Readings Feed

Carl Schramm, Law Outside The Market: The Social Utility of Private Foundations

What legitimizes the vast wealth in private foundations? Can we say with Carl Schramm (download in 60 page pdf) that private foundations serve democratic, pluralistic capitalism by a) reconstituting wealth so that instead of ending up in dynastic structures it goes into foundations for  the public good, and b) by challenging the government and the market with socially entrepreneurial programs and projects? That vision appeals to me personally, but may not appeal to founders whose faith in the market is supreme. Also, are foundations the counterpoise to dynastic concentration of wealth and power, or are they often just another lever?

Reducing taxes in favor of private foundations is a key move in wealth transfer planning. ("Zero Estate Tax Planning" is all the rage.) Doing so does not reduce the family's influence. As we say in planning, "With a foundation, you and your family can control the part you can't keep." Also, we planners will say to a client: "Wealth is like a fire flaming up from coals. Scatter the coals and the fire goes out. By keeping wealth in your foundation, rather than scattering it among successive generations, you, Ozymandias, and your family can keep the fire burning until the end of time. Your intent, Ozymandias, will rule long after you are gone!" 

Still, the point about pluralism seems right. One, two, many Ozymadiases! Each at odds with the others; some with the market, some against; some favoring goverment solutions, some abhorring them; some wise, some foolish. 

The Pasture Spring

North of Boston, published in 1915, established Robert Frost as a literary presence. The first poem in that volume, "The Pasture," opens:

I’M going out to clean the pasture spring;
I’ll only stop to rake the leaves away
(And wait to watch the water clear, I may):
I sha’n’t be gone long.—You come too.

The springs of Helicon, sacred to the muses?  No, the farmer clears dead leaves from a slowly thawing pasture spring on his hard scrabble farm North of Boston.  Maybe that is our role too, to clean the pasture spring, "And wait to watch the water clear." As philanthropic advisors, we cannot always inspire others, but we can "rake  the leaves away."

Is Grant-Making A Desk Job?

William Schambra's The Evaluation Wars, written in 2003, and republished in Amy Kass's anthology, Doing Well Doing Good, makes an interesting complement to Bill Somerville's Grassroots Philanthropy. As does Somerville, Shambra lands on the common sense point that positive social change should be visible to the naked eye. We learn what works by forming personal relationships with those who receive grants and by "eyeballing" what those nonprofit partners accomplish with the resources provided. Our best efforts may be swamped by factors we cannot control, but by doing a little good face to face in our own backyards we may be doing the best anyone reasonably can.

Visualize a funder working at maximum potential: What is she or he doing? Sitting at a desk reviewing a spreadsheet? Skimming a grant proposal from a huge stack? Or, shoulder to shoulder with a nonprofit ally, loading onions on a truck headed to a soupkitchen? Is grant-making best conceived of as a managerial desk job?

The Rise of Collective Intelligence: Decentralized Cocreation of Value as a New Paradigm of Commerce and Culture

An important post by David Bollier at OntheCommons: Aspen Institute convened a conference on Collective Intelligence. David wrote a 75 page paper reprising what he heard emerge from the collective intelligence of those attending. His post offers a capsule summary. 

I did not see "the public interest" emerge as a theme. Commerce and culture get us part way there. But polity comes into it as well. We are ultimately talking about the creation and allocation of knowledge, pleasure, profit, wisdom, status, identity, ownership, control, and political power. Who wraps their wrapper around that commons and says, "Mine"? Or says, "Ours"? Does the political commons, our democracy, wrap around the digital commons, or does the digital commons, privately owned, begin to wrap itself around the public square and the political sphere?

So much of the early work on these issues was done by Libertarian tech and marketing types (the Clue Train crowd). We are way behind in thinking through the digital commons from the standpoint of the nonprofit sector and the political sphere. Power to the Edges, and subverting hierarchy, and co-creation of value does not inspire me much if the whole thing is wrapped into a limited liability company owned and operated by Mark Zuckerberg of Facebook, Rupert Murdock of MySpace, or Candidia Cruikshanks and her triple bottom line social venture funders at the CIA.

Grassroots Philanthropy by Bill Somerville with Fred Setterberg

Grassroots_philanthropyBill Somerville is the President and Founder of Philanthropic Ventures Foundation. Born poor, he was the first in his family to attend college.  Now, with 48 years experience in nonprofit work, he has written a short, passionate, and wise book, with Fred Setterberg, Grassroots Philanthropy: Field Notes of a Maverick Grantmaker. Bill recommends funding people, not projects. To get to know people, Bill suggests that funders push back from their paper laden desks, and go out into the community, not just to talk to grant-seekers, but to seek out high potential change agents, and get to know them, whether or not they have applied for a grant. To free up time for such direct engagement, Bill suggests ways to streamline paper flow.  Bill's advice comes across as that of a man driven by an ethic of service. Those in need are not abstractions to him, nor statistics. With all that money in foundations, he seems to feel, surely more can be done right now to make a positive difference in the lives of people the funder can meet, and should meet, face to face. I can see this book being very helpful not only to salaried grant-makers at large foundations, but also to the founder and family members of unstaffed private foundations, or those who might have a donor advised fund, or just anyone who wants to make gifts not as transactions by mail, or online, but hand to hand, heart to heart, and eye to eye.