FINAL WARNING: Financial Background
Foundations are either state or federally chartered. The first was
chartered by Benjamin Franklin in 1790, in Philadelphia and Boston,
from a $4,444.49 fund, to make loans “to young married artificers
(artisans) of good character.” In 1800, the Magdalen Society was
established in Philadelphia, “to ameliorate that distressed condition of
those unhappy females who have been seduced from the paths of
virtue, and are desirous of returning to a life of rectitude.” In 1846, the
Smithsonian Institution was established by the bequest of English
scientist James Smithson “for the increase and diffusion of knowledge
among men.” The Peabody Education Fund was initiated in 1867 by
banker George Peabody, to promote education in the South.Before 1900, there were only 18 foundations; from 1910-19, there were
76; during the 1920’s, 173; the 1930’s, 288; the 1940’s, 1,638; and
during the 1950’s, there were 2,839 foundations.United Press International (UPI) reported on July 19, 1969, that the top
596 foundations had an income that was twice the net earnings of the
country’s 50 largest commercial banking institutions.According to Rep. Wright Patman, in a report to the 87th Congress, it
is because of the existence of foundations, that “only one-third of the
income of the nation is actually taxed.”Some of the important foundations are: Ford Foundation (Ford Motor
Co.), Rockefeller Foundation (Standard Oil), Duke Endowment (Duke
family fortune), John A. Hartford Foundation (Great Atlantic and Pacific
Tea), W. K. Kellogg Foundation (the Kellogg Cereals), Carnegie Corp.
(Carnegie Steel), Alfred P. Sloan Foundation (General Motors), Moody
Foundation (W. L. Moody’s oil, realty, newspapers, and bank holdings),
Lilly Endowment (Eli Lilly Pharmaceuticals), Pew Memorial Trust (Sun
Oil Co. or Sunoco), and the Danforth Foundation (Purina Cereals),
which all have assets of well over $100 million.The first Congressional Committee to investigate the tax-free
foundations was the Cox Committee in 1952, led by Rep. Eugene E.
Cox, a Democrat from Georgia. Its purpose was to find out which
“foundations and organizations are using their resources for purposes
other than the purposes for which they were established, and
especially to determine which such foundations and organizations are