Bill Gates and George Soros are handing out billions, but there are downsides to foundation giving:
The new focus on metrics has brought with it a new breed of nonprofit and for-profit partnerships. Foundations such as the Omidyar Network, established in 2004 by eBay’s founder, Pierre Omidyar, provide both investments in for-profit companies and charitable grants.
This approach is called by various names such as ‘social entrepreneurship,’ ‘venture philanthropy,’ and ‘philanthrocapitalism,’ but it all amounts to rather the same thing: controlling charitable giving in order to produce measurable, ‘sustaining’ and/or profitable results.
‘Philanthrocapitalism’ is an especially curious coinage, giving rise to a hitherto unarticulated contrast—namely, with the kind of capitalism that is not-philanthro-.
At my last job, we received a notification by e-mail one afternoon from the Fund for the City of New York, asking us to fill out a short form to be considered for a grant from an anonymous donor. We were, apparently, on a list of about 85 small and struggling arts orgs selected by FCNY for this final round of a grant we didn’t even know existed.
I almost forgot about the whole thing until several months later, when a check for something like 150k showed up in the mail. Just like that. As an organization with an overall budget of about 800k and constant cash flow issues, we couldn’t believe our luck.
General Operating Support is rare, and those grants are incredibly competitive. Simply put, most funders want to support a specific project, because project support is more quantifiable: “We gave x organization $50,000 to run an education program in public schools, which served x number of children” etc etc. Ideally, they want to support a project you already have; often, however, they dream up some ridiculous program and force you to create new programming in order to receive funding. This, to me, is the most nefarious sort of Foundation giving—the kind that puts the burden on the organization to shoehorn itself into a project dreamed up by someone who doesn’t, really, work in the field.
Anyway, the point of all this is that the “anonymous donor” was George Soros, who apparently woke up one morning and decided to give $11 million to struggling NYC arts orgs who had been hit especially hard in the recession. What’s more, the funding was basically no-strings-attached: General Operating Support, no reporting required, no logo credits or naming opportunities, just a check.
What can you do, as a cash-strapped arts organization with bills to pay except cash the check and run? In the fall of 2008, for example, our little cash flow problem had turned into a big cash flow problem and we didn’t get paid for a month. How can you bite the hand that feeds?
This bit of Maria’s article in particular hit home with me:
There’s no oversight in the spending of foundation money. The communities and individuals affected by foundation spending typically have no influence on it at all. This isn’t especially surprising, when you consider that the modern entrepreneurs who establish foundations have typically acquired an allergy to transparency; the best known philanthropists in our age, after all, are Bill Gates, a ruthless monopolist, and George Soros, a hedge fund manager.
Indeed. As non-profits we are at the mercy of our donors, whereas our donors are at the mercy of no one. It is my job to find pockets of money, wherever they may be and whoever may be doling them out. I don’t get to say “No, thanks” because I question their morals or business practices.
We cashed the check from Soros and got our paychecks that week and paid off some overdue bills and prayed for the next grant to come in.