Foundations, Obama, and Independence

We have heard much debate in recent years about the “blurring of the boundaries” between nonprofits and business – mostly, I am afraid, from those who see it unequivocally as a good thing. In op-eds, blog posts, and interviews, I have argued for preserving the distinctive identity of the sector as one that is separate from, and sometimes in healthy conflict with, the corporate world.

But what about the relationship of foundations and nonprofits with government?  In a thoughtful and nuanced op-ed in the current Chronicle of Philanthropy, Chester Finn cautions against too much coziness between foundations, in particular, and government.

“If we’re not careful, philanthropy could soon become another version of the nascent corporate state, not unlike what’s going on with the automobile and finance industries.  It points toward a day when the Ford or MacArthur foundation or even the mighty Gates foundation will be no more independent of White House decision making than General Motors or AIG is today.”

Many foundations see this, rightly, as a moment of great opportunity for important social change.  (Health reform just passed, after all.) As a result they are eager to work closely with the White House.  But, as Finn points out, it’s crucial that they not lose sight of what private dollars can uniquely accomplish.

“History contains abundant examples of the distinctive good that truly independent nonprofit and grant organizations have produced for society. …. Private dollars enabled things to be done around, outside, and often in tension with government and politics. … And philanthropy could pay for them because it didn’t care much what government thought.”

There are good reasons we call it the “independent sector.”  Finn’s op-ed is a useful and timely reminder not to lose sight of them.

Phil Buchanan is president of CEP.

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