I’ve been wanting to comment on a couple of older stories because I think they offer some insight into the current state of institutional philanthropy. The Attorney General of Michigan, Mike Cox, is “investigating” the Ford Foundation for not giving away a larger percentage of its funding to organizations in Michigan. Ford, although located in New York, was incorporated in Michigan, and with the Michigan economy in the toilet, Cox and other politicians are searching far and wide for any strategies to pump money into the state’s economy. Of note is that Cox is up for re-election and this makes a handy “woe is we” campaign issue.

In this same vein, two Michigan legislators, one from each side of the isle, have proposed legislation that would require private foundations in Michigan to provide half of their grantmaking each year to Michigan-based nonprofits. Crazy. But true.

In addition to the Michigan’s economic challenges, there are, I believe, two reasons why these sorts of things bobble up from the ocean floor. One is uninformed politicians looking to make a quick score in campaign season. If Cox and his friends have their way, they’ll do more for the Michigan economy than just the new money being pumped in by private foundations; they’ll need to create a new regulatory bureaucracy to ensure 1] Michigan-based nonprofits aren’t utilizing the donations to benefit those in other states [after all, what then would the point be?] and 2] track the legitimacy of all the new nonprofits set up to cash in on the windfall. Not to mention the fact that, if the legislation were to pass, any foundation in the process of being established would likely think twice about incorporating in Michigan; just across the border in Illinois or Indiana would grant considerable more grantmaking freedom.

The other, more important, reason, is private foundations' inability to communicate effectively to legislators -- and the public -- about exactly what it is they do. Schambra gets it right in his comment in the Chronicle of Philanthropy story:

"Like most of my colleagues in the foundation world, I, of course, worry when state A.G.'s start wielding political clubs like this," he said. "But I think foundations have brought it on themselves. Too much empty rhetoric about 'facilitating global-change processes' with precious little to show for it," he said.

As a result, he added, "the folks back home in the old neighborhood have even less to show for it."

This legislation is likely headed nowhere, since you can be assured foundations in Michigan will make sure it's lobbied into extinction. But its introduction is another example of how foundations, while publishing forests worth of annual reports and magazines and creating more sophisticated Web sites, are still well short of the finish line when it comes to effectively communicating about their missions and activities.