Decision-Making, Strategy, and the Uses of Organizational History: The Carnegie Corporation and Program-Related Investments

The historical case study of the Carnegie Corporation’s approach to program-related investments (PRIs) serves to investigate decision-making processes in foundations. In the 1960s and 1970s, the foundation sector reacted to racial inequality and the crisis in America’s inner cities against the backdrop of congressional investigations and inflation. PRIs emerged as one of the philanthropic strategies in response to this situation, aligning with the broader emphasis on the economic development of minority communities. However, the Carnegie Corporation initially chose not to utilize PRIs. By relying on archival records, I demonstrate that organizational tradition, identity, and legal regulations influence strategic practices by granting strategic agency to actors as they construct and interpret these factors to legitimize continuity or change with past practices. The study illustrates that history serves as a strategic resource for nonprofit managers, enabling them to justify managerial decisions by embedding them within organizational narratives that trace back to the past.