One of the stunning phenomena of our networked world is that certain public debates seem to travel the planet with great speed. Last weekend the German Sunday weekly Welt am Sonntag published an article called Da gehst Du stiften!. The title is a word play on the double meaning of the verb ‘stiften’, which can mean setting up a foundation or to scram. The journalist Inga Michler argues in the article that the foundation as a legal institution may not be so much in the interest of donors and society but more in the interest of bankers and lawyers.
The author develops her argument through conversations with a donor, researchers and practitioners in the field of philanthropy. The arguments are known to most of us in the field: the endowment of foundations is often too small, nobody talks about the administration costs of such foundations, or perpetuity is a very long time. These arguments raise many questions about current foundation administration practices and the legal framework for foundations in Germany.
On the other side of the Atlantic, Rob Reich, director of the Ethics in Society programme at Stanford University, published in the March/April issue of the Boston Review the essay ‘What are foundations for?’. This is a thoughtful piece on the pros and cons of foundations in a democracy. Reich also raises the question of who really profits from the foundation. He critically reflects on the role of the administrators of these institutions. But he takes the case a lot further. He shows how important transparency of foundations is in a democracy. This includes an open communication of the impact or failure of every grant. Reich pledges for more risk-taking and more long-term investments in philanthropy. He suggests that (smart, strategic) giving in the end can be a contribution the public good!
Is this a debate you are familiar with? It would be interesting to read how people around the world think about the future of foundations. How do people in emerging markets – subject of the forthcoming Alliance issue – experience this? It looks like the old institution the foundation is ready for a refurbishment, or even a complete new blueprint. In the end it is important that we do not scram away from giving but instead redefine the way in which we want to give in the future.
Michael Alberg-Seberich is managing partner of Active Philanthropy