ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
ERROR
Main Error Mesage Here
More detailed message would go here to provide context for the user and how to proceed
search
Close Nav

A Foundational Error

back to top
eye on the news

A Foundational Error

Pablo Eisenberg pushed the world of big philanthropy to the fringes of the Left—at the price of turning much of the field into an adjunct of government. December 6, 2022
The Social Order

When David Rubenstein gave $7.5 million to the National Zoo in Washington in 2012 to help care for its Giant Pandas, Pablo Eisenberg was outraged. The founder of the National Center for Responsive Philanthropy decried both the “misplaced giving priorities of the nation’s billionaires” as well as the lack of skepticism among “the nation’s press—and so many other parts of society . . . when it comes to raising tough questions about how much the wealthy give and where they direct their donations.”

Eisenberg, who died this fall at 90, pioneered this critique of philanthropy. Like so many on the left today, Eisenberg argued that private foundations and wealthy individuals have a duty to give to certain causes—namely, those that benefit the poor directly—and that the public should hold donors accountable (not to mention the press and perhaps the government) for gifts that fail that test. He did not share Andrew Carnegie’s view that the goal of philanthropy should be to “help people help themselves,” or the view of many others that the value of philanthropy is that it expresses itself in many areas of life.

After spending several years working in government and nonprofits, Eisenberg published an article in 1973 for The Grantsmanship Center News contending that donors of all stripes needed to be more socially responsible and transparent in their giving. In the years prior to this article, heated discussions had taken place in Washington, D.C., about the size and scope of foundations.

In 1969, McGeorge Bundy, then head of the Ford Foundation, was called to testify before Congress about various political grants he had approved, including one to support Robert Kennedy’s staff after he was assassinated in 1968 and another that sought to reorganize the New York City school system but instead provoked a prolonged teachers’ strike. Bundy dismissed criticisms of his foundation. Asked whether he thought there should be a “ceiling that should be put on the size of foundations” (Ford had an endowment of $3.1 billion at the time), he replied: “Yes, I think there is certainly a point at which you could say this is too much money in one place.” When asked where such a point would be, Bundy remarked: “I am not sure I am the most disinterested witness on the point.”

Bundy’s patronizing performance was a factor in Congress’s subsequent decision to put more regulations on philanthropy. The 1969 Tax Reform Act limited the expenditure of foundation funds for lobbying and banned their use altogether in elections. It also set down the rule that foundations had to spend at least 5 percent of the fair market value of their endowment each year for charitable purposes.

For Eisenberg, such rules were merely the starting point for an extended political critique of the foundation world. He also became a harsh critic of the Filer Commission on Philanthropy in the early 1970s, which popularized some ideas in wide use today—for example, that foundations and charities should make up an independent sector free of both profit and political motives. The commission, originally organized by John D. Rockefeller III with the cooperation of leaders in Congress and the Nixon administration, was designed to demonstrate the value of philanthropy to the broader society, thus repairing the damage Bundy’s testimony had done to the field.

In the course of this work, the Filer Commission pointed out that philanthropic efforts in areas such as education, health, and welfare were gradually getting pushed aside by the scale of new government spending in these areas. Foundations, wealthy though they might seem, could not compete with government in the sums spent in these areas. The commission advanced this observation as a warning that the growth of these programs might eventually turn the philanthropic sector into a minor partner of the federal government. So even while the commission insisted that philanthropy should be independent of government, it also recognized that the encroachment of new government programs threatened that independence.

Over time, the so-called independent sector has come to terms with this contradiction with the help of Eisenberg and his allies, who now view philanthropy as a partner with government in expanding spending to assist the poor and minority groups. Few now defend the idea that the charitable tax exemption should be used to support things government cannot or should not do. Many liberal foundations openly advocate for more government spending and intervention in the private sector, thereby undermining the claim that they are independent of government.

Today, the National Committee for Responsive Philanthropy (NCRP), of which Eisenberg was a founder, says that its mission is to “promote philanthropy that serves the public good, is responsive to people and communities with the least wealth and opportunity, and is held accountable to the highest standards of integrity and openness.” In reality, groups like NCRP now view philanthropy as an adjunct to and advocate for an ever-expanding welfare state. The NCRP has been integral in pushing for “equity” in philanthropy, claiming that not enough funding goes to black communities, for instance. It decries “the role of white supremacy in our public life” and claims that this “redlining by another name . . . is holding us all back.” NCRP also supports more abortion access and the continuation of the federal estate tax.

Eisenberg may have started out as a gadfly, but his view that philanthropy is worthy only when it involves direct monetary gifts to the poor or to specific identity groups is now frequently repeated by foundation leaders at Ford, MacArthur, Rockefeller, and the like. Publications like The Chronicle of Philanthropy are in thrall to such rhetoric. The Chronicle’s editor wrote a tribute to Eisenberg recently: “I miss the regular phone calls from Pablo, helping me think about how the Chronicle can do better. But I will never forget the lessons he taught me—and the powerful advocacy he led that has made our society a fairer and more just place.”

Meantime, the work of defending philanthropists who give to education, medical research, churches, or zoos has fallen to a few dissidents on the right. Ideas once common in philanthropy—that handing out checks isn’t the best way to help the poor, or that viewing philanthropy through the lens of identity politics is good neither for charitable recipients nor for the country—are now considered suspect. And you can forget about the idea that capitalism deserves credit for the trillions of dollars that Americans regularly bestow on various causes. Eisenberg wanted more government oversight of wealthy donors because, in his view, their tax-exempt gifts were a form of public property.

Foundations may be creatures of capitalism in their origins, but it’s hard to see that genealogy in the operations of most large institutions today. Though Eisenberg began as an outsider, he has succeeded in pushing the world of big philanthropy to the fringes of the Left—at the price of turning much of the field into an adjunct of government. Unfortunately, Eisenberg’s vision prevails far more today than those of Andrew Carnegie, John D. Rockefeller, or other entrepreneurs of that bygone era.

Photo: Juhku/iStock

Up Next
eye on the news

A Less Charitable World

Philanthropic foundations will feel the squeeze in a bear market—especially when they have been making ill-advised or politically driven investment decisions.
James Piereson, Naomi Schaefer Riley August 29, 2022
Economy, finance, and budgets
Saved!
Close