Renaissance Man on a Mission

Joel Fleishman is on a mission to save foundations from themselves. Calling them “the least accountable major institutions in America,” Mr. Fleishman argues in a new book that although foundations play a vital role in the country’s civic life, they must act quickly to mend their arrogant and secretive ways or risk increased public skepticism and government regulation.

“The only way for foundations to protect the freedom, creativity, and flexibility they now enjoy — and which they need if they are to serve society to their fullest potential — is to open their doors and windows to the world so that all can see what they are doing and how they are doing it,” he writes in The Foundation: A Great American Secret — How Private Wealth Is Changing the World. The book is due to be released by the publisher PublicAffairs next month.

‘Lover’s Quarrel’

Few people are better placed to send a message to the nation’s grant makers than Mr. Fleishman, who has worn many hats during his long career: philanthropy scholar, foundation head, foundation-board member, charity-board member, corporate-board member, public official, university administrator, university fund raiser, law and public-policy professor, and more.

Now 72, he has written his first book — an effort, he says, to air his “lifelong lover’s quarrel” with foundations.

“People criticize them for having lots of money and not spending it very well or spending it on excessive salaries or perks,” he said during an interview in his office here at Duke University, his longtime academic home.

“Sure, there are examples of that, but what’s really important is what the foundations have done. The value they’ve conferred on society over the course of the past 125 years is just amazing, and nobody knows about it.”

However, facing minimal government regulation or public oversight, he writes in his book, foundations “operate within an insulated culture that tolerates an inappropriate level of secrecy and even arrogance in their treatment of grant seekers, grant receivers, the wider civic sector, and the public officials charged with oversight. This needs to change.”

Foundations, Mr. Fleishman warns, are treading on dangerous ground by keeping information from potential supporters. “Because they don’t know anything about foundations, they don’t really identify with foundations and they don’t really constitute the kind of reservoir of support for foundations if foundations come under attack, which they do periodically,” he says.

Furthermore, by refusing to discuss their mistakes openly, grant makers keep vital information from their nonprofit colleagues about what works and what doesn’t.

While Mr. Fleishman could not have predicted it when he started writing, his book’s publication comes at an opportune time: Massive publicity about Warren Buffett’s multibillion-dollar gift to the Bill & Melinda Gates Foundation has heightened the public’s interest in the organizations that have been set up by rich people to do good since the days of Andrew Carnegie and John D. Rockefeller Sr.

While The Foundation is geared to a general audience, Mr. Fleishman plans to write another, more specialized book that will offer tips to foundation insiders about effective management.

Right and Wrong

In preparing his book, Mr. Fleishman interviewed more than 100 foundation executives and program officers, academic leaders, and nonprofit heads to find out what foundations have done right and where they have gone wrong. He and some Duke colleagues used that information to draw up 100 case studies, some of which are included in the book.

Mr. Fleishman writes that the most successful foundations focus on a limited number of issues, thoroughly analyze whether it is practical to tackle a given problem, and carefully select the organizations that will receive their grants.

Among the dozen successful examples he includes in his book: A 1906 report by the Carnegie Foundation for the Advancement of Teaching that catalyzed a movement to revamp medical education, and a decision by the David and Lucile Packard Foundation in 1999 to give more than $22-million to the China Sustainable Energy Program, which helped China develop energy-efficiency standards to go along with its rapid economic expansion.

Grant-making failures, according to Mr. Fleishman, include a project started in 1993 by the Annenberg Foundation to improve public schools, which many foundation officials that he interviewed agreed lacked a “coherent overall strategy,” and an effort in the early 1970s by the Twentieth Century Fund (now the Century Foundation) and the Markle Foundation to create a national council to hear complaints about news reporting, which the foundation acknowledged flopped because The New York Times refused to participate.

But the point Mr. Fleishman hammers home hardest is that foundations must honor their tax-exempt status by letting the sun shine on their activities — provide more documentation about their grants, analyze and call attention to their failures, and conduct public evaluations of both their existing and potential new programs.

His book includes a chapter of “not-so-modest proposals,” warning that given increased Congressional scrutiny, foundations could face retaliatory legislation if they don’t open up voluntarily.

Among his suggestions: Foundations should develop a “transparency and accountability code,” create a board to hear appeals from people who have been denied information from a foundation, pay for a system to publicly rate foundations on how open they are, and require foundations above a certain size to employ an ombudsman.

Absent such efforts, Mr. Fleishman says, a federal Foundation Freedom of Information Act might be needed.

‘Wise Elder’

Mr. Fleishman keeps himself strictly in the background in his book. But friends and colleagues describe him as a Renaissance man (he wrote a monthly wine column for Vanity Fair magazine for eight years) with a huge network of friends and associates. While he shuns the limelight, they say, Mr. Fleishman has been a major force for greater accountability and effectiveness in the nonprofit world.

“In other cultures, he would be called a wise elder,” says Peter Karoff, founder of the Philanthropic Initiative, a nonprofit organization in Boston that advises foundations and other donors.

Mr. Fleishman left an especially big imprint during his spell as president from 1993 to 2001 of Atlantic Philanthropic Service Company, the U.S. arm of a grant maker headquartered in Bermuda with about $3-billion in assets — which at the time awarded all of its grants anonymously at the request of its founder, Charles Feeney, an Irish businessman.

Given his emphasis on openness, it is somewhat ironic that Mr. Fleishman, who was directed to Atlantic by a headhunter, ended up working for a foundation that operated so secretly.

Mr. Feeney acknowledged he was the donor behind the foundation, Atlantic Philanthropies, in 1997, and the organization decided to start awarding grants publicly in 2001. But during Mr. Fleishman’s tenure, operations were so furtive that Atlantic warned grant recipients their money would be rescinded if they revealed the name of the “anonymous funder.”

Mr. Fleishman says he understands Mr. Feeney’s motives, calling him a shy man who hated being thanked. “I will say that despite the fact that we were anonymous and therefore didn’t have to release any information, we did more evaluation probably than any other foundation our size. When I came there in 1993, the first person I added to the staff was a director of research and evaluation.”

He said the hardest part about operating secretly was that Atlantic could never openly bring its grant recipients together to learn from each other — though it sometimes asked one of them to organize a meeting, at which no one could admit to getting money from Atlantic.

But Joel Orosz, a professor of philanthropic studies at Grand Valley State University, in Grand Rapids, Mich., who was a program director at the W.K. Kellogg Foundation at the time, says Atlantic “did an incredible amount of quiet field building,” providing money to projects to monitor and improve the effectiveness of charities and foundations that attracted few other grant makers.

Many groups that now do such work — GuideStar, the database of tax information about charities; the Bridgespan Group, which advises charities on management issues; the Hauser Center for Nonprofit Organizations at Harvard University, to name a few — got support from Atlantic during Mr. Fleishman’s tenure.

Mr. Fleishman continues to offer advice to groups that seek to make charities more effective, even though he is no longer in a position to steer money to them.

Trent Stamp, president of Charity Navigator, in Mahwah, N.J., got help of another kind when he “made the pilgrimage to Joel” as he was planning to start his group, which evaluates the financial health of big charities. “He was so kind and receptive. He didn’t help me with any money, opening any doors, any of those kind of things, but he asked all the right questions.”

Mr. Fleishman has since counseled Mr. Stamp to “try to be smarter” about his service, Mr. Stamp says. One of his main suggestions: Focus more on expanding the breadth of information provided about charities than the number of groups evaluated.

A Flair for Fund Raising

Mr. Fleishman was introduced to foundations early in his career, when he was a legal assistant to Terry Sanford, then governor of North Carolina, and helped raise money for some of Mr. Sanford’s pet projects. The association with Mr. Sanford eventually brought him to Duke, where the late governor served as president from 1969 to 1985.

Mr. Sanford enticed Mr. Fleishman away from a post at Yale University in 1971 by asking him to set up a public-policy institute at Duke. Mr. Fleishman again turned to foundations to get the initial funds for what is now called the Terry Sanford Institute of Policy Sciences and Public Affairs.

He was so good at raising that money that Mr. Sanford “rewarded” him by asking him to lead a capital campaign in 1982 to help bolster Duke’s sagging finances.

“It was something I really didn’t want to do,” Mr. Fleishman says. “But Duke was in a situation where it had never had a successful campaign in its history.”

He felt he could not say no to the person who had given him one of his first jobs and the perch at Duke, so he agreed to head a fund-raising drive that in almost 10 years raised close to $500-million for the university’s endowment and other needs.

Some of Mr. Fleishman’s activities during that campaign were portrayed in an unflattering light in an article in The Wall Street Journal that was published in September. The article describes efforts by Duke and Brown Universities to give preference to the applications of the children of rich and famous people, at the expense of more qualified candidates, in hopes of winning donations or publicity.

In material that is also included in a book — The Price of Admission: How America’s Ruling Class Buys Its Way Into Elite Colleges — and Who Gets Left Outside the Gates, by Daniel Golden — the article described Mr. Fleishman as the “go-to” man for prominent parents while he ran the fund-raising campaign at Duke, pushing to admit the children of potential donors and developing business ties with parents of Duke students such as Ralph Lauren, the fashion designer.

Mr. Fleishman did not comment for the Wall Street Journal article or for the book, but he says now there was nothing improper about his efforts to recommend children of wealthy parents who he thought would be good students for admission to Duke, which then had a dearth of affluent alumni.

He calls himself a “natural-born recruiter” who has recommended perhaps 2,000 students for admission to Duke, “most of whom had nothing to do with money.”

Corporate Insights

In addition to his work with Duke, Mr. Fleishman sits on several corporate boards, including Polo Ralph Lauren Corporation’s and Boston Scientific Corporation’s, which he says gives him insights that he can apply to his nonprofit work.

Corporate boards, he says, are much more focused on “careful process.” He adds: “The directors pay much closer attention to what’s going on than is typical of nonprofit boards, of foundation boards.”

Mr. Fleishman has had an opportunity to apply the principles he promotes in his book as a member and former chairman of the board of the Markle Foundation, in New York. He notes that Markle, with his encouragement, has narrowed its focus to two issues — promoting information technology in the fields of health and national security.

Advance copies of Mr. Fleishman’s book have started to circulate, and some readers have already weighed in.

Susan Berresford, president of the Ford Foundation, says she is recommending the book to associates and may provide copies to each of her board members.

“This begins to fill a big gap,” she says. “We need lots more like this.”

Stanley Katz, professor of public and international affairs at Princeton University, says because it is written by someone with both foundation and academic experience, The Foundation is a unique addition to a small, mostly older, body of literature about grant makers. “I find it hard to fault the general approach,” he says.

But the harshest critics of foundations, from both the political right and left, are not likely to be satisfied with Mr. Fleishman’s defense of big philanthropy’s basic nature.

William Schambra, director of the Bradley Center for Philanthropy and Civic Renewal at the conservative Hudson Institute, for example, argues that “modern scientific philanthropy” thwarts genuine democratic movements by transferring political power from everyday citizens to credentialed professionals.

Mr. Fleishman, he says, “makes the best possible case” for the big, established foundations, but fails to offer a fundamental critique. “He says their primary problem is they have some reticence to step forward and claim credit for all the wonderful things they’ve done.”

New Generation of Scholars

Mr. Fleishman will continue to wage his “lover’s quarrel” at Duke, where he heads the only academic program in the country that focuses on foundation decision making — which has itself won grants from foundations (Ford, Packard, and William and Flora Hewlett). Mr. Fleishman hopes the program will incubate a new generation of scholars who will write books to take up where The Foundation left off.

He says the publicity generated by Mr. Buffett’s gift to the Gates Foundation could inspire greater attention to the issues he raises in his book — and calls on the Gates Foundation to become a “model of what a transparently run foundation can be.”

“Foundation leaders must find the courage and vision to rise above their self-imposed, self-imagined phantoms of insecurity,” he writes, “and lead their institutions into a new era of transparency, accountability, and effectiveness.”