Charity Channel - We Review™ www.charitychannel.com | ||||
|
The Foundation: A Great American
Secret | ||||
|
| ||||
Neil De Haan and John R. Vadnais The Foundation: A Great American Secret (2007, New York: Public Affairs Books), by Joel L. Fleishman, has received significant attention in the world of philanthropy and nonprofits, having been reviewed by such journals as the Chronicle of Philanthropy (Perry, 2006) and the Nonprofit Quarterly (Eisenberg, 2007). The author, a professor of law and public policy at Duke University with many years of experience as a trustee and an executive director of foundations, paints a picture of giant, powerful and independent foundations taking on major societal challenges, often succeeding and sometimes failing. He backs up his many observations and conclusions with a separate volume of 100 foundation cases in Casebook for The Foundation: A Great American Secret by Joel L. Fleishman, J. Scott Kohler, and Steven Schindler. Published in 2007, these books are destined to be recommended reading for students as well as for leaders in foundations, nonprofit organizations, government, and philanthropic corporations. This review focuses on the main work, and not the case book. The Foundation is about the impact that foundations make on society, and how that positive impact can be increased. Fleishman told the Chronicle of Philanthropy that one of his main purposes for the book was “to convince the public of the importance of foundations” (Fleishman, 2006). He also warns that if the foundations don’t monitor themselves and take self-corrective action, there might be outside governmental intervention to address issues of concern. The Foundation is a clarion call to foundations and to the society that values them to increase transparency. To make his case, Fleishman observes that America’s foundations “are increasingly regarded by the public, the press, politicians, and regulators as inherently unaccountable and very rich institutions – a troubling problem for a collection of organizations whose very existence depends entirely on their ability to retain public, political, and governmental favor.”(p.249). Fleishman urges more rigorous measurement of project results, making all project results public, and clarifying project goals and grantmaking criteria. Fleishman suggests that foundations can play one of three roles in our democratic society - as Driver, as Partner, or as Catalyst. As Driver, foundations may pursue “specific objectives according to a strategy they develop and whose implementation they guide.”(p. 4). As Partner, the strategic role is less hands-on and less controlling of the initiative, since “the Partner foundation shares control and accountability with the grant-receiving organization.”(p. 6). As Catalyst, the foundation’s key characteristic is that there is “little active control and little specific accountability for results on the part of the grantee.” The foundation as Catalyst, says Fleishman, “sows seeds and moves on, sometimes assessing the consequences of their grants and sometimes not.”(p. 9). The author tells us that his book is focused not on the full field of 68,000 foundations nor on Catalyst grantmakers, but more on the limited number of foundations that play the roles of Driver and Partner. Nonetheless, many of his recommendations apply to all charitable foundations. Whether for Drivers, Partners, or Catalysts, the discussion of the lack of transparency in foundation operations and funding will ring true to many in the philanthropic community. As he discusses the need for transparency, the author continually focuses on two likely benefits: · Increase the public trust · Improve foundation performance One gets the impression that as much as the “increase the public trust” argument seems real, the author’s particular passion is to improve foundation performance. After making a case that foundations make a huge positive difference to society, that their overall size is large and growing, that foundations have both successes and failures, and that additional transparency would be very helpful, the author considers how to increase that transparency. He develops options to increase foundation transparency in the United States, from most to least restrictive: · Develop a quasi-governmental organization to exercise regulatory authority over foundations that would be similar to the National Association of Securities Dealers (NASD) or the Public Company Accounting Oversight Board (PCAOB) that develops Sarbanes-Oxley regulations, as suggested by Marcus Owens, former director of the IRS Exempt Organization Division(p.257). · Develop self-policing, with a sector-financed Foundation Transparency Rating Board (FTRB) and a “Seal of Public Accountability”(p.260). · Enact a federal Foundation Freedom of Information law to compel the release of information regarding “decision-process documents involving grantmaking initiatives above a specified dollar limit”(p.263), such as grants above one million dollars. · Encourage individual foundations to act now to increase transparency in the decision process. “What’s required is for trustees to assert themselves forcefully and insist upon putting in place the data-generating measures that will facilitate such assessment”(p.264). The author states, “So far as I can discover, only four foundations in America have given a public grade of failing to one of its initiatives.”(p. 192). By not showing its failures, and more broadly by not showing its logic models and the intent and outcome of each project, it deprives other foundations and the society at large from learning and growing at a faster rate. Fleishman makes a strong case for the use of the logic model. He observes that the way to “diminish the likelihood of mistakes in the first place is to require program officers and grantees to make explicit the logic model, the theory of change, that a prospective grantee embodies”(p. 212). (Though not referenced by Fleishman, an excellent place to get a comprehensive understanding of logic models and specific instructions on using logic models in project designs is at the web site of the W.K. Kellogg Foundation). The exceptions cited to the lack of foundation transparency are the Robert Wood Johnson Foundation, which publishes information about all its completed grants, and the Bill and Melinda Gates Foundation, that “has announced its determination to make public and write about its failures.”(p.212). That leaves about 67,998 foundations that do not provide “lessons learned” to the rest of society in any organized and systematic manner. Beyond the discussion of transparency, The Foundation provides a fascinating view into foundation and project history. With rich case background to draw on, the author peppers his work with lessons and anecdotes that draw the reader in. The foundation successes described are in some cases awesome in scale and achievement. For example, Fleishman tells the story of the Rockefeller Foundation’s role in the Green Revolution, dating back to 1943. He points to Dr. Norman Borlaugh, an agronomist working for the Rockefeller Foundation, who was awarded the Nobel Peace Prize in 1970. As a result of the Rockefeller Foundation’s investment in the work of Dr. Borlaugh, says Fleishman, high-yield agriculture has been credited “with saving at least a billion lives since the mid-1960’s.”(p. 122). He also brings the book into contemporary times, as he discusses the Bill and Melinda Gates Foundation, and Warren Buffet’s enormous gift to it that appears to show him agreeing with a statement by Dale Carnegie that “he who dies rich dies thus disgraced.”(p.xii). Most of the author’s interviews, however, are with foundations endowed before 1990 so that they have had “time since their founding to achieve measurable impact”(p.xix). It is the failures that foundation officers and other stakeholders will read with the most interest. To define failures, one must measure outcomes. The author has the courage to look for measurable project outcomes, to categorize projects as successes or failures, and to learn from both. This is precisely what he urges foundations to do themselves. The author shows why foundations are critically important to American and world culture, including how they introduce innovation, contribute to resolving tensions, reduce societal polarization, change opinions, and solve problems. He notes that foundations span the political spectrum, from liberal to conservative, and that the ideas so introduced help the society to overcome its partisanship and polarization. He calls foundations “the passing lane” for our society, where wealthy individuals who are inspired can experiment with change. This work by Joel L. Fleishman is a major contribution to philanthropic analysis and literature, and a call to action to leaders of American foundations to do better still. However, not all reviewers agree that Fleishman’s work is a positive contribution to the nonprofit world. Pablo Eisenberg, a senior fellow at the Georgetown Policy Institute, claims that Fleischman’s views “will not resonate with many people who are practitioners, recipients of foundation grants, or observers of foundation practices.” Eisenberg complains, for example, that the author “apparently has not interviewed the thousands of national, state, and local nonprofits that can’t get a dime for their advocacy activities.” Also, Eisenberg is not happy with the fact that Fleishman did not discuss the merits of a payout increase, which is now a minimum of 5% of assets, even though such an increase “might be beneficial to nonprofits and the taxpayers who support philanthropy.” In addition, having acknowledged that for Fleishman transparency and public accountability are “the key to growth, legitimacy, and future effectiveness of philanthropy,” Eisenberg claims that “there is little evidence that transparency by itself is sufficient to bring about genuine reform.” As a final point in his critique, Eisenberg claims that Fleishman’s “celebration of foundations downplays the important role that nonprofits have played in creating almost all the social and institutional changes in our history.” (Eisenberg, 2007). We recommend this book so that you, as a stakeholder in the world of foundations and nonprofits, can judge for yourself the value and the relevance of The Foundation by Joel L. Fleishman. ____________________ REFERENCES Eisenberg, Pablo. 2007. “Fleishman’s World - an Essay.” This article will appear in the Spring 2007 issue of the Nonprofit Quarterly magazine. Fleishman, Joel L. 2006. Shaking the Foundations. An interview with Joel
Fleishman by Suzanne Perry, Moderator. Available as of March 1, 2007, at http://www.philanthropy.com/live/2006/12/fleishman.
| ||||
|
| ||||
|
Publisher: CharityChannel LLC Copyright We Review(tm) is a domestic and international trademark of CharityChannel LLC. Copyright © and Trademark ™ 2005 CharityChannel LLC. All rights reserved. Article or item is copyright © 2005 by the contributor. |
