The Problems of Private Philanthropy
HUNTER, DAVID R.
The Problems of Private Philanthropy The Big Foundations By Waldemar Nielsen Columbia. 464 pp. $12.50. Reviewed by DavidsR. Hunter Director, the Stern Fund There is some difference of...
...And two thirds of them need to loosen their continuing close ties to the donor families, as well as hire professional staffs...
...It is an important point to note, for the exemptions vest the foundations with a certain quasi-public character, including the attendant responsibility and accountability...
...In addition, Nielsen shows that the foundations do not provide a very large proportion of the voluntary giving in this country...
...On the basis of his study, Nielsen is convinced that "private philanthropy in the United States today is a sick, malfunctioning institution...
...to experiment with new approaches, be they in health, education, criminal justice (or, I would add, the economy...
...But private funding still could not compare with rising Federal aid across the board (even during an administration that professes to want to hold down government spending...
...to propose ieforms of archaic institutions...
...If significant improvement does not occur within a decade, Nielsen recommends that public policy toward foundations be reassessed...
...Collectively, the 33 hold sway over $10 billion, more than half the total assets of the nation's approximately 25,000 foundations...
...He would obviously regret to see them fail to achieve their potential...
...Robert F. Goheen, Chairman of the Council on Foundations, has advised them to pull in their horns...
...The majority of foundations are passive, unprofessional, ameliorative institutions...
...Some of the names are familiar to most newspaper readers: Ford, Rockefeller, Carnegie, Mellon, Sloan, Kresge...
...In 1970 the total was over $18 billion, of which $1.7 billionor 9 per cent came from foundations...
...Others are practically unknown: Surdna, Long-wood, Brown, Nemours, Land...
...Yet in his many public statements, he has emphasized his belief that foundations can play an important role in helping to cure what ails America...
...Without explicitly saying so, Nielsen gives the impression of being somewhat pessimistic about the prospects for the changes he advocates...
...The needs are simply too great to be met in substantial measure by the Third Sector alone...
...This is central to his argument, because it strikes at one of the basic assumptions underlying the privileged tax status of foundations: the belief that privately administered programs and services in many fields are important to the maintenance and growth of a pluralistic society, that therefore voluntary giving should be encouraged by the government, and that the easiest way to do so is by offering a tax exemption on contributions...
...For one thing, the rich get a better break on their charitable contributions than do taxpayers of average means...
...Nielsen thinks voluntary support for the arts, social welfare and education would increase significantly if middle-income people were allowed larger tax exemptions for such donations...
...Nielsen examines the 33 largest foundations in the U.S., all those with assets of $100 million or more...
...This is not to deny the generosity of the donors, but without the tax provisions it is extremely improbable that these philanthropic organizations would have approached their present level...
...to appraise and criticize corporate and government policies and programs...
...Even at this late date, for example, only half of them have demonstrated any concern with racial problems...
...Nielsen observes that if the so-called Third Sector (voluntary agencies and organizations) is to survive, the determining factor will be the volume of welfare, education, research, and cultural grants by government, not by foundations...
...Courageous, as other reviewers have pointed out, because the author is a scholar...
...But Federal involvement is not likely to bring about a shift in the direction Nielsen advocates...
...Foundations exist because the tax laws allow exemptions for contributions to them...
...The foundations also have to democratize by diversifying their boards of trustees, now dominated by Eastern white protestant businessmen...
...If I am wrong, if the reaction to his book is merely angry rejection or supercilious nonbelief or a callous "so, go fight city hall" (as it admittedly has been in some quarters), the foundation scene will not change very much in the next 10 years without Congressional intervention...
...To warrant its continuation, as Nielsen declares, they must become "more independent institutions, fully and exclusively devoted to public purposes...
...I believe there is more uncertainty and soul searching to be found inside our philanthropic institutions at the moment than Nielsen implies...
...the search for new organizational forms to cope with urgent new societal needs...
...An equally important virtue of this book is that it is right...
...Hunter Director, the Stern Fund There is some difference of opinion about foundations even within the family...
...The story of the origins of the big foundations and of their principal donors is a fascinating one, and Nielsen tells it in an effectively wry, detached style tempered with understanding...
...Although the idea is, or was, perfectly valid, the machinery has become creaky, out of date and, what is worse, eccentric...
...His intriguing and challenging conclusions are preceded by a valuable historical review that occupies the book's first 269 pages...
...He wants foundations to be dynamic, creative and reformist, to break out of the conventional patterns of charitable giving that now characterize the overwhelming proportion of their grants...
...The Big Foundations is highly readable, thoughtful, well reasoned, and courageous...
...In Nielsen's view, the foundations should engage the vital issues of public policy: "nuclear weaponry, the health services system, the educational system, the tax system, trade policy, energy supply, communications . . . reestablishment of essential citizen control over the vast faceless forces of both corporate enterprise and government...
...In fact, therein lies the hope for achieving the positive aspirations he sets forth...
...Now Waldemar Nielsen, a former foundation man and currently their leading critic, comes along with the opposite advice...
...One can only share his feelings...
...Daniel P. Moynihan, no hired hand, but the recipient of numerous grants and practically one of the boys, has done likewise...
...not many scholars speak their minds about foundations, knowing that is where the bread and butter comes from...
...They must mobilize their unique resources to analyze the complex divisive problems confronting American society...
...More power to him: He is quite accurate in saying that the big foundations are not doing enough in these arenas now...
...Given these considerations, it is hard to take too seriously the conventional justification for the special tax treatment granted foundations...
...The only place Nielsen can perhaps be faulted is in his assumption of a nearly universal conceit on the part of foundation staff members and trustees that they, their policies and practices are above reproach...
...Thus he challenges them to abandon the role of perpetrator of the status quo, to become "change agents" by addressing more aggressively the questions that make up what he calls an "emergency" in the United States...
Vol. 55 • December 1972 • No. 24
