Philanthropists Fall Short

Why many philanthropists are not social reformers


| November-December 2003


Social reform on almost any front requires fresh ideas coupled with financial backing. Philanthropic foundations should be well positioned to deliver both, but do they? In Whole Earth (Fall 2002), investigative reporter Mark Dowie says the supposed white knights of philanthropy often come up short.

With government agencies facing budget cuts and in many cases reporting to conservatives, private foundations have great potential to promote solutions to serious social problems, says Dowie. But the author of the groundbreaking book American Foundations: An Investigative History (MIT Press) contends that philanthropists too often act as a “drag anchor” on real reform. Though they may be good at giving one-shot cash injections to small nonprofit groups when emergencies arise, they typically revert to funding their high-profile “SOB” standbys—the symphony, opera, and ballet.

The public, however, is starting to catch on. For one thing, many now know that so-called private foundations aren’t so private after all, given that up to half their assets would have gone to the public via taxes had the foundation not been created. In Dowie's view, it's more accurate to think of foundations as “quasi-public/private institutions.” Thus, the more democratically they’re run, the better.

To that end, Dowie thinks foundations could stand a little anti-trust action: “I'd break up the big ones,” he says, thus opening their boards to new viewpoints. He’d also pressure foundations to adopt a more critical stance toward the corporations in which they invest. At one point the nation's leading environmental grant maker, Pew Charitable Trust, for instance, “was earning more money in dividends from the nation’s largest polluters than they were giving to the environmental movement.” Though a lot of institutional resistance remains, Dowie believes it would be a step in the right direction if foundations started engaging in proxy fights or reinvested their endowments in ways that complemented their missions.
Jacqueline White