Reviews

American Foundations: An Investigative History

By Mark Dowie. MIT Press. 800/356-0343. http://mitpress.mit.edu/order_info.html. 2001. 302 pages. $29.95.

Reviewed by Cole Wilbur

American Foundations by Mark Dowie argues that organized philanthropy is on the verge of an evolutionary shift that will transform America’s foundations from covert arbiters of knowledge and culture to overt mediators of public policy and aggressive creators of new orthodoxy.

This is a forecast that will surprise almost everyone in philanthropy.

The author focuses on eight key areas in which foundations operate: education, science, health, environment, food, energy, art and civility. Plus, he presents and discusses some history of philanthropy, talks about imagination and his ideas for the "democratization" of philanthropy.

Dowie, author of five other books and a past editor of Mother Jones magazine, has received 16 journalism awards, and has been involved in his research on the history of foundations for several years. During that time he has spoken with more than 200 people in the world of philanthropy—within and outside of foundations—whose quotes fill the book, leaving the reader no trouble in determining who the author dislikes.

In each of his chapters he offers some interesting general history within the grantmaking field. However, certain chapters—the ones covering food and energy, for example—are almost entirely about the experiences of just one foundation. Overall he gives twentieth century foundation philanthropy a grade of "C-minus, at best."

Dowie comments favorably on a few foundation community advisory boards, discusses the recent hot-button topics of payout and perpetuity, and offers an appendix covering the apparent paradox of foundations investing in corporations that have policies opposite to those of the foundation’s grant objectives. Unfortunately he misses a wonderful opportunity to recommend many changes and improvements for foundations and focuses upon the democratization of foundations. Throughout the book there are hints about his democratization ideas, but when you reach the chapter on democracy he says:

It seems clear that the only way to make foundations true and effective servants of civilization, instead of stewards of plutocracy, is to democratize them.

He would like to have the tax law changed to require private foundations: (1) to break up any private foundation with assets over $1 billion dollars; (2) to have no overlapping board membership other than the donor; (3) to limit trustee terms to seven years; (4) and to mandate that a third of any foundation’s trustees be appointed by elected officials—national, state or local, depending upon the charter of the foundation.

There is no question that this last idea would change foundations. No matter which party was in power, foundations would be encouraged to support "safe" programs by their legislative appointees, so as not to irritate those that appointed them. Programs involving voter registration, controversial environmental issues, family planning, women’s and minority rights, and even some of the arts, would be unlikely candidates for grants if the appointing legislators were conservative, while liberal appointees would shun libertarian or market-driven projects. Since many foundations pay their trustees—an issue Dowie says little about—one wonders to whom the state or federal legislators would give this plum of a trusteeship.

One also wonders how many of those considering setting up a foundation would change their strategy to that of a trust or using a grantee intermediary to make grants if such a system came about. Already many are worried that wealthy individuals with the possibility of a significant reduction or elimination of estate taxes will not leave money to nonprofits or foundations. This idea of legislative appointees would add another reason to avoid leaving money to a foundation.

Unfortunately Dowie is unable to provide any examples of how appointees from the U.S. Congress or state legislators have ever made any nonprofit organization—foundation or other—operate in a more successful manner. And for years community foundations have had directors appointed by community leaders; however, many are moving away from this approach.

The author makes a number of comments regarding better long-term planning by foundations and is critical of their failure to anticipate all of the possible outcomes of their grantmaking. Many of his comments are contradictory. He complains that foundation funding moderates grassroots groups to be less effective, but then says foundations do not fund them enough.

It is too bad that someone who spent as much time as did Dowie investigating foundations could not come up with better suggestions on how to improve the results of foundation grants and to be more accountable to the community, applicants and grantees. A few of these ideas include (1) development of better feedback from the community; (2) establishment of thoughtful goals that can be measured at least in part; (3) the importance of advisory committees representing the areas being funded; (4) the education and training of trustees and staff; (5) better collaboration with grantees, government, community leaders and other funders; (6) opting for ethical issues and approaches; and (7) the effective use of new technology.

In reading the book, I found contradictory comments within a page or two often puzzling. When talking about the Energy Foundation Dowie states that "it is the largest of a new breed of grantmaker known as a pass-through foundation. Its primary function is to pass through its books money that might just as easily be granted directly by its donor foundations." Then, on the next page, he says the presidents of the Pew, Rockefeller and MacArthur foundations "must be credited with an invention that obviates an enormous duplication of effort by individual foundations attempting to solve America’s energy problems. It is undeniable that the Energy Foundation has saved scarce resources that would otherwise have been wasted on redundant bureaucracies."

In short, it seems that the book will appeal to those interested in the history of foundations from the point of view of the author, but it will disappoint those wanting ideas on how to improve the outcome of foundation grants.

Race Still Matters

Prosperity for All? The Economic Boom and African Americans

Edited by Robert Cherry and William M. Rodgers III. Russell Sage Foundation. 800/524-6401. Fax 800/688-2811. Web site www.russellsage.org. 2000. 344 pages. $39.95.

Reviewed by Jacqueline Copeland-Carson

Grantmakers focused on urban poverty reduction and related public policy face a vexing paradox.

The 1990s witnessed remarkable economic growth and decreasing general unemployment. African Americans’ unemployment also decreased to unprecedented levels; and the black middle class expanded.

At the same time, however, a larger proportion of African Americans is considered "discouraged workers," that is, unemployed people who are not looking for work and have opted out of the labor force. Prosperity for All? attempts to unravel this conundrum. The book—a collection of articles drawn from papers presented at a Russell Sage Foundation conference—examines whether the economic boom of the 1990s has actually improved African American socio-economic status.

Space for this review permits only a summary of the rich data, theories and varied interpretations presented in this volume. Prosperity is divided into three core sections. The first examines the boom’s impact on employment and wages. The second focuses more specifically on the relationship of racial discrimination and African American employment.

Together those two sections demonstrate that although people of color have benefited from the booming economy, whites have benefited disproportionately—the numbers suggesting that racial discrimination is still a factor in determining socio-economic status.

The third section considers the social impact of the economic boom on African Americans. It proposes that glass ceilings continue to constrain the upward mobility and compensation of people of color and women. Analysis of Michigan’s welfare reform experience finds that although the boom made it easier for welfare recipients to find work, many of these individuals need more extensive social support to retain jobs and move out of poverty.

This book is not recommended for the econometrically challenged. Its chapters focus largely on debates about employment and race usually left to economists. To better expand its reach across disciplines and professions, the book would have benefited from a final summary chapter written for a broader audience that emphasizes its overall implications for public policy and anti-poverty programs.

For grantmakers with the fortitude to sort through the economic jargon, the collection nonetheless has relevance for foundations working on poverty issues. The book presents the argument that even in the best of times, the economy alone is not enough to pull people out of poverty, especially in the face of lingering discrimination in the labor market. Efforts targeted towards women and people of color are particularly important because these groups still do not benefit equally from America’s economic prosperity.