Like Captain Renault’s encounter with gambling at Rick’s American Café, “I’m shocked, shocked to find that gambling is going on in here,” a flabbergasted U.S. Congress has revealed to the American public that nonprofit universities and hospitals sit on tax exempt endowments amounting to billions of dollars. Not a heck of a lot actually gets spent, in percentage terms less than private foundations that are, by law required to spend—in what the law refers to as “qualified distributions” known in common parlance as private foundation “payout”—while universities in particular continually hammer alumni and the public for donations.

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Not enough space is devoted to the investment practices and consequences of how foundations deploy their half-trillion dollars (actually, much more) of tax-exempt wealth in the markets. When the Los Angeles Times broke the story (actually, several stories) on the Gates Foundation’s investments in corporations that seemed opposed to the foundation’s philanthropic activities, many were shocked by the foundation’s rather cavalier dismissal of its critics.

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