A ‘Reinvention’ to Aid Grant Seekers

As the Foundation Center turns 50 years old, it seeks $15-million to upgrade research tools

To help fund raisers better understand the scope, scale, and style of modern-day philanthropy, the Foundation Center is raising

millions of dollars to expand its research as it marks its 50th anniversary.

In the five decades since the center opened its doors, the foundation world has vastly expanded in wealth and numbers.

The United States had slightly more than 4,000 foundations when the Foundation Center opened its doors in 1956.

Now, nearly 80,000 grant makers are in operation, the center says.

And the wealth of the nation’s foundations has exploded just as fast. Fifty years ago, foundation assets were worth $7.2-billion.

In 2004, the most recent year data are available, the center calculated the assets for grant-making philanthropies at $510.5-billion.

With such massive change, the research group needed a “reinvention,” says Sara L. Engelhardt, the Foundation Center’s president, adding that the organization is attempting more than a superficial makeover. “When you’re 50 years old, you can put on as much lipstick as you’d like, but people still say you still look pretty old,” she says.

The center, in New York, has received more than half the $15-million it is seeking to support its new efforts, which include:

• An increased focus on providing more timely data on giving and foundation-management practices.

• Studies of commercial gift funds, health-care-conversion foundations, and other relatively new grant-making organizations.

• Making its information more accessible to the news media, scholars, foundation leaders, U.S. lawmakers, and, of course, grant seekers through a redesigned Web site and other outlets. In addition, it will offer more of its publications and training sessions in Spanish because of the increasingly international nature of foundation grants.

“We really do feel we are moving to a wider span of helping people understand how giving takes place in this country,” says Ms. Engelhardt. She says the changes should make it easier to use all of the information the center collects. In the past, “we’ve often seemed like an octopus organization.”

Competition Grows

The Foundation Center’s moves may arise in part from greater online competition, such as FoundationSearch, a for-profit venture that offers data similar to the Foundation Center’s.

Ms. Engelhardt said her organization, which has five offices nationwide, 150 employees, and a budget of about $18-million, continues to be a popular resource. Its best-selling product, the annual Foundation Directory, has more than 11,000 subscribers, and its Web site receives about 40,000 requests a day for information.

Despite this, the Foundation Center is criticized for not making its databases more widely available. Its Foundation Directory, for instance, costs between $195 and $1,295 a year, depending on how much information a subscriber requests.

Emmett Carson, the newly appointed chief executive officer of the Silicon Valley Community Foundation, in Palo Alto, Calif., says the center needs to do more to help minorities and poor people who are trying to build nonprofit efforts. “The primary audience of the Foundation Center has been toward professional grant seekers,” he says. “It has not been geared toward grass-roots groups.”

Ms. Engelhardt says that, as part of its overhaul, the center will expand from 300 to 500 the number of organizations, usually public or university libraries, that offer visitors free access to most of the center’s online resources and print publications.

Merger Called Off

While the center is only in the first year of its new plan, it has already taken a misstep. In May, it announced that Lester M. Salamon, director of the Center for Civil Society Studies at the Johns Hopkins University, in Baltimore, would bring his research staff to the Foundation Center and establish the Alexis Institute for Civil Society and Philanthropy.

Two months later, the move was called off.

“It was really a structural thing that made it difficult to basically merge his center with our institution,” says Ms. Engelhardt. “As we got down to the nasty little details of how this would work, we both realized it would not.”

Ms. Engelhardt says the new institute, which will be part of the Foundation Center but operate with some independence, will still open. It will provide research on policy debates involving philanthropy, emerging giving trends, and data that compare foundation programs. She says she expects to announce a leader for it in January.

Mr. Salamon, who remains at Hopkins, says the split was amicable, albeit with a few “bruises,” and that he abandoned the deal because he wanted more say in the decision making than the center’s officials would allow. “I came to the realization that what I thought was going to be in place was not their understanding of it,” he says.

Some observers of the nonprofit world say the failed merger is a blow to the Foundation Center.

The addition of Mr. Salamon would have made the center “intellectually more aggressive,” says Stanley N. Katz, a professor of public affairs at Princeton University.

While the center provides useful services, its analysis of data could be stronger, he says. For example, Mr. Katz would like the center to sift through its information on giving to cultural causes to examine how much foundation money goes to humanities groups as opposed to arts organizations.

Congressional Concerns

The Foundation Center’s history in many ways is the story of how foundations have engaged in — and occasionally resisted — efforts to make themselves more open.

The center was born out of Congressional concerns in the 1950s that some charitable funds were secretly supporting communism or other “un-American” causes. At the time, no central resource for data on philanthropy existed.

To help lawmakers and others better understand charitable giving, the Carnegie Corporation of New York gave $100,000 to establish the Foundation Center as a privately supported nonprofit research institution; in the next few years, the Ford, Russell Sage, and W.K. Kellogg Foundations also contributed to the fledgling project.

Their grants helped to prevent damaging legislation aimed at grant makers, says Dwight Burlingame, a historian of charitable giving and director of academic programs at Indiana University’s Center on Philanthropy. The center’s “creation shortly after the Congressional scrutiny was of very strategic importance,” he says.

Despite this, some foundations through the decades have insisted on keeping their information private.

In the late 1980s, for instance, Ms. Engelhardt said, she occasionally received letters from lawyers hired by foundations that said something similar to, “We’re a private foundation; we will sue you if you include us in your directory because it’s our information and we own it.”

Today, foundations for the most part have warmed to the research group and provide the information it seeks. To date, it has won grants from more than 600 foundations. Such giving accounts for about 50 percent of the center’s budget, with the rest generated by its subscription, publication, and service fees.

But the degree to which grant makers disclose information about their operations remains an issue, especially among lawmakers, such as Sen. Charles Grassley.

The Iowa Republican, who is head of the Senate Finance Committee, has questioned the compensation of foundation executives and the funds’ governance practices.

With this renewed scrutiny by Congress, and philanthropic wealth swelling to unprecedented heights in recent years, Ms. Engelhardt said her organization now more than ever needs to take on larger research responsibilities to help Americans understand philanthropy. Despite its golden anniversary, the center cannot rest on its laurels, she says.

“‘Fifty years young’ is one of our tag lines,” she adds.