A call for a transatlantic retreat on the State of Philanthropy

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I recently traveled to Brussels to see my long-time friends Gerry Salole and Rien van Gendt at the European Foundation Centre.

As usual, we spoke about the status of philanthropy in Europe and the United States.  A huge topic, indeed. Rien spoke eloquently about two relevant developments in Europe. The first is that the context within which philanthropy is functioning has changed dramatically. Foundations are “increasingly seen as important stakeholders in addressing complex problems” in society, which invites more scrutiny, and in some cases, distrust. With this added public scrutiny, foundations are questioning what value they bring, especially in the face of discussions about the tax benefits (or avoidance, depending on your point of view) of charitable giving for the wealthy. The second development is the new confusion over the landscape of philanthropy. Today, there exist traditional foundations, associations of foundations and affinity groups organized by content, by an approach or style of grantmaking or investing. Has this led to a lack of coherency? Is the foundation field incapable of working together to create a larger ecosystem to tackle big issues in depth and over the long haul; to face growing questions and critiques about the sector’s power and influence? As Rien laid this out, I found myself nodding my head in agreement.

Twentieth-century American philanthropy played an important role in making progress on such issues as laws to protect workers, the environment, and consumers. My daughter, who runs the Benton Foundation, recently sent to me an October 2018 article by David Callahan, “Powerless: How Top Foundations Failed to Defend Their Values – And Now Risk Losing Everything.” The gist of Callahan’s piece, is that “nearly all the gains of modern liberalism – many of which leading foundations helped to engineer over generations – are now at risk.”

I spoke to Rien and Gerry about the coherent, long-term, large-investment strategy of conservatives to spread their ideology and capture power and to use their philanthropy as an alternative to paying taxes, so they could control how their funds were spent. Given our political times, and a confluence of other events, that strategy devised in the 1970’s — to invest in ideas, institutions, and people — has borne fruit. Some, but not all, of their agenda advocates for limiting the role of government, dismantling the “administrative state,” and overturning regulations; for turning the judiciary rightward; and for changing fiscal policy, including the passage of a tax law that will ultimately lead to cuts in domestic spending that will touch nearly every community in the US and impact America’s most needy.

The Callahan article reminded me of a 1997 report from The National Committee for Responsive Philanthropy, authored by Sally Covington that talked about the strategic philanthropy of conservative foundations. At the time, this piece made waves in the US legacy foundation world and I wanted to review it again given my discussions in Brussels.

Covington’s report concluded that upon reviewing the $210 million three-year grantmaking of 12 conservative foundations (think Bradley, Olin, Scaife, and the Koch Brothers) “there were some valuable lessons for grant makers interested in influencing current policy trends and the tenor of public policy debates:

  1. Understanding the importance of ideology and overarching frameworks,
  2. Building strong institutions by providing ample general operating support and awarding large, multi-year grants,
  3. Maintaining a national policy focus and concentrating resources,
  4. Recognizing the importance of marketing, media and persuasive communications,
  5. Creating and cultivating public intellectuals and policy leaders,
  6. Funding comprehensively for social transformation and policy change by awarding grants across sectors, blending research and advocacy, supporting litigation, and encouraging the public participation of core constituencies,
  7. Taking a long-haul approach.”

Covington concludes: “While each lesson has its own power and significance, it is the combination of all seven that has made conservative philanthropy especially consequential [my emphasis]. The demonstrated willingness of these foundations to act in such political and strategic terms serves as a sharp reminder of how much can be accomplished given clarity of vision and steadiness of purpose.”

The benefits of this conservative philanthropy movement to the Trump administration are now being realized. Think tanks like the Federalist Society, the Heritage Foundation, Cato, and the American Enterprise Institute, with strong on-going financial support, according to Callahan, have “played a central role in pulling together the right’s narrative and translating its values into policy ideas and blue prints for governance. They’ve provided a home to the movement’s top public intellectuals, trained successive waves of young conservatives, and cultivated pathways into Congress and the executive branch.”

In a 1998 article, “Why do Progressive Foundations Give Too Little to Too Many?” Michael Shuman documented in detail how conservative funders were badly outgunned financially by Progressive behemoths, yet they wielded far greater influence by leveraging their resources in ideas, policy, and movement building, and a willingness to bankroll the darker arts of politics.

Have Progressives been sitting on their heels? In the early to mid-2000s donors did step up to build such groups as the Democracy Alliance, the Center for American Progress, Media Matters for America, and The American Constitution Society for Law and Policy — but these remain modest compared to what the right fields. Callahan states “organizations that operate across issues and can quarterback a movement to win power more broadly have a much harder time raising money.” Instead, project support for single issue organizations who wish to solve problems one at a time and who work in a siloed fashion, remain popular Progressive funding targets. And anything that smacks of ideology or partisanship remains, mostly, off the table.

When I asked a friend, Marvin R. Cohen, Ph.D., what he thought, I received this answer: “Those who have toiled in the philanthropic vineyards are privileged to have labored at the intersection of ideas and resources.  We have been associated with institutions that claim to devote their assets to advancing the common good, particularly on behalf of the most vulnerable members of our nation, and in the process holding themselves and their grantees to the highest levels of accountability.  These institutions pride themselves on being risk-takers, whose decisions are ‘evidence-based.’  At first blush these are praiseworthy characteristics, particularly if they were to hold up under serious scrutiny.  There are, however, good reasons to be skeptical.  The bulk of the nation’s philanthropic dollars are not placed in the service of advancing social justice, nor for that matter in strengthening democratic practice, which constitutes the bulwark of our civic culture.  The current obsession with evidence-based funding, encourages foundations to cleave to programs that can produce readily quantifiable, short-term results, which in turn discriminates against initiatives that target intractable concerns requiring sustained investments…”

Cohen goes on to say that “modern American philanthropy has acquired the characteristics of institutional attention deficit disorder.  It becomes enamored of ideas that compel its attention for a number of years, only to move on to another obsession in order to remain on the “cutting edge” of innovation.  The fact that the nation requires sustained attention to challenging problems seems to be lost on the field.”

Are there exceptions and current experiments that might bear fruit? Yes. I am following the Ford Foundation’s Building Institutions and Networks (BUILD) project, entering its second of six years. This $1 billion initiative aims to help organizations worldwide that move the needle on inequality become stronger, more sustainable, and more durable. Kathy Reich, Director, emphasizes some early lessons, to help other grant makers who are interested in changing entrenched systems and supporting non-profit sustainability of which I pick out three: “1. Non-profits thrive with larger, longer, more flexible grants; 2. Long-term flexible grants work best when they closely align with strategy; and 3. Supporting institutions is critical, but so is catalyzing and supporting networks.”

American foundations are not facing up to and acting on a central reality of our time…if you can’t win and hold power within our country’s key institutions, we risk losing on just about every issue we care about. Covington wrote: “…mainstream foundations increasingly operate within the larger policy assumptions and parameters that conservative funders help shape.”

There is a sense that we don’t know how to operate in the present, nastier, environment. Shuman warned: “If progressive philanthropists insist we play whiffle ball while our opponents play hardball, we’re destined to lose.”   I believe this fight is about equity and trust. But it is also about power, values, ideology. We see this play out even as we debate the nature of philanthropy itself:

  • Although the 2017 tax law retained the charitable deduction, it made other structural changes to the tax code—like increasing the standard deduction and repealing personal exemptions—that eliminated the incentive to make contributions to charitable organizations for about 21 million taxpayers.  Bi-partisan legislation introduced in 2018 in support of a universal charitable deduction would allow every taxpayer, not just the wealthy, to claim a deduction for their donations, and provide an incentive for everyone to give back to their communities.
  • Trump, Pence, and some prominent evangelists, are trying to unravel the anti-corruption law that protects taxpayers and voters called the Johnson Amendment, which says that charitable nonprofits, houses of worship, and foundations – in exchange for receiving donations that are tax deductible to the donors – may not support or oppose candidates for elected office.

It seems to me that there is much to discuss amongst European and American philanthropies, so much that resonates with situations developing in each of our regions. So, I welcome Gerry and Rien’s idea to provide a safe space for a continuing discussion with concerned peers in a transatlantic retreat on the State of Philanthropy. We each have a lot to learn, from each other and about the new world in which we all operate.

 

Marjorie Craig Benton has been both a fundraiser and a grantor for organizations whose missions focus on women and children’s issues, and peace and disarmament.

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