Commentary: Is There Really a Conflict between the Public Good and Professionalism in the Foundation Sector?

Date01 September 2014
Published date01 September 2014
Is There Really a Conf‌l ict between the Public Good and Professionalism in the Foundation Sector? 639
John E. Craig, Jr.
The Commonwealth Fund
In their article “Administrative Growth and Grant
Payouts in Nonprof‌i t Foundations: Fulf‌i lling the
Public Good amid Professionalism?,” Amanda J.
Stewart and Lewis Faulk conclude that higher operat-
ing and administrative expenses (which they use as a
measure of professionalism) of private foundations do
not lead to lower grant payouts—in fact, the rela-
tionship between intramural spending and grants is
slightly positive.
is is an important f‌i nding, as it is not uncommon
for foundations’ intramural spending to be character-
ized in the media as wasteful and self-serving. In the
Charitable Giving Act of 2003, legislation was seri-
ously advanced in the U.S. House of Representatives
to disallow the counting of operating and administra-
tive expenses as part of spending to meet the required
annual payout by foundations.1 Such legislation
ultimately would have liquidated foundations that
spend intramurally to operate professionally.
As Stewart and Faulk point out, professionalism has
been on the rise in the foundation f‌i eld since the
enactment of the Tax Reform Act of 1969 (TRA).
e regulatory structure that the TRA created has
undoubtedly promoted professionalism, but so have
leaders in the sector itself.2 Leading foundations now
devote attention to the outcomes of their grants and
their own institutional performance in ways that were
uncommon 45 years ago. As an example, consider the
Robert Wood Johnson Foundation Anthology (http://
To provide historical context for the trend toward
professionalism, the earliest foundations (such as the
Rockefeller Foundation, the Carnegie Corporation,
and the Commonwealth Fund) pursued a “value-
added” style of grantmaking (Craig 2004).  ey
employed professional staf‌f s charged with the
responsibility of developing grantmaking strategies,
working with grantees to develop projects, monitoring
Is  ere Really a Conf‌l ict between the Public Good
and Professionalism in the Foundation Sector?
John E. Craig, Jr., is executive vice
president and chief operating off‌i cer
of The Commonwealth Fund, a private
foundation that supports independent
research on health care issues and makes
grants to improve health care practice and
policy. His career in the foundation f‌i eld
spans four decades. His numerous essays
on improving the performance of private
foundations can be found at http://www.
Public Administration Review,
Vol. 74, Iss. 5, pp. 639–641. © 2014 by
The American Society for Public Administration.
DOI: 10.1111/puar.12254.

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