The Foundation: A Great American Secret; How Private Wealth Is Changing the World

Few books on philanthropy merit the accolade "instant classic," but The Foundation by Joel Fleishman has all the ingredients to be considered just that — especially by those whose work and lives are directly affected by foundations. And as Fleishman, a professor of law and public policy at Duke University, makes clear, that means most of us.

Indeed, readers unfamiliar with the many roles foundations play in society will quickly learn how versatile foundations can be, whether driving a brand-new initiative, partnering with others, or serving as a catalyst by scattering seed funding among promising projects in the hope that one or two will take root and produce lasting change.

Throughout the early chapters of the book, Fleishman explores themes of effectiveness and efficiency. To be effective and efficient, he writes, foundations need to employ decision-making processes and progress-checking systems that increase the impact of their funding. To be strategic in deploying their resources, they should focus on problems that are ripe for solution while retaining flexibility in how they respond to unexpected opportunities. But regardless of where a foundation decides to focus its efforts, success should always be the goal. And to be successful, an initiative should provide major benefits to the public, expand knowledge in a particular area or field, catalyze social change, take an initiative to scale, and/or help a grantee find a new path to greater effectiveness.

Unfortunately, Fleishman argues, many foundations behave as if they don't care about success behavior, he notes, that is at cross purposes with the social-benefit mission used to justify foundations' existence as tax-exempt entities in the first place. He bases his observation on the reluctance of many foundations to share information about how they decide which goals to shoot for and the strategies they use to achieve them, as well as on the lack of public — and, often, private — analyses of those initiatives, whether successful or not. "Those foundations that are truly interested in using their resources in ways that will have the greatest positive impact on the world around them," says Fleishman, "should study the stories of the most successful and effective foundation initiatives. They provide models for the future success stories that others in the foundation world should aspire to write."

To buttress his argument, the middle section of The Foundation offers a dozen case studies of high-impact initiatives — selected from the one hundred prepared for a companion volume that is , free of charge, from the Duke University .

Calling attention to the talented leaders who shepherded initiatives through to completion and to the fortuitous match between the nature of the problem to be tackled and the judgment, experience, and discipline of the individuals who took on those tasks, Fleishman and his graduate students present a dozen synopses of foundation successes, starting with the 1906 Flexner report funded by the , which led to significant reform of medical education in the United States, and continuing with an initiative from nearly every decade of the twentieth century, including Julius Rosenwald's efforts to build schools for rural African Americans in the 1920s; Gunnar Myrdal's seminal, Carnegie-funded study of race in America in the 1930s; the 's support for the work of Dr. Norman Borlaug and his Green Revolution colleagues in the 1960s; and George Soros and the 's support for democratization and civil society in Central and Eastern Europe in the 1980s.

However, it is his assessment of foundation failures — and some are, by Fleishman's own admission, a matter of opinion — that sets The Foundation apart from many earlier books on the subject. Critics of foundations might argue he doesn't go far enough, but Fleishman does not shy away from drawing attention to foundations' shortcomings, confident in his belief that a fair, unbiased examination of foundations will demonstrate that they have indeed provided significant social benefit to Americans. "At the same time," he writes, "I am convinced that the foundation sector as a whole, as great as its social contribution is now and has been for most of its history, seriously underperforms its potential." The challenge, he adds, is "to ensure that foundations can raise the level of their performance by reducing their insulation from beneficial external influences while retaining the independence they need."

One of the ingredients of publishing success is timing, and Fleishman's has been impeccable. While he was conducting the interviews for the book in 2003 and 2004, Warren Buffett was beginning to think about giving a significant portion of his vast fortune to the Bill & Melinda Gates Foundation, already the world's largest. Of course, that gift, when announced in the summer of 2006 — along with the blizzard of media attention that followed in its wake — helped build an audience for the book beyond what Fleishman and his publisher could have expected when he began the project.

The result does not disappoint. The Foundation is sweeping in its scope, balanced in its presentation, and deeply informed by a lifetime of study and observation. Readers who only recently have become interested in the subject of philanthropy are likely to be surprised by what foundations have accomplished in the century or so since Andrew Carnegie and John D. Rockefeller created the template for the modern foundation, while more seasoned practitioners will be pleased to see foundations accorded the respect and serious treatment they deserve.