Nonprofit Newswire | Scott McNealy on Nonprofits and Bailouts


August 2, 2010; Source: New York Times | The co-founder of Sun Microsystems has a truthful observation to make about foundations but he draws the wrong conclusion.

Scott McNealy apparently is a straight talker, at once discussing Microsoft’s similarities to a heroin dealer, another time suggesting inserting tracking chips into kids’ shoulder blades, and frequently condemning government “overregulation” such as Sarbanes-Oxley.

He’s now pitching something called the Curriki Project to provide schools with free textbooks and teaching materials.  To his surprise, he’s discovered that fundraising is tough. “The charitable class has disappeared along with the investor class and the wealth,” Mr. McNealy said. “All the foundations out there are already overcommitted.” The truth is that he’s discovering foundations and donors are still husbanding their resources.

He’s wrong however to think that foundations are overcommitted. They are only if you believe that they have to hoard their endowments. In a recession, it is a time for foundations to engage in countercyclical grantmaking, to increase their grantmaking in big chunks, because this is when nonprofits and society need more foundation spending, rather than when times are good and foundations are flush.—Rick Cohen