A Right Way To Play Santa


September 13, 1992|By SARA ENGRAM

Philanthropy is a curious business. To the outsider it looks lik sheer fun, an endless game of playing Santa Claus. But scratch the surface and the business of philanthropy is serious indeed.

Even the casual observer of the Harry and Jeanette Weinberg Foundation could get the impression that the foundation's five directors are learning that lesson the hard way.

The foundation was established in 1959 by Harry Weinberg, a Baltimore native who made a fortune in real estate. Mr. Weinberg died in 1990, and when his estate is fully settled the foundation is expected to be one of the 15 largest in the country. Currently, its assets are worth about $733 million.

A year ago, the Weinberg Foundation was the subject of a spate bad publicity. Its directors, chosen by Mr. Weinberg, seemed to have a passion for anonymity and secretiveness, traits that often raise suspicions.

Anyone controlling that much money might seem to be sitting pretty, but it's hard to sit still on hundreds of millions of dollars. And sitting still was exactly what the foundation was accused of doing when word spread that in their first year the directors -- novices at the business of philanthropy -- had awarded grants totaling only $1.9 million, a fraction of the amount observers expected. Federal law requires that, on average, foundations award enough grants each year to equal about 5 percent of the market value of their portfolio.

The foundation has allayed some of those suspicions by handing out $22 million in its 1992 fiscal year and authorizing another $40 million in future grants. Moreover, it no longer seems to regard publicity as poison.

As one observer put it, "Last year they were so secretive you wondered if they were crooked. This year they just seem eccentric."

That's progress, but there's a long way to go. The foundation still discourages contact with the public. It does have an address -- 3900 Charles St. -- but no listed phone number. It still prefers to "pre-select" its grant recipients, rather than opening itself to applications.

It's easy to see why: Money is a magnet, not just for worthy applicants but also for cranks, crackpots and other time-wasters. It's a lot simpler not to have to deal with those day-to-day hassles -- especially for an organization trying to get by on a shoestring management structure consisting only of the five trustees and one paid staff person.

That kind of management may reflect the way Harry Weinberg liked to operate. But the foundation's assets aren't his anymore. In a real sense, they belong to all of us. The kind of philanthropy embodied by private foundations exists because we, as taxpayers, have provided a way for wealthy people to shelter their money from the I.R.S. for the sole purpose of serving the public good.

Twenty years ago, Dr. Merrimon Cuninggim published a book addressing the role of foundations in American society. The title -- "Private Money and Public Service" -- tells the story. How well foundations serve the public is an issue that concerns everyone, not just the wealthy donors, the trustees or the day-to-day managers of a foundation.

Dr. Cuninggim is now retired in Baltimore after spending a significant part of a distinguished career in the business of foundation philanthropy. Like other foundation-watchers around the country, he has followed the emergence of the Weinberg Foundation with more than passing interest.

In essence, he and we are watching the education of a foundation's board. How well the members learn their lessons matters not just to Baltimore, where the foundation and three of its five directors are based, but to the country as well.

Foundations ought to pay as much attention to how they do things as to what they do, Dr. Cuninggim believes. That may mean more paperwork and maybe not quite as much whimsical fun. But it also means more accountability to the public, something that comes with the territory.

Foundations have every right to focus their philanthropy in specific areas. The Weinberg Foundation has done that by directing its grants to charities serving the disadvantaged, with some special focus on the needs of the elderly.

By specifying its interests, a foundation helps to discourage frivolous requests. But that's about as far as "pre-selection" should go.

Foundations have an obligation to communicate with the public through annual reports and other information and by being accessible. They simply don't have the right to operate anonymously or to slam the door in the public's face.

The Weinberg Foundation is a major-league endowment. Its directors carry an obligation to make sure it has better than bush-league management.

Sara Engram is editorial-page director of The Evening Sun.

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