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

• Author: John E. Craig
• Date: 01 September 2014
• DOI: http://doi.org/10.1111/puar.12254
• Published date: 01 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://

www.rwjf.org).

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?

Commentary

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.

commonwealthfund.org.

E-mail: jc@cmwf.org

Public Administration Review,

Vol. 74, Iss. 5, pp. 639–641. © 2014 by

The American Society for Public Administration.

DOI: 10.1111/puar.12254.