Speaking Out - Reflections on Thirty Years of Foundation Work
He was educated at Harvard College and Cambridge University in England and has been awarded honorary degrees by a number of colleges and universities in this country and abroad.
Mr. Pifer has held numerous appointments to national boards and commissions pertaining to education, public and social policy, philanthropy, and international affairs.
An articulate and preeminent spokesperson for philanthropic concerns, Mr. Pifer has been a trustee of the Foundation Library Center, of which he served as chairman, 1968 to 1970; a director of the Council on Foudnations, 1970 to 1976 and a member of the Commission on Private Philanthropy and Public Needs, 1973 to 1975.
Many of the reflections that follow will be about the human element in foundationsthe influence foundation officers and trustees (where the latter perform grantmaking functions) have on individual foundations and on the foundation field through their professional conduct. This may seem a rather obvious approach, but it is not the usual one. More often one talks about foundations in abstract terms, almost as if they were invested with a sentience and personality of their own quite independent of the people who manage their affairs. Thus, one might hear that the X foundation is "imaginative," the Y foundation "liberal" or "conservative," and the Z foundation "stuffy" when in fact the speaker is referring to the characteristics of people in them or patterns of behavior set in earlier times by others and perpetuated by their successors.
The professional conduct of individuals associated with foundations is not a minor issue, for on that conduct depends a particular foundations effectiveness and reputation. It follows that, although a foundation may have a certain reputation inherited from the past, this can be fairly quickly altered through the fresh outlook and changed actions of new trustees and staff. It also follows that, in the case of a newly established foundation, especially a large one, the skill, or lack thereof, with which its affairs are initially managed will soon attract public attention and, thereby, reflect favorably or unfavorably on the foundation field generally.
Moreover, there seems to be a public expectation of mutual accountability in the foundation field. Foundations would prefer not to be regarded as their brothers keepers, but, for better or worse, they are, and I doubt they will ever escape the burden this places on them.
I became acutely conscious of the unfairness of this burden back in 1969 when I was called on to give testimony before a largely hostile congressional committee looking into the matter of foundation payments to public officialsan investigation occasioned by the disclosure of the annual retainer being paid to Justice Fortas of the U.S. Supreme Court by the Wolfson Foundation. I can still hear one senators threatening words to me, "You foundations had better be careful." In the event, some severely restrictive legislation was narrowly avoidedlegislation that would even have barred a foundation from reimbursing a public official for travel expenses incurred in attending a conference it had sponsored. The prohibition against paying foreign travel costs for public officials is, thankfully, the only residue left from that episode.
The Basic Nature of Foundations
First, the American foundation is a highly privileged institution. Since it is endowed, it does not have to use valuable time or energy raising money or shape its activities so as to appeal to donors. Since it does not have to make a profit, it is not subject to the vicissitudes or discipline of the market. Having no students, it is not subject to their needs, claims or foibles. It cannot be thrown out of office by an electorate. It has no membership, congregation or other collective body putting pressure on it. And, finally, since its trustees appoint their own successors it avoids accountability except to itself. In short, it is the least constrained of all institutions in our society.
A second feature of foundations is their dual private and public nature. They are private in the sense that they are incorporated as private entities, arise from private wealth and initiative and are self-governing and self-perpetuating. They are public in the sense that, once they have been granted tax exempt status, they exist solely for public benefit. Their funds, thus, no longer belong to a private individual, family or business corporation, and they must be administered with the broad interest of the public, and no other interest, constantly in mind. To see that this happens is the principal function and responsibility of the trustees, whether they are independent outsiders or insiders personally linked by family membership or employment to the donor.
A third feature of foundations is that the funds they have available for expenditure are a particularly precious resource to the society. This is not because of their size, since the funds are quite small, but because they are constantly replenishable pools of organized but uncommitted money that can be freely and, if need be, quickly, deployed to meet existing or new social needs. There are no other funds like them in the society. Individual gifts are immensely important, but they suffer from the inevitable diffuseness of purpose attendant on their control by many millions of donors. And the very essence of public money is that, once it has been appropriated, it can be spent only according to legislative mandate, whatever unanticipated new needs may develop. Foundation funds, therefore, are truly unique.
These three characteristics of foundationstheir unusual freedom, their dual public and private nature, and the extreme preciousness of the funds they controlmake them such important national assets that any association with them, whether it be as trustee or staff members, carries with it very special responsibilities. These responsibilities, essentially, are to see that the foundation is well managed and that its funds are spent for the maximum benefit of societyobligations that, although linked, are somewhat different.
Assessing Foundation Performance
If one measures the performance of foundations by the general standards of American public life, it would seem that they come off quite well. Although there have been a few instances of scandalous mismanagement and misconduct among them, the incidence of such faults is probably a good deal lower than it is in the business world or in government bureaucracy.
I have always felt, however, that, because there are such privileged institutions and because they have so much potential for unusual service to the society, foundations should be judged by a higher standard. Simply behaving in a publicly inoffensive manner or just staying within the limited requirements of the law are hardly sufficient tests for them to meet. They should be measured, and should measure themselves, b y much more demanding standards and goals.
But what should those standards and goals be? There is, in truth, little agreement on the social purposes foundations should serve. Some would say that the test of good performance in foundation grantmaking is its impact on "social change," others whether its funds offer empowerment" to powerless groups in the society, others the level of support it gives to critically important institutions and organizations, others whether it serves as a fountainhead of new ideas or new solutions to old problems, others whether it has the capacity to exert leverage of substantial sums of public money, others whether it carries out whatever mission its trustees have agreed uponbe it restoring Civil War monuments or promoting excellence in violin playing.
Beyond this, there is the immense diversity of size, history, geographical purview and governing instruments among foundations. No two are exactly alike and most differ widely from each other.
And yet this is not the end of the matter. There are minimal tests one can apply to all foundations. There is, furthermore, the question of whether an individual foundation is performing well when measured against a set of standards and goals appropriate to its own particular characteristics.
I have suggested that the minimal responsibilities of those associated with foundations are to see that they are well managed and that the funds available for disposition are spent effectively. Under the heading of management, one would include such things as the wise investment of endowment funds, meticulous adherence tot he law, efficient administration, full disclosure to the public, a breadth of experience and background on the board, and courteous, considerate and open treatment of grant seekers. Although not entirely susceptible to precise definition, these indicia of good management are sufficiently measurable to let us know in general terms how well a foundation is doing. We all know, unfortunately, that even at this basic level there are a considerable number of delinquents and underachievers in the field. The Council on Foundations has been a helpful influence in advancing the cause of good management, but there is, sadly, a long way still to go.
The Conduct of Foundation Officers
I have to say that these views have become even stronger since I forsook the pleasant occupation of grant maker for the toils of being a grant seeker! And they have been even further reinforced by the views of other grant seekerspeople with long-term experience knocking on foundation doorswho oddly enough, are considerably more candid with me now than when I was an active foundation president.
Most foundation officers, I believe, think of themselves as fair-minded, open, considerate, and unpretentious sorts of people imbued with genuine humility and a self-effacing commitment to philanthropic work. There are, indeed, many individuals in the business who are exactly like this. From my broad acquaintance, I could name a number of them, and I admire them.
There are, however, just enough foundation officersfrom presidents on downof a quite different stripe to be cause for concern. These are the individualsand we all know somewho go around exuding an air of self-importance and apparent infallibility, who have fallen into the habit of pontificating rather than listening, who have become name droppers, who surround themselves with an aura of wealth, power and prestige, and who are patronizing toward grant seekers and are largely insensitive to their feelings and inconsiderate of their needs. These people would be shocked if they were charged with such faults because they quite genuinely believe that simply being part of a profession as worthy as philanthropy automatically makes them worthy people too.
In fact, there is a kind of pervasive arrogance, perhaps most inevitable in the giving process, that permeates much of the foundation field. It is unquestionably the least attractive attribute of the philanthropic occupation and is cause for a veiled but nonetheless real hostility toward foundations on the part of many of those who come into contact with them. Their arrogance is, of course, not made apparent to those at fault because there are few grant seekers so foolish as to bite the hand that might some day feed them. In my opinion, every person working for a foundation should look at himself or herself in the mirror daily and ask, "Am I getting to be one of the guilty ones?" I also believe it would be highly salutary if every foundation officer were required periodically to spend a few months raising money from foundations for some project or institution. I can think of no quicker way to rid the field of its arrogance!
Some of the feeling of having been treated badly by a foundation and the resentment this engenders will, of course, be considered inevitable by the givers. They canand usually dorationalize it as the natural product of wounded egos among those who are turned down for grants. But that is a callous attitude. It is quite possible to turn virtually any proposal down in such a courteous, friendly and considerate manner that the applicant will be left feeling that he or she has been treated decently and fairly. Some foundation officers are good at this and are willing to take some real trouble over it, but many seem not to care what effect they have on the people they do business with.
How grant seekers feel about their treatment is a serious matter, because in the very nature of things at least twenty applicants will be turned down for every one who is successful. Over the years that group will number hundreds of thousands of people, many of them quite influential, who collectively could form a powerful body of hostile opinion toward foundations.
The most common failing among foundation officers is just plain discourtesyletting months go by before replying to an inquiry or request, or often not replying at all, delaying months before sending out checks once grants have been made, breaking appointments without explanation or apology, not returning phone calls, and so on. Some delay in answering correspondence and in returning phone calls is, of course, on occasion inevitable because of heavy pressures on the time of some officers. There can, however, be no excuse for avoidable discourtesyof which there is plentyand it is certainly calculated to infuriate grant seekers.
A particularly egregious fault evident among some officers is to begin to act as if the funds that have been assigned to them somehow belong to them personally. Thus, to applicants who are not part of an inner circle of favored grantees they manage to convey a kind of thinly disguised hostility. Who are you, they seem to suggest, to have the nerve to come here and try to get some of my money? This, one need hardly add, does not endear them to the outsiders.
Other commonly found offenders are the foundation officers who in time fall into the trap of assuming that the control of large sums of money automatically confers some special quality of wisdom on them. When this sort of illusion takes the form of attachment to a particular fashion or orthodoxy and the officers begin to push applicants in that direction as the price of support, they become a menace both to the foundations they serve and to the outside world.
Still another failing in some foundation officers is assuming they have done applicants a personal favor in securing grants for them and therefore should be duly thanked. In my view, no recipient should ever express thanks to a foundation officer unless it is clear that he or she has worked especially hard to get a grant approved. The relationship between grantor and grantee is essentially one of mutual dependence. The grantee needs the grantors help, but, equally, the grantor needs good grantees to spend the foundations money, if it is to fulfill its role. Too few foundation officers seem to understand this basic relationship.
Still another defect encountered among some foundation officers is just plain intellectual laziness. When faced with a complicated, difficult proposal that somehow doesnt fit the standard pattern, they find it easier simply to turn the request down on program or other routine grounds than put themselves to the trouble of seeing that it gets careful consideration. We have all been guilty of this at times.
Finally, a serious fault that can be laid at the door primarily of some foundation heads is timidity. Like all boards of trustees, foundation boards are sometimes bedeviled by the presence on them of forceful, egocentric bullies accustomed to getting their way without question or argument. Over time, the president, executive director, or whatever he or she is called, gets to know the sorts of things likely to provoke a negative outburst in the bully. The easiest and most politic thing to do, therefore, is simply to turn down any proposals that have the potential long before they become the cause of rebuke, defeat and loss of face in the board.
In offering these reflections, I am well aware that both I and my Carnegie colleagues of recent or earlier vintage have probably at one time or another been guilty of most of the unattractive faults I have just laid at the door of others. An admired friend in another foundation once referred to "the well-known Carnegie hauteur." I have no intention, therefore, of setting myself up as some sort of arbiter or conscience for the field, but I recognize, as do many others, that the issues must at some time be faced squarely.
I suspect that if members of the general public well enough informed at least to know what a foundation is were asked to rate foundation work in relation to other occupations according to both its relative difficulty and its satisfactions, most of them would rate it quite low on the first dimension and quite high on the second. I say this because over the years so many people have managed to suggest to me that giving money away must be just about the easiest and pleasant way to make a living one could imagine.
Stung by the suggestion, I have, of course, always responded by pointing out what a huge responsibility it is to run a foundation and how hard those who do have the responsibility work at ittrying subtly to leave the impression that, though they are not subject to the goads and checks found in other professions, foundation officers are driven by an attachment to the work ethic so great as to make other spurs to conscience superfluous. I have also intimated that the delights of the occupation are to be found in its unfailing interest and challenge and not in its opportunity to play the Renaissance prince.
In truth, working for a foundation is one of the most agreeable ways to make a living I know of, and I have often been grateful for the good fortune that brought me into the field. I have little time for foundation people who dont appreciate just how lucky they are. Admittedly, it is not pleasant to have to turn applicants for grants down, especially to their face and especially when they are nice, intelligent people. And yet, this occupational hazard is insignificant compared with the agonies of being a grant seeker or the trials of other professions.
As for the hard work, some foundation officers really do stretch themselves. They work long hours, are on the road days on end, read widely to keep themselves informed and talk with many hundreds of people in a years time. Others, however, give one the impression that they take life rather easily and do little more than they absolutely have to do to hang onto their jobs.
More importantly, some officers seem to lack the deep commitment to their work that would lead them to make substantial investments of their own emotional, intellectual and psychic capital in it. It may be argued that this is the way it ought to be anyway. Good grants are made with the head, not the heart, is an old saw in the foundation field, and one cannot deny that feelings alone are a risky basis for philanthropic decisionmaking. Nonetheless, I personally believe there is a place for the heart in foundation work, especially in this age of pervasive heartlessness in the nations public life. In the baptismal rite of the Episcopal Church one prays that the child will become a person of "discerning heart." That, it seems to me, is not a bad term for a properly detached and analytical and yet is informed by a sense of compassion and a sensitivity to the affective dimensions of personality that may in the end be far more important than highly intellectual ability. Indeed, grantmaking with the head alone is fully as dangerous as grantmaking only with the heart.
Particularly disturbing in this connection was the effort of the present Administration in Washington, several years ago to shift some of the burden of government onto foundations. It was disturbing not because reducing the responsibilities of our national government was necessarily a bad thing but because there seemed to be a complete lack of understanding of the special nature of foundation funds. The perception seemed to be that these funds are simply pools of unspoken-for private money of no special significance, just waiting to be put to userather like general tax funds, only private. This, of course, was far from the case, since by law a reasonable percentage of the value of their assets was already being spent each year by foundations for purposes they had themselves defined. The only way they could have assumed some of the burden of government was to abandon things they were already doing.
The Administrations initiative, well-motivated though it may have been, was completely at odds with the great need for everyone connected with foundations, either as trustees or staff, to understand that the funds committed to their charge are very special and should be used only to accomplish important things that will otherwise not be accomplished. They are, thus, totally different in character from either tax funds or individual charitable donations.
This view of foundation funds is perhaps not one that every foundation will share, especially some controlled by the families of donors, where oftentimes the income is committed to meeting the day-to-day expenses of certain institutions or organizations in which the donors had a personal interest, and corporate foundations, which feel they have a continuing responsibility for the normal operating costs of charities that serve the needs of their companies employees. Nonetheless, even in these understandable cases there is an obligation for those in a position of responsibility to have constantly in mind the enormous preciousness of the funds they control and at least be sure that the institutions or organizations aided are essential agencies working at a high level of efficiency.
Moving beyond the questions of good management and effective grantmaking, I believe there is a higher order or questions one can ask about at least some foundations, especially some of the larger ones, to rate their performance. This would include such questions as: Does the foundation stand publicly for positive values in the society (admittedly a subjective term)? Does it try to play a leadership role in some sphere of our national life or in the world? Is it an effective force for social betterment? Is it imaginative in the way it uses its resources? Is it a center for the generation of important new ideas? Does its value as an institution clearly transcend its value simply as a source of funds? There are controversial and, some would say, inappropriate, questions. But I believe they are legitimate ones to ask of an institution that enjoys such an extraordinary degree of freedom.
These questions do, however, point to a longstanding dilemma faced by foundations. If, on the one hand, they try to be "neutral" that is, refrain from a deliberate leadership role based on a particular set of valuesthe run the danger of being bland, vacuous, irrelevant institutions, lacking either conviction or influence. If on the other hand they do set out to play a deliberate and determined role in public policy formation based on a particular set of values, they may, because of their freedom from conventional forms of accountability, be accused of political meddling and incur a risk of political reprisal.
Along these lines, however, our experience in the Tax Reform Act of 1969 battle was instructive. The Congress was greatly aroused, in part because of evidence that the foundation device was being used in some instances solely for personal benefit but, more importantly, because of deep resentment among many Members of Congress of certain activities by legitimate foundations that were considered to be politically motivated. It took a tremendous effort on the part of those of us involved in the foundations defense to prevent the passage of what would have been severely crippling legislation, and for a time it was an uphill fight. The law that was finally passed, however, was, in my opinion, fair and wise and gave foundations ample scope for engaging in the process of public policy formation, provided they abided by certain rulesrules which seemed to me to be generally reasonable. Foundations, clearly, were not told to refrain from involvement in controversial areas. They were not told to refrain from standing publicly for certain values. They had a scare, it was true, but in the end the Congress gave ringing affirmation to their right to independence. And yet, many foundations chose to interpret the results of the 1969 battle in just the opposite way and have kept their heads firmly down ever since.
In fact, I think it is not in all cases the events of 1969 that have caused many foundations to keep such a low profile, but rather, differences of outlook among members of the board or differences between the board and the staff that have produced a kind of institutional paralysis. I even think on occasion that institutional paralysis in regard to social and moral issuesin regard to standing for somethingmay be the prevailing characteristic of a considerable part of the foundation field.
A Star to Steer By
The dividing line, however, between impermissible political partisanship and a permissible contribution to public understanding is a fine one. The Internal Revenue Service should be constantly on the alert to prevent the clearly wrongful use of tax-exempt funds for political purposes, but it should, in my opinion, be cautious about how it defines what is politically partisan. I, for example, am not nearly as disturbed as are many people at the foundation support that has gone to some seemingly partisan conservative or liberal causes and institutions. The precedent set in blowing the whistle on the foundations that have provided such support might, I believe, pose greater dangers to the future of our democratic system than any danger to it arising from the activities of the institutions aided. In short, I would, as a general matter, allow their views free opportunity to compete in the public marketplace of ideas, trusting in the good sense of the American people to reject what is spurious in them.
One of the more disturbing developments in connection with the question of what is or is not politically partisan is the tendency today for certain positions that once reflected a wide nonpartisan consensus to be classified as politically partisan. Thus, taking such positions as favoring affirmative action for minorities and women, or generous public support for child nutrition programs, or the maintenance of government supported legal services for the poor, or public service employment for older citizens seem now to be regarded as engaging in political partisanship. This was brought home to me quite forcefully when, in early 1981, shortly after the present Administration had taken office, I criticized it publicly on social and moral grounds for the harm its proposed budget cuts would do to the nations less affluent citizens and to its children. Making this speech, which was reported fairly extensively in the press, clearly was considered by some people to be politically partisan and therefore a questionable activity for the president of a well-known foundation. I even received a message through an intermediary from a prominent individual associated with another foundation to the effect that he considered such criticism of the Administration by a foundation president to be "close to disloyalty"!
This both amused and amazed me. Disloyal to what, I wondered, and on what grounds. Did a foundations tax exemption, in his opinion, somehow compromise the independence or First Amendment rights of its president? If so, what about clergymen, college presidents and the heads of voluntary agencies, all of whom are associated with tax-exempt entities? And would criticism of President Johnsons Great Society two decades earlier have been equally questionable for a foundation head?
The distinction between a politically motivated statement and one motivated by social or moral concerns is, one must admit, not always readily apparent. Furthermore, one could concede that a foundation head might in most circumstances be well advised not to run the risk of embarrassing colleagues on the board or staff or confusing the public by using the rostrum provided by the position to make statements of direct support for, or opposition to, particular politicians or parties. Nonetheless, I would defend stoutly a foundation heads rightindeed, on special occasions dutyto speak up publicly on moral issues of the national welfare, even if these issues have in the public mind assumed a political coloration as the result of the demagoguery of politicians. Any restriction on the free speech rights of those associated with foundations is, in my opinion, a coffin nail in the independence of foundations themselves.
At a broader level, the claim that foundations should refrain from possible involvement in controversy by maintaining a posture of strict neutrality has always seemed either naïve or disingenuous to me. There is, in fact, no such thing as neutrality in grantmaking, since any decision made by a foundation reflects the application, consciously or unconsciously, of one set of values rather than another. About all one can say on the subject is that some grants at the time they are made seem more controversial than others and some seem more invested with neutrality than others, but this really doesnt tell one anything of useful operational value.
As a reaction to this rather haphazard form of grantmaking, more and more foundations in recent years have established clearly and sometimes quite narrowly defined program areas, within which they attempt to confine their grants. This was clearly a move in the right directionhaphazard scatteration can, indeed, lead to ineffectiveness and wasted resources. Nevertheless, all reform movements have a tendency to go too far, because in time they become the norm and people fall into the habit of accepting their tenets uncritically. The question becomes one of are we doing the accepted thing rather than are we doing the right thing.
I am not suggesting a return to scatteration based on hunch and the old boy network. What I am suggesting is that some foundation people, in trying, ever so responsibly, to adhere to narrowly defined program areas, have closed their eyes, stopped their ears or taken down their mental antennae (depending on which metaphor one prefers) and have, thereby, shut themselves off from some of the most important issues in the society, since, increasingly, these are broad, messy and unconventional and cannot be squeezed into neat little program boxes. It is a truism that we live in a period of rapid change, an era driven by staggering scientific and technological advance, by demographic transformations of enormous consequence, by alterations in the nations economic structure the import of which even the experts can scarcely imagine, and, finally, by almost constant turmoil in international affairs, fraught with dangers of almost inconceivable magnitude.
This is a period, indeed, that calls loudly for such qualities as alertness, vision, imagination, open-mindedness, flexibility, a capacity to learn new things and think new thoughts, and a willingness to take risks. It is my observation that some foundations, afflicted as they are by severe cases of "program-itis" that constrict their horizons, narrow the rangeof their perception and dull their imaginations, are poorly equipped to be of much value to our times. This is a sad observation to have to make, because never have we needed the immensely flexible resource that foundations represent more urgently.
All of this was nonsense, of course, but it cast a pall over the field and made many foundations skittish about concerted action to support an existing institution or launch some new project. This was also a period when the feeling was strong in some foundations that it was positively wrong to share the support of any venture with a governmental agency.
Gradually, however, these views began to be modified, and by the 1960s some very important projects involving cooperation among foundations or cooperation between them and government were in evidence. A notable example of the latter was the Childrens Television Workshop, which came into existence in 1968, and shortly thereafter put Sesame Street on the air. Without the joint participation of foundations and government this would never have been possible.
By the latter half of the 1970s, the subject of joint foundation funding had achieved a new prominence, thanks to the effects of several years of high inflation on the real value of foundation funds. This was also the period in which the annual volume of corporate philanthropy began to overtake the total amount of foundation spending, raising in private foundation circles pretty much for the first time the question of cooperation with corporate funding partners. It is fair to say that by this time interfoundation cooperation as a desirable operational principle had become well established. Starting in 1975, for example, a group of the larger foundations began to work together in a highly structured manner to accomplish a series of major tasks in the research library field that no one of them could have contemplated alone.
I am a strong believer in cooperative initiatives between foundations, between foundations and corporate philanthropy and, in certain circumstances, between foundations and government. I have, however, learned through hard experience how very difficult such undertakings can be. The problem, essentially, is that foundations are so different from each other in their purposes, interests, traditions, and ways of operating that getting agreement among even two or three becomes an enormous challenge. There is also, in some cases, the problem of sand in the workspetty jealousies, minor obstructionism, turf protection, the "not invented here" phenomenon, and so on.
There is, furthermore, the issue of reciprocity. Foundation A launches a project which it asks B to join. B puts up its share but then comes back to A a year later with its own pet project, which happens to be somewhat out of program for A, or seems rather soggy to it. A then faces a dilemma. If it joins B, it is denying its better judgement. If it turns B down, there is a strong possibility that B will feel betrayed, will be angry and possibly not renew its support for As project, thereby jeopardizing its continued existence. Situations such as this are by no means uncommon. Foundation cooperation is a very good thing, in principle, but how frustrating it can be in practice!
There is, of course, another type of joint funding where a grantee succeeds in assembling multiple foundation support for the project, causing the foundations involved to become inadvertent partners. Such partnerships are common and are much easier for all concerned, because the real responsibility for the project lies with the grantee. Nevertheless, I would be extremely sorry to see foundations abandon the notion of taking the initiative themselves to put together large cooperative ventures. With todays costs, even for modest ventures, this is the only way certain highly desirable things are going to get done.