Problems in International Grant-making

May 19, 2010

This continues my reaction to Joan Spero’s Foundation Center presentation in New York on 17 May. As I noted yesterday, I found the paper well informed and an excellent overview of the current state of global philanthropy. I had earlier mentioned to Spero that I thought she was somewhat uncritical of the problematic aspects of the phenomenon, and I was pleased to find that she referred to several of the problems I had in mind in her prepared remarks.
One problem that I perceive and went unnoticed in the session was the role of the Gates Foundation. One of Spero’s first slides displayed data showing that the international grants of the foundations sampled by the Foundation Center rose from 5% of all grants in 1982 to 24.4% of all grants in 2008. Spero correctly noted this dramatic increase, but she did not show a table (included in her published paper) of the international giving of the 25 largest foundations in 2008.  This table revealed that the Gates Foundation was not only the largest grant-maker, but that it single-handedly accounted for 44.4% of all international foundation grants. The Hewlett Foundation, which accounted for 10.1%, was next, but Ford, number three on the list, accounted for only 4.6%, and only six other foundations contributed as much as 1%. During the question period I suggested to Spero that it might be a good idea to break out the Gates Foundation from the overall numbers, since it accounts for nearly half of all U.S. international grant-making. In another graphic that Spero displayed, analyzing foundation grant-making by major program areas, she did indicate the Gates portion of the several categories. What this graphic revealed was that for Health, by far the largest category, Gates accounted for nearly four-fifths of all U.S. grants, and for International Development (the next largest category), Gates accounted for nearly half of all grant-making. Another table in the paper, listing the largest U.S. HIV/AIDS funders, placed Gates first by a very wide margin—it contributed nearly $379 million, whereas the Soros Open Society Institute, in second place, contributed a little less than $12.5 million. Thus, as all foundation observers know, Gates is vastly larger than all other funders. It has agendas of its own, and I think it is useful to think of Gates more as the world’s largest private government than as a private philanthropic foundation. I understand that most people will not agree with me on this point, but I hope they will agree that one can no longer generalize about U.S. foundation behavior by averaging Gates in with all other foundations.
A second point that I made in the discussion was in response to the very accurate complaints by both Joan Spero and Stephen Heintz that the academic community was not doing a very good job in studying the behavior of philanthropic foundations. There have been attempts to increase and improve academic coverage of foundations, especially in a recent project managed by the Aspen Institute. But the fact is that few scholars (in this country or elsewhere) specialize in the analysis of foundation philanthropy, domestic or global. There are many reasons for this internal to the academy (and I will come back to them in a subsequent post), but it is important to note that the internal problems of the academy have been exacerbated by the foundations themselves. The foundations have been reluctant to release current data, most foundations provide very poor archival access to scholars, and in general they do not appear eager to be transparent (to use the current catch phrase). Few foundations have maintained grant programs to support scholarship on philanthropy. This combination of academic underperformance and foundation withdrawal has resulted in the current paucity of rigorous analysis of foundation behavior. Of course, it is important to say that all scholars interested in the field remain indebted to the Foundation Center and such splendid resources as the Rockefeller Archive Center for access to useful information. But we need much more, and we need substantially more cooperation from the foundations as institutions.
The final problem I identified on Monday is too big for extended discussion here, but I want to put it on the table. Spero noted the “privatization” of American aid policy that is represented by the substantial increase in global philanthropy by U.S. foundations. The optimistic view of this phenomenon is that it represents a public/private partnership, or, as Spero termed it, a form of “Track Two” diplomacy. The pessimistic view is that the trend to privatization represents the triumph of neoliberalism in international political economy. This would be a newer form of the neo-Marxist critiques of foundation internationalism a quarter of a century ago. Barry Karl and I attacked those views many years ago, but they are beginning to look more plausible to me now, and I think they deserve renewed attention.

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Oct 05

Rip Rapson
President and CEO
The Kresge Foundation