The Legitimacy of Philanthropic Foundations

"Americans have for more than a century had an ambivalent view of philanthropic foundations-on the one hand they are the source of largesse for the improvement of the well- being of mankind; on the other hand they represent the tax-advantaged private creation of public policy. Throughout the twentieth century there were periodic public challenges to the legitimacy of foundations, and at the beginning of a new century we are once again witnessing Congressional suspicion and possibly hostility. The value of this volume is that it puts these American controversies into both historical and theoretical perspective-while at the same time describing the ways in which Europeans are both imitating the American foundation form and beginning to experience some of our ambivalence. These are nicely crafted essays that raise the question of foundation legitimacy to a higher level, enabling readers to evaluate the public role of private philanthropy. The Legitimacy of Philanthropic Foundations is a necessary book for anyone interested in foundations and public policy."
-STANLEY N. KATZ, director, Center for Arts and Cultural Policy Studies, Woodrow Wilson School, Princeton University

"Private foundations are powerful and sometimes efficacious, but their power is always precarious, dependent upon the tolerance of the nation-states by which they are chartered and within whose territories they operate. The authors represented in this trailblazing volume, who include many of the leading authorities on philanthropy from two continents, explore the paradoxical dependence of private philanthropy on public legitimacy with skill and wisdom. Their essays demonstrate that the diversity of the foundation world-both within the United States and internationally-is reflected in the diversity of external stakeholders they must please and the diversity of issues they confront."
-PAUL DIMAGGIO, professor of sociology, Princeton University

"In an era in which foundations have acquired much greater scale and power than ever before, The Legitimacy of Philanthropic Foundations asks the question that is on everyone's mind-how to square foundation independence with the accountability expected in a democracy. No one will agree with all the answers given, but everyone who considers foundations and nonprofits essential to a vibrant democracy will find this book 'must' reading."
-JOEL L. FLEISHMAN, professor of law and public policy, Terry Sanford Institute of Public Policy, Duke University

Though privately controlled, foundations perform essential roles that serve society at large. They spearhead some of the world’s largest and most innovative initiatives in science, health, education, and the arts, fulfilling important needs that could not be addressed adequately in the marketplace or the public sector. Still, many people have little understanding of what foundations do and how they continue to earn public endorsement. The Legitimacy of Philanthropic Foundations provides a thorough examination of why foundations exist and the varied purposes they serve in contemporary democratic societies.

The Legitimacy of Philanthropic Foundations looks at foundations in the United States and Europe to examine their relationship to the state, the market, and civil society. Peter Frumkin argues that unlike elected officials, who must often shy away from topics that could spark political opposition, and corporate officers, who must meet bottom-line priorities, foundations can independently tackle sensitive issues of public importance. Kenneth Prewitt argues that foundations embody elements of classical liberalism, such as individual autonomy and limited government interference in private matters and achieve legitimacy by putting private wealth to work for the public good. Others argue that foundations achieve legitimacy by redistributing wealth from the pockets of rich philanthropists to the poor. But Julian Wolpert finds that foundations do not redistribute money directly to the poor as much as many people believe. Instead, many foundations focus their efforts on education, health, and scientific research, making investments that benefit society in the long-term, and focusing on farsighted issues that a myopic electorate would not have patience to permit its government to address.

Originating from private fortunes but working for the public good, independently managed but subject to legal prescriptions, philanthropic foundations occupy a unique space somewhere between the public and private sectors. The Legitimacy of Philanthropic Foundations places foundations in a broad social and historical context, improving our understanding of one of society’s most influential—and least understood—organizational forms.

KENNETH PREWITT is Carnegie Professor of Public Affairs in the School of International and Public Affairs at Columbia University.

MATTEI DOGAN is senior fellow at the National Center for Scientific Research in Paris, and chair of the research committee on Comparative Sociology of the International Sociological Association.

STEVEN HEYDEMANN is director of the Center for Democracy and the Third Sector and political scientist in the Department of Government at Georgetown University.

STEFAN TOEPLER is assistant professor of nonprofit studies in the Department of Public and International Affairs at George Mason University.

CONTRIBUTORS: Helmut K. Anheier, Siobhan Daly, Peter Frumkin, Giuliana Gemelli, Kirsten A. Gronberg, Divid C. Hammack, Diana Leat, Rupert Graf Strachwitz, Steen Thomsen, Julian Wolpert.