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American Philanthropic Foundations

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Once largely confined to the biggest cities in the mid-Atlantic and Great Lakes states, philanthropic foundations now play a significant role in nearly every state. Wide-ranging and incisive, the essays in American Philanthropic Foundations: Regional Difference and Change examine the origins, development, and accomplishments of philanthropic foundations in key cities and regions of the United States. Each contributor assesses foundation efforts to address social and economic inequalities, and to encourage cultural and creative life in their home regions and elsewhere. This fascinating and timely study of contemporary America's philanthropic foundations vividly illustrates foundations' commonalities and differences as they strive to address pressing public problems.

Introduction/David C. Hammack
1. New York Foundations / David C. Hammack
2. Philanthropic Funds in Baltimore / Jessica Elfenbein and Elise C. Hagesfeld
3. The Washington, D.C. Region’s Modest Foundation Sector / Alan Abramson and Stefan Toepler
4. Northeastern Ohio’s Collaborative Foundations / Elise C. Hagesfeld and David C. Hammack
5. Philanthropic Foundations in Chicago/ Heather MacIndoe
6. The Rise of Grantmaking Foundations the South / Martin Lehfeldt and Jamil Zainaldin
7. The Foundations of Texas / Peter Frumkin and Heather MacIndoe
8. Foundations in Los Angeles / David B. Howard and Helmut K. Anheier
9. Foundations in San Francisco and Silicon Valley / Carol. J Silverman and Arleda Martinez
10. Washington State’s Foundations / Steven Rathgeb Smith, Beth L. Lovelady, Natalie C. Alm, and Kate Anderson Simons
By Way of a Conclusion: Regions, Foundations, and Policy / David C. Hammack and Steven Rathgeb Smith
Appendix A: The Biggest Foundations, 1946, 1979, 2012
Appendix B: Community Funds and the Distribution of Smaller Foundations



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Published 16 April 2018
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PHILANTHROPIC AND NONPROFIT STUDIES Dwight F. Burlingame and David C. Hammack, Editors
This book is a publication of
Indiana University Press Office of Scholarly Publishing Herman B Wells Library 350 1320 East 10th Street Bloomington, Indiana 47405 USA
© 2018 by Indiana University Press
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No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying and recording, or by any information storage and retrieval system, without permission in writing from the publisher. The Association of American University Presses’ Resolution on Permissions constitutes the only exception to this prohibition.
The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1992. Manufactured in the United States of America Library of Congress Cataloging-in-Publication Data
Names: Hammack, David C., editor. | Smith, Steven Rathgeb, [date] editor. Title: American philanthropic foundations : regional difference and change / edited by David C. Hammack and Steven Rathgeb Smith. Description: Bloomington, Indiana : Indiana University Press, [2018] | Includes index. Identifiers: LCCN 2018000952 (print) | LCCN 2017059764 (ebook) | ISBN 9780253025432 (eb) | ISBN 9780253025326 (cl : alk. paper) | ISBN 9780253032751 (pb : alk. paper) Subjects: LCSH: Endowments—United States. | Charities—United States. Classification: LCC HV97.A3 (print) | LCC HV97.A3 A628 2018 (ebook) | DDC 361.7/6320973— dc23 LC record available athttps://lccn.loc.gov/2018000952
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Introduction / David C. Hammack New York Foundations / David C. Hammack Philanthropic Funds in Baltimore / Jessica I. Elfenbein and Elise C. Hagesfeld The Washington, DC, Region’s Modest Foundation Sector / Alan J. Abramson and Stefan Toepler Northeastern Ohio’s Collaborative Foundations / Elise C. Hagesfeld and David C. Hammack Philanthropic Foundations in Chicago / Heather MacIndoe The Rise of Grant-Making Foundations in the South / Martin Lehfeldt and Jamil Zainaldin The Foundations of Texas / Peter Frumkin and Heather MacIndoe Foundations in Los Angeles / David B. Howard and Helmut K. Anheier Foundations in San Francisco and Silicon Valley / Carol J. Silverman and Arleda Martinez Washington State’s Foundations / Steven Rathgeb Smith, Beth L. Lovelady, Natalie C. Alm, and Kate Anderson Way of a Conclusion: Regions, Foundations, and Policy / David C. Hammack and Steven Rathgeb Smith
Appendix A: The Biggest Foundations, 1946, 1979, 2012 Appendix B: Community Funds and the Distribution of Smaller Foundations Index
IN PREPARING THIS BOOK , THEnal volume of the Contributions of Foundations project created and funded by the Aspen Institute’s former Nonprot Sector and Philanthropy Research Program, we have incurred many debts—intellectual, institutional, and nancial. We gratefully acknowledge those who have helped us. Alan Abramson, as leader of the Aspen program, supported by Rachel Mosher-Williams of the staff and James A. Smith of the research advisory commiee, launched these studies and helped see them through to completion. Alan, Rachel, Jim, and the many well-informed foundation leaders and researchers they consulted understood that foundations always face questions about their purposes and their privileges. Surely they did not, just before the Great Recession brought so much aention to America’s rising inequality, anticipate the variety of challenges that foundations now face. We hope that this book helps clarify the real questions. A Packard Foundation grant underwrote the Aspen program’s support for the project; we are thankful for that support, and we are especially thankful for the foundation’s decision, and Aspen’s, to leave all aspects of the projects entirely in the hands of the authors and editors. is book developed alongside two other products of the Contributions of Foundations project. We renew the thanks offered in David C. Hammack and Helmut K. Anheier,A Versatile American Institution: e Changing Ideals and Realities of Philanthropic FoundationsDC: Brookings Institution Press, 2013), and (Washington, Helmut K. Anheier and David C. Hammack,American Foundations: Roles and Contributions(Washington, DC: Brookings Institution Press, 2010). ose books emphasize the long course of development of America’s philanthropic foundations and the reality that foundations relate to their many different elds of concern in a variety of ways. Here, we take up a question they le open: How have America’s regions and America’s foundations related to one another? To answer this large question, we have enlisted a strong group of historians and policy scientists: as editors, we owe each of them thanks for the quality of their work, and for their patience and persistence. roughout the entire project, we have learned much through discussions with many others. Here we would particularly thank Putnam Barber, Elizabeth Boris, Kathleen W. Buechel, Emme D. Carson, Paul DiMaggio, James Ferris, Joel Fleishman, Stanley N. Katz, Ellen Condliffe Lagemann, Kathleen D. McCarthy, Steven Minter, Susan Ostrander, Kenneth Prewi, Judith Sealander, Jiannbin Lee Shiao, Mark Sidel, Bruce Sievers, Burton Weisbrod, and Julian Wolpert. For their expertise in the law relating to foundations, we are indebted to Paul Feinberg at Case Western Reserve University, Norman I. Silber of Hofstra University, and John Simon of the Yale Law School. We also acknowledge the characteristically exceptional aid provided by four colleagues who have passed away: Peter Dobkin Hall, Barry D. Karl, Richard Magat, and Stanton Wheeler. e increasing number of individual foundations that make extensive information about their activities available through detailed annual reports, evaluations, and continually improving websites deserve our thanks, and the thanks of all who are interested in American philanthropy. e Foundation Center’s carefully constructed samples of grants made by foundations in 2001 and 2005 were again very useful; we are indebted to the center’s researchers, especially Sara Englehardt, Steve Lawrence, and Larry McGill. We arranged for all contributors to this volume to have access to these samples. Limitations that derive from the Foundation Center’s main purpose—to help foundations work with grantseekers while preserving appropriate anonymity— did impose limits on our ability to answer many questions, especially about the ows of grants across state lines, the exact purposes and elds addressed by grants, and the relationships between grants and a foundation’s 1 broader foci. Also valuable was data available to all through the Urban Institute’s National Center for Charitable Statistics. e Rockefeller Archive Center and several other important archival research collections did much to underwrite the work reported here by preserving and making available extensive collections of relevant materials. We join all researchers in the hope that more foundations will realize that it is in their own interest to make available an even fuller body of information. e aim throughout all phases of this project has been to produce work that strikes foundation leaders as fair and representative, and at the same time persuades skeptical researchers and policy analysts. In our effort to achieve this delicate balance, we have had the benet of many conversations with researchers and foundation leaders at events generously arranged by several sponsors. ese include the Aspen Institute, the Pocantico Conference Center of the Rockefeller Brothers Fund, the Rockefeller Archive Center, the Foundation Center, and the Nancy Bell Evans Center on Nonprots and Philanthropy at the University of Washington Daniel J. Evans School of Public Policy and Governance. We also gained much from discussions organized by the Foundation Center in New York, the Southern California Association of Grantmakers in Los Angeles, the Bradley Center of the Hudson Institute in Washington, DC, the Indiana University Center on Philanthropy in
Indianapolis, the Yale Law School in New Haven, and the Mandel Center for Nonprot Organizations in Cleveland. We have continued to learn much from colleagues and critics at several meetings of the Association for Research on Nonprot Organizations and Voluntary Action and the International Society for ird Sector Research. Several people and institutions provided excellent research and editorial support. At Case Western Reserve University, Elise Hagesfeld provided invaluable editorial assistance, Jesse Tarbert raised important points on several topics, and Yuan Liu provided excellent research. At the University of Washington, Beth Lovelady provided excellent research and editorial support. Meghan Mcconaughey at the American Political Science Association also provided very important editorial assistance. Steven Rathgeb Smith also beneted from the nancial support of the University of Washington, Georgetown University, American University, and the American Political Science Association in the completion of this manuscript. We want to thank Indiana University Press and our editor, Gary Dunham, for their excellent work. Once again, Loraine Shils Hammack’s editorial skill deserves much of the credit for the book’s coherence and readability. We have devoted a great deal of our time to this book over the past several years; Loraine Hammack and Penny Smith deserve our humble thanks for their patience as well as for their advice.
David C. Hammack and Steven Rathgeb Smith
NOTES 1.Created to aid grant-seekers, this database includes basic information about 124,844 grants of $10,000 or more, awarded to nonprofit organizations and government agencies by a sample of the 1,007 largest private and community foundations in each sample year. For community foundations, it includes only discretionary and donor-advised grants; it omits grants to individuals. The file includes foundation names and states; grant recipient names, cities, states, or countries, units—such as the medical school of a university—as well as, for some grants, information about recipient population groups, grant amounts, grant durations, years authorized, text descriptions, grant purposes, grant population groups, types of support, matching support, and challenge support. The data set uses information provided by the foundations themselves; it does not include field information for each grant, and information on grant purposes and on populations served is quite incomplete. The file offers no information as to the relationship of any individual grant to the granting foundation’s larger program. To mask the identity of specific granting foundations, the file includes very limited information on the flows of grants from one state to another.
David C. Hammack
FOUNDATIONS AND OTHER ENDOWMENTS REPRESENT both wealth and voice; it follows that they aract critics. When in 2007 we began the studies that 1 culminate in this book, a prominent criticism held that America’s foundations had become weak, unimaginative, and ineffective rather than bold, energetic, and venturesome. Ten years later, as the Great Recession that began in 2008 persists amid a return of American inequality to the levels that prevailed in the Gilded Age and the Roaring Twenties, new criticisms appear. Foundations and endowments are now said to hoard money that should be spent on immediate needs; critics add that in pushing to exert greater inuence they 2 reinforce inequality when what the nation needs is more equal opportunity. We offer the studies in this volume as efforts to evaluate these criticisms and to put them into perspective. In assembling the book, we have drawn on both history and the policy sciences. Historians wrote several of the essays that follow this introduction; political scientists and sociologists wrote the others. History, we believe, is particularly important for the study of endowed institutions that are intended to persist over the decades. Historians do their best to understand the actual conditions that shaped past decisions and ambitions. Laws, language, and understandings change, sometimes quite radically. e time-series data that social science requires is never available for long periods. Hence, historical study is essential to efforts to comprehend past purposes and past activities and to assess change over time. Because we agree that all institutions must change with the times, we also believe it is essential to bring the best contemporary analysis to any examination of today’s foundations.
FOUNDATION AND ENDOWMENT DEVELOPMENT: A BROAD SKETCH America’s philanthropic foundations date from the American Revolution. ey owe their legal existence to the Constitution’s guarantees of property rights, religious liberty, and freedom of speech and to the rights of corporations as affirmed in the Dartmouth College case of 1819. rough these fundamental laws, the United States freed endowed charities from the close supervision that British rule had assigned to the Church of England and other imperial authorities. America’s new frame of government made possible independent, self-directing endowments, although regulated to some extent by the states and also, especially from the early twentieth century, by the federal government. Charitable funds and endowments constitute autonomous sources of initiative to a large extent free of limits that constrain elected governments and pro@t-seeking businesses. ey pursue many distinct, oĀen conicting, and sometimes controversial purposes. For these reasons, charitable funds and foundations are notable components of American pluralism. roughout American history, they have pursued causes both religious and secular, both notable and frivolous. Many of their causes have been small, local, 3 uncontroversial, and even peculiar. Other causes have drawn foundations into historic controversies that manifested themselves in regional terms. Over time, some endowed causes have lost favor as other causes gained support. From the @rst decades aĀer Americans expelled the government-funded Church of England, special endowments enabled religious communities to thrive throughout the Northeast. With religion came conict, as well as community. Endowed funds helped Northeastern Protestants bring churches and schools to the West, even as some religious communities rejected the storing of treasure for holy purposes, insisted that “God will provide,” and urged leaders and followers alike to take vows of poverty. Early nineteenth-4 century Presbyterians used their funds to try to hold the nation together despite conict over slavery, even as Methodist and Congregationalist funds sent missionaries to engage the slaves and urge emancipation. In the nineteenth century, endowed funds underwrote colleges, engineering schools, libraries, and the arts—helping to advance knowledge and secularism while diversifying local economies and building local elites. AĀer the Civil War, the Peabody Fund, one of the @rst celebrated foundations that operated on an independent basis, distinct from a particular institution or religious group, worked to spread schools through the defeated South. To operate in the South, the Peabody Fund had to acquiesce to local demands that the schools favor white children. Meanwhile, Northern religious funds competed—with very mixed success—for the hearts and minds of southerners, including white Baptists and Methodists as well as the formerly enslaved African Americans. At the beginning of the twentieth century, advocates for a stronger, more uni@ed sense of American nationality turned to endowed funds when Congress, still deeply divided along lines de@ned by the Civil War, could not agree to fund education, science, or most celebrations of the nation. Religious endowments continued their work (as they do today), even as funds commied to science rose to prominence, helping to transform medicine and other professions, to build research universities, to separate northern (but not southern) colleges from church sponsorship, and to create a national system of secondary and especially higher education—again contributing to knowledge and opportunity while also building elites. rough the middle of the twentieth century, a number of foundations, located mostly in the Northeast and around the Great Lakes, promoted national standards in public education, public health, and public administration. OĀen, of course, local and particular regional and religious interests strongly opposed such national standards. Here and there, small numbers of foundations underwrote efforts to encourage labor unions, women’s rights, and measures of social and economic reform—and, 5 perhaps more oĀen, to discourage such things. More recently, a few foundations identi@ed with New York, Chicago, and California have backed movements for equal rights regardless of race, religion, gender, or sexual orientation, while some foundations identi@ed with Midwestern and southern states have underwrien campaigns for religious and/or states’ rights and charter schools. roughout the history of the nation—but more in some places than in others—endowed funds provided key support for libraries, museums, orchestras, parks, charitable societies, and other institutions of popular education, and the arts that ornament America’s cities despite the absence of government support. Engaged with fundamental cultural conicts, America’s foundations and endowed funds have always both reinforced and challenged regional identities and regional 6 differences, thus evoking harsh criticism as well as exaggerated praise. Regionally varying experiences with foundations and endowed funds have no doubt shaped the legislation, the regulations, and the legal decisions that control and constrain foundation activity. Despite the signi@cance of foundations for America’s regional differences and despite the many popular and conventional comments about the foundations and American regions, the topic has never aracted serious aention. is book, the third in a series exploring the roles of foundations in the key @elds they have engaged and in 7 American history, offers an ambitious first effort to assess foundation variation across the United States.
ON “FOUNDATION” e classic foundation receives its initial funds from a single donor, but community foundations and some others also seek new contributions, and if they receive sufficient new money each year they qualify for the advantageous tax status of a public charity rather than a private foundation. If they make charitable giĀs from @nancial assets that they hold and invest, both public charities and private foundations enjoy significant tax advantages. Wealth, permanence, and independence aract critics, who can sometimes take advantage of misperceptions, myths, and misrepresentations. It is oĀen asserted that foundations, de@ned as substantial funds invested for the support of charitable activities over a sustained period of time, date from actions of such industrial titans as Andrew Carnegie and John D. Rockefeller at the end of the nineteenth century. Yet endowed charitable funds had been active for one hundred years by then. It is not infrequently claimed 8 or assumed that all “real” foundations are limited to secular causes. Yet neither practice nor law requires an American foundation to be nonreligious, and as always, a large share of 9 all foundations continue to be devoted to religious causes. It is said that foundations have abandoned a former commitment to the relief of poverty and disaster. But immediate relief of physical need has never been a chief purpose of American endowments and foundations, which have always chiey aimed to sustain the activities associated with churches, schools, and other institutions. Recent critics have it that American foundations have mostly given casually and thoughtlessly, taking lile care about outcomes. In reality, much foundation-giving has always supported carefully considered initiatives. Not a few of those initiatives enjoyed considerable success, even as many failed. And it is certainly true that some endowments have simply held and distributed money for the use of institutions that a well-informed donor believed would make good use of a flow of income over time. Observers and critics oĀen note that in the United States, foundation boards can act without reference to legislative majorities or to current markets: if the observer assumes that sovereignty implies a central monopoly over initiatives, such autonomy can seem illegitimate. American foundations enjoy more autonomy than their counterparts in most other nations, perhaps in all. But they can ignore neither public nor legislative opinion—nor the market. Foundations depend on markets to create and maintain their wealth and to yield income, and to generate the wealth that enables others to help support the causes they champion. Foundations must obey the law in making investments and in making grants. To ignore the opinions of the public and of legislators, regulators, and judges is to put a foundation’s future in peril. From time to time, a few foundations—associated with Carnegie, Rockefeller, Ford, Gates, and a few others—have held truly extraordinary amounts of money. But even these foundations have understood that public revulsion can destroy the value of their money. Because a good reputation enhances the value of any grant, foundations have had to learn to take public opinion into account even when pursuing their boldest initiatives. As is increasingly recognized, foundations are most effective when they understand and advance values shared by the people and organizations 10 they support. Some of the confusion about foundations arises from the fact that many entities that describe themselves as foundations, or are described as such by critics, are not charitable foundations under American law. e word “foundation” has many positive connotations: it can mean fundamental, basic, substantive, consequential, authoritative, principal, and principled. Proclaiming seriousness and credibility, many organizations that have lile or nothing to do with endowment-based charitable giving use the term in their names. Hospital systems such as the Cleveland Clinic Foundation mostly lack large endowments. Annual fundraising campaigns in the style of the March of Dimes—originally the National Foundation for Infantile Paralysis—rarely hold and invest large assets over time. e Clinton Foundation is set up as a public charity that annually raises new money 11 from many sources for charitable purposes; it is neither a private foundation nor a community foundation. Foundations that chiey sell insurance and annuities and manage private—and even charitable—trusts may be commercial rather than charitable. Several large banks and investment companies have, in recent years, created closely tied commercial gift funds that are separately incorporated as public charities, but are by necessity closely associated with their commercial sponsors. Journalists and critics are tempted to include all the entities noted above as well as many others that hold large amounts of money in discussions of foundations. It can make sense to associate philanthropic foundations with the endowments of charities, such as schools, colleges, universities, medical institutes, and arts organizations that do use their