How Private Wealth Is Changing the World
Joel L. Fleishman
341 pages (New York: Public Affairs, 2007)

Martin Morse Wooster
158 pages (Washington, D.C.: Hudson Institute, 2006)

Some books ought to be read as pairs. Joel L. Fleishman’s and Martin Morse Wooster’s recent offerings are such a duo, offering sometimes diametrically opposed perspectives on philanthropic successes and failures. Even their recipes for remedies and improvements for philanthropy’s shortcomings are for the most part polar opposites, except that both believe that foundations can and should be self-corrective. Both authors profess commitment to the vital civic culture of the nation’s nonprofits, yet they both faithfully trust the genius of foundation leaders to divine the necessary corrective actions: improved transparency and foundation storytelling in Fleishman’s view, and a discovery of philanthropic humility in Wooster’s.

The result is two interesting but troubling books, both defending an elite, anachronistic model of philanthropy, generated and run predominantly by philosopher kings and queens, at odds with the expectations and demands for democracy that characterize the growth of heterogeneous grassroots nonprofits throughout the U.S.

Wooster has been a longtime productive and creative conservative critic of mainstream and liberal foundations. Great Philanthropic Mistakes advances his critique: The problems of the major foundations are not simply their departure from the original donors’ ideals. They are also mistakes, straightforwardly wrongheaded investments that lead to bad results for society.

Wooster is a lively writer and an energetic researcher, relying on source documents, autobiographies, and first person recollections to tell the story of what he sees as philanthropic missteps. The result is an ideologue’s highly readable treatise laying waste to eight of philanthropy’s historical sacred cows. In some instances, readers might find Wooster’s proclamations more than a little jarring, particularly his relegation of saintly public television and the Corporation for Public Broadcasting to the column of grand philanthropic failures.

Other examples of foundation blunders will make readers cringe and perhaps cross ideological lines to agree with Wooster, such as the extensively criticized Ford Foundation experiment in school decentralization, and the associated turmoil, racism, and anti-Semitism in the Ocean Hill-Brownsville neighborhood of Brooklyn. One can debate how much of the Ocean Hill-Brownsville “legacy” is exclusively the province of the Ford Foundation (and Wooster does take some liberties here and elsewhere with attributing long-term societal consequences to grants), but this is one of several of his cases that highlight the problem with addressing social problems from an intellectual and philanthropic perch of 30,000 feet.

As Fleishman’s book points out, however, failure is a squishy concept, sometimes historical and contextual. What constitutes the underpinnings of many of the failures Wooster cites are their successes in stimulating government funding and consequently a larger government role in public welfare – such as the Lasker Foundation’s success with the Johnson and Nixon administrations in getting federal funding for the campaign against cancer, and the Rockefeller and Ford foundations’ successes with the Johnson administration in promoting population control initiatives.

Wooster’s chapter on the Ford Foundation’s Gray Areas program, an urban renewal initiative of the 1960s, reveals how he defines disasters. Fundamentally, Wooster attacks not just the Gray Areas program, but the resultant War on Poverty based partly on the Gray Areas model. What he discovers and highlights is that the Ford grants supported some groups that worked well, others that flopped ignominiously, and still others that were neither failures nor successes. In other words, the results were a mixed bag, like much social policy in the U.S.

He concludes the story by declaring that “by 1968 it was clear that the federal government’s community action programs had failed,” giving Ford blame or credit for an entire swath of government programming that was hardly under the control of the foundation or its program “baron” Paul Ylvisaker. Wooster’s jump from a critique of a half dozen Ford initiatives to a condemnation of the entire War on Poverty – which was done in by halfhearted federal commitment, and exacerbated by the competing demands of another war – doesn’t quite make sense, particularly from the perspective of the thousands of families that have received vital services from more than 1,000 community action agencies. Wooster might equally credit Ford with the continuing accomplishments of community action agencies, some of them the original Gray Areas groups such as Action for Boston Community Development, which function as critical components of this nation’s social safety net.

Fleishman would turn Wooster’s argument on its head and applaud foundations for placing poverty on the national agenda and, through persistent promotion of visions for social progress, keeping it there. For Fleishman, it is exactly that ability to push ideas that might not get support from other sectors into the public consciousness that makes philanthropy an invaluable engine of social progress.

Oddly enough, as Fleishman hints by including the John M. Olin Foundation’s work on conservative legal advocacy as an example of a foundation initiative of extraordinary influence, conservative foundations have had great success with exactly these high-impact idea and knowledge strategies. The work of Wooster and his colleagues at the Hudson Institute demonstrates the power of foundations to place and maintain sometimes unpopular ideas in public discourse. The past two decades of conservative political dominance serve as evidence of “high impact.”

Fleishman is the founder of Duke University’s Terry Sanford Institute of Public Policy and the director of the university’s Heyman Center for Ethics, Public Policy, and the Professions. He has written and published extensively about philanthropy for decades. The Foundation, which began to receive publicity long before it was published, is something of a tour de force of examples of philanthropic accomplishment.

Foundation people routinely convey modesty about the potential impacts of foundations, noting that their grants constitute usually less than one-tenth of nonprofit revenues. Fleishman’s unveiled secret is the opposite: With refreshing candor, he says that foundations have been indispensable elements of social progress in the 20th century.

Fleishman focuses on the very largest foundations of our era (noting that 2 percent of foundations control 70 percent of philanthropic assets), and his selected stories are similar to Wooster’s, with a heavy dose of Ford, Carnegie, Rockefeller, and MacArthur. In his case studies, foundations act as drivers and partners; in other words, they call the majority of the shots. Given his eloquence on the importance of the civic sector, one might have hoped that he would pay tribute to the successes of foundations that have had faith in communities and nonprofits and grassroots democracy to actually identify solutions to societal problems.

Although Fleishman does point out foundation failures (he is one of the few to highlight the racist flirtation of some foundations with the sham science of eugenics in the 1950s), his book is primarily about underpublicized successes of great societal import. His selection of 12 “high-impact” case studies touches on examples also raised by Wooster – including the creation of public television and Abraham Flexner’s 1910 book-length report on medical education – though obviously from a perspective very different from his conservative colleague’s.

One can only wish that Fleishman and Wooster would appear on the same dais to debate their overlapping histories, offering revelations to the audience about the complexities and difficulties in good grantmaking. Fleishman’s book actually provides a survey of how to achieve high impacts in foundation grantmaking, most of it the commonsense elements of problem diagnosis, strategy development, tactical decisions, and cogent implementation planning, all of which are hardly unique to foundations. More instructive might have been observations from Fleishman’s near decade of personal experience at the Atlantic Philanthropies, particularly because of the foundation’s historic willingness to take on serious national and international social problems.

In general, Fleishman’s analysis of failures emphasizes operational challenges, essentially accepting the positive outcomes intended by the foundation sponsors, whereas Wooster’s analysis suggests that good planning and implementation could not have prevented his selection of philanthropic gaffes. In other words, Fleishman for the most part accepts the wisdom of what foundations are trying to accomplish, but faults them for their errors of implementation. Wooster, in contrast, faults foundations for their hubris in ignoring the knowledge of nonprofit leaders who serve on the front lines of social change; such foundations instead rely on their own judgments.

Fleishman’s 12 case studies do not, however, read like uncovered secrets as the book title suggests, although many notable books These are two interesting but troubling books, defending an elite, anachronistic model of philanthropy generated and run by philosopher kings and queens. readers will be unfamiliar with the Flexner Report; Julius Rosenwald’s support for building schools for African- Americans in the rural South; and the Robert Wood Johnson Foundation’s central role in the movement against tobacco use. It is hard to imagine that the bulk of Fleishman’s nonprofit sector readers will not know about the Green Revolution or, because Muhammad Yunus recently won the Nobel Prize, the Grameen Bank’s microlending innovations, or even George Soros’ support for civil society in post-communist Eastern Europe.

But Fleishman tantalizes the reader with a potpourri of lesser-known examples of what he considers to be models, including the youth development program of the Edna McConnell Clark Foundation; the Ford Foundation’s support of the Manpower Demonstration Research Corporation; Ford’s seminal role in the community development corporation movement, including the creation of the Local Initiatives Support Corporation; and smaller but perhaps powerful examples of foundation accomplishments by the likes of the McKnight Foundation in Minnesota, the Z. Smith Reynolds Foundation in North Carolina, and the George Gund Foundation in Cleveland. Some of these examples might, for most readers, actually be so little known as to be considered de facto secrets, raising questions about what makes them instructive, high-impact examples.

It must be galling to conservatives that Fleishman frequently defines foundation successes as sparking expanded government funding commitments ranging from the success of Rosenwald’s efforts in attracting funds for his rural schools to Joan Ganz Cooney’s Children’s Television Workshop. Fleishman’s model is well-grounded in the Ford/Rockefeller/Carnegie model of experimentation followed by government adoption, replication, and expansion; and fundamentally at odds with Wooster’s view of good, bad, and calamitous philanthropy.

Foundation and nonprofit trade association leaders might be stunned to read Fleishman’s contention that government regulation of nonprofit accountability is, “for all practical purposes, slight” and that foundations themselves enjoy a “freedom from accountability.” At face value, his observations constitute a clarion call for serious public scrutiny of essentially “unfettered” public foundations.

Like Wooster, Fleishman eschews government regulation in favor of self-regulation. Wooster wants foundation egoists to become humbler, reduce their “overreliance on expertise,” and remember the limitations of using wealth to change society. Fleishman promotes an aggressive regime of foundation-managed disclosure and transparency; infusing the sector with foundation-located ombudsmen; and initiating a foundation rating board to rank transparency. He is confident that sunshine will make foundations do the right thing, even though there is virtually nothing in the system of philanthropic accountability to make them do anything.

Both books contain enough insights and blind spots to stimulate a long and vigorous philanthropic debate.

Rick Cohen is a national correspondent for The Nonprofit Quarterly. Before joining the magazine in 2006, he was the executive director of the National Committee for Responsive Philanthropy, the nation’s premier nonprofit philanthropic watchdog organization.

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