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Michael Kaiser Headshot

In Praise of Foundations

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A sizable group of American billionaires has recently pledged to give away at least half of their fortunes to not-for-profit organizations and causes. (For full disclosure, one member of this philanthropic group, David Rubenstein, is the chairman of the Kennedy Center, my employer.)

I, for one, will be pleased and relieved if a substantial amount of this money is given to existing foundations or to establish new, professionally-managed foundations.

Foundations occupy a vital place in the world of philanthropy. Unlike most corporate donors, foundations are not looking primarily for visibility. Arts organizations that receive foundation grants typically have to do little to create visibility for these funders. And unlike most individual donors, foundations are not looking primarily for benefits. Foundation executives are rarely looking for tickets to events, meetings with artists, or other benefits of sponsorship. In my experience, the vast majority of executives of professionally-managed foundations are truly devoted to the health and well-being of the organizations they support and are, in most cases, deeply knowledgeable about the needs of these organizations.

Foundations work on behalf of the community. While it's true they set their giving priorities within their mission, the giving of any foundation is primarily for the benefit of others and not themselves.

This means foundations often support projects that may not be necessarily glamorous or 'fun' but have great value to the community.

For example, foundations are the main supporters of service organizations which are not attractive funding opportunities for many corporate or individual donors because they have a difficult time creating visibility or benefits. Foundations are also often central to supporting capacity building at organizations that need assistance with increasing staff, hiring consultants or writing strategic plans. And, most importantly, foundations tend to fund the least advantaged of arts organizations -- those that serve particular communities or those that perform work that is less accessible. In this way, foundations are supporting the vital elements of the arts ecology that are also the most endangered.

While there are trusts and foundations in other countries, these groups are primarily an American invention. Wealthy Americans who have had a positive experience with philanthropy chose to create permanent funding mechanisms, often as a part of their estate planning.

In other countries, foundations tend to be not-for-profit organizations which collect funds and then distribute them to particular causes. They function more like re-granting organizations without a sizeable corpus of their own. This often puts them in direct fundraising competition with the organizations they are trying to support. And the need to raise money often affects the kinds of projects these foundations find attractive to support.

While American foundations will never be the largest source of arts funding -- that role is saved for individual donors -- they play a vital role that will become increasingly important as other funding sources become more difficult to obtain, especially for smaller, rural and minority arts organizations.

Let us hope their corpus of funds grows substantially in the coming years as Americans of wealth develop their philanthropic plans.

We need it.