Report on Payout Shouldn’t Be Dismissed

To the Editor:

Professor Perry Mehrling’s new study (“Playing the Percentages,” October 21) is an exciting addition to the long-running debate over foundation payout. He has quantified with economic measurements what many of us in philanthropy have already accepted: that in spite of the enormous returns on investment over the past 20 years, and the unprecedented amount of new money invested in philanthropy, most foundations continue to pay out near the minimum.

Those in favor of maintaining the status quo of 5 per cent need to ask themselves, “Are today’s persistent problems less important than the possible problems we may face tomorrow?” Tomorrow’s citizens — today’s youth — must be empowered to act on tomorrow’s problems. Let us give them every advantage we can today. An investment in building democracy, improving education and health, reducing poverty, and eliminating social ills today could bring us dividends far in excess of today’s return on investment.

We should take heed of voices, like Barbara Dudley’s, that question the public benefits of private philanthropy. Foundations acted as a community when they fought for the 5-per-cent payout in 1981. It would be equally gratifying — and beneficial to our tax-exempted sector — to see us act to regulate ourselves by agreeing to distribute the wealth we have been entrusted with to build a more equitable, just, and humane society. We need to constantly remind ourselves that we’re here to make a difference, not to make money.

Sarah Stranahan
Board Chair
Needmor Fund
Boulder, Colo.