July 15, 1999 | Read Time: 7 minutes
As we approach the 21st century, we need to remind ourselves about the three basic values that undergird philanthropy and foundations — generosity, experimentation, and freedom. Because they are so basic, and perhaps taken for granted, we may not be sufficiently alert to forces affecting them.
One such force is the increasingly complex foundation landscape, which will continue to grow and diversify. Since 1987, the number of foundations in the United States has grown from 28,000 to about 50,000, and their assets have expanded from $115-billion to over $300-billion today. At the same time, the variety of grant-making activities has proliferated as well.
Of the new foundations, many of the largest are located on the West Coast and also in the Southeast, not just in the traditional strongholds of the East and Midwest. Many have been established and are being run by families and individual entrepreneurs. Others are beginning with donor-run collaborative systems, sometimes called giving circles.
The implications of this new landscape deserve note. First, the infusion of new large-scale donors into regions formerly less well served by big private foundations is good for those regions — and, incidentally, good for everyone, since many of the new donors have a global philanthropic vision. What’s more, the expansion is visible proof of the vitality and diversity of our field. It means that our biggest institutions can’t be easily typecast as having one regional perspective, one ideology, or one set of concerns.
Second, we now have a good number of high-technology entrepreneurs who bring an “investment” approach to grant making. Those entrepreneurs say they think of philanthropy as they think about their businesses, stressing the need to be clear about desired returns and being sure that sufficient money and organizational heft are present to reach their goals. While some people in philanthropy worry that the venture-capital approach will make donors too intrusive, I believe it is good to see increasing numbers of donors doing that kind of strategic thinking.
We often hear from some of these donors and others — as well as from some philanthropic observers — that wealthy people should give away their money during their lifetimes. That is not a surprising sentiment. After all, the donors made the wealth, they have a lot of confidence in their abilities, and they enjoy giving the money away.
But we need to be aware that some of the spend-it-now enthusiasm is based on the mistaken belief that, with the passage of time, perpetually endowed foundations all wander far from the donor’s original intent. That simply is not so. Most do adhere to their original charters. Moreover, in many cases, donors intentionally established perpetually endowed foundations with very broad charters precisely because they knew that they couldn’t predict what would be needed. Thus, a foundation’s grant making may be unlike what the original donor had imagined but still in keeping with the donor’s intent of flexibility and responsiveness to changing times.
Third, the multiplicity of grant-making organizations is likely to generate greater concern about what constitutes good philanthropic practice. New donors will be curious about what has worked and what has not. A growing body of knowledge exists about grant making, program design and planning, mistakes to avoid, tricks of the trade, and so forth. We need to think about how philanthropic training should be organized, shape its development, and decide if it should be conducted in universities, in foundations, or elsewhere.
For many new donors, of course, philanthropy will remain a do-it-yourself business. Those donors are likely to make the same number of missteps that any newcomer does, which in turn will produce a few horror stories — and, more importantly, more discussion of the philanthropic lessons learned.
Fourth, the changing landscape means that there will be greater need and opportunity for working alliances that don’t now exist between foundations. By that I mean not simply program partnerships, but also organizational structures. Several leaders of foundations around the United States have told me that they expect to see arrangements in which a number of foundations share administrative offices. One foundation executive thought that some of the large foundations will ultimately offer back-office services to new small ones or to individual donors — a sort of philanthropic-incubator function.
Along with today’s changing philanthropic landscape comes another new challenge: the increased expectation that foundations demonstrate their results to the public. As private bodies acting for the common good, foundations should show results to justify the public’s trust and their special tax status. Representatives of the press who cover philanthropy understand this and increasingly seek evidence of success. And their time frames are short.
In many respects, the pressure to show results is healthy and challenges us to be clear about markers of progress and results when we speak to broad audiences. It also helps deflate puffery and jargon. Most fields have insider language and people with the prideful tendency to promise more than they can deliver. Ours is no exception. The new demands for demonstrating results encourage foundation boards and staff members to spell out what they are doing, why, and what near-term practical changes will indicate that they are moving toward those goals. Those pressures make us stronger.
On the other hand, too much pressure for short-term, easily measurable results may drive grant makers away from types of work whose results can be difficult to gauge, such as leadership development, race relations, and human-rights education. In such fields, the changes we hope for often take time to emerge and have to be captured by “soft” measures.
Foundations must continue to focus a portion of their energy and resources on serious and complex problems such as poverty and injustice, or the nurturing of new leaders. We can support innovation in those fields by working with courageous change makers as they struggle against tough odds. To do so means ignoring the voices in our field who are calling for us to get back to what they call traditional charity — countable, visible actions like feeding the hungry, clothing the ragged, simply giving help. Charitable acts of that sort are important, as we see so vividly recently in the rebuilding of Kosovo, and in the aftermath of natural disasters. But charity can also include work on the underlying causes of human misery. The old adage of teaching a person to fish has meaning and importance in philanthropy.
The glare of publicity can be uncomfortable for grant makers long used to acting publicly in a private manner. That discomfort reflects, in part, a characteristic U.S. trait: a combined fascination with and uneasiness about wealth and the power it seems to confer. So many grant makers try to convince themselves that they can and should ignore the press.
But the repeal of public privacy is here to stay, and philanthropy will be covered in the news media as never before. If we don’t tell our story well, others can be convinced that we are “stealth forces” in society. They will be suspicious about us and never learn about the neighborhoods that have been rebuilt, the colleges and universities that have been strengthened, the fellowships provided, and all the rest. So, large and small foundations must make communications a priority.
Grant makers can look to the future with optimism and with confidence in each others’ abilities to adapt to the changes occurring around us. Our story is not a tale of one set of beliefs, one generation’s ideas, or one way of doing business. It is a tale of our richly diverse people and the different views, ambitions, and dreams they have expressed through their giving. In the new millennium, with its global concerns and realities, that diversity, ambition, and imagination will be all the more important.
Susan V. Berresford is president of the Ford Foundation, in New York. This piece is adapted from a speech she made recently at the annual meeting of the New York Regional Association of Grantmakers.
