Wasted potential

By Todd Cohen

Charity is more than giving away money.

While they make grants to support programs, foundations can do much more.

They can use their dollars, knowledge and connections to help charities operate more effectively, and push for change in public policy to fix social problems.

They also can be more active shareholders, investing in companies in sync with their own goals, and using their shareholder clout to try to retool corporate policies that run counter to their mission.

As the Philanthropy Journal reported in our recent five-part series, a small but growing number of foundations are taking their shareholder role seriously.

But far too many foundations remain passive investors.

They aim to generate strong returns by investing their endowment, and comply with the law by making grants equal to 5 percent of their assets.

But they fail to treat their endowment as more than an investment to generate enough interest to cover grants.

With government mired in business as usual, and politicians cutting taxes to pander to voters, social progress depends on charities making productive use of all their assets.

Stock can be a powerful philanthropic tool, one that foundations must use to help make change happen.

Todd Cohen is the Editor and Publisher of the Philanthropy Journal.

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