Foundations Should Stop Hoarding Their Assets

To the Editor:

Ian Wilhelm’s article “New Structure at Carnegie Is Designed to Respond to Emerging Issues” (October 18) raises an important question.

The restructuring at the Carnegie Corporation of New York is certainly a sweeping change, and in the nuclear age, greater understanding among religions — a goal of the restructuring — is sorely needed. But the most arresting part of the article is the brief mention that Carnegie assets have grown more than a billion dollars in less than four years — and that that translates into only a $20-million increase in grant making.

Is it time for Carnegie to begin paying out more?

Or — if Carnegie doesn’t see higher payout as the most responsible or effective way to steward its endowment — how about investing another $20-million into foundations that pay out considerably more than the 5 percent the law requires? Carnegie values collaboration, and the impact of that kind of program could be instructive.

For instance, Carnegie could pick a broad and compelling area, and put money into funders oriented toward that area. It can do it as a short-term pilot program to see what it can learn and what it can get in terms of impact on the chosen area, the grant makers, the grantees, and the grantees’ communities.

As a community-based public foundation that spends a lot more than 5 percent of our assets on grant making, that makes sense to us at Maine Initiatives. On the face of it, it seems that Carnegie would gain more than it would lose by launching that kind of program. Philanthropic collaboration would be fostered, lessons would be learned, and real lives in real communities would be changed.

No one wants to be a dinosaur.

But in an age of nuclear proliferation, vanishing water, global warming, religious polarization, and breakneck urbanization, the dinosaurs of the foundation world are those that let portfolio trump mission and hold assets back for a day when it will be too late for solutions. There’s a lot to be learned from funders that believe their job is to move as much money as possible today to the groups working to address the issues and solve the problems.

To evolve, foundations need to learn the value of increased payout. Investments and assets matter, and the best way to protect them is to let grantees take on the issues that place a healthy future — including the future of the businesses foundations invest in — in doubt.

If Carnegie is, as its president says in the article, a trend setter, no new trend to set would be worthier than this.

Charlie Bernstein
Program Director
Maine Initiatives
Augusta, Me.