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Hello, you're listening to the Philanthropisms Podcast. This is the podcast where we try to put philanthropy in context. I'm your host, as ever, Rodri Davis. Uh, and yes, we're back for people who've listened before. Uh, you'll know that we've been on a short summer break, uh, brief hiatus over the summer while I was mostly away on holiday, hanging out with my family, trying to switch off a little bit and recharge the batteries and come back with more thoughts on philanthropy, more interviews and all that kind of thing, ready for the autumn. So, this first episode back, um, I thought I'd do is return to the model of doing a kind of deep dive into a particular topic, partly because that's something that we haven't actually done for a while on the podcast. Um the last mini season that we had of it was, I think, entirely uh interviews or possibly entirely interviews apart from one episode, uh, which was you know partly down to the very nice problem of having lots of interesting people to interview. But I have always intended to try and balance this podcast between conversations and me sort of taking a deep dive look at topics. Uh, also, more pragmatically, uh it's the start of September, and I in no way had any podcast interviews in the can. Uh, and whilst I have some set up, they're not going to be for a little while, so I don't really have any choice but but to do a deep dive into a topic, uh, which is not uh to say that this is something that I've hastily cobbled together, because I thought what I'd do is take a topic that I have looked at in depth before, uh both in written form and when I've been speaking at events, and do a podcast version of it, both because I'm aware that not everybody will have been in the room for those uh spoken uh versions uh at events, and uh I'm also under no illusions that a lot of people, probably the majority of people, don't sit down and read through uh some of the very, very long uh blog versions that I sometimes do of these things. So I thought I'd do a podcast version. And the topic uh that I've chosen I want to look at is philanthropic foundations, and particularly a look at the question of what foundations actually are, what the historical background to them is, and what that tells us about why they are controversial, uh, sometimes come in for a lot of criticism, and why there are kind of particular issues about them at this point in time, and as we'll see, have been for a long time, and kind of how will we understand some of those debates. So I'm gonna do my best to kind of take a bit of a dive into the history, some of the current debates, uh, what people have said before about foundations, what some of the arguments for them are, what some of the arguments against them are, uh, and I'm gonna try and keep it breezy, uh light, um, hopefully entertaining uh and mercifully short, although, you know, I don't have a great track record when it comes to that, so please do bear with me. Okay, well, I guess the starting point is to say, you know, why is it important to ask the question, you know, what are foundations and and why do we have them in society? And I guess there's a couple of reasons for that. I mean, the immediate one is you could look at some of the news that's been around um over the last uh few months and years within uh the philanthropy world and actually kind of filtering more out into the mainstream world, where there have been quite a few kind of um issues that have been raised that are particularly about foundations. And this ranges from things like the story about the um Brooklyn Community Foundation um about a year or so ago, which announced that it was changing uh its name to Brooklyn.org. Um, and part of the explanation for that, they said, was that the very word foundation they thought was kind of off-putting and had problematic connotations, and that a younger generation didn't really like it. Um there's also the story that I think we've probably mentioned in passing on the podcast before about uh the Lankelli Chase Foundation uh here in the UK, which took the decision last year, um I believe, to dismantle itself and to hand over its assets over a period of about five years. And the the idea behind this, again, was that they they sort of felt as though the whole model of foundation philanthropy and sort of institutional philanthropy more broadly was so problematic and in their view, kind of tied up with legacies of colonial capitalism that they they wanted to sort of disavow that and and in doing so, in order to kind of um you know walk the walk as well as talk the talk, they felt the need to sort of dismantle themselves as an institution. Um, and then there have been other things, the the debate about um whether or not foundations should be subject to a payout rate, uh, as they are in some places like the US and Canada, uh, that occasionally crops up uh in the UK, and it certainly did about six months ago in the UK, following um some research by Pro Bono Economics, which estimated the scale of assets that were sitting in the bank accounts and endowments of foundations in the UK and not going out in the form of grants. Um and then there have been other things like the report on uh transformative philanthropy that some of you may have read and will also have listened to the author um Fozio Erfan uh talk to me about on the podcast. Uh and uh, you know, as I've said many times, you can find uh that re uh report on the why philanthropy matters website. So all of those things and many more, I think, make it clear that there are ongoing question marks about foundations, both in terms of sort of the specifics of what they're doing, but also the kind of the very idea of a foundation and some pretty fundamental questions asked about the legitimacy of this model, which I guess in a way is unsurprising. You know, foundations are really the kind of institutionalized form of elite philanthropy. I mean, you have to be at a certain level before you start doing foundation philanthropy, really. So we're talking about stuff that is kind of at that end of the spectrum, and uh, you know, that that end of the spectrum when you get towards elite philanthropy, as as anyone who's listened to this podcast will know, tends to attract uh criticism, both because there are specific um issues about philanthropy and have been for a long time, and also because it kind of gets bundled into wider critiques of wealth and inequality. Um, and in some ways, foundations I think often act as a lightning rod for some of those wider critiques of philanthropy, partly because they are more visible maybe than individual donors often are. It's sort of easier for an individual donor to retain a level of anonymity, whereas once you uh create an institution like a foundation, you know, although some people would say they're not exactly noted for their huge uh levels of transparency and openness, they are required to do certain minimum things in terms of reporting, and often they do have kind of, at the very least, a public presence or a website or that kind of thing. And many people, I guess, I would guess listening have at one time or another worked for a foundation or received grant funding from a foundation, or perhaps have their own foundation. So it's certainly something that many people in the philanthropy world and in wider civil society will have experience of and therefore views about, you know, whether foundations are a good thing or a bad thing, or whether, you know, both can be true at at one and the same time. And I think in order to understand where we are at the moment, um, I think it's really important to have a sense of where the foundation structures that we have today come from. Uh, because I think that gives us some insight into why they have attracted criticism over a long period of time, and perhaps we'll bring a bit of nuance to some of the debates about. And hopefully what you'll get a sense of as I talk is that there, although there are differences, I mean, many pretty fundamental differences between foundation sectors in different countries and at different times, you know, there is something, or does appear to be something fairly fundamental about the basic idea of a foundation-like structure, because a lot of countries, not all by any means, but a lot of countries, do have some kind of structure of this kind. And interestingly, from a historical perspective, we'll see there's a sort of intriguing possibility that actually it kind of arose organically in multiple different places, and there's a kind of convergent evolution thing going on. And also we'll see, you know, uh by looking at some of that history, why it is that foundations have pretty much since you know the year dot attracted controversy and criticism of one kind or another. So I think the starting point before we dive into some of that history is just to address the the more basic question of okay, that's great, this sounds interesting. What are we even talking about? What what is a foundation? You know, can I can I stop you there, please? And that is actually, as with so many things uh to do with philanthropy, quite difficult to answer. I mean, I'm always tempted to start um by using uh Dwight McDonald's uh quote from 1956 in his book about the Ford Foundation, where he said, you know, the Ford Foundation is a large body of money completely surrounded by people who want some, which I really like as a one-liner, um, and it's quite good for using when you're doing presentations, but it probably doesn't tell you an enormous amount, you know, about what a foundation actually is. And really, as you'll see in a minute, when you dig into it, the reason that it's hard to come up with some of those exact definitions is is not, you know, again, not because I don't know what I'm talking about, although some people might, you know, question that, or because nobody else is trying hard enough. It's because the the various things and the range of things that that you know foundations and quote marks do, and the range of forms that they take is absolutely enormous. There are lots of organizations in different places in the world that call themselves foundations, and they don't necessarily do the things that many people would associate with that term. And conversely, there are lots of organizations that do pretty much do all the things that you would associate with foundations, but don't use that terminology. And when we expand horizons in any direction, either by taking a historical view and looking backwards, or looking more broadly at foundations today in a wider global context, it gets a lot more complicated. Just to illustrate that point, I mean, there's a good quote here from uh Tobias Jung, the Philanthropy Academic, who's been a guest on this podcast before. Um, he says in civil law systems such as Germany, um, it's usually the case that a foundation is a spec specific codified legal structure. However, in common law systems such as the UK, it's customary to use the foundation label in an uncodified manner to point to an entity's specific activities or to the public benefits it provides. Beyond this, things get conceptually and practically messy, which is a really important point. The one there about the UK in particular, which is, you know, we talk all the time about foundations and there are organizations that call themselves foundations, we have a foundation sector, uh, we have a representative body for foundations. What we don't have is any kind of legal structure that defines something as a foundation. So actually, you know, there is a kind of conceptual blurriness about what we're we're even talking about. That being said, there are sort of various efforts and have been various efforts over the years to try and capture what some of the key characteristics of foundations might be. So, you know, a good one or a useful one to take as a starting point is um F. Emerson Andrews, who was one of the sort of big early figures of research into foundations in the US, he wrote a book in 1956 called Philanthropic Foundations, and he suggested the definition that um a foundation may be defined as a non-governmental, non-profit organization having a principal fund of its own, managed by its own trustees or directors, and established to maintain or aid social, educational, charitable, religious, or other activities serving the common welfare. And a slightly updated version of that. So the uh foundation scholars Helmut Anheyer and Steph uh Stefan Topler, uh, who've written a lot about this stuff, they say, you know, in its most basic form, the foundation idea is based on the transfer of property from a donor to an independent institution whose obligation it is to use such property and any proceeds derived from it for a specific specified purpose or purposes over an often undetermined period of time. And taking those two sort of attempted definitions, neither of which I I think most people would agree is perfect, and some of the other things that we can kind of, you know, from our own experience or from things that are said out there, take as uh definitional or characteristic of foundations. I think there are a couple of features that it's worth pulling out, none, you know, none of which necessarily are exhaustive or sort of um you know sufficient uh to describe all foundations, uh, and maybe they aren't even necessary conditions, but certainly they they provide some sort of um you know rough guide to to what sort of thing we might be talking about. And the ones that I think are important are these. So, first of all, you know, foundations have assets. So traditionally that would be an endowment, so money that is sort of put aside for charitable purposes, often for an unspecified period of time, which is something we'll come back to very much uh later on in this podcast. And that money is then invested, and the idea is that the uh the returns from that investment, or at least a part of them, is then used to make grants towards uh charitable causes, but the the actual sort of principle of that endowment is is used, is kind of just set aside and kept there in order to generate those returns over a long period of time. Now, a foundation doesn't actually have to have an endowment. There are lots of other models uh that one could use. So uh a foundation might, for example, be set up to take ownership of a particular institution or a piece of property, and oft a lot of the sort of historical foundations that you'll see around Europe, for instance, that's what they do. They kind of own a particular building or an institution, and part of their role is to manage that, but over time it might also be that it generates income, and then they start to use that to address um other kind of charitable causes. There's also foundations that operate as pass-throughs where they don't have a permanent endowment, but instead they receive regular or sometimes irregular donations from an individual donor or from a family or a company. So, you know, they are dependent on essentially money being sort of passed into them on an annual basis, and that might vary according to profits or to the decisions and the whims of individual donors, and then that is the money that they have to spend out, and they don't necessarily kind of hold on to any of it or or invest it. But they do have assets of some kind. It's kind of hard to be a foundation without any assets because essentially your job is to distribute assets to individuals or groups uh working on specified causes in line with how you've been set up and what your mission is. So let's take it that foundations do have assets. I think another one that was mentioned as a as a word um in Anhara and Topla's uh definition is independent. So foundations are independent, and that is independent of government, obviously, um and you know the the corporate sector, although again uh historically that has been a slightly problematic uh grey area, but also legally they they are supposed to be independent of their founders. So although there are many found uh foundations that are set up by individuals or by families, at least in theory, the point of putting those those resources and those assets into a foundation is that whilst the the family or the individual might retain some degree of involvement in how those resources are distributed, it is technically independent of them and they don't have sole say over it, and there are you know there is separate accountability and governance that's put in place. Now, again, we all see that um you know that is is fine in theory, it doesn't always necessarily work in practice, but there is some degree of of independence. So they have another feature, I think, is that they have defined purposes. So a foundation has to be specified, you know, what it is there to do, um, so that there are criteria to guide how the money is then distributed out of it. And in most cases, that means that there need to be requirements um about how it meets a particular public benefit, or it might be that it's required to give only to causes that are seen as charitable in particular jurisdictions. That can vary quite widely. In some places, it's okay for foundations to give to individuals or to not-for-profit organizations that don't necessarily have a public benefit. And in some places, it's not possible to do that. And I think it's also worth saying that we'll we'll see, one of the major turning points historically uh in the sort of development of foundations is the point at which there's a very clear shift away from what had up until that point been a norm, which was that uh foundations were set up with relatively uh tightly constrained purposes, often too tightly constrained, to a new norm where the big foundations that emerged at the start of the 20th century in the US were set up with incredibly broad general purposes, um, essentially, you know, the kind of the furtherment of, you know, the for the for the good of mankind, which basically allows you to do pretty much uh anything. And that in, you know, sort of brought its own problems with it. Another characteristic is that a foundation should be not for profit. So, you know, it doesn't exist for the primary purpose of seeking or delivering financial returns. Again, not to uh preclude what we're going to talk about afterwards, but there is, you know, part of the debate, I think, about whether or not foundations should exist in perpetuity, so whether they should be allowed their endowments should exist forever or whether they should be time limited, is uh that some would argue that actually the maintenance of an endowment becomes an end in itself. And so delivering financial returns on that endowment does almost end up becoming the primary purpose of a foundation rather than the charitable cause or the public benefit cause that it was set up uh for initially. Other features, so I think it I think it's fair to say that foundations are long-term in at least some sense. As we've sort of alluded to already, the default in the majority of cases historically has been that endowed foundations are actually established in perpetuity, so they don't have a fixed end date. And we'll see, that's actually been one of the main sources of controversy throughout the ages and continues to be today. It's not necessarily the case that they always are. Uh, some foundations uh have been established with deliberately limited lifespans, both historically and increasingly, that's being done today. But even in those cases, they tend to exist for, at the very least, sort of 10-15 years, and that's at the bottom end. Often it's sort of 20 years or more, so there is some degree of longevity there. And then I'd say the the final feature that I would take as key is that um foundations are tax advantaged. So that's both in terms of not being subject themselves to certain taxes that their for-profit equivalents might have to pay, and also in terms of being seen as legitimate recipients of of donations that that are then themselves eligible for tax reliefs. And uh I think that's important because a lot of the critique, I guess, about the legitimacy of foundations within society turns on the fact that everyone has a stake because to some extent they are sort of subsidized by all of our tax money. And as we'll see, one of the interesting things when you look historically is that actually this is a relatively modern point of view. Um historically speaking, you know, the idea that charitable donations should receive tax reliefs of relatively new development, and a lot of the sort of big foundation philanthropy of the certainly of the very start of the 20th century and anything prior to that, you know, nobody was getting a uh a uh tax relief on their donations to those foundations. So, you know, it's it's kind of easy to get a little bit anachronistic when talking about that. And then two further features that I don't think I would include in my list as sort of definitional because they they certainly don't apply to all foundations, but I do think are just worth flagging up, are one, you know, that they make grants. I mean, this isn't necessarily true, and certainly in some contexts it's kind of very far from true. There are plenty of places in Europe and elsewhere where actually it's more common for foundations to be operating institutions, so to sort of have resources and do work themselves. But in the context of the UK, certainly, and you know in the US as well, the the sort of standard paradigm and the way in which people think about foundations is as grant-making entities. So entities that, as we've said, already have financial resources and may sort of deliver returns on those, and then they make grants in the form of money or potentially other assets to other organizations to do the work. And then linked to that is the final feature, which is that foundations make invests. Again, this is not true of all organizations, as we've already said, because not all of them, uh not all foundations are endowed, but of those that are, the way in which that model has traditionally worked is in order to generate returns on those endowed assets, you make investments of one kind or another. Um, and I think this is important to flag up because it is quite a sort of big point of debate at the moment and a key point of critique is that actually when you look at the foundation sector as a whole, the endowed foundation sector, it it very much starts to look a bit like uh an iceberg where you have this small bit you know poking out above the water, which is the grant making bit. And then the reality is the vast you know body of the iceberg, which Which is the endowed asset sits below the water. And that to a lot of people seems slightly odd that it's that way round when the point is surely to get those assets out to organizations that are working to um address you know uh important and often extremely pressing um social and environmental causes. So I think those are sort of some key features. So uh in a moment uh I'm gonna kick off looking at the history of foundations and try and take you on a whistle stop tour uh of where foundations come from, how they developed, uh, and how that's led us up to the present day. So stay tuned for that. Okay, so in this section, the plan is to try and trace the history of the idea of philanthropic foundations. Um, obviously, I'm not gonna be able to do that in a vast amount of detail, um, both because it's a very big and complicated story and because it would take an enormous amount of time. Uh, instead, what I'm gonna try and do is uh whip through some of the sort of key moments and key turning points that sort of highlight some of the important uh debates and features uh about philanthropic foundations in the space of let's say 15 minutes. Although, you know, uh again, whether I stick to that or not, uh let's see. So the starting point, or the one that I want to take, is ancient Rome, which is you know it's always a good place to start. And one of the key points here, I think, before there was anything like the idea of a foundation, really, comes in 150 BCE. And here, Warren Weaver, the great US philanthropoid of the sort of middle 20th century, um, noted in a book he wrote on philanthropic foundations in 1967, he said, So Roman law broadened the legal air concept by declaring that charitable organizations could be both sentient reasonable beings and also immutable undying persons. And this is important, it's the same thing that gave rise to the sort of legal status of corporate entities, and it means that organizations of various kinds have the ability to exist as independent entities from you know the individuals that make them up. Now that doesn't do the job of kind of getting us to foundations by itself. For a long time, those sorts of organizations could only exist while the people involved with them were also alive when they couldn't receive bequests, so they couldn't be left money when somebody died. That changed then uh a bit later, in about 178 AD, so um sort of roughly 300 years later, under the reign of Marcus Aurelius. And this is the point at which, as as Warren Weaver says, the foundation idea was born. And that idea kind of then stuck around um at varying levels of popularity throughout the history of ancient Rome. Um and then as the Rome, the Roman Empire in the West declined um and eventually kind of fell in the fifth century, the story, like most things about Rome, shifts to the east. So obviously the the Roman Empire had split into two halves, the Western Roman Empire, which is the one that we've sort of traditionally seen as kind of declining and disappearing. But then over in the east, um the Eastern Roman Empire, which became the the Byzantine Empire, was going great guns. And over there you had emperors like Constantine, so he was the one who um who sort of first went and shifted the power base to the East. And he obviously was a convert to Christianity, so the Christian church now becomes part of the story, and it becomes the dominant player in the provision of social welfare and also a powerful new focus for donation. Um and obviously that's a state of affairs that would hold in the Western world for quite a long time, up to and including the present day. And under uh emperors like uh Constantine and um particularly one of his um uh sub one of his uh successors, Justinian I, Roman law underwent a pretty big rewriting and a sort of codification. And one of the things that that did was put the legal status of charitable endowments on a firmer footing, particularly to provide um additional protection from threats of sort of misappropriation and and corruption, which had been quite a big issue um up till then, sort of with the growing power of the church, there had been quite a lot of examples, I think, of people using the ability to set up uh endowments as a way of kind of building power bases outside of uh outside of government. And as a result of this, according to um another author who's written about this, John McGukin, he said um, so by the sixth century, uh the great philanthropic foundations of leprosaria, so institutions for dealing with leprosy, uh, hospitals, orphanages, geriatric homes, and food relief centres had become common in the cities of the Byzantine world. Um so obviously, you know, these things continue to sort of flourish over in Byzantium. So, you know, is the story then, all right, well, they went from the west to the east, and and then eventually we presume, given you know what we know about the history of them uh subsequently, that they came back to medieval England and then we can trace a through line through to the present day. Well, no, not necessarily. This is and this to me is where the story gets really interesting. So if we sort of park the whole uh origins in in Roman law story about foundations for a minute, there's another uh entirely different story that's sort of taking place at the same time. And this is a story in the Islamic world of a structure called the WAC. And essentially, with without simplifying it too much, the Islamic world for the purposes of what we're talking about uh uh the wax for the purposes of what we're talking about today is is the Islamic world's version of the philanthropic foundation. It's different in in various ways, and there are different forms of wax. Um, many of them historically were associated with particular sort of buildings or provisions. For instance, the the oldest surviving wax still uh uh around today is um a well. It's called the well of Rumah. Uh so it says, you know, according to Islam, there's a quote here just saying, according to Islamic tradition, the well, which uh originally belonged to a man named Ruma, who was a Jewish Medinan, um, used to sell the water for prophets. And at that time it was difficult for Muslims who were already struggling financially to pay for the water they needed. So, seeing this, on the request of the Prophet Muhammad, um, Uthman ibn Afan purchased the well from its Jewish owner and made a whack for all, uh, Muslims and non-Muslims. So essentially he kind of bought the well and turned this uh facility into something that was kind of permanently endowed and would therefore uh be kind of providing uh a public benefit. The interesting thing about wax is that there's quite a lot of debate in the academic world among scholars of um sort of in charity law and particularly around foundations, about whether actually we can trace the origins of the foundation as we know them today in the Western world to the WAC rather than to the Roman law. The point being, I mean, the kind of key crux of the argument here is that actually there's there's kind of a clear discontinuity potentially between Roman law and what happened in the medieval world, certainly in in Britain, which is where we'll be picking up the story soon. So the assumption that we can kind of trace anything meaningfully through from Roman law straight through to the Middle Ages in in uh England is potentially actually uh a little bit fallacious. Whereas it there's probably an argument to be made, or some people make the argument, that we can see a stronger influence from Islamic law, particularly because there were many traders and people who were coming from the Islamic world and certainly the sort of Islamic world as it was in southern Spain and and southern Europe at that time, that that was possibly influencing England much more directly because they would have had quite a lot of ongoing kind of direct trade with that. Um so just just to kind of highlight um this is an interesting uh quote here. I just want to read out. It's a relatively long one, but I think it really captures this. Um and it's from a really interesting uh paper from about 1995 um by Abish Avini. Um and it's on the origins of the modern English Trust uh revisited. And so he says here so the origins of the English Trust, um, as it was known before the passage of the Statute of Uses in 1535, um, has been the subject of debate among some of the greatest legal minds of historical jurisprudence. From these debates, several theories emerged concerning the origin of the trust. The Roman Fide Commissum, which is the one that we essentially were talking about first, the Germanic Salmanus, which is uh another um sort of foundation-like structure that emerged in the Germanic world, which I'm not going to go into too much here because I would complicate the story too much, and the Islamic WAC. The Roman theory holds that the Fide Commissum, a device which permitted a testator to devise property to a legally incompetent beneficiary by transmitting the property to a capal uh legatee, was introduced into England by the ecclesiasts uh seeking to circumvent governmental restrictions on land ownership. Uh, it says, and the Islamic theory on the influence of the WAC, uh an endowment created by a donor for use by designated beneficiaries and under the administration of a trustee, holds that the WAC was imported by Franciscan friars returning from the Crusades in the 13th century, and that they adapted this device to the needs of their mendicant order. And what uh scholars like uh Avini and others, we'll see in a moment, would argue, is that actually the WAC was a bit closer to how we understand uh a foundation or a charitable trust these days, because it was more aligned with the idea of a specific public benefit and there being kind of uh beneficiaries, whereas actually the Roman idea, although it was used in many cases for things that looked a bit like philanthropic foundations, actually, from a legal point of view, essentially it was much more to do with the relationship between the testatus of the person leaving property um and the kind of use of that property afterwards, and it wasn't specifically or kind of explicitly linked to any notion of public benefit. Um, and there's a really interesting paper, and this is where I kind of first came across this idea that the WACF might have been influential on the development of the charitable trust by an academic called Monica Gaudiosi from 1987. And this caught my eye because she basically argues in this paper that that actually one example that highlights or illustrates, in her view, the influence of the idea of the WACF is um the founding of Merton College, Oxford. And she claims in that that the way in which Merton was founded and the kind of structure that was used, which looks very much like a kind of charitable endowment, was directly influenced by Thomas Merton's um knowledge of the tradition of WACF. And she says in this paper, she says, were the Merton documents written in Arabic rather than Latin, the statutes could surely be accepted as a WAC, which obviously in itself that's sort of correlation rather than than causation, but it's a really kind of interesting argument. Anyway, that that's probably too much of a rabbit hole to go down. Essentially, I just want to make the point that the idea that you know the the story necessarily starts in the Roman world and we can kind of trace uh a thread through that to the present day in the Western world, I think is uh a dangerously or potentially dangerously kind of Western or Eurocentric view of things, and that actually we have to take into account that there may be these sort of at least one or two, or possibly three or more, different uh sources of influence that eventually kind of uh had some bearing on the eventual development of of the idea of charitable trusts in England. But that's the important point, and that's where I want to kind of pick up the story, because the medieval period saw a huge growth and an evolution in the sort of foundation-like structures in Britain and in Europe. So at first, as we've sort of alluded to, many of these, if not pretty much all of them, were linked with specific physical institutions, so almshouses, schools, or hospitals, and they were almost exclusively under the auspices of the church, or at least kind of heavily linked with it, because religion was pretty much a kind of inescapable backdrop to most aspects of life at that point. Uh many of the institutions that that still exist in some form or other to this day, and which kind of lay a claim to being the oldest charity in Britain, certainly all the oldest charities in Europe, are of this kind of form. So there's um the King's School in Canterbury, um, in Kent in the UK, um, which claims uh to be able to trace its origins all the way back to 597 um and the arrival of St. Augustine in England, although I have to say it's a slightly tenuous claim, but it's certainly very, very old. Um, and others um like the Hospital of St. Cross in Winchester, which um is a more direct uh link, and that dates from 1132. And uh there are many other examples. So in in Europe, for instance, in Switzerland, there's the Insulspital in Bern, um, and that's a charitable trust uh still going today, which operates a hospital uh and was founded in 1354, interestingly via the will of a woman, Anna Seiler, who was a sort of wealthy inhabitant of the city of Bern. But then towards the around the sort of 1200s, so the 13th century, we start to get the emergence of more secular structures that look a bit more kind of recognizably like charitable trusts as we know them today. So um an interesting example is in 1282, the Bridge House Estates was founded in London. Um, now originally this was a vehicle of fund to collect the tolls for crossing London's bridges, so the old London Bridge and some of the other bridges that were there in London. And the money was used then for the upkeep of the bridges, and uh it continued to do that for a long time, and but over time I think that money sort of built up to the point where there was more of it than was required simply for the upkeep of those bridges, so it developed into sort of wider charitable purposes, and actually, you know, that uh that fund is still going strong today. It recently merged with um it's so it had a uh a charitable arm called the City Bridge Trust, which was the bit that sort of spent the excess, which obviously over time, given the way that interest compounds uh became a pretty sizable fund. But the um the City Bridge Trust and the British House Estates merged um uh a year or so ago uh to form the City Bridge Foundation. So that's a foundation in the UK that can trace its history back pretty much 800 years. And there are other examples in other parts of Europe as well that are pretty old. So um uh quite an interesting one is the example of um Jakob Fugger, who was a um German merchant and banker. Amazingly, he was known as Jakob the Rich um because of his enormous wealth. Um I came across one figure that was I thought was worth quoting. It's been estimated um that he had a uh a fortune that was the equivalent of 400 billion US dollars today, so significantly more than even the richest people in the world today. Or it was uh also 2% of Europe's GDP at the time, which is, you know, we we're worrying about wealth inequality these days, but it just goes to show that there's always been some pretty stark wealth inequality, even if uh only in the hands of a very, very small number of people. And uh Fugger played a big role in the Reformation, actually. Interestingly, it was partly uh to pay back a loan to Fugger that Pope Leo uh X issued a new papal indulgence um in 1515. So this is one of these things that where the Pope said it was all right for people to pay in order to buy these indulgences, so these were you know ways in which they could kind of purchase uh absolution for their sins, um, you know, before and and essentially kind of buy passage to heaven. And this was one of the things and one of the catalysts for Martin Luther and others. So it was Luther wrote his famous 95 Theses, and it kind of led to the Protestant um uh Reformation across Europe, um, you know, discussed uh uh things like indulgences, which were seen as the kind of you know, the the worst possible example of what was wrong with with Catholicism and its um its ritual uh and the way in which it kind of gave those within the hierarchy of the church uh the authority to to decide how to interpret religion, and instead, obviously Protestants wanted to give people a more direct relationship with the Bible uh and with God. But anyway, it's a sidebar. But Fugger is also famous because he founded quite a lot of found uh sort of foundation-like structures, many of which still exist today. And most notable of those is um in the city of Augsburg, there's a thing called the Fuggeri, which is um sort of public housing, and it's it's got a pretty good claim to be the oldest public housing in the world. Anyway, that's uh sort of not quite a relevant uh detail, but I just like uh interesting historical stories. But let's get back on track in terms of the thematic stuff. So we're in the Middle Ages, we've got the growth and evolution of these uh charitable trust or foundation-like structures, some of which are starting to look a bit more like they've got secular purposes that are, you know, possibly still within the auspices of the church, but kind of you know, looking outside that in terms of what they they seek to do within society. The next big shift we get, we get then um is with the reformation and the the sort of secularization that flows from that, and also at the same time the process of industrialization that is just beginning and then kind of continues apace over the 18th century and into the 19th. The the impact of the Reformation on philanthropy is quite contested, and it's something I could fill an entire podcast with by itself, but for the purposes of what we're talking about here, um, I just want to assume some people may contest this, that at least one of the things that it resulted in was a secularization of philanthropy. You might believe that that's because you know the the focus of Protestant teaching was was significantly different to that of Catholic, in terms of the focus not being on the donor seeing the purpose of giving simply as um kind of cleansing their immortal soul and and securing their passage to heaven and instead kind of focusing on what was done uh in the world today, or you might think more pragmatically that the Reformation resulted in the sort of decimation of all of the structures that had been built up within the Catholic Church for kind of providing for needs and social welfare, and so that stuff just needed backfilling. Um, and so you know, a lot of it kind of was recreated in in Protestant form. Whatever's the case, there was certainly, you know, philanthropy began to look more secular at that point, and we and we start, you know, I think that's the point that lots of people, myself included, would kind of see as the starting point of modern philanthropy in the sense that we understand it today. Perhaps the more important thing here for this story about foundations is the impact of industrialization and urbanization. As people moved from rural areas to cities and the nature of work and the economy changed, and people kind of lived in densely packed urban areas and worked in sort of factories and and and these kinds of uh jobs, the nature of poverty and need and illness changed significantly. And this meant that the approaches of philanthropy had to change significantly because it wasn't really possible to to kind of address needs on a one-to-one basis in a in a parish um sense, as had been the case previously, where the donor would essentially have you know the the ability to decide who were or weren't the deserving uh um recipients of their their arms, this wasn't possible anymore. So people started having to try and sort of organize and develop structures for for philanthropy. Um and this is where you get the birth of kind of charitable associations and voluntary organizations. The other thing that happens is because the nature of poverty and need changed over time, many of the older charitable trusts that had kind of proliferated throughout the medieval and early modern period um started to look less relevant, if not downright redundant, because they had very narrowly defined purposes. And as a result, when you get to the 18th, to the 19th century, sorry, there were pretty widespread sort of concerns and criticisms that there were all of these um Tudor trusts and kind of parochial trusts in London in particular, where there was lots of money tied up in them, but it was virtually impossible to spend any of that money because they you know the purposes with which they'd been set up were so kind of irrelevant to the needs that there were in London at that time that the money was just going to sit there potentially forever. I mean, as an example, there were reportedly things like there was a fund that was set up where the money was spent on keeping a lamp lit on a particular street in in London, um, at the corner of Billingsgate, I think, um, pretty much forever. There was one that was a fund spent for killing ladybirds on the street of Cornhill, and possibly apocryphal, there was a fund that was uh there to buy um bundles of firewood that were to be used to burn heretics, um, which obviously by the 19th century was kind of less useful than it might have been in the 16th century. As a result of this, campaigners, most notably a man called Sir Arthur Hobhouse, kind of started to call for what they saw as the dead hand of the donor, um, this you know, the force where the wishes of past generations and past donors was allowed to kind of dictate how money was spent in the present to be overthrown. And in the case of these parochial charities, they was they were successful actually, and these parochial charities were sort of broken open uh and put together into a new um single fund that was then able to give uh money out, and this also, um, as a sort of side note, led to the creation of the modern incarnation of the charity commission. Um, and we'll come back to to the dead hand in a bit because that's quite an important, sort of wider uh theme within the the story of Foundation. Rushing ahead a little bit, let's shoot forward to um the start of the 20th century, and this is, I think, where we get one of the other really big turning points in the foundation story. So the the the foundation and sort of charitable trust model had not really taken hold in the US for for a long time. The US, I think, because of its kind of roots in Protestantism um and particularly in sort of dissenting forms of of Protestantism and Puritanism, had a Quite different view of uh voluntarism and charity that was quite resistant to structure and sort of formalization. Uh, and actually, foundations were seen as sort of highly uh problematic. This changed um initially, kind of the when the the model of the charitable trust as it sort of existed in in the UK and Europe was was imported. Particularly an important person here is George Peabody, the financier in the sort of late 19th century, who created Peabody Fund, which uh gave money to sort of education causes in America. And this uh still had a specified purpose. So it was you know essentially kind of you know tentatively allowing something that looked like um the charitable trusts as they existed in the UK at that time to come into the US. But what happened then is um, as many scholars have noted, a somewhat kind of surprising and uh you know unprecedented development, which is in the early 20th century what you get is not the development of more and more of these trusts with specified purposes, but the creation of an almost entirely new form of entity, which is the the open-ended foundation. And this is um the story here is essentially you know the one of the creation of the Rockefeller Foundation, is the sort of big story here because John Rockefeller wanted to create an entity that he could use to continue his philanthropy after his death. This was, for various reasons, resisted pretty strongly by the federal government, and actually Rockefeller was unable to charter his foundation, so to get it kind of legal status at a at a federal level. Um instead, he ended up having to charter it in the state of New York and was successful in doing so. But the the the uh remarkable thing is that in doing so, the um purposes of that new foundation were specified incredibly generally. It was just for for you know the the betterment of mankind, essentially was, you know, the the foundation was allowed to do anything that kind of met that very, very broad aim. And it's really interesting that like quite a few um academics have noted that this was, you know, just basically kind of came out of nowhere. So um Barry Carl and Stanley Katz, sort of two eminent uh historians of philanthropy in the US, so they say so, although the philanthropic trust seems obvious in retrospect, it was both unlawful, given the standards of British and American trust law, and unforeseen at the moment it sprang into multiple existence in the first decade of the 20th century. The philanthropic foundation thus represents the fusion of a traditional charitable organization, ancient methods for the perpetuation of family wealth, and novel social, legal, and intellectual ideas. And um Anhyron Toppler also say that given the significance of this new orientation of foundation work and the large amount of resources that went into it, the first of these foundations came to symbolize a new era of institutional philanthropy, pushing the more traditional aspects of foundation work to the background. And so the point is here that this was something that was really quite surprising. Actually, just one more quote on this. So um Anheyer and Leet uh in another paper on foundations, um, they rather sardonically say that the the remarkable achievement of 20th century US philanthropy was to modernize a basically European institution that had been discredited twice. So the point is here that actually at the point where the foundation, the general purpose foundation, uh emerged in the US and became the thing that sort of set the template or the paradigm for big philanthropy as we understand it today, this was absolutely, I mean, not only was it not, you know, uh a given that this would happen, it was actually remarkably surprising because this this idea of a foundation or a trust with a very sort of broadly defined purpose was literally, you know, ran counter to British and American trust law as it stood at the time. So these things probably shouldn't even have been seen as as legal. But just once it once this precedent had been set, it became something that was clearly so appealing and had sort of sort of such a self-evident appeal to um major philanthropists that it very quickly sort of proliferated and became the norm. And you know, as we'll see, that that was uh something I think that's had a huge influence on philanthropy um ever since. We should know, of course, that just because um this general purpose foundation model proved successful, we shouldn't think, oh well, it was uncontroversial at the time, and that people just didn't really notice this and then quietly um let it go. Going back to Rockefeller, there were congressional hearings held um to consider Rockefeller's application to set up his foundation in the first place. And you've got people like so the Reverend John Hayes Holmes famously said when testifying, he said, this foundation and its very character must be repugnant to the whole idea of a democratic society. And similarly, I mean there's a fascinating article I came across in a the Springfield Republican newspaper in 1910 when Rockefeller's plans to establish his foundation became known. And it's an amazing article because they may they essentially outline a lot of the arguments that have subsequently been levelled again and again against big money foundations. But they say uh just as the enormous influence of the monasteries in the Middle Ages was based largely upon inalienable property and its usufruct, so its its use or the use of kind of the money that comes from it. So these private incorporated foundations living forever would attain an influence antisocial and anti-democratic to an extraordinary degree. With financial power would go the determination to shape and direct, and thus the benevolence and the charity of a society whose future needs and aspirations we cannot forecast would be controlled by the sinister influence of the dead hand. So there's that dead hand idea again. So essentially there was a lot of concern at the outset about the creation of these huge general purpose foundations. The thing that sort of made the difference, perhaps, and quietened down some of that um that concern was the the outbreak of the war, so certainly the first world war, that um there were various foundations, particularly Rockefeller, um, that did quite a lot of work following the First World War in giving money for the rebuilding of institutions in in France. And by the 1920s, um, another quote saying, you know, by the 1920s, it was generally accepted that foundations were doing good, and it wasn't really uh until the very different years following the second world war that they encountered a new wave of public suspicion. So actually, throughout the 1920s and 1930s, everybody broadly sort of got on board with foundations, whether grudgingly or not, and you know, into the the second world war again, they were seen as kind of an important part of the picture, and then the point at which we just need to pick up the story a little bit, because it's the the last really important bit, um I would say, in a way, is post the second world war. So in the US, here you've got remarkable growth in the foundation sector in the 1940s and 50s. So there's a I found some data from the Foundation Center from 1983, and that shows that the number of large foundations, so those that have over a million dollars in assets um or at least $100,000 in annual grants, so that the number of those went up from 367 at the end of the 1930s to over 2,000 by the end of the 1950s. And the thing that was sort of partly driving this, or largely driving it, was that the tax uh regime at the time allowed people to give large volumes of corporate stock uh into uh these foundations and then essentially still retain control over the foundations. Um, and particularly the foundations were uh allowed essentially to become the sort of major shareholders of companies. Um, and the person who pioneered this was Henry Ford um and his son Edsel, and it was basically a kind of tax avoidancy uh wheeze. So in Ford's case, they gave over large amounts of the stock in the Ford Motor Company to the Ford Foundation. The family still retained control of the the Ford uh foundation and were therefore able to retain strategic control over the company as well. And this is where that question of the independence of foundations becomes uh somewhat tested. And this uh, you know, people started to look at this and say, hang on a minute, this doesn't seem okay. And particularly there were a few people within government at the time, most notably um a not very pleasant man called Wright Patman, who was a Democratic uh congressman and a sort of avowed segregationist, but who also had an enormous B in his bonnet about um foundations and sort of campaigned for 15 years or more on this. And he was eventually, through his persistence, kind of successful, um, or was a large factor in the passage of the 1969 Tax Act um in America, which was a huge sort of turning point in um the philanthropic landscape there and often sort of traced as the creation point of the sort of modern US nonprofit sector, um, because this is where there was a new legal form for private foundations was created. So a distinction between sort of operating or public charities and foundations. And then these new private foundations were subject to new rules, including limits on their ownership of stock from a single company, and also uh eventually um mandatory requirements to pay out a certain uh amount of uh or certain percentage of their assets in the form of grants each year. Now I'm gonna leave the history bit there because I've inevitably run longer than planned, um, but also because I think that gets us close enough to where we need to be in terms of understanding the modern day context. Um, there are other things that can be said. There's the whole story of kind of community foundations as a different model, um, but I might come back to that and do uh a whole podcast episode on that, looking at community foundations. Similarly, there are things like donor-advised funds, which are a big uh point of controversy these days, uh and again have their own story. But let's park those for now. In the next section of the podcast, I just want to pick up on some of the themes that have emerged through this uh historical narrative and highlight why some of those are still kind of important debates about foundations today and kind of how we should understand some of those debates. So stay tuned for that. Okay, well, if you made it uh this far, I'm gonna assume you've got a certain tolerance for relatively long uh podcasts, but even so, I'm gonna try not to outstay my welcome too much. So in this final section, I just want to run through some of the kind of key themes I think that we can determine from the history of foundations, as we've outlined it in the last section, and from current debates, just to get a sense of what some of the most important issues maybe have been and and still are when it comes to the question of foundations and their role in society and their kind of underlying legitimacy. Um so one of them that we alluded to in the in the last section a couple of times, and I think is really important to flag up, is the question of concerns about the dead hand of the donor and uh perpetuity when it comes to endowments, particularly. So the the point here is that the concern really is that foundations um provide a means for enshrining the wishes of an individual or a group of individuals or a family in a structure that then is allowed to sort of persist through time and have what some would see as a kind of undue and unjust influence on future generations. So, as I as I mentioned, there have been various people who've sort of uh critiqued um foundations from this point of view. You can start really from uh around the time of the French Revolution and the um economist and Robert Jacques Turgot, who uh outlined a kind of critique of foundations along precisely these lines and sort of saying that their legitimacy had to be questioned because allowing um people now to influence the lives of those in the future like this was entirely unwarranted. And then you have people like the campaigner Sir Arthur Hobhouse, who made this um argument very stridently in a book, uh series of lectures turned into a book called Um The Dead Ham. And Hobhouse wrote, quote, it said, uh to me it seems the most extravagant of propositions to say that because a man has been fortunate enough to enjoy a large share of this world's goods in this life, he shall therefore, and for no other cause, when he must quit this life and can enjoy his goods no longer, be entitled to speak from his grave forever and dictate forever to living men how that portion of the earth's produce shall be spent. Um so obviously Hobhouse was very much kind of against these things and felt as though perpetuity for endowments was hugely problematic. And interestingly, there have been other um kind of donors who have uh agreed with him. So not always, you know, hugely common, but they've been there throughout the history of the of philanthropy. Certainly in the early 20th century, there was an interesting sort of strain of fairly kind of radical progressive donors, and one of the aspects of their philanthropy tended to be that they didn't believe uh in kind of perpetuity, and so they set up limited life foundations. So you have people like um the Jewish philanthropist Julius Rosenwald, who set up uh a philanthropy, uh set up a foundation with a limited lifespan. Um and he wrote uh a whole essay in which he made it clear that he was um opposed to gifts in perpetuity for any purpose. And he said, you know, charity tends to do good, but perpetual charities tend to do evil. And there were other examples like Charles Garland, who um was a donor in the early 20th century who set up a thing uh called the uh American Fund for Public Service or the Garland Fund, and that was limited life. Uh also George Eastman of the Eastman Kodak Company, uh, he famously uh said, I think one of the pithiest quotes on perpetuity said, uh men who leave their fortunes to be administered by others are pie-faced mutts, which I really like. Um so obviously this question about the dead hand has been a sort of big concern, and it continues to be one today. So um there's a real debate at the moment about whether perpetual endowments are problematic and what the solution to that should be. And often this is sort of tied into uh a debate about whether foundations should be made to spend down their endowments or uh have kind of lifespans imposed on. And interestingly, what we're seeing is an increasing number of donors, certainly sort of younger next generation donors, when they set up foundations, are looking to do so with those limited lifespans uh in mind. But this reflects, as I say, kind of very long-standing concerns that have been around for a very, very long time. Um, another point of debate about foundations is around taxation. We mentioned that one of the kind of key features of modern foundations is that they enjoy tax advantages, uh, both themselves in terms of not being subject to certain taxes that for-profit entities would be subject to, and also in terms of donations to foundations receiving favorable tax treatment. Um, and this is a point of debate, I guess, because a lot of time, you know, concerns about the role of foundations in society hinge to some extent on an argument that, well, you know, these things, if they were just existing independently and rich people were using their own money to fund them, well, that might be fine. But what's actually happening is that they're subsidized by the public purse through the tax system. So we all have a stake in uh in kind of how that money is used. Um and this raises questions about whether something needs to be done at all about that tax treatment, from those who might argue sort of most radically that foundations should receive no tax benefits whatsoever, through to others who might argue that they should be allowed potentially to retain some measure of tax uh benefit, but that that might be set at a lower level or capped in some way, or that those tax benefits should come along with new demands or requirements, whether that's in terms of accountability and transparency, so they have to report more, or to demonstrate that they are having an impact, or whether it's in terms of the amounts of money that they are required to spend in any given year. And so this then sometimes becomes sort of tied up in uh conversations about whether there need to be mandatory payout rates, which, as we mentioned at the start of the of this episode, there are in some places, most notably the US, but also Canada and Australia, but there aren't in other places like the UK and and others. And you know, there are some who would say that that is uh something that we should be looking to replicate um here in the UK and in in potentially other European countries. Then another big theme of debate about the role of foundations, or maybe a couple of different themes that are linked, are well firstly one about risk and innovation and the degree to which the legitimacy of foundations arises in part or primarily from their ability to take certain risks and their role in driving societal innovation. Often, when people are kind of pushed on what it is that justifies philanthropy as a whole, but particularly foundation philanthropy and the kind of continued existence of endowments and perpetual endowments in philanthropy, they will reach for some version of the argument that these things have value because philanthropy and uh foundations are kind of not accountable in the same ways that the public sector or uh organizations in the commercial world are, they're therefore able to take certain different types of risks, they're motivated by different types of goals, and that this is an important part of the continual process of innovation that might kind of drive society forwards towards new milestones of social progress. In the words of the um the director of the Carnegie UK Trust when he was giving evidence to a parliamentary committee in 1952, it's the business of charitable trusts to live dangerously, which is a quote that I absolutely love. And I think there's a lot in this. I think lots of uh sort of foundations and philanthropists would accept that to some extent the role of you know foundations and philanthropy is to drive innovation in that way. But I guess this raises, well, a couple of questions, two main ones to my mind. I guess firstly, what do we actually mean by innovation? I think sometimes this comes down too simply to just doing new stuff. I think, you know, doing new stuff and experimenting is an important part of it. But is there also an argument that to some extent, you know, it's innovative to defend things that we already have, for instance? You know, this is certainly the case in somewhere like the US at the moment, where there are lots of kind of hard-won elements of social progress that are under threat or have even been kind of reversed in recent years, and actually is part of the role of foundations to defend some of those previous uh innovations and developments. And also, is there something innovative about just doing stuff that already works? You know, is is it a legitimate role of foundations to kind of continue to fund things that aren't necessarily new but are important and which work? Or would some people argue that at some point or other, if those things genuinely are important and that they work, they should be taken on by the state or some form of market mechanism and philanthropy should move on to something else and see itself only as a kind of uh catalytic force? I guess the the other point about uh risk taking and innovation and and foundations is whether the reality always matches up to the theory, even if the the theory is that the legitimacy of foundations comes in large part from their ability to take risks and drive innovation. How much of what foundations actually do meets this criterion? Are foundations currently taking sufficient risks and being innovative enough, or are they actually, in too many cases, playing it safe? And I think there are plenty of critics who would argue that it's the latter. Linked to this is, I think, another really important element of the debate about foundations and a kind of important debate about philanthropy more widely, and one that we've covered in an entire episode before on this podcast. Um, so I won't go into it in as much detail here. But this is the debate about pluralism and whether part of the strength of philanthropy and you know, particularly foundations, is that they are able to support the development of a wide variety of different points of view and ideas, and therefore provide the sort of raw material for a conversation or a debate between different values and ways of seeing the world that then leads towards social progress. The classic statement of this idea comes from uh the philosopher John Stuart Mill, um, who wrote an essay on endowments in 1869, and he said, endowments are a precious safeguard for uncustomary modes of thought and practice against the repression, sometimes amounting to suppression, to which they are even more exposed as society in other respects grows more civilized. So he thought this kind of uh endowments in particular were a kind of uh a safety valve or a bulwark against what he saw as the tyranny of the majority that can come uh in a democracy. And there's been a lot of debate about this um, you know, uh since then. I think there are people, again, who would buy this argument uh in principle uh and say that actually, you know, yes, that that works in theory, but in practice the danger is that it assumes that there is a balance between uh people who are sort of motivated in in different ways. So that you have genuine plurality, whereas in reality things tend to skew in one direction or the other. So Ben Whitaker, who wrote a great book in 1974 called The Foundations, he put, I think, this concern very neatly. He said, you know, a convincing rationale for foundations requires more than the standard incantations regarding the virtues of pluralism and innovation. All good philanthropoids recite on arising and retiring. A conviction that the theoretical concept of independent foundations is a potentially beneficial is not the same as believing that their present operation should not be drastically improved. Currently their efforts are too often open to the criticism that they're principally used merely to lubricate the machinery of the status quo, for almost all the people who control foundations belong to segments of society whose privileges predispose them to be basically satisfied with its present structure, and indeed frequently have a vested interest in preventing any serious, really radical reforms. So, you know, Whittaker there making an argument that I think we hear very much today saying that actually, you know, the problem in being naively assuming that allowing a sort of plurality to exist in the form of foundations assumes that you will have foundations that represent all points of view across the political spectrum, including ones that are relatively radical and kind of push for radical reform. I mean, interestingly, there is perhaps more of a sense these days that there is that genuine kind of philanthropy and those sorts of foundations out there, um, and that perhaps they are becoming a more significant part of the overall landscape, but I still don't think we should necessarily get carried away. I think the other point of view is that the uh the other point to be made here is that the debate about plurality has got much more polarized and divisive in recent years. I think there was a consensus up to a point for a long time, um, certainly in the US and in other places, that broadly pluralism within philanthropy was a good thing, or at the very least, you know, it came at a price that was worth paying in terms of allowing things that we might disagree with to exist, as the cost of allowing those things that we do think are important to be funded and supported through philanthropy. But I think uh, you know, that consensus is increasingly under strain because there are lots of people these days who would argue that actually, no, we shouldn't allow that kind of pluralism and that there is such a thing as legitimate or good philanthropy, and there are other things that represent illegitimate or bad philanthropy, even if they aren't technically illegal, and that actually we should constrain the bounds of philanthropy to leave in the things that are good and exclude the things that are bad. But obviously that is um difficult uh because that you know the can the conception of what is good or desirable and what's bad or undesirable is is subjective and depends on your point of view. Um, and I think there are people who are less willing to sort of allow the continued existence of uh foundations that represent points of view that they disagree with to exist as part of that necessary price of plurality. So I think you know this is a really kind of live debate. And linked to that, I guess to some extent, is the wider question of whether or not uh philanthropic foundations, particularly endowed ones, are things that we should be comfortable with allowing within a democracy. And in part, this goes to those questions about pluralism, because it's partly about whether you think that they allow uh people with points of view that you disagree with to um exert undue influence uh on society. But more broadly, I guess the point is whatever the point of view being represented by a foundation, whether it's one you agree with or disagree with, actually is it just problematic fundamentally to allow individuals or kind of unaccountable institutions to represent centres of power that are able to hold that sort of sway within a democracy? I think David Callahan makes a really good point in his book, The Givers, which came out in 2017, about the necessity of making sure that we're testing our ideas about philanthropy and about foundations, not on the basis of whether or not we agree or disagree with the particular cause or with the particular donor in question, but more on that sort of fundamental point of principle. So he says, when donors hold views that we detest, we tend to see them as unfairly tilting policy debates with their money. Yet when we like their causes, we often view them as heroically stepping forward to level the playing field against powerful special interests or backward public majorities. These sorts of a la carte reactions don't make a lot of sense. Really, the question should be whether we think it's okay overall for any philanthropists to have so much power to advance their own vision of a better society. And I talked about this in much more detail on the in the episode on pluralism, but I think this then ties into the question of whether philanthropy enjoys a sort of broad base of support and represents a sort of genuine means of allowing minority views to have representation within a democracy, uh, in which case I think it is an important counterweight to the potential tyranny of majority that you get in a sort of straightforward exclusive uh electoral democracy, or whether you think that it is something that allows a very small kind of elite to exert an undue influence, or is something that could be subverted by those with wealth essentially to serve their own self-interests. Um, I think the reality is it can be both, obviously, and I would be sort of uncomfortable with going to one extreme or the other, but I would absolutely uh agree that there needs to be much more scrutiny of the potential challenges that come through the influence of sort of dark money on the political process and potentially more safeguards and limits placed on uh on some of that. And maybe if that comes at the cost of kind of constraining the freedom of philanthropy or foundations more broadly to influence uh the policy sphere, it might well be that that is a price worth paying, but it's absolutely not a kind of question or debate that we can just bury our heads in the sand about. And then there are just a couple more, I think, key themes that we can see throughout the history of foundations and that are still important today. One is concerns about the sort of inherent lack of transparency that there is in foundations. I know it sort of was at one point a well-cited uh statistic in the US that I think something like 90% of foundations didn't have a website. Now, obviously, that figure may have changed a bit, but I I'm pretty sure I've seen a recent version of it. It's still a surprising number of foundations that don't have any sort of public online presence. There are obviously reporting requirements that come with setting up an independent entity like a foundation. Certainly in the US, you have to report to the tax authorities. Here in the UK, um, you have to report to the charity commission and to HMRC, but there isn't a huge compunction above and beyond that. Uh, and there's, I think, a suspicion that in many cases, um, or in some cases at least, that foundations and the fact that they are at arm's length from individual donors are used in a way to sort of hide the identity of those donors. Now, that sounds quite pejorative. I guess the other way of framing that is that sometimes donors want a certain degree of anonymity, perhaps for religious reasons, or perhaps because they don't want to be subject to lots and lots of fundraising asks, or perhaps even because they want a certain level of humility and sort of not to center themselves and their name and their family's name, you know, when they're doing their giving. So there's a whole range of reasons why you might want to not necessarily be kind of as you know open or transparent about uh your philanthropy as some might demand. That being said, I think all of the uh things that we've talked about in terms of questions about the legitimacy of philanthropy within uh democracy and within our society, tax advantages given to it, I think do give grounds for making a fair argument that there's a certain degree of openness and accountability that we might be uh kind of reasonably entitled to demand of foundations. Um, and also, I guess, more pragmatically, that having that openness might make it easier to sort of make philanthropy more efficient at a macro level or or kind of better coordinated. And that's where there are interesting initiatives and things like 360 giving in the UK, um, where using the power of open data to kind of make it possible to see where grants are going, um, is you know, potentially kind of opening up new avenues for making philanthropy more effective. There are obviously separate questions then on the side of where the money comes from in the first place, which we'll touch on in in a moment. But you know, it this this degree of openness I think could go a long way towards kind of overcoming some of the concerns about inefficiency and philanthropy, certainly. I think it's worth saying also that even if there are concerns about foundations um not being as transparent as some people might want, part of this debate is about you know being careful what you wish for, because actually the the even the minimal demands that are made on uh foundations in terms of transparency and openness uh aren't necessarily the same when you look at other models that people could be using to do their philanthropy. So donor advice funds, for instance, um, one of the key elements in debates about those that we will probably come on to at another in another episode of the podcast, is that actually they're even less transparent than uh kind of standalone philanthropic foundations. And increasingly there is a trend towards certain types of donors, particularly sort of elite donors from uh you know tech background and from Silicon Valley, to use entirely non-philanthropic vehicles for their giving, things like um limited liability corporations or LLCs. And part of the concern about that is that those are much less transparent than you know any form of foundation would ever be. So I think there's a whole debate about uh transparency that's important to take into account. One of the other things that I just wanted to flag up is concerns about imbalances of power. Now, this is obviously pretty sort of inherent to philanthropy in the broadest sense. The concern that there is an imbalance of power between the giver who has resources and the recipient who is in need of them is something that has uh kind of run throughout uh the whole history of philanthropy at all levels. But I think when it comes to foundations, the fact that they're a sort of institutionalized form of giving at a fairly high level, as we we talked about at the beginning of the podcast, means there have always been kind of particular concerns about the uh power imbalance that's sort of contained within the relationship between foundations and those that they give grants to. And I guess what's interesting about that is the extent to which some people, some donors and some people working in foundations have always been aware of that and what they have tried to do to address those concerns. Um so there's a kind of interesting long history of people taking more radical approaches to foundation philanthropy, um, whether that's by uh limiting the lives of those foundations, as we've talked about already, or whether it's by doing things like adopting a participatory approach where you bring in people who would have traditionally been seen as recipients of grants to make decisions about how those grants are distributed in the first place. Um and there are interesting sort of historical examples going back to the early 20th century, but there are also kind of a growing number of more radical approaches to philanthropy that we're seeing today from funders like uh Mackenzie Scott or people like Leah Hunt Hendricks, um, who I've written bits and pieces about, um, and who I'm sure at some point we'll do a whole podcast about as well. And then the final thing that I just wanted to talk about, which is another topic that we've covered in more detail on a separate episode of the podcast, is the question about where the wealth comes from in the first place. Now, again, this is not specific to foundations, but I think it tends to be felt particularly keenly in the case of foundations, because they are more visible and that they're that institutionalized form of philanthropy. And also because they, because of the perpetual nature of endowments, they're able to exist over that long period of time. That means that you're more likely to get questions asked about the origins of wealth, because over time there may be sort of you know views about what is an acceptable way in which to make money uh evolve and change. And so people look back and ask questions about you know whether we should be comfortable with sources of wealth that in the past might have been seen as acceptable. Obviously, there are sources of wealth that you know at no time were seen as acceptable by everyone, and the most obvious of those is the proceeds of slavery and other kind of extractive practices, or or the sort of broader proceeds of colonialism. And there are big debates at the moment about whether those sort of historic sources of problematic wealth and the way in which they have fed into the creation and the sort of perpetuation of the endowments of certain um philanthropic entities, you know, what we should do about that. Is it enough just to acknowledge them, uh, you know, to say sorry? Should we take, you know, the names of some of those problematic donors of the past off the institutions that they funded or the foundations that they set up? Or do we need to look beyond that and start questioning whether you need to adopt a reparative approach to philanthropy that's partly about sort of addressing the harms that were made through the creation of that wealth in the first place? As I say, these are big questions that I'm not going to go into now, but um, you know, we've talked about this wider question of tainted donations and the idea that some sources of wealth are so morally uh dubious that it's not possible to do good by giving that money away on a previous podcast. But I just raise it here because I think it's an important part of all of the wider debates about foundations today. Okay, well, I think that brings us to a close. You know, we've run pretty long there. Um, but hopefully you found all that interesting. Um, I think actually, you know, it's one of those topics that might seem a bit dry because you're talking about a sort of organizational or legal structure, but actually it's an interesting lens through which to ask some pretty sort of fundamental questions uh about not just philanthropy, but about how we want society as a whole to function, how we view wealth, how we view responsibility, and all these kinds of things. Um, so you know, I think it's a really interesting topic to dig fairly deeply into. And if you're still here at this point in the podcast, uh, I'm assuming that you agree, or at the very least, that you fell asleep and my voice was uh sufficiently sonorous to keep you relaxed. If you want uh to find out more about any of the stuff we were talking about in the podcast, um do dig into the show notes. I'll put some links there to places where you can find out more, um things that I've written, things that other people have written. Uh if you're interested more broadly in these kinds of issues and deep dives into topics around the history of philanthropy and current debates, do check out the website at whyphilanthropymatters.com so you can find all that kind of stuff, as well as all the back issues of this podcast uh and lots of other bits of content there. So there's plenty for you to get stuck into. Uh, if you want uh shorter updates, do follow me on social media. I'm mostly operating on LinkedIn these days, so you can definitely find me there. If you've got ideas for people that I could talk to on the podcast or topics you'd like to see me cover in future deep dives, do drop me a line by email. You can find that at the website. Uh, and I do promise that uh I do actually act on these. Various people have got in touch uh over the past couple of years with suggestions, and I've very much followed up on them, and they've led to some great episodes. So please do uh do that if you have ideas of your own. Other than that, just like, subscribe, uh, tell all your friends about it, leave us a nice review wherever it is that you get your podcasts, and I will see you next time.

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Bye.