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2006 Annual Meeting - Philanthropy: Art or Science?
Closing Address: Lance Lindblom, President & CEO,
The Nathan Cummings Foundation
Mr. Lindblom's Biography
Lance Lindblom closed the annual meeting by speaking on the future
of foundations and the challenges that they face. He began by
saying that we are at a crossroads where foundations have the
potential to play a very important role but the question is can
we really play that role.
Mr. Lindblom said that we are currently in a crisis and this crisis
is the dying of an old social structure. Over the last three decades
we have experienced a shrinking government, lowering of taxes,
and other matters that have led to societal changes. These changes
have created larger increases in wealth as well as a tremendous
shift in power. That shift has been to larger institutions and
they have determined who bears the benefits of this and who bears
the risks and costs. Lindblom stated that some of these costs
can readily be seen in the environment and increasing income gap.
Global climate changes like the rise in temperatures have led
to amazingly problematic issues. Our global economy, though it
is thriving, includes an increased income gap that has led to
conditions of depravation such as poverty and an increase in HIV/AIDS.
Lindblom also said that the richest 1% is earning most of the
national profits; CEO compensations are not related to performance;
and public trading companies have received 10.4% of the profits.
At the same time minimum wage today is only $5.13. Since the 1970’s
we have had a doubling of GDP and productivity but people are
earning the same or less. We have the highest concentration of
wealth and the most separation of wealth today than in 1939.
In looking at the culture wars, Lindeblom said that it is really
interesting to see that they share the same beliefs of supporting
civil engagement. However, their disagreement is between those
who are engaged and those who are disengaged. According to Lindeblom,
the fastest growing group of disengaged persons are our youth.
They are risk taking and thrill seeking, believe in Darwism and
exclusion, are more likely to believe that those who suffer in
life deserve it, think “hey, it’s a great time to
be rich”, are self interested and don’t worry about
the consequence, are about survival and exclusion, and are de-sensitive
to meaning and value.
Lindblom suggested that there are 3 responses that we can have
to these risks and costs issues: retro movement activism; defenders
of the status quo, which operates at the issues side not the strategic;
and advocates of change where we change things to something new.
Lindblom sees foundations as having an opportunity to truly address
these risks and costs. Through the words of Fredrick Mayer, Lindblom
said that given the nature of foundations, they can intervene
in ways that can create value. He then proceeded to outline why
foundations are in such a position:
o Foundations are not restricted,
o They have no focus on building power,
o They can work in ways that society cannot operate in,
o They can make up for the social failures of markets,
o They work on societal failures to work more peaceably and together,
o They are risk taking, hunch money for society,
o They can match the societal and government failures that exist.
There are, however, restrictions on foundations. Some of these
restrictions are self-induced. Lindblom said that when foundations
act with hubris, arrogance and self-absorption the government
wants to intervene to address these problems but the government
is not always the one that should be addressing these. Lindblom
then gave the example of changes of tax policies, namely the estate
tax. With a shift in the estate tax, funding for educational programs
would decline from 1 – 2 billion dollars. Lindblom also
noted that the government would loose revenue and there would
be more demand on the foundations to meet social needs.
Lindblom stated that since there is such a lack of resources in
society and because foundations have the resources, when a few
are acting badly, all of them are the targets. He gave the example
of groups that want foundation money to remain in the state where
the foundation is based. One foundation who is currently being
affected by this is the Ford Foundation. The state of Michigan
is threatening to investigate Ford and require that Ford give
20% of their grants to Michigan. If this happens, foundations
will no longer be independent and could be restricted in how they
meet the needs of society.
In closing, Lindblom said that foundations must be open to learning
and making adjustments when needed. Foundations should take advantage
of strategic opportunities; but there are internal challenges
that they should be mindful of that could keep them from doing
just that. He said that foundations speaking among themselves
are sometimes affecting their vested interest mainly because
o Philanthropy is voluntary and can be arbitrary and self-indulging,
o You can be self-absorbed in your social identity rather than
making a change in society….in this case, it’s about
the individual that is giving, not about the giving itself,
o Trustees face their own capacity lens of “too little time”,
o Those who do not possess the knowledge to make the changes that
need to be made and address the actions that need to be addressed
(e.g. it’s difficult for a daughter to tell a father that
he is out of line and a mother to tell her son that there is a
conflict of interest).
In thinking about these issues, foundations must understand that
this is not their money. They are stewards for the public and
meaning will come from fulfilling that stewardship. And that’s
the point, foundations must always think of themselves as public
stewards.
Lindblom then ended by saying that we will be judged by the successes
and failures of this period of transition.
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