operations lean to direct more money to grants, or to keep the spotlight on its grantees. Nonetheless, such good intentions are not necessarily good grantmaking, and the foundation must move beyond checkbook philanthropy to amplify its impact and that of its grantees. Check out our report and the accompanying video, and tell us what you think!

Caitlin Duffy is the project associate for Philamplify at the National Committee for Responsive Philanthropy (NCRP). Follow @NCRP and @DuffyInDC on Twitter and join the #Philamplify conversation.