PHILANTHROPIST AND AUTHOR
RELEASE THE POT OF GOLD
by Lewis B. Cullman
[Mr. Cullman wrote this unpublished essay in 2009, after the market crash in September 2008 led private foundations to declare that they would be giving less to charities. It reflects his thoughts, still current, about the responsibilities of private foundations.]
U.S. philanthropy is the envy of the world, primarily because of the extent of private giving. Now it’s time to go one step further – by releasing the pot of gold stashed away by foundations that make grants to charities.
With government, individuals and corporations cutting back during this economic meltdown, charities that rely on outside support are hanging on for dear life. Foundations – sitting on an enormous reserve of assets (estimated to be close to $400 billion) – should make up this shortfall.
Howls of protests will emerge from foundations that claim they are also suffering. This position makes no sense at all. After all, the original grantors who created the foundations were given tax incentives to give all of their money away to charity – not to husband it!
Some foundations such as those established by prominent philanthropists Brooke Astor and Irene Diamond, as well as Atlantic Philanthropies, have elected to give generously and go out of business. They have followed suggestions made in 1969 congressional hearings, spearheaded by Texas congressman Wright Patman, that foundations be limited to a lifespan of 25 years.
Unfortunately, many foundations have consistently justified their conservative giving as a safety net for “a rainy day.” But that rainy day is here! The rainy-day argument assumes that present-day foundations must be preserved. This position ignores the fact that new wealth will be created every decade, and new foundations are bound to be formed to take care of the future needs of charity.
It was a disappointment to read that major foundations have announced they are reducing their giving. They are setting a terrible example. They should be the leaders in urging other foundations to provide more support now, not later. They know that the present value of money may be worth even less in the future.
As a board member of numerous charities, I hear disturbing suggestions about how to adjust to the reduction in support. Most are draconian cuts, including the laying-off of personnel and eliminating essential services.
Boards of grant-making foundations will do nothing unless they hear from charities desperately needing support. Make your voices heard by contacting your supporters who have that pot of gold. Contact your legislators, and don’t forget the media. A once-in-a-lifetime event like this is your moment to kick up a storm. Show your mettle. Act now.