Foundations
Architects of Social Change
Steve Gunderson
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This article discusses developments in philanthropy in the United States, with a focus on the role played by foundations. Steve Gunderson is president and chief executive officer of the Council on Foundations in Washington, DC
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Throughout the history of the United States, individual citizens have voluntarily joined together to meet important needs in their communities. This generosity, this willingness to work together toward a common goal, is a hallmark of the American character. Philanthropy has strong roots in religious beliefs, in the history of mutual assistance, in the democratic principles of civic participation, in pluralistic approaches to problem solving, and in American traditions of individual autonomy and limited government.
The hardships of the early settlers to North America, where government was then weak and distant, forced people to join together to govern themselves, to help each other, and to undertake such community activities as building schools and churches and fighting fires. Out of these experiences grew a tradition of citizen initiatives and individual efforts to promote the public welfare. Later immigrants supported their communities by giving through churches and by forming groups to help the poor, as well as by organizing associations to assist each other in their new homeland. Native Americans and African Americans have likewise had deeply rooted giving practices.
Religious leaders also have long encouraged their members to give to the poor and to the charitable works of their churches. Giving to needy people in their communities, to the poor in other lands, to the victims of natural disasters, and to their churches has been a strongly felt obligation for many people, and religious beliefs are still an important motivation for being involved in philanthropy.
Benjamin Franklin (1706-1790), the inventor and statesman of America's colonial era, was an early philanthropist. He gave to improve his community and to provide opportunities for people to help themselves. He founded local civic organizations such as Philadelphia's first volunteer fire company and institutions such as the Pennsylvania Hospital, the University of Pennsylvania, and the Philadelphia public library.
But it was not until the early 20th century that individuals generally began to use their philanthropy to seek ways to combat problems, conduct research, and promote science. One of the early proponents of modern philanthropy was Andrew Carnegie, a wealthy business entrepreneur. He viewed the person of wealth as a product of natural selection by the forces of competition. By winning wealth, a person became an agent of civilization, and philanthropy became a tool for improving civilization while substituting for radical reforms. Carnegie's philanthropy included starting public libraries and other agencies that would provide "ladders upon which the aspiring can rise."
Carnegie and several other civic and business leaders—among them John D. Rockefeller and Margaret Olivia Sage—organized their philanthropic giving in a new form, much like the business corporations that were then so successful. Also at this time, banker Frederick H. Goff created the first community foundation in Cleveland, Ohio. These new "foundations," both private and community, were not designed to help those in need directly; rather, they were to be the instruments of reform and problem solving, addressing the root causes of poverty, hunger, and disease by giving funds, known as "grants," to those persons and organizations best equipped to address specific problems. This idea of systematic, scientific philanthropy is a product of the era of optimism and faith in the ability of science and reason to solve human problems. And it is the rationale for most current-day American foundations. Today, much charity is still carried out with grant funds dispersed in this manner.
Philanthropy As Architect
Philanthropy can be thought of as the architect for strategic investments that promote the common good. Much like professional architects, foundations analyze challenges, design solutions that are functional, and make maximum use of available resources by focusing on outcomes. Foundations are not bound by profit margins as is industry, nor are they constrained by the politics of government. They can afford to take risks to conduct the important research and development work needed to examine social structures, review known patterns, and take on the challenges that produce crises.
Foundations come in many different forms: family foundations centered around the use of a family's resources, community foundations organized to improve the quality of their communities, and independent foundations geared toward unique missions established by boards of trustees. But this is just one chapter of philanthropy. Corporate giving is another key element of our efforts to give back to society.
Foundations bring together the expertise of industry, government, academia, community groups, and individuals to address pressing issues and find successful solutions. It is exactly this type of collaboration, for example, that has led to a public-private partnership between foundations and the U.S. Library of Congress to fund an initiative to build the World Digital Library, which will bring scattered primary materials of the world's varied cultures into consolidated Web sites for each culture. The World Digital Library has enormous potential for increasing transcultural understanding.
Through insight, inspiration, and innovation, foundations have made significant and lasting contributions in health, education, the environment, youth development, and the arts, and they have been instrumental in revitalizing neighborhoods and restoring the social fabric of communities across the United States and throughout the world.
For example, many foundations today are addressing the problems of HIV/AIDS, malaria, and tuberculosis, and are spending millions of dollars on research and projects to expand vaccination programs targeting childhood diseases in the world's poorest countries. The Bill and Melinda Gates Foundation spends more than a billion dollars each year—nearly as much as the World Health Organization—on efforts to raise public awareness of and eradicate the aforementioned diseases. Many regard the Gates Foundation, one of the newest and largest foundations to enter the philanthropic sector, as the most influential organization in global health today.
Education is also a key focus of philanthropy, with many U.S. foundations expanding their scope of funding and research to advance higher education around the world. To this end, the John D. and Catherine T. MacArthur Foundation, the Ford Foundation, the Rockefeller Foundation, the Carnegie Corporation of New York, the William and Flora Hewlett Foundation, and the Andrew W. Mellon Foundation have joined together in the Partnership for Higher Education in Africa. Collectively, these foundations have given more than $150 million and have pledged to disperse an additional $200 million over five years in support of selected universities in Ghana, Mozambique, Nigeria, South Africa, Tanzania, Uganda, and Kenya that are seen as agents of social, economic, and political progress.
Philanthropy in the 21st Century
The nature and practice of philanthropy in the United States is currently experiencing a spectacular change fueled mostly by growth in size and character. Economic prosperity has resulted in a dramatic proliferation of foundations. The few thousand post-World War II American grant-making institutions have swelled today to more than 65,000 organizations worldwide, testifying to the profound growth in philanthropy—not just in the United States, but on a global level. The assets of these foundations now total more than $500 billion, with giving at an all-time high of $33.6 billion annually. It is, in many respects, a time of optimism and creativity as people explore new systems for bringing private wealth back to the community from which it was derived to benefit the public good.
The United States lives and flourishes in a global economy. As a result, American philanthropy is increasingly global. As wealth grows in new market economies, traditions of "giving back" are stressed. Worldwide, there are dozens of new foundations in Africa, Asia, Latin America, and Europe. The 2005 Community Foundation Global Status Report estimates that there are at least 1,188 community foundations in 46 countries outside the United States, with at least another 150 under development around the world.
Engaging in that global community must include a constructive partnership with philanthropic colleagues all over the world. The Council on Foundations, an international membership organization of more than 2,000 grant-making foundations and corporate giving programs established in 1949, is committed to increasing the cooperative global reach of philanthropy and is currently organizing one of the largest gatherings of philanthropic leaders in history. During this summit, scheduled for 2008, the council will invite our American and global colleagues to gather in Washington, DC, to engage in crucial conversations across all lines, enabling us to best address the critical role for philanthropy in the 21st century.
The challenge to philanthropy is to do desperately needed work where others are unable or unwilling to do it: in the hard soil where violence takes root, amid the grim conditions in which unemployment is all but assured, and for those ventures that are difficult for governments to undertake because of political pressures. Philanthropists must focus their work on the trends that predict tomorrow's news headlines. The most enduring legacy of philanthropy across the decades may reside simply in the act of giving, in making the exemplary donation, whether it is to create a foundation, sustain a charitable organization, or alleviate a human need.
Fortunes rise and fall, but society can always rely on the perpetuity of philanthropy's innovation, cooperation, and results for the common good.
The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. government.
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