April 30, 2011; Source: Chicago Tribune | Some parts of the nonprofit sector are suffering from misperceptions about the importance of transparency. Wrapping themselves in the cloak of 501(c)(3) or 501(c)(4) nonprofit status, these organizations spurn requests for transparency in their use of public funds and charitable donations as if acceding to such requests would undermine their reason for being.

In Illinois, the Community and Economic Development Association of Cook County has declined to disclose to the public – and the press – how it used millions of dollars of federal weatherization funds made available in the federal stimulus program. CEDA is hardly a tiny mom-and-pop nonprofit. It had over $200 million in revenues in 2009, 96 percent of which were from public sources.

CEDA’s reaction to a Freedom of Information Act request from the Chicago Tribune was that it is not a “public body” and therefore does not have to comply with the newspaper’s request. The Trib sought information about the weatherization program from the state department that oversaw the allocation of weatherization funds. After five months they received the names and addresses of CEDA’s contractors, but not the amounts of money they billed or were paid. A similar request from November to the federal agency in charge of the program, the U.S. Department of Energy, was still pending as of April 29.

So it’s not just the nonprofit, but the state agency and the federal oversight agency that are all stumbling and bumbling in the dark rather than letting a little sunshine in. Is there a compelling reason for CEDA, the state Department of Commerce and Economic Opportunity, and the federal Department of Energy to withhold details on CEDA’s weatherization expenditures? Does the reason for denial outweigh the benefits to the public, CEDA, and the government agencies from public access and public scrutiny?

When the knee-jerk position of nonprofits and government agencies is objection to disclosure and transparency, the signal to the public is simply awful. It’s time for nonprofits to rethink the parameters of their default objections to transparency. And it’s time for the state and federal agencies that promised to make the stimulus program the most transparent program ever to ask whether the publication of self-reported, often unverified, frequently inconsistent data from subrecipients on the website recovery.gov has achieved the kind of transparency that we were promised at the outset of the stimulus.—Rick Cohen