Grant Makers Need to Muster the Power of Democracy to Promote Change
By MARK ROSENMAN
TOO MANY FOUNDATIONS, and even onprofit organizations, seem to think that it’s impolite or anachronistic to talk about power.
But if there is one thing that ought
to be clear from the Tea Party movement, it is that the power of democratic involvement can have a more profound impact on the causes of concern
to charities and philanthropies than all
of their prized innovations and scaled-up programs.
Foundations and others love to talk of
being “more impactful,” but they seem
to try little beyond efforts to become
more effective at what they already do.
Rarely does any truly fresh approach
to grant making get serious consideration, and seldom do foundation and
charity officials care to look at what has
become all too obvious—it’s all about
We know that there are two basic
routes to power in our society. The most
legitimate one is to participate directly
in democratic political processes. The
second, and less legitimate, one is to
buy political influence through campaign contributions and other means.
Since charities and foundations
are prohibited from partisan political
spending, they are limited to strengthening democratic participation. Yet very
few even consider this realm because
they don’t think about power itself.
Why is the power of democratic participation so important?
The answer is simple: because government—local, county, state, and federal—matters. It is essential in our
lives and to every cause in the nonprofit world.
Most of the troubles America faces
reflect failures of government to adequately moderate the forces that create
and perpetuate problems or provide and
Markets and corporations need effective regulation to provide safeguards
for citizens and the planet, as well as
for the orderly conduct of business. Institutions need leadership, accountability, and resources to perform well in the
public interest. And people can be encouraged and helped to behave better,
and they can be sanctioned when they
don’t. Government is critical in each of
Still, the arguments for smaller,
cheaper, and weaker government are,
at least in part, a response to the perceived inadequacy of its efforts to provide protections and to offer efficient
programs and services.
While some people hold ideologies
that are “antigovernment” and contend
that laws, regulations, programs, and
taxes have overstepped acceptable limits, the majority of Americans still want
better safeguards and services; many
are even willing to pay higher taxes to
make sure they are available.
But government won’t be able to serve
us if foundations and nonprofits allow
the Tea Party movement and its Repub-
lican allies to force extreme cuts in government programs and to curtail safeguards vital to Americans.
Ill-advised budget cuts and deregulation will affect every area of nonprofit
work. Environmental protection, education, the arts, social services, health—
no cause will be spared.
Some of this retrenchment is a function of government deficits, which are
real and compelling.
But the deficit didn’t concern conservatives when they worsened it by cutting billions upon billions of dollars
from the very wealthiest Americans’
taxes. This continues their decades-long efforts to “starve the beast” of government so it doesn’t have the money to
serve Americans’ needs or provide prudent safeguards.
Foundations, which provide less than
2 percent of charities’ revenue, cannot
possibly generate sufficient private re-
sources to make up for this diminishing
government role and the very real hard-
ships it is creating in all areas of non-
profit concern. And foundations’ search
for ways to achieve a greater impact
will continue to fail unless they grapple
with questions of power in our society.
A Foundation’s Report on Its Failings Should Spur Reflection Among Grant Makers
THIS YEAR MARKS the centenary of the Carnegie Corporation of New York, the foundation set up by
Andrew Carnegie to give away the portion of his fortune he was unable to distribute—despite his best efforts—
during his lifetime.
It was not the first foundation to be
established but was by far the biggest;
its endowment of $125-million (nearly
$3-billion today) was twice the combined assets of all the nation’s other big
Along with the Rockefeller Foundation, created two years later, Mr. Carnegie established an influential model for
what a modern, grant-making organization ought to do.
Rather than just providing money for
existing projects or organizations, foundations adopting the Carnegie approach
have sought to promote broad changes
in education, health care, international
affairs, race relations, and other causes
or to develop new fields and institutions, such as environmental groups,
public television and radio networks,
and women’s-studies organizations.
With the ability to mobilize money
and expertise and to take risks, foun-
dations have viewed themselves as
sources of “venture capital” (as
many of today’s philanthropists
would say) for badly needed so-
cial, political, cultural, and eco-
businesses, governments, and
nonprofits together, under the
foundation’s leadership, to solve
That was a bold objective,
but not more so than those that
ambitious foundations have
pursued for a century. However, in this case, the results
The report, which was prepared by
the consulting group FSG, concludes
that the problem lay with the strategy
the foundation adopted.
Although it does not provide many details about what happened in the communities included in the program, the
report describes a series of difficulties
the foundation encountered, many of its
One difficulty turned out to be with
the scope of Northwest Area’s goals.
Even after narrowing its original aim
from “seeking to help communities most
in need create positive futures—
economically, ecologically, and socially”—
to merely reducing poverty in those
communities, the project still left the
organization’s directors and staff—not
to mention its potential grantees—with
little guidance about what to do.
That could have been an advantage,
opening the door to innovation and experimentation.
But instead, this “lack of strategic
clarity” (as the report calls it)—and
the absence of a coherent “theory of
change”—led to confusion, disagreement, frustration, and ultimately the
collapse of the foundation’s effort.
A second problem stemmed from
the “imbalance in power” between the
grant maker and the places—many of
which were small and rural—it sought
To achieve its goals, the foundation
needed the active cooperation of the
people and organizations in these communities, but its control over sizable
amounts of money instead created “a
sense of dependency” among its grantees.
What’s more, its choices to work with
one group rather than another had
large financial consequences and invited disputes over which organizations
really represented the interests of local
In Yakima Valley, Wash., a community member sued the foundation when
it decided not to support the strategic