August 26, 1999 | Read Time: 5 minutes
The John and Mary R. Markle Foundation’s decision to spend $100-million over the next three to five years to finance Internet-related projects (The Chronicle, July 29) is to be commended on many counts.
First, by electing to move in such a dramatic new direction, foundation president Zoë Baird and her board have shown great leadership and vision — qualities that are all too rare in the foundation world today. Second, the decision to concentrate on one specific area demonstrates an understanding that a foundation cannot become a knowledgeable and effective grant maker without a clear and precise focus. And third, by choosing to give double the federally required amount of 5 per cent of investment assets over each of the next five years — and by concentrating those resources on a single area — the Markle Foundation is certain to have a far greater influence than it would if it continued to split its grants among many different areas.
Indeed, every foundation ought to seriously consider following the Markle Foundation’s lead by committing itself to leadership, selecting a focus, and doubling its payout.
Yet it is hard to understand why Markle has chosen the Internet as the centerpiece of its new strategy.
Undeniably, the Internet is the hottest topic around right now. In the slow-paced world of foundations, we all would like to find a way to be part of that action. But it is not so easy to understand how foundations can play a meaningful role.
The evolution of the Internet has been so rapid and unpredictable that professional venture capitalists, who have dealt with it for years, still have a hard time trying to understand how to use their money effectively. And most foundation officers and trustees have far less Internet experience to draw upon than do venture capitalists.
There is no doubt that the Internet already has become extremely useful to foundations and grantees alike. In every field, both donors and recipients can use the Internet to help reach their goals — whether those goals be promoting the arts, fighting poverty, or pursuing some other social objective. In fact, grants to help charities figure out how to use the Internet effectively may be quite valuable.
But to take the development of the Internet as a goal itself is a very different matter. So many vastly larger forces are at work. Initial public stock offerings for Internet-related companies have raised $14.4-billion dollars of equity so far this year — roughly as much as all foundation grants made last year. It is not clear where foundations can make a difference.
Even the question of universal access is being solved in unexpected ways. Computer prices have plummeted. Numerous companies compete to offer free e-mail and on-line access. At least one start-up company now gives away computers, provided that the recipient uses its Internet service for about $20 per month. And in a majority of American homes, the Internet is rapidly becoming as accessible as the television set.
In many ways, the Internet is simply a tool, like the telephone. It may make a huge difference in the history of the world through the ways in which we use it, but its development and distribution is not an obvious purview for philanthropists.
Public television, as Ms. Baird herself suggests, may be a better analogy. Financed by a few leading foundations, including Markle, in the 1950s and 1960s, public TV might have evolved differently if foundations had gotten involved sooner, Ms. Baird suggests.
Still, it is not clear how. Global markets have determined television distribution and content. Foundations, for all of their clout, can hardly sway mass markets or alter the economic model that businesses develop to serve millions of customers.
Perhaps Ms. Baird envisions a PBS of the Internet. Yet even that parallel is unclear. In the pre-cable era, television programming was controlled by three stations. Without public television, there would have been virtually no educational or civic-affairs programming. But on the Internet, anyone can post information — and anyone can gain access to it. So it is not clear why or how foundations should get involved in financing the Internet.
What’s more, it would be a genuine cause for concern if foundations jumped onto every popular topic. One of the greatest strengths that foundations bring is their independence. Often they have done the most good by focusing on areas of society that are otherwise ignored. For example, much of the groundwork that led to the Supreme Court desegregation decisions — surely an unpopular cause that the legislative branch had no desire to touch — was paid for by the Ford Foundation and other grant makers.
Perhaps there really is a role for foundations in the development of the Internet. The Markle Foundation, having gotten so many things right, may have figured that out as well. If so, it may be in the area of philanthropy that Markle can make the most difference.
As part of its 18-month planning process, the foundation conducted much research, gathered panels of experts, and commissioned studies with outside consultants, all to decide how to protect the public’s interest with regard to the Internet. By sharing that information with other grant makers, Markle could help them understand how to be effective in this new arena. In that way, philanthropy could have a better chance of making a difference in the brave new digital world of the Internet.
Mark R. Kramer is a venture-capital investor, a foundation trustee, and former chairman of the Jewish Funders Network, an organization of independent Jewish foundations. With this column he becomes a regular contributor to these pages. His e-mail address is kramercap@aol.com.
