the roles and contributions of foundations foundations... · social entrepreneur respond, initiate...
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The Roles and Contributions of
Foundations:
Comparative US-European PerspectivesComparative US-European Perspectives
A presentation by
Helmut K Anheier and David Hammack
October 2010
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Foundation Renaissance
There is renewed interest in foundations in countries as
different as the United States, the UK, Australia, Japan,
Italy, Germany, Sweden and Turkey or Brazil.
Yet there is some untested assumption of institutional Yet there is some untested assumption of institutional
similarity across these settings – how can we assume
that foundations are alike and mean the same even if
historical context and roles suggest differences?
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U.S. vs. European Foundations
The US endowed grant-making foundation, quite strictly
regulated to prevent material benefits to donors and
staffs, eschew electioneering, and observe transparency,
differs from European norms.
From 1890, US state and federal laws increasingly
differentiated the US general-purpose grant-making
foundation from retirement funds and from corporate,
community, and other forms of foundations, and also
from endowed charities such as universities, research
institutes, and museums.
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European Foundations
that would not be foundations in the US
• Political Foundations
• Bertelsmann Foundation
• Wallenberg Foundation
• Bosch Foundation• Bosch Foundation
• Italian Banking foundations
• Political foundations in Germany
• Fondation de France
• Church foundations
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U.S. Institutions
that could be foundations in Europe
• Harvard (2008: $35b) and Yale (2008: $23b): endowments
larger than the Ford F’s (2008: $11b) generate income
covers nearly half their expenses. Also possess extensive
buildings, labs, grounds, book and art collections, etc.
• The Cleveland Museum of Art (endowment nearly $1b),
substantial buildings and grounds, world-class collections.
No admission fee, no direct government support. A
“nonprofit organization.”
• 700 community foundations: assets up to $2 billion.
“Public charities.”
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The Project
Contributions of American
Foundation
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Hypotheses: Important Foundation Roles
Charity (“Immediate Relief”)
Complement GovernmentSubstitute for Government
Philanthropy
InnovationInnovationSocial and Policy Change
Control, Redistribution
Asset ProtectionRedistribution
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Hypotheses: Comparative Foundation Advantage
Social Entrepreneur
Respond, InitiateConvene, Catalyze
Institution Builder
Lead CollaborationsLead CollaborationsEstablish Self-Sustaining Institutions
Risk Absorber
Accept Programmatic, Social, Political RiskPreserve Assets Dedicated to Valued Goals
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Hypotheses: Comparative Foundation Disdvantages
Insufficiency
Resources inadequate to ambitions
Particularism
Focus on some groups, ignore others
PaternalismPaternalism
Disregard views of others
Amateurism
Rely on “informed dilettantes”
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Impact
Definition
“the sustained difference an activity made in producing a intended change” or “the cause-effect relationship between resources and activities on the one hand and some observable and sustained change in relation to stated goals on the other”on the other”
Context
measurement of the impact of resources and activities must be evaluated within a sophisticated understanding of the relevant – and constantly changing – institutional, legal, political, economic, and social context.
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Evidence
Context
Extensive secondary literatures on fields, institutions, activities
Current government and other data on relevant topics
Current Foundation Work
Foundation Center database of foundation grants for 2001
Special studies by contributors: on schools in Arizona, on R.W. Johnson Foundation initiatives, on foundation responses to “welfare reform” in the 1990s, on foundation initiatives in the former Soviet Union and Eastern Europe, etc.
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The selected fields
Research Universities
Health Care
K-12 Education
Social WelfareSocial Welfare
Arts and Culture
International
Religion
Social Movements
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The Argument: Context Counts
Four Distinct Periods
the particular-purpose, sectarian era of the
nineteenth century,
the classic institution-building era of the first half of
the twentieth century,
a postwar effort to redefine and expand foundation
relevance that lasted into the 1990s,
the current effort to reposition foundations and
focus on achievable results.
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19th C Protestant Particularity
• (Northern) Baptist Education Society (1791)
• American Bible Society (1816)
• Education Board of the Presbyterian Church (1820s)
• American Education Society (1825) • American Education Society (1825)
• Society for the Promotion of Collegiate and Theological
Education at the West (1843)
• The American Missionary Association (1846)
• The Board of Education of the Methodist Church Student
Loan Fund (1872)
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19th C Nonsectarian Foundations
• Franklin Trusts of Philadelphia, Boston (1791)
• The City Funds of Philadelphia (1831ff)
• Lowell Institute (1836)
• Peabody Education Fund (1867), southern education
• John F. Slater Fund (1882), southern education
• Bernice Bishop Estate (1884) Hawai’ian School
• Baron de Hirsch Fund (1891), resettlement of Eastern
European Jewish refugees
• Andrew Carnegie’s Public Library Campaign (1890s)
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Large Non-Sectarian Foundations, 1900-1925
1902 Carnegie Institution of Washington Washington, D.C.
1902 General Education Board New York
1905 Milbank Memorial Fund New York
1906 Carnegie Foundation for the Adv of Teaching New York
1907 Russell Sage Foundation New York
1909 The Rockefeller Foundation New York
1910 Carnegie Endowment for International Peace Washington, D.C.
1911 Carnegie Corporation of New York New York
1914 Engineering Foundation New York
1917 The Rosenwald Fund Illinois
1918 The Commonwealth Fund New York
1918 Laura Spelman Rockefeller Memorial New York
1918 The Chemical Foundation New York
1919 Twentieth Century Fund New York
1919 Mayo Properties Assn. Minnesota
1924 Daniel and Florence Guggenheim Foundation New York
1925 The John Simon Guggenheim Mem. Fndn New York
1925 Wisconsin Alumni Research Foundation Wisconsin
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Classic Era: Self-Sustaining Institutions
• Public Libraries
• Separating U.S. Universities and Liberal Arts Colleges from
Denominational Control
• Medical Research, Education, Professionalism
• Public Health Initiatives• Public Health Initiatives
• Scientific Research as University Priority
• High School Curriculum & College Admissions
• National Standards for Charity Organization & Industrial
Regulation
• Empirical Approaches to Social Research
• Transnational circulation of elites
• Framing Research on International Affairs
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Notable Classic-Era Setbacks
“ hierarchical regionalism” in med services Milbank, Commonwealth, Rosenwald
School curriculum for non-college-bound Carnegie F. for the Advance of Teaching
Equal education for African-Americans S’n Ed Bd, Carnegie C, Rosenwald, etc.
Regional Planning Russell Sage Foundation
Na’l system of vol., professional soc service Russell Sage Foundation
Public vocational ed, juv. courts, sex ed Carnegie, Rock, Commonwealth, PaynePublic vocational ed, juv. courts, sex ed Carnegie, Rock, Commonwealth, Payne
Protestant Christianity on campus Danforth, many southern funds
Curb business cycle, prevent Depression. Rockefeller, Sloan, Rosenwald, RSF, etc.
Christianity in Asia Rockefeller, China Medical Board, Luce
Labor rel, sober behavior, eugenics Rockefeller Foundation, several others
International peace, prevention of WW II Carnegie Endowment for Int. Peace,
Rockefeller, World Peace Foundation, &c.
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Relative Decline of Foundations
Federal Spending on Health, Education, Welfare, etc.
as Gross Domestic Product Share, 1902-1990
16.0%
0.0%
4.0%
8.0%
12.0%
16.0%
19021913
19221932
19401950
19601970
19801990
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Federal Funding in Key Foundation Fields,
as GDP Share, 1965-2010
12.00%
16.00%
20.00%
DisabilityHousing & Food
Income Support
Calculated from data in Historical Statistics of the United States, millennial edition.
0.00%
4.00%
8.00%
12.00%
1965 1970 1980 1990 2000 2010 estimate
Medicare, Medicaid
Social Security
Soc Svc, Com Dev
Support
K-12
Hi EdResearchInternat’lMilitary Research
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Relative Decline of Foundations
U.S. Personal Consumption Expenditures,Per Capita , 1959-2007
25,000
30,000
0
5,000
10,000
15,000
20,000
25,000
1959
.19
62.
1965
.19
68.
1971
.19
74.
1977
.19
80.
1983
.19
86.
1989
.19
92.
1995
.19
98.
2001
.20
04.
2007
.
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Relative Decline of Foundations
Giving as Share of Personal Income in the United St ates,1929-1994
4.0%
4.5%
5.0%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
1929 1934 1939 1944 1949 1954 1959 1964 1969 1974 1979 1984 1918 1994
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Foundation Grants at 7% of Assets,
as GDP Share, 1944-2008
4.00%
5.00%
0.00%
1.00%
2.00%
3.00%
1944 1954 1965 1975 1985 1995 2008
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Growth of Nonprofit Organizations
Nonprofit Share of US Employment, 1800-2000
10%
0%
2%
4%
6%
8%
1800 1850 1900 1950 2000
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Relative Decline of Foundations
Giving as % of Personal Income, Nonprofit Employment as % of Labor Force,
Estimates, United States, 1800-2000Nonprofit
Employment10%
Total Giving
0%
2%
4%
6%
8%
1800 1850 1900 1950 2000
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Relative Decline of Giving
Gifts & Endowment Contributions To Income in Three Large Nonprofit Fields,
Cuyahoga County, Ohio, 1930-1990
80%
0%
20%
40%
60%
1930 1960 1990
Hospitals Social Services Colleges, Universities
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Great Variation in Local TaxationActual state and local tax revenues per capita
State total taxable resources per capita
4.8-7.3%
7.4-7.8%
7.9-8.2%
8.3-10.3%
http://images.google.com/imgres?imgurl=http://www.higheredinfo.org/mapgen/state.php%3Fdatacol%3D6939&imgrefurl=http://www.higheredinfo.org/dbrowser/index.php%3Fmeasure%3D35&usg=__SNadCTq2Ej5Y8-pS-EO8XwqCPEM=&h=400&w=631&sz=94&hl=en&start=1&tbnid=j8LIP9BfWnTM1M:&tbnh= 87&tbnw=137&prev=/images%3Fq%3Dtax%2Beffort%2Bhigher%2Beducation%26gbv%3D2%26hl%3Den%26client%3Dfirefox-a%26rls%3Dorg.mozilla:en-US:official
U.S. = 7.8%
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Boston
Seattle
Chicago
Detroit
Pittsburgh
MinneapolisSt. Paul
New York
PhiladelphiaSan Francisco
Foundation Giving: Flows of $5 million
Within Network of 15 Metro Areas, 2003
Atlanta
Miami
Houston
DallasLos Angeles
Philadelphia
Washington, D.C.
Net Donor
Net Receiver
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80 Northeast Ohio Recipients of $1 Million or More in Total Foundation Grants,
1999-2003, By Major Institutional Category
University Circle & Allied Organizations $173.6 M 39%
Other Cuyahoga Cty Ed and Cultural Orgns 55.0 M 11%
Cuy. Cty Social Service Organizations 47.5 M 11%
Cuy. Cty Educational Initiatives 29.8 M 7%Cuy. Cty Educational Initiatives 29.8 M 7%
Cuy. Cty. Housing & Economic Development 29.0 M 6%
Cuy. Cty. Catholic and Jewish Charity Feds 14.0 M 3%
Cuyahoga County commissioners, court 9.3 M 2%
Colleges and Universities Outside Cuy. Cty. 41.6 M 9%
Akron, Canton Soc Service, Education 30.8 M 7%
Other Fund Raising and Distributing Entities 21.9 M 5%
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Results: Current Foundation Contributions
Charity (“Immediate Relief”)
Complement Government: Inadequate Resources Substitute for Government: Inadequate Resources
Philanthropy
Innovation: New Institutions Fields mostly too bigInnovation: New Programs Fields crowdedInnovation: New Programs Fields crowdedSocial and Policy Change Must consider legitimacy
Regional Build-Out Newly Identified Role
Control, Redistribution
Asset Protection Notable; Implies ControlRedistribution Inadequate Resources
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Results: Current Foundation Contributions
Social Entrepreneur
Identify, Initiate Uncommon, ChallengingRespond, Convene, Catalyze Often Practiced
Institution Builder
Lead Collaborations Some AttemptsLead Collaborations Some AttemptsSelf-Sustaining Institutions Many Local Gap FillersReinforce Established Patterns Common
Risk Absorber
Action, Social, Political Risk Some EffortsPreserve Assets Common
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Current Foundation Contributions
Insufficiency: Universal, even Gates
Particularism: Common - Local, Religious, Cultural
Paternalism: Infrequently citedPaternalism: Infrequently cited
Amateurism Celebrated quality of US funds
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Europe
• Multitude of foundation forms
• Multitude of models that go beyond
charity/philanthropy/strategic philanthropy
distinctiondistinction
• Need to “brand” foundations as European
institutions, not in reference to US “gold standard”
• Context specific developments (welfare states,
nonprofit regimes, varieties of capitalism)
• Test US results against European experience
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U.S. – Europe – Examples
U.S. Europe
Innovation: New Programs ?R.W. Johnson Healthy Behavior
Orphan Drugs
Social and Policy Change ?Kids Count
Kaiser Family Foundation – HealthKaiser Family Foundation – Health
Regional Build-Out ?Texas Medical Center
LA MuseumsSouthern Educational FoundationEastern, Center Europe
Asset Protection ?Religious
Arts
Civil Liberties
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Comparative Summary, Europe
Context Roles of
Foundations
Importance
Social democratic Smaller limited
State controlled Smaller limited
Corporatist Larger Significant
Liberal Larger Significant
Mediterranian Medium Less significant
Post socialist Smaller Potentially significant
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New Policy Developments
• At policy level: Encouragement in many European
countries to foster foundations often with the U.S. as
model (e.g., UK, Germany, France)
• European dimensions: some evidence of greater • European dimensions: some evidence of greater
cross-border awareness, interest and activities on
behalf of EU foundations
• European Foundation Statute (established broader
foundation concept) – need to substantiate what
roles and contributions to expect
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