In American Foundations: An Investigative History, Mark Dowie traces the history of foundations beginning with Andrew Carnegie and ending with Irene Diamond and George Soros. (Bill Gates is mentioned only briefly, since his most spectacular high-profile giving is too recent to be discussed in the book.)

Dowie is a passionate environmentalist whose most recent book was Losing Ground: American Environmentalism at the Close of the 20th Century. He has written extensively for Mother Jones and Whole Earth. In a recent essay still available on the Web, he proffers the opinion that socialism is alive and well in Western Europe.

Although highly critical of foundations (he gives their work in the last century a C minus!), he nonetheless concludes that third sector philanthropy is and can be a viable instrument of social change.

His chief criticism of foundations is that they siphon wealth away from the tax base, where it could or might be used for the betterment of all, in favor of an agenda arrived at by one person or a small group of people, often representing the privileged class. (Ultimately he concedes that if the money were left in the hands of the government it is questionable whether much good would be done with it.) While he admits that the goals of foundations run the political gamut, from civil and human rights on the left side of the spectrum to dismantling the welfare state on the right, he notes a funding preference for established, mainstream organizations, and he fears that nonprofits may tailor their activities toward what funders are interested in, rather than taking creative risks.

On reflection, Dowie concludes that most foundations are "centrist," with the exception of a handful of well-organized foundations to the extreme right, which he credits, in part, with leveraging the Reagan revolution through their funding of "think tanks." He rates foundations high for their funding of the civil rights movement in the 1960s, low for their handling of environmental issues today. In fact, his most scathing criticism of foundations is their funding of environmental organizations with one hand, while holding stock in companies that pollute with the other. As a secondary issue, he states that in some instances foundations could do more for the common good by divesting themselves of certain stocks than by making grants. To bolster this argument, the book's appendix contains a detailed analysis of the effect of socially conscious investing on the bottom line — which, surprising to some — is not bad.

Dowie's "ideal" philanthropist is Irene Diamond, who set specific priorities, most notably AIDS research, funded it heavily, and "spent out" her endowment. (He hastens to add that spending out is not for everyone.)

American Foundations: An Investigative History is well researched, although much of the statistical data seems old. The anecdotal sections are reasonably up to date, however. Although the book is heavily researched, it is not dry reading. Dowie feels passionately about many things, and his passion grabs the reader. He does not shy away from hot-button issues — distribution of wealth, politics, the meaning of democracy and civil society.

This book is recommended for anyone interested in the history of philanthropy, as well as to grantmakers looking for new challenges (or looking to re-examine their portfolios). However, since Dowie has a definite agenda, one would do well to read other works on the subject.

For citations to additional literature on this topic, refer to Literature of the Nonprofit Sector Online, using the subject headings "Foundations-analysis" or "Philanthropy-analysis."