The Changing Nature of American Philanthropy
From: The Open Mind
Host: Richard Heffner
Guest: Eli Evans
11/4/99

HEFFNER: I'm Richard Heffner, your host on The Open Mind. And the last time my guest joined me at this table was to discuss his role as writer, historian, if you will, and memoirist. For our subject then was his enormously admired The Provincials: A Personal History of Jews in the South, a gracefully written and wonderfully insightful account that has aged so well as to become averitable American classic. Today, however, I want to talk with Eli Evans about the other hat he has worn so well, so many years now, as a major foundation executive. First for ten years at the Carnegie Corporation and now for two decades as President of the Charles H. Revson Foundation.

Now Mr. Evans' new presidential reports celebrating the first 20 years of the Charles H. Revson Foundation is titled, Striving To Make A Difference. And I want to begin today's program by asking my guest to look back over his 30 years in the world of philanthropy and tell us just what differences these years have made in that world.

EVANS: Well, philanthropy itself has really changed dramatically over the last 30 years. I think, if I had to put my finger on it, one of the biggest differences is that the general size of the field has increased.

HEFFNER: Size of the field?

EVANS: Of the field itself: You know it's doubled in size in the last 20 years. There were 22,000 foundations in 1980. There's something like 45- to 50,000 of them today. And with this last spurt of great economic growth in America, there are a number of foundations that are being established by new great personalities like Bill Gates, Walter Annenberg and Ted Turner, George Soros and others. That's one big difference. But if I had to really think about it, the most remarkable difference is the interaction between foundations and government on the one hand. And on the other hand, the interaction between foundations and a growing kind-of non profit sector in all of its variety. All of this has enriched American life in many different ways. And I think that it's also made foundations slightly more visible.

In the early days, when I was in the foundation field, very few people hadheard much about foundations other than the Ford Foundation or Rockefeller and Carnegie. Now you hear about new foundation activities every day. The newspapers have become much more acutely aware of it and the field operates in a far more public manner than it ever did before.

HEFFNER: Well, you talked about the relationship between foundations and government There was a time –not so terribly long ago– when there was a great deal of tension between government and foundations.

EVANS: Yes... the ‘69 Tax Act, if one looked back over the course of this century was a real turning point, kind of watershed for foundations, The government, at that time, the political forces in government came to feel that foundations needed to be reigned in because of their real influence. I think this influence was far overblown. But a few grants had gotten enormous publicity, particularly the grants I was involved in on voting right in the South. And the Southern Congressmen and Senators who were very much the most powerful forces in the Senate, decided it was time. And new restrictions did come to the foundation world.. Before coming to Carnegie Corporation I had worked as a speech writer in the Lyndon B. Johnson White House. I took off a year, actually to work with Alan Pifer who became the spokesman the foundation field who was then the President of Carnegie Corporation, who had succeeded John Gardner. We visited members of Congress and Senators about what was happening in Washington. The Tax Act did come out and it put certain kinds of restrictions on the kinds of grass roots lobbying that foundations could do. But it also had some very good effects. It required foundations to issue reports. It required us to fill out what are called 990-A's listing all grants so that everything was very public. And the foundation field itself began to invest in entities like the Foundation Center where grant seekers could go to find out where, by computer, they should apply for grants. And the whole system became much more open. It needed to be open, and that was a very good thing. And also I think the requirement to give away a percentage of money each year of our endowments meant that much more money was going to be flowing into philanthropy.

HEFFNER: What was the purpose of that requirement?

EVANS: Well a few foundations had been husbanding their money. And not spending it so that a series of abuses became the portrait for the whole foundation field, unfortunately. And because of those few abuses, the Congress felt that it was necessary to require a portion to be spent every year. One of the really bad results of this is that Congress put a tax on foundations... a small excise tax... which they said at that time was to go to administer the field. But it brought in much more money than was required. And, indeed, I think Alan Pifer, President of Carnegie, and many people in the foundation field felt that this tax was unnecessary. I mean, it really just took money out of the philanthropic field, out of the charitable field. So there were changes then and it created a mood that brought the lawyers into the boardrooms and the decision-making. And that meant caution. So that it was read not that you can't do these things, there were just the rules by which you could do it. For instance, no foundation could put more than 25 percent in a single voting campaign. The voting rights project in Atlanta was then run by Vernon Jordan. I was real proud of the fact that I went down to work with Vernon to try to develop ways in which the Carnegie Corporation at that time could join with others to put money into voting rights and voter registration. You know this was a changing point in American history in 1965 when blacks were given the right to vote and all of the restrictions against them were being challenged. It changed politics in the South.. Blacks came on the rolls in the South, and the region itself was profoundly changed by registering those voters. We remember it as "Mississippi Burning"--Mississippi on fire, and it was the South on fire as the region went through this change. On the other end, there are now 3,500 black elected officials in the South. There were less than a hundred in those days. There were two Southern Governors who have been elected Presidents because they were moderates...Bill Clinton and Jimmy Carter could never have emerged out of the South without the Voting Rights Act. And Strom Thurmond, who is in the Senate, now has blacks on his staff and seeks the black vote every year in South Carolina. This was a tremendous change and the foundations that participated were trying to help these blacks who had never really registered to vote before, to register to vote.

And it was controversial.

HEFFNER: Controversial even now...

EVANS: Yes.

HEFFNER:..that's the question I want to direct myself to. When you are being more charitable...are being most charitable...how justified would you say was the protest that foundations had taken upon themselves to be instruments of social change.

EVANS: Well, I think foundations are still instruments of social change, social adjustment. I don't think anything in that way has changed. Of course, there are all types of foundations. What is the phrase about it? "If you've seen one foundation, you've seen one foundation." There's so much truth to that. This non-profit sector of American life...which is not an American invention, but is almost an American invention. Remember that when Andrew Carnegie started the Carnegie Corporation in 1911 there was no income tax, and therefore was no tax advantage for him to do it. There was little tax advantage for John D. Rockefeller who admired what Andrew Carnegie had done. It inspired Rockefeller to start the Rockefeller Foundation. They began a new idea. And the new idea was that people who earned great wealth should give it away at the end of their lives. Carnegie was very ardent on this subject. He actually participated in kind of a visionary way. He was a poor boy from Scotland, who had been favored by some rich people who allowed him into their library and he was inspired by that. And he began the public library system in America and participated personally in doing it. He loved doing it. He would build libraries across the country if the city would put on a school tax which would enable the library to go forward. I think about it often because the Bill Gateses and Turners and the rest ...the Hewlett, Packard and Jim Barksdale of Netscape... the enormous technology fortunes which are now coming to be part of the philanthropic stream are having to think about American life in a way no philanthropists have really thought since those early days of the 20th century.

HEFFNER: Still...when you say you don't know how it's all going to come out... what picture do you have when you say that?

EVANS: I think that the kinds of grant-making that it takes to change anything are much more sophisticated than it was back in the early part of this century. Andrew Carnegie's foundation was larger than all of the money spent on higher education at that time. The scale on which these funds were acting was just entirely different from what we have today. Look, in the whole field of philanthropy there's something like a $175 billion given away. Most of it...80% of it by individuals. Foundations give away something like $17 billion dollars a year. It's not a lot of money in the scheme of things. Half the money that's given away in America goes to religious institutions. Another great percentage goes to institutions of higher learning and so forth. So, it's not really a great deal of money in the sense that it was back in the early part of this century. So we're dealing with a different scale, with a vastly larger government system in this country. And therefore the idea of how these funds are going to be used is going to take a lot of originality and creativity. But you see signs of that in extraordinary ways.

Let me talk abut George Soros for just a moment. I find him to be a remarkable figure in the history of American philanthropy. We've never had anybody like George Soros in American philanthropy: a man who has made his own money; kind of a swashbuckling giver; the kind of person who wants to engage in an interaction and a dialogue with the American public through his grant-making. Indeed, he does just that. So he discusses his reasons publicly when he makes grants and talks about the meaning of death or the legalization of drugs or his foundation's efforts around the world in which he's working in 45 cities to help democracy flourish because in his birthplace of Hungary, that was not the case. This is just an extraordinary single figure, giving away extraordinary money. And he does other remarkable things. I mean he just put up $100 million dollars to re-train the Russian Army... consider a man being able to think on that scale. And some of his grants in these newly emerging democracies in Eastern Europe are so simple, yet of immediate democratic import. He brought printing presses and Xerox machines for many new groups... the kind of gift with insight, acting on the idea that it takes many voices to make a democracy.

HEFFNER: And if I should say, frightening", what would your response be?

EVANS: Well, I know what you mean, but you know, I think also I could mention foundations on the other side of the political spectrum. I don't find it frightening in the sense that there are many more forces against change but one can concentrate on a single giver and say that this is something that he himself has chosen to do because of his history. I love the fact that men like Soros are now the Andrew Carnegies of this country, because Andrew Carnegie himself decided at some point enough was enough sold his business to J.P. Morgan which was U.S. Steel, and devoted the last twenty years of his life, joyously, I might add, to giving his money away to build a public library system in America. There are instances of that happening now...Michael Steinhardt has sold his hedge fund and is committing himself completely to Jewish life and to dealing with paradigmatic changes in Jewish life. He and the Bronfman family are trying to support an effort to send 50,000 students a year to Israel for the Israel experience. There are now about 5,000 students going every year. And they've started the Birthright program to hope that it can be dramatically increased. Well, to be able to think on that scale for public good is really an important new element.

HEFFNER: But you say, you say "for the public good" and I would agree with you. But you mentioned just in passing...foundations that use their now tax exempt money and we're not back in the income-tax-less days of Andrew Carnegie for purposes that you wouldn't approve of politically...talking about people on the other side of the spectrum...

EVANS: Right.

HEFFNER:...you know that I put this question to Peter Goldmark when he was here years ago...

EVANS: Right, right,.

HEFFNER:...I wonder your own reactions to the criticism that this is just too much power that can be wielded outside of public policy that is controlled by the electorate.

EVANS: Well, I think that the reaction to this is somewhat overstated, if I may say it because...

HEFFNER: The power is overstated?

EVANS: No, the power is overstated on the one hand. I certainly don't experience that kind of power. As a matter of fact I don't think there are any of us in philanthropy who feel we have anywhere near the kind of money that it takes to really make social change in this country or around the world. The problems are so immense. Extraordinary. And when one looks with insight as we do because we're in touch with experts and people every day who are dealing with these issues, one really feels like it's just a drop in the bucket. I could talk at length about the things that we've done at the Revson Foundation...about education and poverty in New York. About Jewish life in the world. And bio-medical research. But really, when I Iook at it in terms of the scope of monies actually being spent on scientific research, support for the poor, education and training..supported through the government and through all kinds of other activities, I feel like foundation funds are a drop in the bucket. That's number one.

Secondly, I think tax exemption is not a kind of gift of the American government, if I can say that. It'‘s a statement about democracy and about the kind of democracy that we want. The most important thing about foundations .. I would now argue ..it has been proven over and over again.. is that they represent a kind of third way. You know a way for people with ideas whose ideas are rejected by government to find another door to walk through. And I could mention instance after instance through history . There was the case of the opportunity to build a new kind of education system in America. John Gardner was the President of Carnegie at the time, the Montessori programs had just begun and the whole Head Start program came out of Carnegie's watchful support of these early programs. And it launched an idea that it would be an important element in the future of the country if pre school education become a national movement. One can go case after case of the great acts of American philanthropy in this century. Who's to say what the most important of them are . One looks at the Rockefeller Foundation's building of the Rice Institute out in the Philippines.

HEFFNER: Mmm hmm.

EVANS: ...Simply sixteen experts brought together to look at the natureof the growing cycle of rice and doing research to increase that cycle four times over what it was. Now the Green Revolution which began with this small institute in the Philippines was a tremendous contribution to the future of the planet, actually. It also created a tremendous number of problems and I could talk at length about them. But for the moment it was an extraordinary act.

I think one of the important philanthropic initiatives in this century was the Ford Foundation's actual creation of public broadcasting. Ford spent $350 million dollars between 1950 and 1965 to support public broadcasting in America. There would have been no public broadcasting without the Ford Foundation. Stations all across the country were built during this chaotic period. The Congress was under tremendous pressure from very strong financial forces not to assign limited spectrum space to a public use and yet that battle was won because it was supported by Ford in a way that people don't appreciate today. And looking at the Carnegie Corporation I really think that the creation of Sesame Street, in which I participated in late'69, really changed the attitudes of Americans toward what public television might be. Sesame Street is now in a hundred countries around the world. This has been an extraordinary device for early learning, for allowing poor children to learn at the age of 2 to 4 years old, and the families to participate in it. So let me return to tax exemption as something that America did, not as a gift or as a favor to thesefoundations, but as a way to help our country be a more democratic country, to make decisions in many different ways, to have a yeasty, large number of doors to walk through for people with ideas. And that's really the heart of it.

HEFFNER: That's certainly not the comments that those Southern Senators and representatives. . .

EVANS: (Laughter)

HEFFNER: . . . were making when you were doing your bit in the South.

EVANS: Right.

HEFFNER: . . . And what you did was enormously important. I've read up on your activities there and the creation of a program for young lawyers. I mean this was wonderful by my lights and by yours, but not by those Southern politicians.

EVANS: Well, if I could tell you the forces operating against this small program, it almost overwhelmed it. Just to fill your viewers in: it was an idea to increase the number of black lawyers who would work in Southern towns and cities. Between 1969 and 1973 when I was working at Carnegie, I began to see, as we worked in voter education, that the lawyer in the local community was the chief economic developer, the chief leader of the community, the person who would pull the community up. And I took a trip and visited all the Southern state university law schools. After that, the Earl Warren Fund was created at the NAACP Legal Defense Fund, the only effort that Warren ever lent his name to–remarkable–, to support scholarships for black law students. Let me talk a little bit about what I call the art of the grant. The grant here was to increase the numbers of black lawyers in the South, not just to give scholarships to young people who wanted to go to these law schools. And so the program consisted not only of scholarships for black students to go to state university law schools, but also to serve in the summer time doing civil rights activities. If after graduation, they agreed to go back to a town that did not have a black lawyer, they received a stipend for civil rights work, a law library and that sort of thing. Well, ultimately over 40 foundations, 34 corporations–something like that participated, raised more than four million dollars to do this. Over a five year period the numbers of black attorneys went from less than 17 to almost 400 in Southern state university law schools. The Deans said to me, "we will accept black students, but we can't afford to give them scholarships. But if there's a national fund to support scholarships, we will accept the students." And that project has resonated throughout the South ever since. We did a report in which we described this project and then focused on a single lawyer. A young man named Sandy Bishop, who just wanted to go to Atlanta and Jack Greenberg, then the director of the Legal Defense Fund, said, "No, you've got to go to Columbus, Georgia." And he's now a member of Congress from that district. Across the South there are judges, school board members, state legislators, and on and on.

HEFFNER: But those foundation grants I would think would raise the hackles on the part of a lot of people from the old world of philanthropy. . .

EVANS: It's true. But I think that difference between pro-active and just taking the proposals that come in the door is really overstated, particularly in a world in which there are 45,000 foundations. Most people don't have the contacts, the address that grantees need to apply for these funds. And the great acts of philanthropy have been, I think, in some ways pro-active. One can't create public broadcasting or bring Sesame Street to the screen, or develop the programs that we've been involved with, including Sesame Street now in Israel, followed by an Israeli/Palestinian Sesame Street which went on the air last year; you can't do that without taking some sort of approach that allows you to build on the power of an idea and then go out and find partners who will support it with you. That allows small foundations to think on a larger tapestry of ideas, larger than the limits of their own money. And foundations need to do more of that because the problems are so large that no one funder, thinking within the context of their own funds, we can do anything about them. But thinking together and working together, one can do a great deal about them.

HEFFNER: I presume that you anticipate that foundations will have a much greater influence. . . you don't like that word. . . you don't like the notion of power. . . but will play a larger role in our lives in the years ahead.

EVANS: Yes, if they're on the frontier of change. No less a figure than Clark Kerr said that university education was at a turning point in history, unlike anything that has occurred for five hundred years. The Internet is a profound, remarkable, important potential for American education. I want to leave out E-Bay and I want to leave out the commercial impact of it. I have a fourteen year old kid who won't use an encyclopedia anymore, but he does research and it's just incredible to listen to him talk to his friends and see the way they're so comfortable in this computerized world. They go on vacation, they can talk to friends who are in California and in Israel as if they were around the corner. This is a remarkable revolution. I think if foundations and that's why I hold out so much hope for the technology foundations take it upon themselves to help America and the world become a closer place, a more intimate place, a place committed to freedom and individual responsibility, then I think we do have a tremendous role for philanthropy in the next century to help this world become a more tolerant, open and generous place.

HEFFNER: Eli Evans, thank you so much for joining me today and talking about philanthropy, particularly from the point of view of someone who's been in the wold of philanthropy for 30 years now. Thanks for coming on The Open Mind.

EVANS: Thank you. Thanks.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. If you would like a transcript of today's program, please send four dollars in check or money order to: The Open Mind, P. O. Box 7977, F.D.R. Station, New York, New York 10150.

Meanwhile, as another old friend used to say, "Good night and good luck." N.B.

Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.