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Foundations and Scrutiny

I don't much care for its tone, and I'm not willing to accept that campaign finance reform was "an immense scam," but as for the conclusions of this essay (In a World of Bloggers, Foundations Can Expect More Scrutiny)by William Schambra of the Hudson Institute and formerly the conservative Bradley Foundation,  it's hard for me to fundamentally disagree.

Schambra argues that bloggers such as Ryan Sager (who led the recent charge against the Pew Charitable Trusts) represent a "new network" that will keep organized philanthropy on its toes:

Foundations may insist [their policy] recommendations spring from pure rationality and objectivity. But the new network has another name for them: liberalism.

If this seems harsh, conservative grant makers can only say, "Welcome to our world."

Harsh? What's harsh about that? Liberalism is my name for it too. It's an honorable name.

Schambra continues,

Some will quail before this new media world, complaining that now is hardly the moment for heightened criticism of foundations, with Congress poking around. But it is precisely this paranoia about negative reporting -- this priggish reluctance to air differences and difficulties before outsiders -- that prompts Congress and the public to suspect foundations have something to hide. Awareness that they are being scrutinized tends to keep large organizations nimble, alert, and alive. Why should philanthropy be any different?...

Foundations that want to become active in public policy should not be discouraged from doing so. But it is important for board and staff members alike to take a long, searching, honest look at the political assumptions the foundation inevitably carries into the public fray. Those assumptions will quickly be brought to light, by others who do not share them. It will no longer be credible to profess innocence of political intent in the name of objectivity. Foundations may find the new world of press and public policy to be messier, louder, and less genteel. But we will all find it to be more honest, more balanced, and ultimately, more informative.

The major mainstream foundations -- Ford, Carnegie, Rockefeller, Mott, and half a dozen others -- are all products of the postwar "liberal consensus," when it was possible to believe, as President Kennedy said, "What is at stake ...today is not some grand warfare of rival ideologies which will sweep the country with passion, but the practical management of a modern economy. What we need is not labels and cliches but more basic discussion of the sophisticated and technical questions." When foundations adopt the tone that they are engaging in rational and objective research about problems and solutions, they are not covering up for some ideological bias, they are speaking from this most basic founding principle.

And yet, that principle is dead. The Kennedy-era consensus is gone. And foundations need to understand that the very idea that "rationality and objectivity" should shape public policy, that we should test programs, find best practices, and government should support those that work, is now itself a contested idea (along with evolution and climate change), territory to be won back in a "grand warfare of rival ideologies." Foundations that want to return to the world in which they were created will have to fight for it -- and that means admitting that they are taking sides, and operating, without shame, with politics (not partisanship, but politics in the broad sense) and ideology in mind.

They should be more involved in public policy, and that means not just advocating increases in government funding for services they are interested in, but fighting for a tax and budget structure adequate to provide that funding.

There are plenty of exceptions. The work on campaign finance reform that Schambra cites was not liberal, in that many liberals hate the law and its most prominent backer, Senator McCain, is a solid conservative, a worthy heir to Senator Goldwater's seat. Strategies to help low-income families save and accumulate assets, as developed by some of my colleagues, similarly have supporters from the far right to the far left, and diverse foundation support as well. And there is plenty of research and analysis that foundations fund that truly has no ideological context, or that cuts across ideological or party lines.

But in many, many instances, the kinds of policies that foundations want to further -- reducing global warming, increasing public supports for low-income families, fixing health care, making the tax code fairer, fixing public school funding, increasing voter participation, etc. -- are going to be treated as political in a way they never were -- "messier, louder, and less genteel," as Schambra puts it. And he's right that it can be healthier and more balanced in some ways, just as the world of the "liberal consensus" papered over a lot of real differences.

Posted by Mark Schmitt on May 18, 2005 | Permalink


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The Schambra essay link is broken.

Posted by: RMG | May 18, 2005 7:37:12 PM

Thanks for letting me know. I wrote most of this five days ago, and then decided to think about it for a while -- in the meantime the link to the original article in the Chronicle of Philanthropy expired. The new link is on the Hudson Institute site.

Posted by: Mark Schmitt | May 18, 2005 10:39:33 PM


Do you think that foundations will become less inclined to participate in politics (at whatever level) as a result of this? Or, perhaps more importantly, be wary of the engagement of their grantees.

I think that in many cases grantees should be obligated to seek policy changes and that foundations should be asking them what they are doing to foster change. Homeless service providers, for example, should be expected to seek greater support from government or change in policies that contribute to homelessness.

That isn't partisan; that is a central component of the mission of the organization.

If a foundation is tossing millions of dollars to a community to address something that we collectively aren't addressing, then they ought to expect that the recipients of those funds are doing something to change the environment that created the problem.

It seems so basic to me. So, what am I missing?

Posted by: Steve Hill | May 19, 2005 8:07:12 AM

This sentence:

And the more foundations understand that the very idea that "rationality and objectivity" should shape public policy, that we should test programs, find best practices, and government should support those that work, is now itself a contested idea (along with evolution and climate change), territory to be won back in a "grand warfare of rival ideologies."

seems to trail off -- it starts a "the more X, the more Y" construction, but doesn't finish it.

Posted by: Vance Maverick | May 19, 2005 9:38:52 AM

No, Steve, I think (hope) that it will push foundations to understand that they have no choice but to engage in advocacy, and to do it more broadly. That is, foundations interested in homelessness not just pushing for more funding from government for services, but for a tax structure that makes that funding possible. I hope I was clear on that point.

Posted by: Mark Schmitt | May 19, 2005 9:53:03 AM

Schambra's concession -- his acknowledgement of the fundamental media fact of the day -- is most welcome. To me, foundations seem to be the least understood institutional participants on the American political landscape. Schambra refers to "this priggish reluctance to air differences and difficulties before outsiders" -- what this means is that foundations have largely been free to spend millions and millions of dollars without much in the way of transparency. This may not mean as much when that money is going to academics, for example, but there's no doubt that the present electoral success of the Republican Party owes much to a conservative momement that, since the '70s, has been sustained financially by foundational support. Lewis Lapham brilliantly analyzed this historical phenomenon in a lengthy piece in the September 2004 Harpers called "Tentacles of Rage: The Republican Propaganda Mill, A Brief History" (sorry, I haven't been able to find a link to it). There is certainly no equal on the liberal side.

Disclamier: My graduate education at the Univ. of Toronto was funded mostly by grants from the Olin, Bradley, and Earhart foundations. (Schambra's a Straussian, by the way.)

One interesting point that comes to mind, more by way of comparison than anything else. Here in Canada there are a few American-style foundations, but nothing that compares to what's going on down in the U.S. In Europe, however, the political system includes publicly-financed foundations tied to specific political parties. The best examples are in Germany, where the two major foundations, the Friedrich Ebert Stiftung (SPD) and the Konrad Adenauer Stiftung (CDU) both have budgets in excess of 100 million Euros. They are institutionally independent, but obviously committed to their respective parties' electoral success, and, indeed, what they do essentially is provide extensive policy development and support for their respective parties. In 1992, an independent commission set up by then President Richard von Weizsaecker affirmed that foundations constitute an essential element of Germany's political culture. In 1998, the five major foundations jointly pledged that they would inform the public regularly about their work and ensure transparency in terms of their funding and expenditures.

(There are similar, if smaller, foundations in Sweden and the Netherlands.)

Clearly, this system is so European that it would likely never take hold in the U.S. (although there is talk of it here in Canada). What's interesting is that these are jurisdictions with public financing of political parties and with severe controls on political contributions and spending. And also with astonishing transparency. That's precisely what's most needed in the U.S., where these private foundations operate in a world that is virtually closed off from public view and largely ignored by the mainstream media. If it take a few bloggers to let in some fresh air and hold foundations accountable, well, more power to them.

Posted by: Michael J.W. Stickings | May 19, 2005 10:33:38 AM

For an excellent historical view on "what went wrong" with the postwar liberal consensus as it pertained to foundations, I highly recommend John Judis' The Paradox of American Democracy: Elites, Special Interests and the Betrayal of Public Trust. Judis does a nice job on how the rise of Heritage and AEI, along with corporate-funded "think tanks" designed to produce "research" to discredit or undermine assumptions that would lead to increased regulation contributed to the politicized crtiticism of the big foundations discussed in this post.

Posted by: DHinMI | May 19, 2005 10:49:11 AM