Challenges for Nonprofits and Philanthropy: The Courage to Change: Three Decades of Refelctions
by Pablo Eisenberg
Edited by Stacy Palmer
University Press of New England, 2005
242 pp., $29.95
As a young man, Pablo Eisenberg spent some time at a “restricted” summer resort in New Hampshire, open to his otherwise-unwelcome Jewish father only because of his world-renowned skills as a cellist. A superb tennis player, Pablo did not hesitate to take on the cosseted summer residents at their own game, drubbing them mercilessly and joyfully. Ever since, Eisenberg has stalked boldly into the salons of the wealthy and powerful, speaking uncomfortable truths about the corrupt, immoral, or simply lazy practices concealed within the atmosphere of privileged collegiality.
Challenges for Nonprofits and Philanthropy: The Courage to Change is a collection of Eisenberg’s prophetic speeches, essays, and op-eds from the past 30 years. Edited by Stacy Palmer of the Chronicle of Philanthropy, where most of these pieces appeared, the collection makes clear why, as she puts it, Eisenberg “has been one of the most influential and outspoken voices in philanthropy.” His voice reflects an illustrious career in the world of nonprofits, including almost a quarter-century as director of the anti-poverty training organization Center for Community Change; co-founding the left-leaning philanthropy watchdog group National Committee for Responsive Philanthropy; a ten-year stint as a columnist for the Chronicle; and today, teaching at Georgetown University’s Public Policy Institute. One of his essays was almost single-handedly responsible in 1975 for persuading Aetna CEO John Filer’s Commission on Private Philanthropy and Public Needs—the last major public inquiry into philanthropy—to include representatives from poor, grassroots groups.
If Eisenberg strikes some as a harsh critic of nonprofit and foundation practices, it’s because he holds such high expectations for the sector. In the past, he maintains, civil society’s nonprofits led the charge in abolishing slavery, tackling the plutocracy of the Gilded Age, and attacking discrimination by race, gender, sexual preference, and disability. And so he expects nonprofits today to assume a major share of responsibility for the most serious challenges he sees facing the nation: “providing social and economic justice for all Americans; protecting the global environment; rebuilding the public’s trust in the fairness and effectiveness of our political system and government; eliminating poverty and creating livable wage jobs for all who can work; ensuring health protection for all Americans; limiting the excesses of corporate power”; and generally “reinvigorating our society and its democratic institutions.”
To tackle these challenges, he notes, nonprofits must be willing to rise above mere charitable activity and engage in aggressive advocacy for society’s outcasts, insisting on a more egalitarian distribution of wealth and power, and providing checks and balances against overbearing corporations and governments. Nonprofit leaders must possess “vision, courage, dynamism, accountability, ethics and competence,” plus a willingness to put aside particular institutional missions in order to join coalitions working for the broader public interest. Foundations, he insists, should be willing to support this sort of visionary advocacy, entrusting front-line nonprofits with unrestricted general operating support to enable them to respond flexibly and imaginatively to society’s problems. The foundation leaders he admires most are those, like the Ford Foundation’s David Hunter, who “challenged his colleagues ‘to be more yeasty, to make more ferment, to produce more action for social change, not to be so far above the battle, to get into the fray more.’”
Against such demanding standards, the nonprofit sector has fallen woefully short, in Eisenberg’s view. While nonprofits have multiplied and expanded and foundation coffers are bulging, the sector seems to have lost its way. Expansion has “diffused the focus of the nonprofit sector, scattering its priorities and activities over a wide range of issues and concerns,” cultivating narrow concentrations on fragments of problems, rather than “collective action on serious matters.” Nonprofits no longer boast extensive grassroots memberships and have become more centralized and likely to be directed by “highly professional staff members and lobbyists,” with a loss of democratic energy. As nonprofits play an ever larger role in the provision of government social services, their “increasing dependence on public funds” makes them less likely to challenge government agencies. At the same time, nonprofits are under pressure to adopt more managerial practices from American business, and indeed to establish profit-making enterprises. This may increase efficiency, but “corporatization” brings with it, according to Eisenberg, the bad habits of business, including self-dealing by boards and staff, obsession with management technique, and an artificially inflated status and salary for the CEO.
Similarly, foundations today too seldom exhibit the sort of visionary, activist leadership that Eisenberg endorses in his published appreciations of the Ford Foundation’s Hunter and Paul Ylvisaker, Common Cause’s John Gardner, and corporate philanthropy’s John Filer. Instead, foundations have become excessively cautious and controlling, forbidding grantees to undertake public advocacy and making grants only for special projects so they can “retain a much greater measure of power and control over grant making and their grantees” than they could by giving general operating support. Foundation board members and executives are chosen entirely from the professional elites on the basis of safe, collegial qualities like star power and “clubability”; experienced activists, members of minorities, and energetic, imaginative minds need not apply. These tendencies are only reinforced by the growing number of academic programs in nonprofit management education, Eisenberg argues, because they “have focused overwhelmingly on quantitative analysis and the details of management,” neglecting “those qualities of vision, ethics, integrity, and courage that are the soul of leadership.”
Meanwhile, the umbrella membership groups representing nonprofits and foundations behave like narrowly self-interested trade associations, turning blind eyes to the misbehavior of their members and becoming energized only when immediate institutional interests are threatened. As journalists and members of Congress turn up more and more examples of self-serving misbehavior by nonprofit leaders, the response has not been the necessary “introspection, self-criticism, and self-reform,” he laments, but rather gauzy P.R. campaigns, vehement denial, or violent counterattack. Sinking into the self-protective, reactionary behavior of bloated, bureaucratic mega-organizations, Eisenberg suggests, the sector today increasingly demonstrates that it possesses no compelling sense of purpose, “no vision or, at best, only a fuzzy notion of what it should do.” This lack of vision in the liberal mainstream is only underlined by the successes of conservative philanthropy, he notes, which can be explained by its powerful “vision, unity, and leadership.”
The constant themes in Eisenberg’s 30-year retrospective remind us that the sector’s problems of corruption and loss of direction are hardly new. Indeed, the prophetic warnings he issued after William Aramony’s fall from grace as the megalomaniacal, embezzling CEO of United Way of America in the early 1990s should have alerted the sector over a decade ago that it was dealing with fundamental, not superficial malfunctions.
Interestingly, Eisenberg has little faith the sector can overcome these problems on its own, in spite of his exhortations. He dismisses the notion that the sector can reform itself. That, he argues, must become the job of a beefed-up IRS, more aggressive congressional investigations and federal regulations, and more inquisitive state attorneys general.
I find Eisenberg’s diagnosis of the sector’s ills is right on target. The fact that he is one of the few leaders willing to engage in lively debate about the means and ends of America philanthropy (the sort of self-critical internal dialogue every other profession welcomes as a sign of vigor) testifies to the sector’s hidebound, directionless malaise, a malaise that has endured even as the sector has grown into a towering institutional presence. On the other hand, I don’t think that even the most vigorous prodding by government oversight agencies will accomplish the revitalization Eisenberg seeks.
No, the stagnation gripping the philanthropic establishment only reflects a more profound problem, namely, the failure of twentieth-
century American progressivism. This ideology held that the problems of the industrial age could only be solved by professionals steeped in social science expertise and armed with political authority. Modern foundations and nonprofits (especially universities) understood their roles to be housing and deploying that expertise, in close partnership with government. Through the 1960s, the sector’s high-minded idealism—its conviction that it knew what was best for us all—captured the public imagination and charged the sector with purpose and a passion for reform. This is the period that evokes such nostalgia and high expectations from Eisenberg.
Today few share Eisenberg’s optimistic view of the progressive project, or take at face value its idealistic claims. The rule of expertise has failed to deliver on its promise of sweeping solutions to the “root causes” of society’s problems. Indeed, in many instances, it has only made problems worse. Meanwhile, as the nation has shifted from decentralized government with citizenly engagement in local problem-solving to more centralized government and rule by experts and bureaucrats, a populist resistance has arisen, taking aim at arrogant elites within government as well as large nonprofits and foundations. Little wonder, then, that the nonprofit sector, along with its ruling “progressive” ideology, has lost its sense of purpose. Left standing, of course, is a vast, well-funded institutional apparatus, reduced to cynical defense of its privileges. Lacking a larger, compelling vision of the public good that would inspirit moral behavior and provide clear standards of conduct, the sector lapses into ever more episodes of corruption and personal enrichment, with few other than Eisenberg willing to speak out on behalf of what seems a nobler past.
The sector might begin to rediscover its idealism, however, if it took seriously the more populist or democratic element of Eisenberg’s teaching. Eisenberg argues that neighborhoods and communities in America “are beginning to show encouraging signs of revitalization” primarily because of the “hard work of grassroots community organizations.” Such local, front-line organizations, he notes, should command far more support than they do from foundations. Their hands-on, battle-hardened leaders deserve more chances to become executives of the sector’s organizations and instructors in its classrooms. Eisenberg champions the superiority of immediate, practical experience over abstract, intellectual doctrine, of the hard-bitten neighborhood organizer over the effete, pampered philanthropist.
Alas, Eisenberg is among the few in the sector who believe it can be revitalized by opening itself to an infusion of energy from the grassroots. Most just defend the prerogatives of the professional elites, for reasons now having less to do with moral conviction than with self-interest and ambition. Even with Eisenberg’s thoughtful incitement to reform, the sector is unlikely to summon up the “courage to change.”
William A. Schambra is director of the Hudson Institute’s Bradley Center on Philanthropy and Civic Renewal. Krista Shaffer, research assistant, contributed to the review