Charles L. Scott II, better known as “Scotty,” will step down in July as CEO and executive director of the Association of Small Foundations (ASF). He has been with ASF since its inception in 1995 and seen it grow into a 2,800-member organization for donors who run their foundations with no more than five staff members. From his Vermont home, Scott granted a wide-ranging interview to Philanthropy in April.
PHILANTHROPY: Does the current decline in foundation assets mean the predicted “golden age of philanthropy” will end before it begins?
MR. SCOTT: While the market fall has seriously harmed many foundations’ endowments, foundations are showing just how deeply dedicated they are to the grantees who depend on them. A number of foundations are cutting administrative expenses, and some are even dipping into their corpuses, to ensure the grantees they support can continue to function. It’s important to remember that while the economy is hurting existing foundations, it isn’t slowing by much the number of new foundations being created each year. In 2003, for example, about 3,000 new foundations will come into existence. This is happening because the much talked about transfer of wealth is here. At ASF, some 40 percent of our members will receive a bequest this year. Despite the short-term setback many foundations are currently experiencing, philanthropy will continue to grow in this country. It’s in the American fabric. And as a society, we care too much to do otherwise.
PHILANTHROPY: ASF has recently begun offering trusteeship seminars, and one will be offered this fall at The Roundtable’s 2003 annual meeting in San Diego, California. How did this seminar come about, and what can participants expect?
MR. SCOTT: Several years ago, our annual survey of ASF members showed that 76 percent of our folks would be interested in a day-long seminar on trusteeship. A lot of ASF people who are successful in their personal lives find themselves sitting on boards and facing the reality that they’re starting over. Working with two experts in adult education, we created a one-day seminar limited to around 60 people. It’s an intense day that covers everything from tax, legal, and fiduciary issues to evaluating grantees and 990 PFs. We encourage our members to send their entire boards, and oftentimes boards will tie in one of their own meetings with the seminar. We’ll be teaming up with the Roundtable this year to present the seminar at your November meeting in San Diego.
PHILANTHROPY: Accountability and evaluation are popular topics in philanthropy today. Where do you see these trends heading, and what dangers do you foresee?
MR. SCOTT: There are a number of good rating systems currently available to assist foundations in evaluating grantees, and more will be coming online in the near future. More ASF members, and philanthropists in general, are going to get involved with accountability and capacity-building. There is, however, a component about this that worries me—information overload. The web makes more information available to more people than at any other time in history, but it creates the illusion that a lot of organizations are equal. The challenge now is to create a source of information that can provide comparative data on the majority of nonprofits out there in a way that is user-friendly, thorough, and fair.
PHILANTHROPY: What is right with American philanthropy, and what are its biggest shortcomings?
MR. SCOTT: One of the best things about philanthropy in this country is that the number of people getting involved continues to grow. We do this because we are all immigrants, we believe in the American ethic of hard work, and we feel fortunate for what we have. Philanthropy works in this country because people give money to people, rather than organizations giving money to organizations. We are a society that cares too much to do otherwise. Further, philanthropy is learning to ask some hard questions about itself: “When have I accomplished my goals?” “When should I fold up?” What worries me most about philanthropy is that the nonprofits receiving funding aren’t asking these questions of themselves. The amount of service duplication in the grantee world means that there should probably be some mergers and some sunsetting.