The Politics of Foundations

Helmut Anheier, Siobhan Daly, Helmut Anheier, Siobhan Daly

• Publisher: Routledge
• Year: 2006
• ISBN:
  9781135991074
• Edition: 1
• Topic: Business
• Subtopic: Business internazionale
• Index: Business

This book explores the roles and visions foundations have of, and for, themselves in the new Europe.

The leading contributors go beyond a quantitative profile of foundations in Europe, and probe deeper into their role and contributions in meeting the economic, cultural, environmental and educational needs of European societies. Includes a mapping and appraisal of foundation visions, policies and strategies, and an overall assessment of the current and future policy environment in which they operate. The Politics of Foundations combines the detailed comparative analysis of current challenges facing foundations, with individual country studies on Austria, Belgium, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, the Netherlands, Norway, Poland, Spain, Sweden, Switzerland and the United Kingdom and also includes a comparative view from the United States.

This valuable reference will be of interest to researchers and students of foundations, policy-making, comparative politics and international business, as well as policy makers and professionals.

Part I
Studying the politics of foundations

1
Philanthropic foundations in modern society

Helmut K. Anheier and Siobhan Daly

Philanthropic foundations are typically discussed in terms of the contributions they make to charity, research, culture and the arts, health care, humanitarian assistance and other worthy causes. They are also recognized for their role in bestowing public recognition for artistic, scholarly, altruistic and other forms of excellence. Their function, therefore, is to allocate, on a voluntary basis, private resources for public benefit and status.

Yet, leaving aside taxation and similar systems, foundations are not the only institutions for converting private funds to public use. What sets foundations apart from other ways of philanthropic giving – such as individual giving to religious, charitable or other causes – is the legally highly regulated and institutionalized form of donating, managing, expending and distributing private resources (usually money) they take for supporting some recognized public purpose. Establishing a philanthropic foundation is a socially as well as a culturally and legally visible act. It is also usually seen and presented as a laudable initiative.

Yet foundations are also inherently political institutions – a characteristic that has received much less attention when compared to the growing scholarship on their charitable and philanthropic activities (see Anheier and Toepler 1999; Lagemann 1999; Hopt and Reuter 2001; Schlüter et al. 2001).¹ This political nature, however, rests much less on party politics in the conventional sense, but implies a rather different, more fundamental way of the ‘political’. Exploring these political aspects and their implications is a major focus of this volume.

What makes foundations inherently political? For one, foundations represent private agendas that operate in public arenas outside direct majoritarian public control (Karl and Katz 1987; Anheier and Toepler 1999; Prewitt 1999) – a characteristic that makes them distinct and perhaps even somewhat unusual institutions. Indeed, foundation historian Nielsen describes them as ‘strange creatures in the great jungle of American democracy’, and wonders that foundations ‘like giraffes, could not possibly exist, but they do’ (1972:3).

The political nature of foundations derives from their very constitution and their institutional location in modern society which affords them far-reaching independence. Put differently, foundations are political because their legitimacy, including their very existence and range of permissible forms and operations, depends on political preferences and the regulatory and institutional frameworks they entail. Such preferences cannot be taken for granted, and have indeed significantly varied and changed over time. What is more, such preferences may be more or less codified in law, more or less explicitly part of public debates.

Independence, politically, legally, culturally and socially sanctioned, is at the centre of the political nature of foundations. Anheier and Leat (2006) argue that foundations are among the freest institutions of modern societies: free in the sense of being independent of market forces and the popular political will. This enables foundations to ignore political, disciplinary and professional boundaries, if they choose, and to take risks and consider approaches others cannot. As quasi-aristocratic institutions, they flourish on the privileges of a formally egalitarian society; they represent the fruits of capitalistic economic activity; and they are organized for the pursuit of public objectives, which is seemingly contrary to the notion of selfish economic interest.

While modern foundations exist in democratic societies, they are themselves not democratically constituted. There is no ‘demos’ or membership equivalent, and no broad-based election of leadership takes place. Unlike market firms, membership-based nonprofit organizations or government agencies, foundations have no equivalent set of stakeholders that would introduce a system of checks and balances. Expressing primarily the will of the donor, the organizational structure of foundations does typically not allow for broad-based participation and decision-making outside the limited circle of trustees. No shareholder or membership represents the interest of the organization, its clients or beneficiaries.

Thus, the political nature of foundations rests on their triple independence of market forces, the ballot box and outside stakeholders. Of course, such independence is not absolute, and only relative to the greater dependence of other institutional forms such as the public agency or the private business firm. However, the critical point is that the politics and policies that allow for such greater independence and make the legal, social and cultural space for foundations possible cannot be taken for granted. As we will see, countries vary greatly in the extent and the terrain of political space allocated to foundations. Nor is this space constant over time. Foundations indicate, perhaps more than any other type of nonprofit organizations, long-term directions and shifts in the relationships between public and private responsibilities, and between private wealth and the public good.

Yet why should modern societies make space available for independently endowed private actors in the public domain? Why do some societies allow public agendas formed and implemented by private foundations, while others do not and attach many restrictions? Indeed, the political space for foundations is more than a legal or formal one. In the institutional reality of modern societies, this space is shaped by political ideologies, visions and models, and enacted through roles and, ultimately, justified by expected contributions.

In this book, we will explore these various visions and roles that describe the political space of foundations. We will do so from a comparative perspective, and draw in the experiences of a relatively large set of countries. These countries have in common that they are market economies with a democratic system of government. However, they vary in their history, level of economic development, and political-administrative system. Most importantly, they vary in the history of foundations, the current political space they allocate to them, and the overall importance of private philanthropic institutions. This book seeks to explore these differences.

In preparing the ground for the comparative analysis this book offers, it is useful to take a brief look at history first (see Smith and Borgmann 2001). Historically, foundations are among the oldest existing social institutions, showing great longevity. Even though historians have traced the ‘genealogy’ of foundations back to antiquity (Coing 1981), Plato’s Academy in Greece and the library of Alexandria in Egypt, modern foundation history has medieval roots.

Throughout the Middle Ages, foundations were largely synonymous with religious institutions operating in the fields of health and education, and operating as orphanages, hospitals, schools, colleges and the like. An integral part of feudal social structures, the governance and operations of foundation boards frequently combined both aristocracy and clergy. Indeed, foundations were the prototypical institutional mechanism for the delivery of educational, health and social services under the feudal order. Beginning with the High Middle Ages, however, we find a stronger presence of the emerging urban middle class among founders of foundations, which were often linked, and dedicated, to particular trades or crafts guilds (Schiller 1969). Gradually, the rising urban middle class, professionals and industrialists began to replace gentry and clergy as the dominant donor group – a trend that grew with the process of industrialization in the nineteenth century.

However, as Archambault et al. (1999) show, not all countries experienced growth in the number and influence of foundations during the industrialization phase. Being identified with the ancien regime, foundations and associations remained banned in France after the Revolution of 1789, and faced a highly restrictive legal environment until the twentieth century. Indeed, the state kept a watchful, frequently distrustful eye, on foundations in many countries. For example, in Austria, the state repeatedly attempted to appropriate foundation assets to fill budget gaps at various times from the seventeenth to the nineteenth century, and transformed private university foundations into governmental institutions during the eighteenth and nineteenth centuries.

However, in many European countries, and not only in the United States, the latter part of the nineteenth and early twentieth century was generally a period of growth and expansion for foundations. By contrast from 1914 to 1949, the European foundation world suffered greatly from the political and economic upheavals, in particular from the impact of inflation, wars and totalitarian regimes, which led the former German President, Roman Herzog (1997:37–38) to speak of a persisting ‘cultural loss’. Only since the 1980s have European foundations expanded in numb...