The Complicated Power of Philanthropy.
The Complicated Power of Philanthropy
Ahead of BU Giving Day, Interim Dean Michael Stein discusses the complex, but essential, role foundations play in supporting public health—and why individual contributions are just as meaningful to our school, particularly in this moment.
Americans are generous. Nearly all Americans donate some money every year. We donated more than $550 billion to eligible nonprofits in 2023. Much of that giving now goes to foundations, special legal entities that have encouraged individual and corporate donation. Foundations have been around only for a little more than 100 years, and their creation marked a shift from retail charity to wholesale philanthropy. More than 100,000 private foundations exist today, holding more than $1.6 trillion. How should we think of the role of foundations in 2025, particularly as they relate to matters of health?
At the turn of the 20th century, John D. Rockefeller, founder of Standard Oil, decided that rather than offering direct relief to individuals through alms, he wanted to address the root causes of social ills. He imagined a general-purpose philanthropic foundation with a broad mission and global vision, an enduring entity that would outlive him and be directed by experts. Aware that such a new legal entity would be a matter of public concern, public inquiry and public criticism, he sought congressional permission to incorporate. But his idea for a Rockefeller Foundation was resisted by those put off by his personal wealth, his business practices, even his personality. Other critics believed such a foundation would be repugnant to democracy, undermining political equality, sanctioning and supporting Rockefeller’s preferred public policies, and unaccountable to the public.
In contrast to the praise given to today’s philanthropists, Rockefeller was castigated for years. Congress voted down his request for a charter, and his foundation was only finally approved by New York state years after his new idea emerged. The age of Foundations was born.
We have since fallen in love with, and become dependent upon, foundations. Nearly three-quarters of identified foundations–small and large, independent, corporate, family-run—have been established in the last 25 years. Foundations using private assets for a public purpose are no longer controversial. But should they still be? After all, philanthropy is power—often unaccountable, nontransparent power—another example of wealth inequality in a country that has rising disparities of wealth.
The priorities of foundations seem worthwhile. Poverty relief, education, human services and social welfare and health are the most common concerns. A majority of foundations globally operate their own programs and activities; grant-making is central to philanthropic practices in the United States.
But as a country, we have given foundations certain legal permissions such as low accountability and transparency, generous tax treatment, protection of donor intent in perpetuity. And the results are two-sided. Yes, foundations are generous. But the tax advantages for individuals and corporations giving to foundations, rather than paying taxes on those assets, cost $50 billion per year in foregone tax revenue that might have been used otherwise.
In science, in public health, we are grateful for those foundations that dispense grant dollars to our cause. At this moment of government retrenchment and its abandonment of many aspects of scientific research, foundations’ grant-giving is essential. In the United States, foundations must expend a minimum of roughly 5 percent of their assets per year. Most foundations in Europe give more than 10 percent; the average expenditure rate is 9 percent in the US, putting us in the bottom third of high-income countries for giving. The higher rates in many countries may reflect a desire for rapid social impact, as opposed to the competing desire to maintain assets in perpetuity, which seems to be an American state of mind.
Should American foundations distribute more of their money in 2025? The MacArthur Foundation recently boosted its giving in response to federal funding cuts. However, it is not possible, nor advisable, for the philanthropic sector to make up the multi-billion dollar deficit created by the Trump administration’s cuts to scientific research funding. The compact between the federal government and our scientific enterprise is a defining feature of American competitiveness, and yes, our greatness. Another sector cannot and should not replace the role of government in fostering scientific innovation that benefits us all.
At this moment, universities and schools of public health are facing tremendous headwinds, and we are grateful to the foundations and individuals who are doing what they can to support us.
As we at BUSPH know well, the distribution of small giving in the aggregate matters a great deal. Individually, for each of us, the personal decisions to give are complicated. Do we feel it as an obligation? To whom and how much should we give? Should we give anonymously? Should we fund essential goods and services, foundations with broader missions, or non-profit organizations such as academic institutions?
As we approach this year’s BU Giving Day on April 9, we hope that you will consider supporting the BUSPH community, and how we are responding to emergencies bearing down on public health.
- Our students inspire each of us each day. Despite the pessimistic headlines, they are determined to create a better future for all. Philanthropic support for scholarships is transformative, opening doors for talented, passionate students who might otherwise be unable to pursue their dreams of making a difference in public health.
- Our faculty are conducting groundbreaking research that is informing solutions across the globe. Gifts to the idea hub at SPH are a catalyst for innovation and impact, funding pilot projects and providing seed funding for research. Your generosity fuels transformation, enabling researchers to think like entrepreneurs, take risks, and scale their ideas to make a real difference in population health.
- Our impact is transforming the field, from supporting mission-driven organizations, to producing innovative communications, to engaging a wide variety of communities. By supporting Generation Health, you are enabling BUSPH students to work with organizations that may not have the resources to offer paid positions, thereby fostering partnerships that benefit both the students and the communities they serve.
Thank you for your engagement and commitment to BUSPH. It matters, and we at BUSPH will use what you give to good effect, to support the next generation of public health leaders and for bettering health of all.
Michael D. Stein
Dean Ad Interim
Boston University School of Public Health
mdstein@bu.edu
Previous Public Health Matters are archived at: https://www.bu.edu/sph/news/articles/category/public-health-matters/
