I have only a little more than three years of experience on the giving side—that is, helping George Soros give out his money in the United States, not giving my own paltry personal sums away—but 20 years of experience on the grant-seeking side. So I feel qualified to have some firsthand opinions on the “vices and virtues of philanthropy.” To start with the vices, contemporary American philanthropy is:
Most foundations and wealthy individuals are too busy looking over their shoulders to provide any leadership. There’s a “pack mentality” in funding, as in many areas of life, that causes most donors to hold back until someone else makes the territory safe to tread in. Few donors have a coherent vision of social change, and most of the rest are advised by over-cautious lawyers to stay so far away from advocacy that few get close to the leading public policy issues of our time, such as education, poverty, crime, immigration, or campaign finance reform, to name a few.
·FEARFUL OF SCRUTINY·
Foundations have power that isn’t checked by the normal mechanisms of market or government. They don’t have to fear losing customers or voters, and rarely face the kind of intense press scrutiny that corporations or officeholders must live with. This unaccountability makes many foundations opaque and unresponsive institutions, and in too many cases, arrogant ones. Get two or more grantseekers together and they will be full of stories about the strange practices of foundations—confusing or shifting guidelines and priorities, distant or high-handed staff, unreturned phone calls and unanswered letters, and so on. I’m sure that George Soros’s Open Society Institute, where I work, is among those criticized, despite our best efforts. But few grantseekers are in a position to criticize, directly or publicly, those from whom they seek to raise vital funds.
This is a big country, and a big globe, but with very few exceptions the larger American foundations are heavily concentrated on the two coasts. True, program officers travel a great deal, but it is remarkable that so few foundations maintain offices and staff anywhere outside their headquarters city, or in poorer neighborhoods within that city. And foundations are not just geographically remote from many of the communities they purport to serve. Most foundations draw their program staff from a narrow sector of experience, with a heavy concentration of academics. Not too many foundation staffers have been successful advocates, or run organizations of their own.
There’s an old saying that if all you have is a hammer, every problem looks like a nail. Too many foundations have a foundation-centric view of the world, and more and more seek to run programs themselves, on the notion that “the field” they seek to influence is not sufficiently developed, or perhaps too fractured. This is sometimes the right approach, but it is a dangerous trend. What foundations ought to be doing, for the most part, is looking for promising initiatives, providing the support they need, and getting out of the way. But too many steer clear of projects they have not had a hand in designing, or create “partnerships” with and among grantees that, given the unequal balance of power between donor and donee, are hardly agreements among equals.
Nearly all foundations these days talk the lingo of “sustainability” and “capacity-building.” Few want to prop up an organization forever, or have it become dependent on their grants. (Here, however, is an interesting difference between so-called conservative foundations and so-called liberal ones: the leading conservative ones have been fairly content to fund—over many years and with general support—key institutions in their field, and seem unconcerned with the dependency that may be created; the liberal foundations are always looking for an exit strategy, and want their grantees to be able to pull themselves up by their own bootstraps. This is a mirror image of the way conservatives and liberals traditionally think, in the larger world, about, say, welfare.)
Too much of the time, if we are honest with ourselves, we are building the “capacity” of organizations to “sustain” themselves with some other foundation’s grants—not to identify sources of earned income or tap into broader public support. Because in fact far too many organizations, on both ends of the political spectrum, are too dependent on a handful of foundation grants for survival.
But then there’s the other side—the virtues of contemporary American philanthropy. There’s plenty of evidence that it can be:
I don’t happen to share the Lynde and Harry Bradley Foundation’s enthusiasm for vouchers that enable families to use public tax dollars for private, even sectarian schools, but it is a bold approach to a serious public policy issue—the sorry state of many urban schools serving the most disadvantaged kids in our society. The foundation’s aggressive support for vouchers is a model of bold advocacy for social change. Despite the many knocks it gets for taking on powerful constituencies in education, the foundation persists. George Soros’s stance on drug policy reform—while often mischaracterized as a drive for drug legalization—is similarly bold. It’s hardly popular to raise criticisms of the war on drugs, which has been the dominant national policy since the Reagan years. But the unintended consequences of our drug policies—including nearly two million people in prison, many for non-violent offenses—demand public debate, and OSI funding is helping to stimulate one.
Foundations may not get the press scrutiny that they deserve—and that would help them to improve their performance—but a number of donors work hard at getting feedback. The David and Lucile Packard Foundation distributes a confidential questionnaire to its grantees, and makes public the results and its responses to it. The Open Society Institute has an ombudsman who can receive and resolve complaints throughout its global network of foundations. The Annie E. Casey Foundation commissioned independent reports on some of its programs, and has been extremely candid about mistakes it has made. And a number of foundations—but not enough—support watchdogs of philanthropy like the Philanthropy Roundtable or the National Committee for Responsive Philanthropy.
More and more foundations are reaching outside their trustees and staff for advice, and relating more directly to the communities they purport to serve. The Edna McConnell Clark Foundation, for example, has advisory committees in place for all of its grantmaking programs. The Open Society Institute also follows that approach, and its new office in Baltimore has delegated grantmaking responsibility to a local board which includes a number of members who have not previously been involved in the distribution of philanthropic resources. One foundation—the Bert and Mary Meyer Fund of Florida—has gone so far as to turn its assets over to a new board composed of its grantees. The new public charity created by this move deserves support from other donors.
If you raise funds, as I have over the years, the kind of funder you most appreciate is the one who decides you are doing a good job, and makes a general support grant—ideally over a multi-year period—that expresses confidence in your ability to use the money wisely. The New York-based Joyce Mertz-Gilmore Foundation, which supports human rights, environmental, arts, and lesbian and gay causes is that kind of funder. To judge by its annual report, the Lynde and Harry Bradley Foundation, on the other end of the political spectrum, is another.
Empowering grantee organizations through the kind of support discussed above is extremely important. But the most important form of empowerment is of individual agents for social change. Many conservative funders, recognizing the power of ideas to affect change, have generously supported writers and scholars who challenge the conventional wisdom. Progressive foundations have provided such space for thinkers, artists, and activists—for example, through the MacArthur Foundation’s “genius” awards—or granted funds directly or indirectly to groups working at the grassroots level. One example is the grants pool supported by OSI, the Charles Stewart Mott Foundation, the Public Welfare Foundation, and a number of other funders, for low-income advocacy groups working to insert the voices of poor people in state-level debates over welfare policy in the age of devolution.
If a certain parallelism is evident here, it’s intentional. For every philanthropic vice, there is a corresponding virtue. Sometimes the vices seem to outnumber the virtues, but the trend, I am happy to say, seems to be in the other direction.
Gara LaMarche is director of U.S. programs for the Open Society Insititute, a private foundation established by financier George Soros. Prior to joining OSI, Mr. LaMarche was associate director of Human Rights Watch. He has also served in a variety of positions with the American Civil Liberties Union.