Emmett floats the idea

The transcript for the April 21, 2005 Center for Public and Nonprofit Leadership Issues Forum "The Cost of Caution: Advocacy, Public Policy, and America's Foundations" is now available.

I didn't get the chance to attend the event, but, before I talk about the thrust of the argument that seemed to have gone on, I was interested to see that Emmett Carson floated his $1-million floor at this presentation.

His comments, at least, in the transcript, seem to come out of nowhere on page 18. It's such a non sequitur that the panelists don't respond until two pages later and promptly move on.

Here's how the panelists respond:

Bill Schambra: I think Emmett Carson’s proposal is a terrible idea, the notion of banning foundations under $1 million. If we are going to have a grass roots agenda in this country that does, in fact, cut across the political spectrum, it's going to come not from the large foundations that are entrenched in the technocratic agenda, but from the folks who have set up a very small foundation, who are moved by some very small, particular concern on some issue, who are focused on their locality. Those smaller foundations, I think, are the hope of the future.

I think Emmett made a telling remark, that if you were to ban those foundations, it wouldn't affect the membership of the large philanthropic associations at all. This is part of that general process of eliminating amateurs by professionalizing and credentialing and raising the barrier to entry for new start-ups. I think this is happening in the foundation world. I think that the philanthropic associations are very likely to game the Senate in such a way that they actually manage to get restrictions that are more onerous for new struggling start up organizations of all sorts, and that is a dangerous thing.

Emmett Carson: For those of you who are listening to what I am saying, let me be quite clear: These individuals can continue to give, continue to be effective, continue to have whatever values that they have, but there are 48,000 entities that don’t have annual reports, that don’t have any access to professional information, to ideas, to research - to a whole range of things. The structure of a foundation is very complicated, but it offers no inherent advantage to individual giving. There are other ways that donors can be just as effective, not have a tax return every year, not drain resources. The issue is the structure. It’s not the giving.

Pablo Eisenberg: Emmett, I would feel a lot more comfortable about your suggestion if, in fact, there were a minimal payout requirement for those funds under community foundations and other financial institutions to make sure that the small donors actually pay out some of their money.

I think Schambra's comments clinch the issue: "Those smaller foundations, I think, are the hope of the future." Carson's vision of philanthropy is threatened. It should be.