Is Criticizing Private Foundations Anti-Capitalist (i.e., Marxist) or Pro-Capitalist?

There seems to be two kinds of treatment of people who express any kind of criticism of private foundations. One kind of reaction is to accept their criticism and laud the person for being an important voice in the field. These folks are perceived as being an intellectual scholar or enlightened leader: They are warmly invited to circulate among foundation board trustees and to speak at foundation-only conferences. Joel Fleishman (2009) falls into this camp as do many foundation CEOs and presidents who express self-critical opinions, such as “we need to do more” and “this is not our money.” When I consider why these folks are so well received within the private foundation community, it’s because they are moderate in their ideas of what foundations should be doing.

Instead of calling for increased regulation, such as increasing taxes on private foundations or increasing the payout floor beyond 5%, they ask foundations to self-regulate their giving to give more to the poor, consider sunsetting, and be less secretive and more transparent. The bottom line is that their recommendations stop short of increased governmental regulation and do not upset the general social order. Take, for example, Fleishman (2009). In the same book in which he suggested that foundations should pay out more and that more foundations should sunset, he is also quite firm on the point that foundations have the Constitutional “right to disburse [funds]” in any way they choose (pp. 15-16). This “autonomous” right to freedom of grantmaking is a position that has a large following, reflected in the membership of Philanthropy Roundtable. (I may return to this topic later, as there’s also interesting going-ons with those who believe that foundations should be considered as having tax immunity (freedom from government) than tax subsidy of helping re-distribute wealth [see, for example, Reid, 2013].)