Summary:Philanthropic foundations are at the forefront of social change. While agreeing with this statement to differing degrees, each of the panelists, described by moderator Michael Milken as "five representatives of our country′s greatness," held this statement to be largely true. Foundations provide a social vision and "build bridges to future generations."
To Lewis Coleman, president of the Gordon and Betty Moore Foundation, social change is evolutionary rather than revolutionary. It is a gradual process whereby the time needed for change is often greater than the lifespan of the donor. Given the long-term horizon, it is difficult to measure social change and evaluate the efficacy of foundations. Philanthropic foundations must always ask themselves whether their institutional goals match those of their founders.
Coleman is unique to the philanthropy industry for three reasons: he is relatively new to his job running the Moore Foundation, having started as recently as 2000; the founders of his foundation, Gordon and Betty Moore, are alive and active members in society; and he brings private-sector banking experience to his job, having served in the banking industry for 37 years.
Adam Meyerson, President of The Philanthropy Roundtable, a national association of grant makers consisting of 600 member organizations, likens his job to no less than moving the world. Referring to Archimedes, he says, "We in the philanthropy business are in the fulcrum business;" we seek to build freedom and personal responsibility in individuals′ lives.
Meyerson sees several opportunities presently in the philanthropic sector, each of which has broad social implications. He sees opportunities in K-12 education and helping to ensure that each child of every social and ethnic group receives access to adequate K-12 education. He sees opportunities in improving the quality of the environment and restoring marriage as the basic building block of society: there is no greater security and safety net for children than having a supportive, intact family unit. And Meyerson sees opportunities helping countries and freedom-loving individuals triumph over terrorism.
Meyerson′s "mission is to foster excellence in philanthropy." He argues that "donor intent is central to philanthropic integrity." Philanthropy is an expression of an individual′s financial decisions.
Susan Urahn, Director of the Knowledge Resources and Education Program at The Pew Charitable Trusts, looks for "issues ready to pop." The Pew Charitable Trusts have been around long enough that Urahn asserts that philanthropy can be at the forefront of social change. Their aim, stated in tagline rather than a formal mission statement, is "investing in ideas, returning results."
Grants are their primary, but not sole, tool. The Pew Charitable Trusts have two main approaches. The first is to be an "honest broker of information." They conduct polling and research, without an expressed agenda, and supply it to people who use information to formulate public policy. They enact social change by researching issues that matter. The second approach, one they consider a position of social importance, is to take an advocacy approach to bring the issue to the forefront of social consciousness.
Foundations "have to be able to apply leverage" in reasonable ways, according to Urahn. They need to search out "ripe" issues "amenable to change" where a small amount of money can make a large difference. Under-resourcing projects is a big problem in the philanthropy sector. The Pew Charitable Trusts use a "portfolio of grants" approach that attacks an issue from several different fronts.
Hank Brown added that in regard to giving grants, the issue is not whether a grant is "good or bad," but whether the fund might "pass up something that was better." While each grant is attractive, every fund is working with a limited pool of resources and must carefully select those issues that can return results.
Urahn sees her role as Director of the Knowledge Resources and Education Program as pertinent for the following three reasons: there is an abundance of new research emerging regarding brain development in children, the public is aware of this research and its importance, and 80 percent of 3- to 4-year-olds are getting out-of-home care. Furthermore, Urahn adds, "80 percent of the care settings are at best adequate." With so many children in need of early education and so many potentially inadequate settings, more advocacy is needed to get children adequate early education.
In order to provide greater access to preschool, Urahn takes the following four approaches. First, she funds grants for objective, rigorous research to make the case for early education. Second, she sets up advocacy centers to establish preschool grants from the state of Pennsylvania, which currently does not have such grants. Third, she educates lawyers fighting for rights to preschool under equal education provisions; finally, she funds constituencies such as businesses and superintendents with an interest in this area.
Hank Brown, President and CEO of the Daniels Fund, runs the largest philanthropic fund in Colorado, serving the four states of Colorado, New Mexico, Utah and Wyoming. The fund focuses its efforts on social improvement through education in three areas: a scholarship program focused on low-income young people, changing K-12 education by expanding choice in K-12 education and assisting charter schools and school readiness for children.
Barry Munitz, President and CEO of The J. Paul Getty Trust, agrees with Coleman that there are very few great philanthropic moments within recent decades, but added that Getty is one such rare example. When J. Paul Getty died in 1976, he left $1,000,000,000 to the trust. "The man who dies rich dies disgraced," said Munitz, echoing the words of Andrew Carnegie.
Munitz argues that distinctions such as "new philanthropy," "venture philanthropy" and "social philanthropy" are needless and all refer to the same general concept. Munitz would like to improve assessment in the nonprofit sector. "Media coverage of the nonprofit world is terrible…Transparency and disclosure are crucial." According to Munitz, how the work is done is just as important as what work is done.
To Munitz it′s more important to make effective grants than to cover a philanthropic area of interest. Philanthropic organizations should spend money on "risk capital." They need to take more chances and test new ground. Two important issues to Munitz are "reaching out early" on key concerns and "being honest." Some societal problems, he admits, cannot be solved, even collectively amongst foundations.
According to Meyerson, a large shift is occurring in the philanthropic world: the donor-advised fund industry has grown. Just as mutual funds greatly expanded the investing industry, so donor-advised funds will revolutionize philanthropy, he predicts. A person can identify a foundation that matches one′s interests and participate in philanthropic giving without establishing one′s own foundation or fund. Already there are as many donor-advised funds as foundations.
The panel concluded with a brief discussion about the management of philanthropic money. "We would never attempt to manage any of our own money," Munitz says. He exclusively uses private advisors and adds that he would not know how to hire and involve investment professionals within his organization. Urahn took the same stance as Munitz. Coleman, however, disagreed when it came to his foundation. "Having professional managers does not take you out of the investment management business." Left 175,000,000 shares of Intel by Intel co-founder Gordon Moore, Coleman and the foundation made the decision when to diversify the foundation′s holdings. "We made the calls on when to sell the Intel," he says.
Despite their differing ideas on the management of their respective endowments, Meyerson added that a vibrant private sector is essential to generating philanthropy dollars. Strong returns are a cornerstone of philanthropy both for the initial giving and subsequent preservation of that capital.
