Hammack1 EN

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The Legitimacy of U.S Foundations: an Historical Overview David C. Hammack ©2005

Foundation Definitions and Types : 

Foundation Definitions and Types independent corporations that invest substantial wealth for charitable purposes, and distribute income in the form of grants. address a specific purpose, or “the general good.” controlled by independent, self-perpetuating boards of trustees. Types: private, family, community, and corporate types operating and supporting foundations lie outside our scope.

Growth of U.S. Foundations: Numbers: 

Growth of U.S. Foundations: Numbers

Nineteenth-Century Antecedents : 

Nineteenth-Century Antecedents Single-Purpose Foundations Denominational Fundraising Organizations Denominational Colleges Special-Purpose Benefactions Early Research Universities

Some Characteristic 19th Century Foundations: All of Them Single-Purpose: 

Some Characteristic 19th Century Foundations: All of Them Single-Purpose The interdenominational Magdalen Society (1800) for the care and moral education of girls in Philadelphia (later the White-Williams Foundation); the Swedenborg Foundation (1850), for the “sole purpose” of printing and distributing “the theological writings of Emanuel Swedenborg;” The Peabody Education Fund (1867), education in the South, especially for African-Americans; The John F. Slater Fund (1882) to improve education in the South, often through schools with church sponsorship.

Key 19th C Protestant Fundraising Organizations: 

Key 19th C Protestant Fundraising Organizations Northern Baptist Education Society (1791) American Bible Society (1816) Education Board of the Presbyterian Church (1820s) American Education Society (1825) Society for the Promotion of Collegiate and Theological Education at the Westm (1843) The American Missionary Association (1846) The Board of Education of the Methodist Church Student Loan Fund (1872)

19th Century U.S. Denominational Colleges: 

19th Century U.S. Denominational Colleges Harvard (Unitarian) Brown (Northern Baptist) Yale (Congregationalist) Columbia (Unitarian) Princeton (Presbyterian) Bowdoin, Amherst, Williams, Oberlin, Kenyon, Mt. Holyoke, and other Protestant colleges . . . Boston College, Fordham, Notre Dame, St. Mary of the Woods, and other Catholic universities and colleges . . .

Some Nonsectarian 19th Century Benefactions: 

Some Nonsectarian 19th Century Benefactions New York Hospital (multiple donors) Massachusetts General Hospital (multiple donors) McLean Asylum (1818) Perkins Institution for the Blind (1832) unitarian Sailor’s Snug Harbor (1833) (Randall) Lowell Institute (1835) Wadsworth Atheneum (1842) Girard College (1831/44) no ministers Astor Library (1849) Cooper Union (1859) Lenox Library (1880)

Early U.S. Research Universities: 

Early U.S. Research Universities Harvard (Abbott Lawrence gift for Agassiz, 1847) Yale (Sheffield Scientific School, ca. 1861) Columbia (School of Mines, 1864) Pennsylvania (Hospital, 1874). Cornell (1865) Johns Hopkins (1876) Clark (1877) Stanford (1885) Chicago (1889; research focus from around 1900)

Large Early National Special-Purpose Foundations: 

Large Early National Special-Purpose Foundations Peabody Fund (1967) southern education John F. Slater Fund (1882) “Negro Industrial Schools” Baron de Hirsch Fund (1891) Eastern European Jews, especially settling in the U.S. Andrew Carnegie’s Public Library Campaign General Education Board (1902) (Rockefeller) Carnegie Institution of Washington (1902) Carnegie Foundation for the Advancement of Teaching (1905) Milbank Memorial Fund (1905)

Contributions of Large Early Special-Purpose Funds: 

Contributions of Large Early Special-Purpose Funds Promotion of K-12 Education in the South, often reinforcing rather than reducing racial differences Promotion of job training and general education for east European Jews Successful promotion of public libraries throughout the United States Promotion of Public Health, especially anti-Tuberculosis, measures

Andrew Carnegie, 1889: 

Andrew Carnegie, 1889 The best means of benefiting the community is to place within its reach the ladders upon which the aspiring can rise -- free libraries, parks, and means of recreation, by which men are helped in body and mind; works of art, certain to give pleasure and improve the public taste; and public institutions of various kinds, which will improve the general condition of the people.

Acceptance of General-Purpose Foundations:Late 19th C Developments in the U.S.: 

Acceptance of General-Purpose Foundations: Late 19th C Developments in the U.S. Continuing Limitations on Government Capabilities State Control of Incorporation; State Competition Failure of Protestant efforts to limit Catholic Institutions Acceptance of Religious Diversity Shift in Authority from Religion to Science Example of Growing Universities Appearance of Vast Fortunes NB: Carnegie, Rockefeller wealth overshadowed small universities of their time Breaking of Bequests to Cornell, the NY Public Library

Growth of U.S. Foundations: Assets Notable Growth 1910-1929, 1940-1969, 1990-??: 

Growth of U.S. Foundations: Assets Notable Growth 1910-1929, 1940-1969, 1990-??

Ratio, U.S. Foundation Assets to the Stock Market: Stable Variation in the 0.025-.035 Range Since the 1950s: 

Ratio, U.S. Foundation Assets to the Stock Market: Stable Variation in the 0.025-.035 Range Since the 1950s

Regulatory, Public Opinion Environment to 1969: 

Regulatory, Public Opinion Environment to 1969 Income Tax Deductibility for Donations, 1914 Income Tax Exemption for Nonprofit Income, 1914 Skepticism of “Rockefeller” motives by organized labor, conservative Christians, expressed in Congressional hearings on Rockefeller’s bid for a federal charter Some criticism of foundations as reinforcing influence of an “eastern” Protestant elite, 1930s on Concern during the 1930s as well as later about the cosmopolitanism and

Foundation Responses to Challenges Since 1900 I: 

Foundation Responses to Challenges Since 1900 I Avoid most controversial activities Work through active nonprofit organizations Celebrate the regional, “community,” and religious focus of midwestern, southern foundations Emphasize opportunity for individuals Insist on the rights of donors Celebrate foundation diversity, relying on 1st Amendment & expansion of individual rights

Rockefeller Foundation leader Raymond B. Fosdick recalling response to criticism before World War I : 

Rockefeller Foundation leader Raymond B. Fosdick recalling response to criticism before World War I Except for a narrow range of noncontroversial subjects, notably public health, medicine, and agriculture, the foundation’s participation in the areas it wished to assist must be limited to grants to outside agencies competently organized and staffed to carry on the work in question …. In no other way could the objectivity of research be established beyond cavil and the projects freed from suspicion of ulterior motive.”

Regional Distribution of U.S. Foundation Assets, 2001: 

Regional Distribution of U.S. Foundation Assets, 2001

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U.S. Foundation Spending per capita, By Region, 2001: Small Amounts Source: U.S. Census, Foundation Center

The Most-Studied 20th Century Foundations: All General-Purpose, All in the “Greater Northeast”: 

The Most-Studied 20th Century Foundations: All General-Purpose, All in the “Greater Northeast” Russell Sage Foundation (1907) Carnegie Corporation of New York (1911) Rockefeller Foundation (1913) Julius Rosenwald Fund (1913) The Commonwealth Fund (1918) The Twentieth Century Fund (1919) John Simon Guggenheim Foundation (1925) Alfred P. Sloan Foundation (1934) Rockefeller Brothers Fund (1940) The Ford Foundation (1936; 1948)

Contributions of Most-Studied FoundationsBefore 1948: 

Contributions of Most-Studied Foundations Before 1948 Strong Support for Separating U.S. Universities and Liberal Arts Colleges from Denominational Control Reorganization of Medical Research and Medical Education in the US Strong Support for Establishment of Scientific Research as a High Priority of Leading US Universities Promotion of Standardized High School Curriculum, Standardized College Admissions Testing Promotion of National Standards for “Welfare Capitalism” and Regulation of Industrial Conditions Promotion of Empirical Approaches to Social Research

Other Large Eastern Foundations to 1945(Large ≈ Top 100 2004, Assets > $475,000,000): 

Other Large Eastern Foundations to 1945 (Large ≈ Top 100 2004, Assets > $475,000,000) Surdna Foundation (1917, 1934) NY John A. Hartford Foundation (1929) NY Smith Richardson Foundation (1935) CT Robert Wood Johnson Foundation (1936) NJ Henry Luce Foundation (1936, 1967) NY Longwood Foundation (1937) DE Andrew W. Mellon (1940, 1969) NY Sarah Scaife (1941, 1958 . . ) PA

Other Large Eastern Foundations, 1945-1969: 

Other Large Eastern Foundations, 1945-1969 William Randolph Hearst Foundation (1945, 1951) NY William Penn Foundation (1945, 1960) PA Richard King Mellon Foundation (1947) PA Annie E. Casey Foundation (1948) MD Pew Memorial Trusts (1948) PA Annenberg Foundation (1951 . . ) PA The Sherman Fairchild Foundation (1955) MD Horace W. Goldsmith Foundation (1955) NY Lila Acheson Wallace Foundation (1950s) NY DeWitt Wallace Foundation (1950s) NY Edna McConnell Clark Foundation (1969)

Regulatory, Opinion Environment, 1945-1968: 

Regulatory, Opinion Environment, 1945-1968 Exceptional Marginal Tax Rates of World War II Era Federal regulatory challenges to dynastic uses of foundations in the 1950s and again in the late 1960s Politicized hearings into left influence on mainstream foundations, especially the Carnegie and Rockefeller foundations, in the early 1950s Yet No Serious Regulatory Change in McCarthy Era

Regulatory, Opinion Environment, 1945-1965: 

Regulatory, Opinion Environment, 1945-1965 Wright Patman hearings of the late 1960s leading to the Tax Reform Act of 1969, increasing restrictions, requiring new reporting, imposing new regulations; intent to limit dynastic use of foundations Substantial expansion of federal funding under the Great Society transformed the nonprofit sector, sharply reducing the significance of foundation grants

Foundation Responses to Challenges Since 1900 II: 

Foundation Responses to Challenges Since 1900 II Gradually increase disclosure: lists, Foundation Center, annual reports, foundation histories and biographies, websites, GuideStar Democratize giving – through small and family foundations and community foundations Gently encourage self-regulation by individual boards of trustees; emphasis on board responsibility, “outcomes”

Large Midwestern Foundations to 1948:Emphasis on Local Community: 

Large Midwestern Foundations to 1948: Emphasis on Local Community Amherst H. Wilder Foundation (1910) MN Kresge (1924) buildings Charles Stuart Mott (1926) Danforth (1927) protestant education, etc. W. K. Kellogg (1930) Northwest Area Foundation (1934) (Hill) Lilly (1937) religious education Joyce Foundation (1948) IL

Large Midwestern Foundations, 1948 - 1969: 

Large Midwestern Foundations, 1948 - 1969 George Gund (1952; 1966) OH Archibald Bush (1953) MN Robert R. McCormick Tribune Foundation (1955) Skillman Foundation (1960) MI Pritzker Foundation (1960s?) IL Spencer Foundation (1962, 1968) The McKnight Foundation (1953; 1972)

Southern Foundations in Support of Religion: 

Southern Foundations in Support of Religion Christian Education and Ministerial Relief of the Presbyterian Church in the United States (Sn) (pre-1900) TN The Student Loan Fund of the Board of Education of the Methodist Church (pre-1900) TN Oldham Little Church Fund TX LeTourneau Foundation TX “for the gospel of Jesus Christ” The Baptist Foundation of Texas J. Bulow Campbell Foundation for Southern Presbyterians (1940) GA Lettie Pate Evans Foundation “poor Christian girls” (1945) GA

Large Southern Foundations to 1969Emphasis on the South as a Region: 

Large Southern Foundations to 1969 Emphasis on the South as a Region Duke Endowment for the Carolinas (1924) NC Houston Endowment (1937) TX Robert W. Woodruff (1937; 1985) GA Moody Foundation (1942) TX Samuel Roberts Noble Foundation (1945) OK Kate B. Reynolds Charitable Trust (1947) NC J.E. and L.E. Mabee Foundation (1948) OK William K. Warren Foundation (1948) OK Meadows Foundation (1948) TX John S. and James L. Knight Foundation (1950) FL The Brown Foundation (1951) TX Robert A. Welch Foundation (1954) TX

Additional Indicators of Regional Variation:Largest Community Foundations, 1949: 

Additional Indicators of Regional Variation: Largest Community Foundations, 1949 New York (1920) Cleveland (1914) Chicago (1915) Boston (1915) Los Angeles (1916) Winston-Salem (1919) Indianapolis (1916) Minneapolis (1915) Hartford (1925) New Haven (1927)

Contributions of Midwestern, Southern Funds to 1960s: 

Contributions of Midwestern, Southern Funds to 1960s Support for weak local and regional institutions, including small, poorly funded churches – or reservation of control over local and regional institutions in hands of foundation boards . . . Expansion of university extension, reinforcement of applied work at state colleges, promotion of systematic approaches to problems of education and public health Promotion of opportunities for white men to advance within established community frameworks Retention of Texas oil wealth for the benefit of Texas institutions Establishment of the Community Foundation

Large Western Foundations Before 1969: 

Large Western Foundations Before 1969 James Irvine Foundation (1937) CA El Pomar (1937) CO Conrad Hilton Foundation (1944) NV Henry J. Kaiser Foundation (1948, 1968) CA Weingart Foundation (1951, 1978) CA Ahmanson Foundation (1952) CA Evelyn and Walter Haas Fund (1953) CA W. M. Keck Foundation (1954) CA David & Lucile Packard Foundation (1964) CA William & Flora Hewlett Foundation (1966) CA Casey Family Programs (1966) WA

Major Contributions of Funds Into the 1960s?: 

Major Contributions of Funds Into the 1960s? Promoting national excellence, especially in science and medicine; helping open careers to talent especially for white men but also beginning to address race . . . Pioneering educational, social service, public health programs for adoption by the federal and state governments, including many applied programs Supporting a wide variety of institutions especially in the fields of higher education, research, and publishing Facilitating the immigration of expert refugees, arranging person-to-person meetings, providing international scholarships and fellowships, engaging with foreign scientific and cultural agencies

Since 1960, Federal Funding of the Services provided by Nonprofits (and also by state governments and business firms) Has Soared as Share of GDP: 

Since 1960, Federal Funding of the Services provided by Nonprofits (and also by state governments and business firms) Has Soared as Share of GDP

Higher Incomes Allow Americans to Pay for More Services, including nonprofit services: 

Higher Incomes Allow Americans to Pay for More Services, including nonprofit services

As Ability to Pay and Government Funding Mushroomed, Nonprofit Employment Grew Rapidly : 

As Ability to Pay and Government Funding Mushroomed, Nonprofit Employment Grew Rapidly

Private Giving Has Not Increased as nonprofit employment has risen: 

Private Giving Has Not Increased as nonprofit employment has risen

The Share of Nonprofit Income From All Private Gifts(including foundation grants) Has Declined : 

The Share of Nonprofit Income From All Private Gifts (including foundation grants) Has Declined

Foundation Grants and Other Private GiftsNow Constitute a Small Part of Nonprofit Income: 

Foundation Grants and Other Private Gifts Now Constitute a Small Part of Nonprofit Income

Regional Redistribution of U.S. Foundation Assets Western and Southern Foundations Are Catching Up: 

Regional Redistribution of U.S. Foundation Assets Western and Southern Foundations Are Catching Up

Community Foundations: Assets > $500 m, 2002West Coast Now Matches the Northeast & Midwest : 

Community Foundations: Assets > $500 m, 2002 West Coast Now Matches the Northeast & Midwest New York $1,776,159,621 Cleveland 1,520,736,774 Chicago 1,200,315,383 Marin 991,948,930 Kansas City 686,126,000 Saint Paul 678,100,000 San Francisco 664,449,772 Oregon 631,464,691 Columbus 628,139,633 Hartford 587,880,661 Boston 571,632,382 Dallas 562,427,000 Los Angeles 560,490,721 Silicon Valley 539,652,366

Regional Variations Have Not Disappeared: The “Nonprofit Economy Varies Systematically from East toWest : 

Regional Variations Have Not Disappeared: The “Nonprofit Economy Varies Systematically from East toWest

Large Midwestern Foundations Added After 1970: 

Large Midwestern Foundations Added After 1970 John D. & Catherine T. MacArthur (1978) IL Hall Family Foundation (1983) MO Lynde & Harry Bradley Foundation 1985 WI Lumina Foundation for Education (2000) IN Ewing Marion Kauffman Foundation (1960s, 1993) MO

Large Southern Foundations Added After 1970: 

Large Southern Foundations Added After 1970 Walton Family Foundation (1987, 1998) AK Picower Foundation (1989) FL Freedom Forum, Inc. (1991) VA Goizueta Foundation (1992) GA

Large Western Foundations Added After 1970: 

Large Western Foundations Added After 1970 Wayne & Gladys Valley Foundation (1977) CA M. J. Murdock Charitable Trust (197?) WA Anschutz Foundation (1982) CO Meyer Memorial Trust (1982) OR J. Paul Getty Trust (1982) CA Marin Community Foundation (1986) (Buck Trust) CA Donald W. Reynolds Foundation (1993) NV Daniels Fund (1998, 2000) CO Bill & Melinda Gates Foundation (1999) WA Virginia G. Piper Charitable Trust (2000) AZ

Large Eastern Foundations Added After 1970: 

Large Eastern Foundations Added After 1970 Howard Heinz Endowment (1941, 1986, 1993) PA Starr Foundation (1978) NY McCune Foundation (1979) PA Barr Foundation (1987) MA Freeman Foundation (1992) NY Park Foundation (1993) NY Doris Duke Charitable Foundation (1996) NY

U. S. Community Foundation AssetGrowth, 1921-2001: 

U. S. Community Foundation AssetGrowth, 1921-2001

High U.S. Community Foundation Assets Per CapitaMetropolitan Region Population over 1,000,000, 2001: 

High U.S. Community Foundation Assets Per Capita Metropolitan Region Population over 1,000,000, 2001 Cleveland-Akron-Lorain-Elyria-Canton $528 Hartford $484 Columbus $480 San Francisco-Oakland-San Jose $416 Minneapolis-St. Paul $400 Kansas City $358 Oklahoma City $335 Providence-Fall River-Warwick $308 Pittsburgh $238 Indianapolis $236

Low U.S. Community Foundation Assets Per CapitaMetropolitan Region Population over 1,000,000, 2001: 

Low U.S. Community Foundation Assets Per Capita Metropolitan Region Population over 1,000,000, 2001 Los Angeles-Riverside-Orange County $44 Austin-San Marcos $42 Tampa-St. Petersburg-Clearwater $31 Miami-Fort Lauderdale $30 St. Louis $25 Sacramento-Yolo $20 Houston-Galveston $15 Salt Lake City-Ogden $ 3 Las Vegas ---- Orlando ----

Major Foundation Contributions Since the 1960s I: 

Major Foundation Contributions Since the 1960s I Difficult to specify because rising individual wealth and greater government funding rendered private giving much less important to US nonprofit organizations Also difficult to specify because of the remarkable increase in the numbers of small foundations, small family foundations, and advised funds held by community foundations and by commercial charitable gift account managers. These small funds hold charitable assets out of the control of active agencies and allow donors to retain control after taking tax deductions. Question: How balance donor control and dynasty effects with incentives for increased giving?

Major Foundation Contributions Since the 1960s II: 

Major Foundation Contributions Since the 1960s II Most foundations have continued to support activities mounted by formal nonprofit organizations Some foundations have sought to redress social inequalities or to stimulate economic opportunities for the disadvantaged Some foundations have sought to maintain opportunities for individuals, or to reinstate traditional arrangements, or to reduce the role of government

Addenda:Several Groups of Foundations: 

Addenda: Several Groups of Foundations Fairly Substantial Community Foundations by Region Hospital, Blue Cross Conversion Foundations Foundations that Spent Down Their Assets Conservative Foundations

Ratio, Community Foundation Assets to Nonprofit Revenue, Large States, 2001: 

Ratio, Community Foundation Assets to Nonprofit Revenue, Large States, 2001

Ratio, Community Foundation Assets to Nonprofit Revenue, Small States, 2001: 

Ratio, Community Foundation Assets to Nonprofit Revenue, Small States, 2001

Eastern CFs, Assets Above $150 million, 2004: 

Eastern CFs, Assets Above $150 million, 2004 Pittsburgh Rhode Island New Hampshire National Capital Region New Haven Rochester

Midwestern C Fs, Assets Above $150m, 2004: 

Midwestern C Fs, Assets Above $150m, 2004 Minneapolis Cincinnati Central Indiana Southeastern Michigan Milwaukee Omaha Kalamazoo Dayton Grand Rapids

Southern CFs, Assets Above $150m, 2004: 

Southern CFs, Assets Above $150m, 2004 Richmond & Central Virginia Greater Atlanta Oklahoma City The Carolinas Greater Memphis Winston-Salem Baton Rouge Louisville Venice, FL Tulsa

Western CFs, Assets Above $150m, 2004: 

Western CFs, Assets Above $150m, 2004 Peninsula (CA) San Diego Hawaii Arizona Seattle Rose Community (Denver; Jewish) Denver Santa Barbara

Hospital, Blue Cross Conversion Foundations, by assets: 

Hospital, Blue Cross Conversion Foundations, by assets The California Endowment 1996 $2,762,621,100 The California Wellness Foundation 1991 852,613,722 The Colorado Trust 1985 338,287,802 Kansas Health Foundation 1978 375,703,185 Presbyterian Health Foundation, OK 1985 154,249,984 Baptist Community Ministries, LA 1995 187,706,859 The Assisi Foundation of Memphis 1994 173,762,920 Quantum Foundation, FL 1995 127,687,968 The Healthcare Foundation of NJ 1996 127,981,000 Drs. Bruce and Lee Foundation, SC 1995 127,562,044 Healthcare Georgia Foundation 1999 100,782,847 Jewish Healthcare Fndn of Pittsb.. 1990 102,062,728 Archstone Foundation, CA 1985 105,802,818

Foundations as Agents for Donors:Notable Foundations that Distributed Their Assets: 

Foundations as Agents for Donors: Notable Foundations that Distributed Their Assets Julius Rosenwald Fund (1913 - 1948) IL American Fund for Public Service (1922-1941) MA Children’s Fund of Michigan (1929-1954) IL The Maurice and Laura Falk Foundation (1929-1964) PA Blakely-Braniff Foundation (?-196?) TX DJB Foundation ( - 1974) Louis D. Beaumont ( - 1977) OH Max C. Fleischmann (1951-1980) NV Stern Family Fund ( - 198?) Field Foundation (1940-1990) IL James Foundation (1941-1991) MO Lucille P. Markey Charitable Trust (1982-1998) IL Aaron Diamond Foundation (1986-1996) NY The Whitaker Foundation (1976-2003) VA

Large Foundations that Plan to Distribute Their Assets: 

Large Foundations that Plan to Distribute Their Assets John M. Olin Foundation ( - 2005?) The Atlantic Philanthropies (1982 - ) Beldon Fund II ( - 2008?) Mary Flagler Cary Charitable Trust ( - 2012?) FL Donald W. Reynolds Richard and Rhoda Goldman Fund The Annenberg Foundation

Notable Conservative Foundations: 

Notable Conservative Foundations Lynde and Harry Bradley Foundation Carthage Foundation Sarah Scaife Foundation Earhart Foundation Charles G. Koch, David H. Koch and Claude R. Lambe charitable foundations Phillip M. McKenna Foundation J. M. Foundation John M. Olin Foundation Henry Salvatori Foundation Smith Richardson Foundation.

Notable Conservative Foundations: Grants to . . .: 

Notable Conservative Foundations: Grants to . . . Heritage Foundation Intercollegiate Studies Institute George Mason University (the Mercatus Center) American Enterprise Institute for Public Policy Research Hillsdale College Citizens for a Sound Economy Foundation Judicial Watch Free Congress Research and Education Foundation Hoover Institution on War, Revolution and Peace Manhattan Institute for Policy Research.