Tag Archives: Council on Foundations

A Tale of Two Letters, and Two Sectors

[Note: A version of this post was published in the opinion pages of The Chronicle of Philanthropy on November 2, 2017.]

Here’s an idea: Let’s agree to stop referring to “the nonprofit sector.”

That’s because, in reality, there are two nonprofit sectors.

The first is comprised of the hundreds of thousands of charitable organizations that provide actual services. The second is made up of funders: foundations, donor-advised fund sponsors, and corporate and individual donors.

The priorities of these two nonprofit sectors are different. The first nonprofit sector – I’ll call them “the charities” for short – is focused on meeting mission: feeding, housing, educating, and counseling people; saving the earth and animals; curing diseases and healing the sick; producing community theater and running art classes; rescuing, feeding, and supporting families displaced from natural disaster; and generally doing what they can to keep this frayed and fragmented society of ours from falling to pieces.

The second nonprofit sector – “the funders” – genuinely cares about all of that. But the funders are also concerned with their own institutions’ and donors’ well-being, tax advantages, budgets, and privileges. And the interests of the funders are often in conflict with those of the charities. Continue reading

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The False Allure of Charitable Endowments

[Note: This article was co-posted March 2, 2015 at Inside Philanthropy.)

In her recent Inside Philanthropy guest blog post defending donor-advised funds, Council on Foundations CEO Vikki Spruill asserts that those of us who are critics of donor-advised funds and perpetual foundations undervalue the role played by charitable endowments. Spruill writes, “The compulsion to ‘pay it out now’ in order to address immediate needs is woefully shortsighted.” In a comment to Spruill’s piece, Inside Philanthropy blogger Frank Monti agrees, writing, “…the value of the endowment is that resources are available in perpetuity. Jesus said ‘the poor you will always have with you.’”

I’m neither a theologian nor an economist, but I challenge the sacred place held by endowments in American philanthropy. And while I will reluctantly agree that there are always likely to be some poor people, I suggest that our addiction to endowments makes poverty worse, now and in the future. Continue reading

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