Opening Medical Gates
“Economists think a lot about how governments can correct the failures of profit-seeking markets and how markets can correct the failures of sluggish government,” writes Sebastian Mallaby, a columnist for the Washington Post, but it’s the “big philanthropic actors [who] have a shot at correcting both.” As evidence, Mallaby points to the Bill and Melinda Gates Foundation and its progress in making vaccines available in the Third World. Mallaby notes that both the for-profit sector and government have failed to make vaccines readily available—the market sector couldn’t make them cheaply enough, and governments couldn’t guarantee funding from year to year because of swings in political priorities. In 1999, Gates created a $750 million vaccine fund, and immediately the landscaped changed. Private companies, aware that a buyer was guaranteed, began cranking out vaccines, and new manufacturers have begun to emerge. “Now the Gates brain trust is working on the next stage of its concept:” Mallaby writes. “What if the vaccine fund issued securities, using the proceeds to smooth unpredictable donations from governments?” Perhaps it will work, perhaps not, Mallaby writes, but clearly, the foundation has changed the terms of the debate and is showing how the nonprofit sector can be a critical player in solving national and international problems. “The Gates Foundation is young and gloriously experimental, and not all its ideas will work. But that is the whole point: Because it is sitting on a $26 billion endowment, it can take more risks than taxpayer-backed organizations.”
Shattering the Greenhouse
The American Enterprise Institute and Pacific Research Institute have released Steven Hayward’s 2004 Index of Leading Environmental Indicators. It reports so much good news that “it is nearly impossible to paint a grim, gloom-and-doom picture anymore” of the country’s environment. Especially dramatic improvements in environmental quality include (1) vehicle emissions are dropping about 10 percent per year as cars become cleaner and more efficient; (2) 94 percent of Americans are served by water systems with no reported violations of health standards; (3) since 1988, there’s been a 55 percent decrease in toxic waste release, even though total output in the industries involved has increased 40 percent; and (4) U.S. air quality trends are as good, if not better, than those in Europe. The report, available online at PacificResearch.org, also notes that private conversation efforts such as the Peregrine Fund have been highly successful (see “Soaring High,” Philanthropy, January/February 2004).
Expenses Decline, Giving Increases
The Daniels Fund in Colorado has announced that its dramatic reduction in administrative costs is yielding a significant increase in its giving. “Our new streamlined structure,” says CEO Hank Brown, “directs funding to where it is most needed. This year, an additional $820,000 in scholarships will be provided to deserving students, and an additional $2 million in grants will be made to nonprofit organizations.” The fund had budgeted 160 full Daniels Scholarships to be awarded this year. Thanks to the streamlining of the organization, that number will reach nearly 200, and the fund’s overall budget will increase from $25 million to $27 million. (An interview with Hank Brown appeared in the November/December 2002 Philanthropy.)
German Civil Society Revives
As state funding dries up in Germany, the government is helping philanthropy flourish by doubling tax deductions for private donations and making it easier to start foundations, reports the Wall Street Journal. Berlin attorney Peter Raue is among those taking advantage. After starting an American-style foundation, attracting corporate sponsors, and weaning the Berlin Philharmonic off government funds, he helped bring British conductor Sir Simon Rattle to conduct the orchestra. He also helped land a traveling exhibit from New York’s Museum of Modern Art. Raue, the Journal writes, is simply recovering a lost German tradition. Before the Nazis came to power, closed foundations, and seized assets, there were four times as many foundations in Germany as there are today.
2003 Foundation Giving
Giving by the nation’s over 60,000 independent, community, and corporate foundations fell to $29.7 billion in 2003, down from $30.3 billion the year before, according to newly released estimates by the Founder Center. Adjusted for inflation, the year’s giving represents a 4.7 percent decline. Despite the bad news, the New York Times reports, many foundation leaders expressed relief the “drop in giving was not more precipitous, given that foundation assets fell 10.5 percent from 2000 to 2002.” As for giving in 2004, the mood is cautiously optimistic. Paul Brest, president of the William and Flora Hewlett Foundation, told the paper, “The market has done well so far, but you don’t want to count your chickens too fast.” One of the few foundations to increase their giving in 2003 was the Donald W. Reynolds Foundation. Because it plans to end operations in 44 years, “its giving is not tied to fluctuations in assets.”
Meanwhile charitable giving to universities and colleges from all sources is surging. A new RAND Corporation report shows higher-education private giving climbed to $23.9 billion in the fiscal year ending June 30, 2003. This reflects a strong rebound from 2002, when private giving dipped from the previous year for the first time since 1988. Giving by alumni, traditionally a school’s best source of contributions, was up 11.9 percent, while foundation giving climbed 4.8 percent. Giving by religious organizations remained constant. Corporate giving was not counted.
A Noble New Fellowship
To encourage the pursuit of a “noble life,” the Templeton Foundation is funding the William E. Simon Fellowship for Noble Purposes, which the Intercollegiate Studies Institute will administer. The first award, to be made in 2005, will be given to a graduating college senior who demonstrates “passion, dedication, a high capacity for self-direction, and originality in pursuit of a goal that will strengthen civil society.” The award will pay $40,000, which can be used to engage the winner’s community, advance his or her expertise, or otherwise further the winner’s pursuits.
For a number of years prior to 2001, the family of the late pharmaceutical magnate John G. Searle was locked in a struggle with Chicago Community Trust over how it was administering the Searle Fund, then worth some $280 million. In 2001, the family voted to move the fund from the Chicago Community Trust. The trust claimed it was fulfilling the late Searle’s wishes and would not consent. Both parties ended up in litigation over the situation. In April 2004, a compromise was reached. Though details have not been released, the Chicago Tribune reports that the Community Trust “will continue to administer the Searle Fund and four other Searle family funds, and the trust and Searle family consultants will share responsibility for giving grants.”