Julius Rosenwald, an often forgotten but visionary philanthropist of the last century, believed deeply that his philanthropic dollars should be distributed during his lifetime. He wanted his vast wealth, much of it designated toward charitable and philanthropic endeavors, to be used to solve the problems he saw, not to be held in trust in perpetuity to be distributed by future generations. Let others, he explicitly argued, solve the problems of their times, with their means.

Over the past year, there has been much noise, and some rare clarity of voice, in public discourse regarding the role of philanthropy in the public weal. Much of this debate has centered on the wisdom or legitimacy of establishing endowments or foundations in perpetuity, and a surprising amount of that has come, in my experience from younger funders.

It hasn't been the best of times for the philanthropic community. It has proven itself every bit as susceptible to guile, avarice, and self importance as the business community [perhaps not so surprising since most philanthropic foundations have as their base, resources from individuals who have made those fortunes in the business world, and are typically governed by those same people and their families and close advisors. I don't know how extensive abuse of public trust will prove to have been in the business community; I suspect that, in the philanthropic community, it will be shown that the good far exceeds the rotten.]

To make matters worse, these affronts and abuses have come at a time of tremendous challenges to philanthropic resources. Despite the profound gains in last year's market, it is a rare foundation or major funder with the dispensable income of 2 or 3 years ago. History tells us that, even with a rebound in the economy, the philanthropic enterprise will trail the economy by 2 or 3 years.

The challenge is compounded yet further by the government's recent attention to philanthropy. Not surprising if one thinks about it. After all, our national debt has exploded at the cost of human services. Where might one find relief? One has the sense that politicians are viewing foundations with a Willie Sutton perspective - that's where the money is. If one has exempted the wealthiest individuals, beneficiaries of tremendous tax relief and the most immediate beneficiaries of an economic rebound, philanthropic foundations, donor advised funds, and the like are a repository of substantial and enticing dollars. Why not shift the burden of responsibility for human need to those quasi private and now suspect institutions? Why allow a permanent endowment?

I am troubled by this political and expedient approach rather than a more conceptual and thoughtful concern with the proper role of philanthropy in American society. But not surprised.

I have been surprised, though, by what I have heard from younger funders. Their abiding skepticism toward large and bureaucratic institutions is joined by an altogether new vision: that of free market philanthropy. This approach argues that endowments "soften" the drive of not-for-profit" organizations. This argument says that each organization should be forced to make its case in the only measure that makes sense - in the fund raising sphere. Endowments allow organizations to be less agile, responsive, entrepreneurial, or customer oriented. If an organization cannot make its case among funders, it should cease and let others who can step forward. After all, they say, that is what makes for vibrancy and vitality, with the funder being ultimate arbiter of success.

Why am I troubled? Any of us who have been on the funding side know that there are organizations which have long outlived their usefulness and are being kept alive by carefully nurtured reserves. Moreover, we all know organizations which have lost their way because their funders and endowments continue to keep them going for sentimental reasons and not because of the vitality of their missions. And we all know bloated bureaucratic institutions for which it would be virtually impossible to measure any outcome other than how much money they raised. And, regrettably, we know too many organizations which patronize their so-called "young leaders" but rarely have space at the table for them to become true shapers of the organization. There is much empirical evidence to justify the cynicism and skepticism I have heard from those of a younger generation.

But, I am still not fully persuaded by them. When, earlier in my career, I had executive responsibilities for organizations dependent on donors, I saw the short-sightedness of needed buildings which were crumbling because there was no endowment. What donor would want to have his or her name associated with an organization which couldn't maintain its infrastructure - or properly honor the wishes of donors of a previous generation?

More, I saw the difficulty of developing a reliable and responsive system when funding was dependent on the whims of donors and the faddishness of causes. Human services, cultural accomplishment, and educational excellence are not achieved in the blink of an eye, and are not often most effectively produced by popularity contests.

It is too easy to look at several large not for profit organizations and see them as the norm. But of the over 1.2 million not for profits in the United States, few are universities or United Ways. The overwhelming majority are small, local, special interest organizations. They often have tiny staff and very little access to meaningful capital. They live hand to mouth, or at least donor to donor. But they are often cutting edge, creative, and ahead of the popularity curve. Were it not for endowed foundations which have the expertise to see beyond raw percentages and beyond slick marketing, many of the most innovative and responsive ideas would never see the light of day or serve very local communities.

There are good and justifiable reasons for a funder, family, foundation, or philanthropist to choose to limit their beneficence to a specific time frame. There are good motivations for doing so, and among my clients there are many who have made that choice.

But there are also good and valid reasons for endowments and foundations to be established with an eye toward perpetuity. Not all current problems lend themselves to immediate solutions; not all funding should be based on effective marketing; popularity is not the same as values; donors with clearly articulated values may want to help guarantee the implementation of those values long after they are gone; foundations with clearly articulated values can transcend the whims of the moment. Without society's risk capital, the best ideas may never see the light of day.

Any of us who have been on the funding side know that nothing about the future can be guaranteed. An endowment can enhance but cannot guarantee the likelihood that future professionals will bring credit and honor to a donor. Current spending can enhance but cannot guarantee that a particular need will be fulfilled or a project will achieve its goals. Not for profit organizations need to earn the trust of those who will invest in their ideas and ideals. But funders need to be encouraged to recognize the validity and legitimacy of both kinds of funding.

Philanthropy has the uniqueness of being able to think the big thoughts, and address the long term. I have learned much from my students and younger clients. I would hope that one of the lessons they will learn is to see the validity of those gifts which address tomorrow's tomorrow.

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