October 18, 2010

Speakers Debate the Right Defense of Foundation Autonomy

Amelia Island, Fla.

Making the case that philanthropic dollars do good and benefit society isn't going to be enough to convince lawmakers and the public that foundations deserve the freedom and tax benefits they now enjoy, William Kristol, the conservative commentator, told an audience at the Philanthropy Roundtable's annual meeting.

Instead, he called for a "more principled defense" against government regulation of foundations and their work.

Mr. Kristol said that it's not always the case that philanthropic dollars help society, a message he joked would make him the "skunk at the party." The argument that foundations deserve autonomy because of all the good they do was made by his co-panelists during the discussion, and it is a focus of a new public-education campaign by the Philanthropy Roundtable.

Mr. Kristol suggested that some charitable projects are ill-conceived, others cause real harm, and some are totally at odds with each other. "You can support think tanks that are either propounding Obamacare or opposing Obamacare, and you can't both be right," said Mr. Kristol. "They can't both be good for the country."

He said that people who question whether foundations deserve their special tax status are not necessarily unreasonable. Such people see foundations as big pools of money, led by individuals who are relatively unaccountable to the public and who are spending that money however they see fit.

"They don't have to be idiotic populist yahoos on the left or right" to raise those questions, Mr. Kristol said.

He urged donors to embrace a broader defense of philanthropic freedom. "I would turn the question on its head," he said. "People who have a stake in philanthropic freedom have a stake in freedom."

A university's decision not to recognize a student group because of its beliefs, or efforts to force the Boy Scouts of America to accept gay people, he said, ought to give donors pause. Donors and nonprofit organizations should be concerned about the freedom of corporations; nonprofits, like businesses, are operating in the private sector, Mr. Kristol said. He also said that nonprofits should be worried about President Obama's recent attacks on organizations registered under section 501(c)(4) of the federal tax code, nonprofit groups that can engage in lobbying.

"I don't think that philanthropic freedom will survive," he said, "if we sit back and allow the freedom of other entities to be severely constrained."

The title of the session was "Right, Left, and Center: Why They Each Have a Stake in Philanthropic Freedom." Mr. Kristol was joined on the panel by Jane Wales, vice president for philanthropy and society at the Aspen Institute, in Washington, and Claire Gaudiani, author of the book, Generosity Unbound: How American Philanthropy Can Strengthen the Economy and Expand the Middle Class.

Ms. Wales argued that philanthropy's autonomy allows it to make risky investments with the aim of achieving long-term good for society: "My question is, Why would you ever constrain that?"

Ms. Gaudiani also suggested that the freedom that foundations enjoy fosters innovation. She said that donors, regardless of their political views, will lose out if philanthropy's autonomy is chipped away.

A danger, she said, is the right leading the charge against government regulation of foundations with no input from the political left, or the left choosing not to engage in the issue.

Ms. Gaudiani suggested that it was unfortunate that liberal grant makers didn't speak out more strongly against proposed legislation in California that would have required big grant makers to disclose information about the diversity of their staffs, boards, and grantees. Liberal foundations may feel they can't criticize advocates pushing for such legislation, she said, because they share the advocates' general goal of strengthening groups that help poor people and minorities.