Transparency Matters Most When It Is Voluntary

TL;DR: Transparency matters most when organizations choose it before they are forced to explain themselves. Public trust depends on clear disclosure, consistent governance and a willingness to answer reasonable questions before a reporter asks them.

In his recent Chicago Tribune investigation, "Illinois passed a law to expose diversity gaps at top nonprofits. Almost none are complying," reporter Dan Petrella found that many Illinois foundations had not published demographic information required under state law. The most revealing detail, however, was that several organizations appeared to address the issue only after a reporter called.

That distinction matters.

Illinois lawmakers passed a law in 2024 requiring certain large grantmaking foundations to disclose demographic information about their boards and officers. The stated goal was to increase transparency around who helps guide some of the state's most influential philanthropic institutions.

Nearly two years later, compliance remains limited. According to the Tribune's reporting, only a small number of covered organizations had posted the required information. Some foundations cited delayed guidance from the state. Others pointed to ongoing litigation. One organization told the Tribune it was unaware the requirement existed.

Those explanations may be valid. They also point to a broader issue that extends well beyond this particular law.

Public trust depends on transparency. That principle applies to government agencies, corporations, nonprofits and civic institutions alike. Transparency allows stakeholders to understand how decisions are made, who makes them and whether institutions operate in a manner consistent with their stated values.

Many nonprofits ask communities to place significant trust in their leadership. They seek donations, advocate for public policy, influence civic discussions and distribute millions of dollars in charitable resources. Those responsibilities carry an expectation of accountability.

The Illinois law itself has obvious limitations. The state created a disclosure requirement without creating a meaningful enforcement mechanism. There are no penalties for noncompliance. The Illinois Department of Human Rights took more than a year to publish the demographic classifications organizations were expected to use. Legal challenges continue to cloud the law's future.

Those shortcomings deserve scrutiny.

At the same time, the absence of penalties creates an important test of institutional leadership. Organizations often reveal their commitment to transparency when disclosure is voluntary or when compliance carries little immediate consequence.

That is particularly true for mission-driven organizations. Many foundations emphasize community engagement, inclusion, public service and civic responsibility. Transparency strengthens those commitments because it allows the public to evaluate institutions using information rather than assumptions.

The lesson from the Tribune's reporting extends beyond demographic disclosures. Every nonprofit faces moments when legal requirements, public expectations and organizational convenience do not perfectly align. The decisions leaders make during those moments shape credibility over time.

Stakeholders notice when organizations communicate openly. They also notice when information emerges only after questions are asked.

Trust rarely disappears because of a single disclosure issue. More often, it erodes gradually when institutions appear reluctant to share information that reasonable stakeholders expect to see.

Foundations play an important role in Illinois communities. Many support education, arts and culture, health care, economic development and neighborhood investment. Their work affects countless residents and organizations across the state.

That influence makes transparency worth pursuing regardless of whether a statute requires it. Strong institutions benefit when they explain how they are governed and who holds decision-making authority. Clear disclosure practices help build confidence among donors, grantees, policymakers and the public.

The debate surrounding Illinois' disclosure law will continue in courtrooms and legislative chambers. The broader principle should remain clear. Trust is strongest when institutions choose transparency before they are compelled to provide it and before a reporter starts asking questions.

AI-generated image. Not representative of real individuals or events.