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The duty of privilege — and the role of foundations in solving problems

Foundations enjoy a privileged role in our society. In exchange for tax exemption and a charitable deduction for the founder (such as Hill, McKnight, Bush), what do foundations “owe” society? And how might foundations be more effective in carrying out this duty?
 
Minnesota has about 1,400 grantmaking foundations, with assets exceeding $20 billion. In 2007 they made grants of $1.3 billion, which is about 5 percent of their assets. Minnesota foundations give about 25 percent of all private gifts.
 
Minnesota’s foundations prided themselves on being at the forefront of national philanthropy. Indeed, leaders like former Gov. Elmer L Andersen set the standard of excellence in his role as corporate executive, publisher, chair of the Board of Regents, as well as the Bush Foundation. As a public servant, he inspired so many of us to “make something” out of this mountain of financial resources that we were entrusted with. He had a gentle way and a gifted mind. To have known Elmer was to have glimpsed greatness in action.

I once asked him, “Why did Minnesota become such a good state?” Without a pause, he demurely shared a great secret: The immigrants who came to Minnesota worked hard, deferred their own gratification and invested those dollars into the institutions that would create a better future for the next generation. His examples were the 18 private colleges, the University of Minnesota, Fairview Hospital, public schools, and scores of human-service agencies that helped people to survive. Elmer realized that tough times drove people together! To survive, you had to share. Work together.
 
Reasoning together
His hero was Erasmus, the Dutch scholar and theologian. “Why?” I asked. His response: “Because he got people to reason together to find a solution.”
 
Today, we need an Erasmus, and foundations just might be the force and source of reason that points the way to a better future for our communities and state, and perhaps our nation.
 
Foundations cannot attempt to influence legislation or elections. Fair enough. But they can produce the facts, knowledge and expert opinion to educate the public, including public officials. Here are just a few issues that beg for a clear, incisive examination:
 
• Why have city centers like St. Paul deteriorated over the past 50 years, and more important, what can be done to re-establish them as vibrant centers for business and residential living? Forgoing the “blame game,” could a task force of business executives, public leaders, citizen-servants study this critical issue, and with the assistance of a university, issue a set of findings and recommendations for action?

• With unemployment pushing 10.2 percent (and this statistic fails to include self-employed, part-time and discouraged job seekers) how do we get thousands of handicapped or disabled people back into the work force? How might they be a vital asset instead of a drain on state resources? If you talk to leaders within the agencies serving the disabled, you will hear a chorus of frustration that state funding policies are inconsistent, contradictory and often counterproductive. We need leaders like Jim Frey, himself a wheelchaired person and president of his family’s foundation, to pick up the reins of leadership and play the role of Erasmus: Come reason together to better utilize shrinking state funding.

• George Pillsbury, the 88-year-old member of this state’s most distinguished family of public servants, took up the cause of the unicameral legislature. This raises the overarching question of how local and state governments are structured to provide effective and efficient service. Do we really need 87 counties? Or hundreds of townships in rural areas? Perhaps we did in the days of horses and a buckboard to vote at the town hall. Today is a new day.

• Why do we have city police departments that are within a sheriff’s jurisdiction? Wouldn’t a consolidated and coordinated department be more effective and less costly? And why do fire departments run ambulances? Could private operators provide equal service at no cost to the property tax payer? Is there a better way to govern the metropolitan area? Do we really need in excess of 300 separate jurisdictions?
 
A model for others
Given these issues that affect the future of our communities and state, are foundations up to the task? At least one example stands out, and could be a model for others. The Wilder Foundation has distinguished itself — thanks to the leadership of Len Wilkening and, more recently, Tom Kingston, to study and track the plight of homeless people. This issue is before us because of Wilder’s unrelenting and tireless work. Good going! But we need many enlightened foundations to take up an issue and bring it to public attention.
 
All of the issues mentioned above are manageable. Better practices, better policies, better solutions can be devised and implemented, with cost savings, improved living conditions for people facing hardship.

Foundations could be the catalyst to make it happen, IF their boards and staff step up with courage, persistence and a collaborative approach to funding. In so doing, they will surely advance the public well-being, which is the sole reason foundations are tax exempt and received the charitable deduction.
 
Paul Olson served for 35 years in foundation leadership roles, ranging from senior program officer at the Hill Family Foundation to 25 years as CEO of the Blandin Foundation. He serves on the University of Minnesota Medical School Board of Visitors and is a volunteer with Minnesota Diversified Industries. He is a founding member of Norway House.

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