Small Foundations Have a Story Worth Telling

LETTERS TO THE EDITOR

To the Editor:

Perhaps because I have worked at philanthropy in the environmental-conservation and public-policy arena for 30 years, and because our foundation is pretty small ($19-million), I lament Joel Fleishman’s focus on too few, too large, and too general foundations to make the case for philanthropy’s importance to our communities, how and why they succeed or fail in their efforts, and how they might be more effective (“Renaissance Man on a Mission,” December 7, 2006).

Mark Kramer’s review in the same issue makes a similar point.

Statistics have been consistent for decades that philanthropy tends to support the same areas of importance in pretty much the same proportion over time — education, health, the arts, environment, and so on. It may vary a bit from state to state, but the priorities are pretty similar, as measured by amounts invested in the top 10 topics.

It is the vast majority of the smaller foundations, comprising 65,000 of us, that make a difference where we are. We will never have the assets that the really large foundations have, so we have to be pretty focused, creative, and optimistic to get anything done. There are lots of us, and that to me is the real story of philanthropic effectiveness that is not being told very well.

I don’t know how the political winds are blowing for philanthropy now that the Democrats are taking over, but as a veteran of “Foundations on the Hill” lobby days each year, and of the legislative process at the state and federal level, the argument for “self-regulation” is not one that legislators react well to.

Mr. Fleishman is right in warning us of the dangers of not informing the politicians about all the good we do, but his strategy of telling a few stories from an even fewer number of philanthropies strikes me as one doomed to fail. Congress has 535 members from all the states; there are philanthropies in every one of them. How hard is it to grasp that those places ought to be the source of our storytelling?

Gerald P. McCarthy
Executive Director
Virginia Environmental Endowment
Richmond, Va.

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To the Editor:

Joel Fleishman is advocating that foundations “open their doors.” This is exactly what large, multinational companies have been under pressure to do for the past several years. “Corporate social responsibility” is the term in the private sector. The assumption is that the independent sector should be light years ahead of the Fortune 500, not behind, especially in areas like accountability and transparency.

Mr. Fleishman argues that foundations need to “create a climate of transparency, the lack of which both causes foundations to underperform their potential and creates growing public distrust.”

Large companies are well aware of the damage to their business when they lose public trust and fail to disclose information that customers and shareholders care about. We are in an era when large companies cannot afford not to be transparent in their conduct around governance, labor, safety, and environmental practices.

Why aren’t foundations responding the same way many companies now are — or at least the more than 700 that have issued corporate social-responsibility reports?

The problem may be that foundations have not been called on the carpet to change how they do business, or are not doing a good job communicating about how they are operating differently. Foundations’ stakeholders are not clamoring for reform. There is no real foundation equivalent of boycotting products, staging pickets, and filing shareholder resolutions. Except possibly refusing grants — unlikely, given that foundations are often the lifeblood of nonprofit organizations.

The irony is that the advocacy groups that have launched campaigns to make companies more open are often funded by the same foundations Mr. Fleishman is criticizing for their secrecy.

The public’s expectations around institutions’ transparency and accountability are mounting. Government oversight is increasing. And the Internet is furthering this movement.

Given their bully pulpit, foundations should not only be spotting these trends but also stepping up to develop, promote, and comply with the same code of behavior they would expect from their grantees and the companies in which they invest their billions in assets.

Maria Schneider
Senior Vice President
Edelman
New York