For All the World to See
The governors of Virginia and Minnesota joined U.S. Secretary of Education Rod Paige recently in announcing the launch of a new website, schoolresults.org. The site “will enable parents, educators, policymakers, and citizens to see how a school compares with other schools in the same district, county, or state,” reports the Minneapolis Star Tribune. Minnesota’s Republican governor Tim Pawlenty praised the site for providing access to “user-friendly, easy-to-understand information.” The $54 million price tag to create and run the site for two years was picked up by the Broad Foundation—a Los Angeles foundation dedicated to strengthening public school leadership—and the U.S. Department of Education. According to foundation founder Eli Broad, by the end of this summer data from all 50 states, the District of Columbia, and Puerto Rico, will be posted.
The controversy over the estate of Albert C. Barnes and his art collection has caused no end of debate in Philadelphia and across the nation. (See “Donors Held Hostage,” November/December 2003). The Lenfest family, which has supported moving the Barnes Museum to Center City in Philadelphia, has taken the story to heart. The Philadelphia Inquirer quotes patriarch Gerry Lenfest, 73, as saying recently, “During your lifetime, you can direct how your wealth is spent for the most good. But after your death, it is problematic. You don’t have the control.” For that reason he’s giving away the family fortune, which was made in the cable TV business. To date, $325 million has been given away, with $800 million to go. The children, who are independently wealthy, will receive none of Lenfest’s funds. “They say family foundations keep a family together,” he tells the Inquirer. “I think it probably has just the opposite effect.”
The Center for Effective Philanthropy has released the first of two planned reports on foundation governance. The first report, “Foundation Governance: The CEO Perspective,” surveys what the CEOs of America’s 250 largest foundations think about their boards. “The majority of foundation CEOs are highly satisfied with their relationships to their boards and, to a somewhat lesser degree, consider their boards to be effective,” the Center reports. The survey also showed that the “boards that are perceived as most effective by their CEOs are highly proactive . . . .They do not limit themselves to the traditional roles of overseeing investments and approving individual grants.” Based upon the survey findings, the report concludes, “boards should review how they are spending their time and consider ways to motivate higher levels of board engagement.”
The report also touched on the question of board compensation. Most survey respondents at independent family and non-family foundations said at least some of their trustees were compensated. Although the report found that higher levels of compensation correlate with greater commitments of time by trustees, when CEOs were asked to consider their board’s effectiveness, there was no statistically significant difference between compensated and uncompensated boards.
The report apparently did not ask CEOs whether their trustees sought to enforce donor intent.
A second report, which will survey board members’ perspectives, is due out later this year.
Marta Fox, wife of Mexico’s President Vicente Fox, is a popular figure in Mexico. So much so that she’s considered a front-runner to succeed her husband as President in 2006. She’s built up quite a reputation as a fundraiser. As first lady, she has used her office to raise large amounts of cash and in-kind donations for her private foundation, Vamos Mexico, which is supposed to assist the poor. But, the Financial Times reports, it’s difficult to know if the charity is spending its money for these purposes, because it has not released an audited financial statement since 2001. Making the situation worse for Marta, “some of the business of her foundation, including press relations, is handled by her personal staff at Los Pinos, the presidential residence, and their salaries are paid by taxpayer funds.” Some critics claim the foundation is a “thinly veiled vehicle” for furthering her political ambitions, a charge that Marta Fox vehemently denies. The charges seem to have no traction with Mexico’s poor, with whom she remains wildly popular.
A Final Chance for Detroit Charters
Last October, philanthropist Bob Thompson withdrew an offer to donate $200 million to build 15 charter schools in Detroit. But, writes the Detroit News, he “isn’t prepared to give up on the city.” Daniel Howes, the article’s author, says Thompson told him in a recent interview he’s amenable to reopening negotiations with the city, so long as it doesn’t reignite the controversy that led him to withdraw the original offer. Why the change of heart? Perhaps because “now Detroit has lots of competition for his cash. In the four months since he yanked his offer amid withering criticism from teachers’ unions and politicians . . . Thompson said he has been deluged with ‘voluminous’ requests from other big city mayors, even governors, to bring his charter schools plan to them.” Thompson, who’s 71, say he and his wife will quickly decide whether to re-extend their offer to Detroit or accept an offer to take their plan to another city. “Time is not my friend. If we’re going to help someone, we should do it now.”
Engaging the Young
The Truman Heartland Community Foundation of Kansas City believes philanthropy can do more than help those in need, it can also teach the young to become involved in their communities and build good business skills. Since 1998, the foundation has run a Youth Advisory Council, which recruits area high school students in grades 9-12 who show an interest in leadership and voluntarism to authorize grants. This year’s Council has decided to help establish a $1 million endowment to fund future youth needs. Nicole Stevens, a program assistant, said this year’s recruits “were looking for an ongoing source of funding and realized if they funded an endowment of $1 million, they can give $50,000 to $100,000 each year to the community.” Paul Thomson, president and CEO of the foundation, praises the youths’ careful evaluation of proposals. “I like to say to applicants, it’s a lot tougher to get a grant from the kids than from us.” One council member is grateful for the business experience: “I really enjoy it, because the way you learn about money is a lot more businesslike.”
The William E. Simon Foundation will award its 2004 Philanthropic Leadership prize to David Robinson, a former NBA all-star with the San Antonio Spurs and founder of Carver Academy in San Antonio, Texas (for more about Robinson and Carver Academy, see the article beginning on page 20). Robinson was also recognized for his work with the city’s hungry and its neediest children. The Simon Foundation’s Social Entrepreneurship prize will go to Elayne Bennett for her work as founder and president of the Best Friends Foundation, a national network of programs that work with schoolchildren to promote abstinence from sex, drugs, and alcohol.
The Thomas B. Fordham Foundation extended a prize for distinguished scholarship in education to Eric Hanushek, a fellow at Stanford’s Hoover Institution, for his work on evaluating private school spending and resource allocation. The foundation’s prize for valor was awarded to Howard Fuller, founder of the Institute for the Transformation of Learning at Marquette University, which works to expand the number of educational opportunities available to low-income minority students.
A Public Switch
The Pew Charitable Trusts recently changed its status from that of private foundation to public charity. The move required the approval of the IRS and two Pennsylvania courts. Pew officials, the Chronicle of Philanthropy reports, say they will continue to give away at least 5 percent of their assets annually, although this is not a requirement for a charity. The officials added that the change will make it easier for Pew to attract “big donations for the organizations it supports” and to run its own charitable programs. Pew will also escape taxes on income generated by its nearly $4 billion in assets and “be able to devote more time and money to lobbying and advocacy” than private foundations can.
One of Pew’s first acts as a charity has been to set up a fund to attract donations for the Barnes Foundation, which is seeking court approval to counter its original benefactor’s intention that it be located outside Philadelphia.
While other foundations have considered such a transformation, the difficult legal hurdle is the requirement that a charity receive broad public support. Pew successfully argued that its new entity could qualify because it would be supported by the seven original trusts set up by the children of Sun Oil founder Joseph Pew and his wife. Those trusts are now supporting organizations for the new charitable group. Pew promised government officials that it would raise additional funds from other donors and that it would add non-family members to its governing board.
The change has drawn fire from both left and right. From the left, Pablo Eisenberg writes in the Chronicle that the IRS should not have accepted such “legal gimmickry.” And, he adds, “already regarded by many nonprofit groups as a bully that tries to impose its priorities on other organizations, especially in the area of environmental grantmaking, Pew will be able to wield even more power and influence.” Eisenberg also worries that Pew’s fundraising will edge out nonprofits that lack its multi-billion-dollar clout.
From the right, the Wall Street Journal editorializes that the decision to change legal form, like much else Pew does, has little connection to the original donors’ intentions. The Journal especially fears “even more . . . political activism” for causes that, as an earlier Boston Globe article put it, “Pew himself might well have loathed.” The newspaper notes that Congress hasn’t “seriously debated the issue of foundations and donor intent and the tax breaks that guarantee perpetuity” since the Patman hearings of the 1960s; it suggests new congressional hearings may be in order.