05/25/2012 11:19 am ET Updated Jul 25, 2012

Why Foundations Need to Be Better Storytellers

Maybe it's because we were in Los Angeles. They're big at telling stories there -- they built a whole industry around it. Whatever the reason, there was a lot of talk at this month's Council on Foundations Annual Conference about the power of storytelling. And there was a lot of talk about the need for American philanthropy to do a better job telling its story.

Those of us who run foundations sometimes forget that we operate in a very privileged environment. The net revenues we generate are almost exclusively untaxed, allowing us to give more to our communities. Donors are offered significant tax incentives to support our work. Our grantmaking decisions aren't subject to appeal or too much oversight as long as we follow the law. While our impact is tremendous, it's not measured in a consistent way by any outside parties. Our for-profit friends cannot enjoy that luxury -- it is a privileged space indeed.

Philanthropy needs to better demonstrate what it's doing with the resources entrusted to us. The public is increasingly curious about what we're up to -- an interest fueled by politicians who imagine that philanthropy is a big pot of money waiting to be spent to alleviate government budget strains.

Philanthropy has a great story to tell, but fails to do a good job of telling it. Over the past few years, America's foundations, aided by emerging technologies, have rushed to become more "transparent." Interested citizens can now view our tax filings on GuideStar, a nonprofit organization funded largely by foundations, that collects and publishes those forms. Almost all foundations now have websites that list their directors, grantmaking guidelines and financial statements.

But transparency is not storytelling. Having access to the nearly impossible to understand IRS form 990s does not tell America why foundations should continue to exist and be supported. Hearing about the number of grants made and the size of the assets managed by foundations tells the world nothing about the impact that foundations have. And we now know that only one out of ten Americans can even name a foundation -- let alone talk about what one does.

The stories are out there. There are old ones like the Dorr Foundation's funding of highway safety experiments that lead to the painting of white lines on the sides of roads and dramatically decreased automobile accidents. There are more recent stories, such as the Incourage Community Foundation in Wisconsin Rapids, WI. That foundation is leading the community through an initiative to rethink its economic future after losing its traditional paper industry. Their Workforce Central effort is designed to help connect recently displaced workers with meaningful jobs.

Creating jobs, saving lives, rebuilding communities. These are the kinds of stories that will help Americans understand and protect the important position that philanthropy has in their lives.