By Todd Cohen
Foundation executives are crying wolf.
Controlling wealth they did not create, they give away a lot of money, enjoy power and good pay, get treated like sages and rarely face criticism from charities needing grants.
Yet they are steamed over a House bill that would force them to give a bit more to charity.
Under current law, foundations must give away at least 5 percent of their assets each year, and can count salaries and other costs as part of their giving.
Under the bill, foundations still would have to give 5 percent but could not count costs.
CEOs like Susan Berresford, Ford Foundation president, say having to give more could doom foundations.
In the face of crushing social ills, and their own hefty salaries, those executives’ dire warnings ring hollow.
The 5-percent payout rule, with or without administrative costs, is as tough as government gets in policing philanthropy.
Independent foundations, which in 2001 controlled more than $400 billion in assets and gave away nearly $24 billion, operate like unregulated banks.
If they stick to their donors’ focus, and to government’s few rules, foundations can do as they like.
If they truly fear extinction, they should go on a diet: In 2002, The Chronicle of Philanthropy says, Ford paid Berresford $615,939 in compensation, $114,095 in benefits and an expense allowance of $6,792.
Foundations exist to give, not hoard. If forced to give a bit more, they need to be a bit more careful about how they spend and invest.