ABSTRACT
American foundations are big business. Foundations think of themselves as America's laboratory. Professor Galbraith called American foundations "essentially arms of the welfare state". The foundation is an instrument forged by citizens who transfer profit from the commercial sector and put it directly to work as risk capital for the general betterment of the society. Most foundations have come to think they should help the government expand. As government has emerged as the only active competitor for public responsibility, it became the principal market for social innovation, the foundation's natural product. The re-emergence of the independent sector is opening up many new opportunities to foundations. Foundations can give the independent sector the self-awareness it needs to restore its confidence and its determination to build for the future. The true development of the foundation will come when it accepts the discipline of competition with government and thus is forced to bold innovation.
