Nora Dietz-Kilen

Grant Making and Foundations

April 27, 2018

Foundations: Welcoming Socialism in a US Democracy

Foundations, often perceived as goodwill channels of philanthropy, are more complex

than being and funding do-good missions. Upon deeper exploration through the Grant Making

and Foundations course, there are a number of issues rising to the surface on the legitimacy of

foundations. In the hot seat of these concerns sits foundations’ ability to enhance democracy.

Especially in the line of financial support, however, extra money is required to be able to give it

away in the first place. This can perceivably limit notable philanthropic support to the rich and

wealthy, which tends to err on the side of wealthy white American men. From the perspective I

have, as an immigrant with a pre-existing condition from a formerly lower-class family, most of

my identity would suggest that I would argue against the legitimacy of foundations, disputing

another opportunity for the privileged and powerful to increase their clout. However, not in spite

of but because of my background and understanding, I contend the opposite. Foundations

enhance a democracy in a capitalist society, because they provide a healthy dose of socialism.

The definition of democracy used in this context is primarily American, more specifically

of the United States of America. Within the United States, democracy is commonly identified by

a free and fair election, but it is the very foundation, no pun intended, of the free and fair election

that suggests a United States democracy. Beyond such a procedural definition, the basis of this

system of governance rests in the voice of the entire population and the value of each citizen,

regardless of background, to be heard and addressed. While voting is a crucial and common

route to express opinions in this government system, it takes on more forms than just in the
polling booths. If voting is the formal indication of choice, the precedent is that people have the

opportunity and ability to choose and voice their decision in the first place. People have the

freedom of opportunity to support the foundations whose values align with their own.

To further specify the form of democracy, the complementary economic system to the

USA’s democracy is capitalism. This is where the country’s trade and industry are controlled by

private owners for profit, as opposed to being controlled by the state. By contrast, socialism

focuses on regulation by the community members as a whole. The very survival the US’s

capitalist economic structure rests on the existence of a vehicle for socialism to balance out the

competition of political and economic powers in a capitalist society. The make of this vehicle is

the philanthropic sector, and the model is the foundation.

Without negating the legitimacy of capitalism, the existence of socialism in a primarily

capitalist society provides a necessary outlet and steam valve for such competitive nature to

release. This counters capitalism just enough to benefit all, not just a few, hence the direct tie to

democracy where all are given a voice, with far less regard to power and clout. Though there

exist an ever-growing list of reasons to support this socialist vehicle’s capacity to strengthen

democracy, there are three primary arguments to be explored.

The first of these arguments returns to the procedural definition of democracy, in direct

connection to the realm of public decision making through policy. Foundations often have their

grip elbow-deep in the political process through public policy engagement. To clarify, public

policy in this context refers to “encompassing the decisions made by governmental bodies which

have important impacts on public resource allocation, or that have important behavioral impacts

on individual or organizations” (Ferris 5). This argument holds relevance because, per findings

by The Foundation Center notes that in 1 in 4 foundations already fund or engage in public

policy making (The Foundation Center). The recognized need to participate in public decision
making is present and active amidst foundations. Public policy is an avenue for foundations to

increase their impact by making it more sustainable in the very legislative framework that they

must operate within. Foundations can make grants to grassroots and advocacy organizations,

they can fund policy research, they can convene a multitude of talents and approaches to a policy

through workshops and community gatherings, and can educate both policymakers and

community members on key public problems (Ferris 7). Each of the listed policy engagement

activities directly contributes to creating well-informed and active citizenship in the US

democracy. Involvement in such activities is not only beneficial to the public sphere and

citizenry, but also to the effect that foundations would like to see in their communities.

Foundations engaging in public policy is “not an option but an obligation” (Mullaney). Many

foundations acknowledge that to see their impact grow beyond their own limited resources, they

must push to be more strategic and to demonstrate impact (Smith 387). The US democracy only

benefits from this relationship where foundations are encouraged by the survival and longevity

of their impact through policy engagement.

The second primary argument to address is foundations’ capability for risk-taking

experimentation and innovation. For example, because private foundations do not have to answer

to the same regulations as entities within the for-profit sector, foundations can funnel large sums

into venture philanthropy. Profit-driven businesses would not be able to financially risk such a

move, deviating from their goal to bring in the most profit. Even if other sectors and their entities

did risk experimentation, having such a centralized ‘laboratory of democracy’ couched within

the government warrants a reasonable level of mistrust on behalf of the public (Reich 4).

Foundations, however, free of such governmental or electoral skepticism, are ideally suited to

pursue democratically-agreed upon initiatives and innovations (Reich 4).

The third reason presents an argument in the form of an imaginative exploration of a

United States democracy without foundations. Forgive the poetic format of the following, but the

repetition does help to drive home the message. Without foundations, issues that are deemed

lower-priority but high impact, such as birth defects, honey bees, etc. would be overlooked, and

citizens would suffer in the short and long term. Without foundations, the wealthy would have

far fewer philanthropic outlets to funnel their wealth, hoarding it and concentrating the wealth

disparity even more. Without foundations, there would be fewer jobs, nevertheless

mission-driven jobs for citizens to hold, nevertheless subsequently removing their ability to fund

foundations they support. Without foundations, communities would lose a space to convene

seemingly atomized people with underlying similarity in values and passions. Imagining a

struggling democracy without foundations warrants the presence of opposing criticisms. To

legitimize the contention on foundations’ legitimacy in elections, the counter arguments should

be addressed and rationalized.

To the earlier point demonstrating a world without foundations, such a scene would also

remove a philanthropic outlet for the movement of wealth through US civil society. While there

are still issues in the disparity of wealth systemic in the country with a self-perpetuating gap, the

alternative would be far worse for civil society in the US. Critics like Jacob Silverman argue the

point of a “capitalist fever dream” in which billionaires can justify their obscene amounts of

wealth by funneling it into philanthropy and “emerging cleansed” (Silverman). Without judging

the intentions of billionaires for donating to philanthropy, there exists no sufficient argument to

qualify why they wealthy should not donate. The wealthy can benefit from tax benefits, but the

public society still benefits from their contributions. In a utopian society, there would be no

inequality, but the involvement of foundations in democracy still outweighs the potential

dystopia. If all of the wealth that big names like Carnegie and Rockefeller never went outside of

the family - the Indianapolis community alone would pale in difference, nevertheless the entirety
of the United States per other donors. This does not mean that the vitality of the country rests on

the generosity of the wealthy, but rather that the democracy and existence of philanthropy was

created with such wealth gap integral in its inspiration and creation. Further, though philanthropy

does include the wealthy choosing where to give their money, it also includes the non-wealthy,

lower socioeconomic statuses choosing where to give. There are far more of them than there are

of the tremendously wealthy, and though the numbers don’t equal out, the influence on American

philanthropy does.

Another criticism seems to come from those who share similar identities to me -

however, we do not yet share the same enlightening insight presented here. Especially in the

recent push toward the streets for marches, protests, sit-ins, walk-outs and even riots, political

activism by the average citizen comes wild, fierce and often informal. However, foundations are

then criticized for quelling or neutralizing these impassioned demonstrations, moving them from

the streets to the boardroom (Kohl-Arenas 8). This is a gross misinterpretation of effective social

movement. Foundations do not stand in alternative to these movements, but rather as the next

step. A baton of action is passed from the citizens who gathered the numbers and awareness for a

social need to the foundations who can answer where the government has not. Foundations, by

their social impact-driven nature, “make democracy more robust, […] encouraging civic values

and practices that undergird democracy, like tolerance and respect for minorities” (Quigley,

Benjamin 245). As minorities and marginalized communities in the US are often the ones to kick

start a social movement, they exist in a much more symbiotic relationship with foundations,

rather than fighting to fill the same role.

On the same side of the coin, while foundations are criticized for restricting fervent

movements by being too overbearing, they’re also criticized for being too uncontrolled and

unmitigated themselves. In addressing their challenge of accountability and transparency, this

criticism actually harmonizes with the previous argument about risk-taking. The trust

foundations are granted, unlike the skepticism toward government, corporations and politicians,

is exactly what allows foundations to engage in ventures essentially unavailable elsewhere.

While the perceived practice of being relatively unaccountable and opaque to stakeholders and

donors warrants a discernible amount of suspicion, this freedom qualifies foundations to be

catalysts for change (Clemens 51). Foundations don’t have to answer to anyone, because often

the people who they would be answering to are the ones who created or inspired them.

Foundations don’t have to respond because they are the response. The stakeholders, donors,

volunteers, staff and community members that can judge foundations are the same ones that

called for a reaction to a social problem in the first place, filling the gap in a capitalist

democracy. This argument, along with the others presented, complicates itself in the context of

other critiques. The greatest criticisms of foundations must bounce between foundations not

doing enough or doing too much, overextending their argument to the point of discord.

After exploring the case for their role and debunking the arguments against, the

legitimacy of foundations to enhance democracy in the United States prevails. Foundations, just

as any form of engagement in society, could always improve, but continue to exist in the best

position to do so, between being too free-reign and reckless, or too corporate and thwarted.

Citizens like myself are better off with a creative, formal outlet to professionalize our voices into

actions and resolutions for community issues. The United States democracy is better off with

giving the rich and powerful a philanthropic outlet to express generosity over greed. Without

foundations, the United States democracy and the citizenship valued would suffer. But with

foundations, the democracy will challenge itself, improve, endure setbacks and plunge

innovatively forward.
 Works Cited

Clemens, Elisabeth., and Lee, Linda C. “Catalysts for Change? Foundations and School Reform,
1950-2005” ​American Foundations: Roles and Contributions,​ edited by Helmut K.
Anheier and David C. Hammack, The Brookings Institution, 2010.

Ferris, J. M., & Harmssen, H. J. 2009. Foundation practices for public policy engagement.
California, Center on Philanthropy and Public Policy.

The Foundation Center. 2010. Key Facts on Foundations’ Public Policy-Related Activities.
http://foundationcenter.issuelab.org/resources/13574/13574.pdf

Mullaney, John. “Foundations Engaging in Policy: Not an Option But an

Obligation.”​Philanthropy News Digest (PND)​,
philanthropynewsdigest.org/commentary-and-opinion/foundations-engaging-in-policy-no
t-an-option-but-an-obligation.

Kohl-Arenas, Erica. ​The Self-Help Myth: How Philanthropy Fails to Alleviate Poverty.​
University of California Press, 2016.

Reich, Rob. 2016. “Repugnant to the Whole Idea of Democracy? On the Role of Foundations in
Democratic Societies.” PS: Political Science and Politics. 49(3):466-472.

Silverman, Jacob. “The Billionaire Philanthropist.” ​Longreads,​ 15 Mar. 2018,

longreads.com/2018/03/13/the-billionaire-philanthropist/.

Smith, Steven R. “Foundations and Public Policy.” ​American Foundations: Roles and
Contributions,​ edited by Helmut K. Anheier and David C. Hammack, The Brookings
Institution, 2010.

Quigley, Kevin F. F., and Lehn, Benjamin. M. “U.S. Foundations and International Grant
Making.” ​American Foundations: Roles and Contributions​, edited by Helmut K. Anheier
and David C. Hammack, The Brookings Institution, 2010.