Key Points

As foundations increasingly grapple with the penetration of socioeconomic dissension into every facet of our country’s public culture, it has become difficult to evade the moral salience of whether philanthropic wealth aggregation and allocation reflect or even entrench the structures of material accumulation many now see at the root of declining support for liberalism across advanced economies.

This essay argues that contrary to growing internal and external anxieties about the role and legitimacy of general-purpose foundations in the United States, there is a sound theoretical expression of them as an essential institution in a liberal democracy. The core principle of this theory is that philanthropy’s exceptional status is justified by its unique ability to overcome critical limitations on our collective imaginations. It is the general-purpose foundation that, through its independence and partiality, can both take the longer view and challenge the orthodoxies of any particular societal configuration.

The theory presented here also commends a specific strategic doctrine for the general-purpose foundation: to maximize impact by investing in the production, distribution, and adoption of new social knowledge through an optimized combination of activities and assets. General-purpose foundations ought to maximize and ought to be involved in social demonstration. When program officers talk about “filling gaps” or making “catalytic” grants, they are channeling philanthropy’s distinctiveness in being able to do what others cannot or will not.

Unaccountable, privately aggregated wealth rightly elicits suspicion in an egalitarian society. And, certainly, philanthropy should welcome a public discourse in which such criticisms can freely manifest from outside its walls. But philanthropy should also arm itself, including those who draw a salary from endowments, with an affirmative democratic justification that is more than descriptive. If philanthropy will not assert for itself a morally legitimate and useful status in a democracy, then who will?

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