Cui Bono? Private Goals in the Design of Public Organizations

Who benefits (cui bono) from private foundation behavior? As a result of their social significance and public support, vibrant debates have ensued regarding how much of a redistributional ethic private foundations should be expected to maintain, with the vigor of the conversation increasing as private giving continues to grow and as more living donors wish to play a role in the distribution of their wealth. Informing this debate with research has been difficult, however, for both empirical and conceptual reasons. I address some of these challenges with nine years of rich field data from diverse private foundations and conceptual work from organizational sociology, and present a framework that enables analysis of how foundation goals inform their routines and practices.

First, I identify two varied goal orientations – public goals that aim to serve external constituents and private goals that benefit internal members of the organization – and theorize how these shift dynamically with the diachronic participation of organizational members. In this way, I contribute to emerging scholarship that challenges the assumption that charitable organizations are driven solely (or even primarily) by philanthropic or publicly-oriented objectives. Furthermore, the framework provides a model by which scholars and practitioners can examine any set of organizational routines or practices with attention to the complex interactions between private and public goals. I suggest that if we are better able to honestly examine why an organization is motivated to act the way in which it does, we increase our ability to shift behaviors to those that are more publicly or socially desirable.

Second, I present a typology of four ideal type organizations which vary in their attention to public and private goals – the philanthropic model, the minimalist model, the legacy model, and the family model. While the philanthropic model dominates scholarly investigation and popular conversation regarding the nonprofit sector, the other three types of organizations are less thoroughly understood, in part because we have lacked sufficient conceptual apparatus. The organizational types theorized here in the context of private foundations have corollaries in the broader nonprofit landscape. For example, the minimalist model is driven by an instrumental rationale to achieve a modest social goal that benefits a broader public, often with very thin infrastructure. The broader nonprofit corollary is a temporary organizational vehicle to raise funds for a particular cause or to hold a specific event. Similar corollaries exist across all four models.

Although organizational sociology has increased scholarly awareness of informal goals, it has generally maintained that these goals are primarily attained through informal organizational networks, decoupled from formal organizational structures to maintain legitimacy (Blau, 1955; Scott, 2008; Bromley and Powell 2012). This analysis suggests, however, that some foundations generate legitimacy in the eyes of their relevant stakeholders— in this case, family members—through a tight coupling between their informal goals and formal organizational structures. While DiMaggio and Anheier (1990) claimed that nonprofit organizational structures are sometimes a “drape around the organization’s informal goals,” my analysis pushes this claim a step further, finding that charitable organizations are sometimes structured precisely to facilitate informal goals. The tension between the official public goal of philanthropy and the private operative goal of relationship building is therefore a delicate part of the symbiotic relationship between families and philanthropy.

This article demonstrates the ways in which both public and private goals drive the structures and practices of foundations, and proposes a method for investigating nonprofit organizational design with attention to the complex interactions therein. It is an apt moment to strengthen our analysis of how philanthropic practice is influenced by varied goal orientations. Hopefully, the conceptual apparatus developed here can serve as a guide for future work, using the lens of goal orientation to ask of an organization, cui bono?

Carrie Oelberger, Ph.D.
University of Minnesota


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