Donating money to modify public thinking and government policy has now taken its place next to service-centered giving as a constructive branch of philanthropy. Many donors now view public-policy reform as a necessary adjunct to their efforts to improve lives directly.
This is perhaps inevitable given the mushrooming presence of government in our lives. In 1930, just 12 percent of U.S. GDP was consumed by government; by 2012 that had tripled to 36 percent. Unless and until that expansion of the state reverses, it is unrealistic to expect the philanthropic sector to stop trying to have a say in public policies.
Sometimes it’s not enough to build a house of worship; one must create policies that make it possible for people to practice their faith freely within society. Sometimes it is not enough to pay for a scholarship; one must change laws so that high-quality schools exist for scholarship recipients to take advantage of.
Because public-policy philanthropy has only become common recently, this list has more entries dating from the latest generation compared to our other lists of U.S. philanthropic action. And since one man’s good deed is another man’s calamity when it comes to giving with political implications, we have included policy advocacy of all sorts on this list.
Not all public policies split into “Left” vs. “Right” variants, but for those that do, the reality is that much more philanthropic money has been deployed leftward than rightward. Detailed quantification in the book The New Leviathan showed that 122 major foundations with total assets of $105 billion provided $8.8 billion of funding for liberal causes in 2010. That same year, 82 foundations with total assets of $10 billion provided $0.8 billion for conservative causes. In other words: there is eleven times as much foundation money going into public-policy philanthropy that aims left as aims right. (Individual donors are more evenly split, though still more on the left.) The Washington Post once observed that the Ford Foundation alone has given more to liberal causes in one year than donor Richard Mellon Scaife (sometimes called the Daddy Warbucks of the Right) gave to conservative causes in 40 years.
Whatever your aspirations for American governance and society, tracking the deeds of previous public-policy donors—summarized below—will help you find the best ways to succeed.
— Section research provided by Karl Zinsmeister and John J. Miller
The newspapers in Philadelphia, as in every city, have struggled mightily over the last decade to find a viable business formula in the era of Internet news. To save them from collapse, Philadelphian and prominent national philanthropist Gerry Lenfest some years ago purchased the Philadelphia Inquirer (America’s third-oldest newspaper) and the Philadelphia Daily News, plus the companion website Philly.com.
In 2016, Lenfest donated all three properties, along with a $20 million endowment, to a nonprofit entity. The notion is that the publications will continue to operate as for-profit businesses, adapting as necessary to balance their bottom lines, but that there will be no pressure on them to make money, and special projects can be funded with earnings from the endowment. So far, endowment grants have been applied to improving the use of technology by the papers. The one other major newspaper in the U.S. that operates as a for-profit under a nonprofit umbrella is the Tampa Bay Times, owned by the Poynter Institute.
In 2017, the nonprofit that owns the Philadelphia publications announced it had supplemented Lenfest’s original $20 million endowment with an additional $27 million raised from other donors. Lenfest then announced that if $40 million more in gifts could be raised, he would match that amount. That would leave the nonprofit trust with an endowment exceeding $100 million.
Given that declining circulation knocked the value of the Philadelphia newspapers down from $515 million in 2006 to under $50 million in less than a decade, it’s clear that even with these funds they’ll have to make many adjustments to their operations. But the executive director of their nonprofit trust says the philanthropic support will subsidize “a test lab for local news innovation.”
The troubled city of Flint, Michigan, shifted in 2014 to a new public-water source that ended up exposing between 6,000 and 12,000 children to unhealthy levels of lead. After this was discovered, dysfunctional governments proved unable to move quickly to protect the youngsters from harm. Ten charitable organizations rapidly stepped into this void—pledging a combined $125 million for water testing, health care, and various kinds of short- and medium-term relief for households.
“There are needs out there that just can’t wait for the state to appropriate the money and wait for the bureaucratic channeling of funds,” stated Eric Lupher of the Citizens Research Council of Michigan. “If you live in the city of Flint you don’t want to wait for the money to show up. You want to take your kids to the doctor now.”
The Charles Stewart Mott Foundation, which is based in Flint, provided $50 million to the recovery effort for immediate use in the first year. Other philanthropies among those pitching in included the FlintNOW, Kellogg, Kresge, and Skillman foundations.
Like other Americans, donors have worried about the direction of family trends since the 1960s, when mushrooming divorce, illegitimacy, father absence, and other problems began to expose children to new risks. It is widely understood that family breakdown is a major contributor to other social problems like rising poverty, criminal behavior, schooling lags, and health issues. But few charities have showed much success at re-knitting families together. And culture wars surrounding family issues scared many donors away from even trying.
Then in 2015 The Philanthropy Roundtable began convening major donors and encouraging them to contribute to a kitty of at least $30 million to be used to support fresh efforts at bolstering family integrity. This “Culture of Freedom” initiative particularly proposed to borrow new techniques from the business and technology worlds and adapt them into tools to be used by churches and and local nonprofits in low-income communities where family decay is dragging down incomes, child welfare, and adult happiness. Things like demographic micro-targeting of social services, social-media promotion of family-reinforcement programs, app-based support for healthy home habits, and so forth. The initiative chose three cities in which to test services: Jacksonville, Dayton, and Phoenix. An initial drop in divorces in Jacksonville and spike in family church attendance in Dayton gave donors and service providers hope, early in 2017, that some of these new techniques may hold national promise.
President Obama’s 2015 decision to end sanctions on Iran in return for promises of increased nuclear accountability did not emerge on its own. It grew directly out of years of quiet activity by the Rockefeller Brothers Fund. After the 9/11 attacks demonstrated that al-Qaeda had become the most urgent Islamic threat, the fund began to convene meetings to explore the possibility of some U.S.-Iran rapprochement. Its Iran Project, given $4.3 million, funded a group of former U.S. diplomats to develop a relationship with Mohammad Javad Zarif and other Iranian officials, and begin to get them engaged with influential Americans. Zarif is now Iran’s chief nuclear negotiator and the godfather of the Iran-Obama plan. The Rockefeller Brothers Fund also paid for most of a $4 million campaign launched in 2010 by the Ploughshares Fund, a San Francisco-based peace group, to build support among liberal think tanks and activists for pressure on behalf of an Iran deal.
John Boruchin was born in Poland, and lost most of his family to death camps during World War II. He immigrated to the United States, carved out a career building homes in California, and gradually accumulated a large fortune. At his death he left $100 million to endow a new center devoted to shaping public understanding of Israel in America. The Boruchin Israel Education Advocacy Center, which will be managed by the Jewish National Fund, will run student and faculty exchanges between the U.S. and Israel, organize campus seminars, sponsor young professionals on visits to the Jewish state, run a speaker’s bureau, and otherwise advocate for close ties between the U.S. and Israel.
John Boruchin was an admirer of Ze’ev Jabotinsky—a Russian Jewish journalist and organizer who warned in the decades before the Holocaust that Jews in many countries were “living on the edge of the volcano” and needed a safe sanctuary in their Middle-Eastern homeland, where he proposed creation of a democratic state of Israel. In 2015, amid attacks on Jews in Europe, and the rise of boycott-Israel movements on U.S. campuses, the chairman of the new policy organization created by Boruchin suggested that his gift “comes at a critical period in history, as Israel and world Jewry face serious challenges with rising anti-Israel sentiment and anti-Semitism. This center is needed now more than ever.”
With almost predictable regularity over recent years, the Department of Veterans Affairs has become embroiled in repeated scandals combining failed services with mushrooming backlogs. A root of the problem is an explosion in the number of former servicemembers who are now defined as disabled. Only 11 percent of all World War II veterans received disability payments. Among those who served in Vietnam, 16 percent got checks. But among the men and women who served after the 9/11 attacks, a whopping 45 percent have already applied for disability compensation after leaving the service, and that ratio will increase as this cohort ages.
Not only do close to a majority of former servicemembers now call themselves disabled, but under what has come to be known as the “disability-compensation escalator,” those on the rolls tend to ratchet up their official degree of disability every few years. Recipients can claim additional disabilities at any time, and it is very common for someone who goes on the books at “30 percent disabled” to later be re-rated at 40 percent, then 60 percent, etc.
The vastly increased recourse to disability checks, and the constant upward drift of benefits, combine to create terrible disincentives against work and independence. This hurts participants in many ways. Veterans who work not only have much higher income than those on the dole, they are also more likely to recover from their afflictions, and have better mental health, much bigger social networks, deeper self-esteem, and more stable family lives. So the disability “aid” increasingly pumped out by the federal government correlates with more joblessness, and less wealth, health, and happiness among veterans.
On top of these ill-effects for vets, the existing system is bad news for taxpayers. The cost of the veterans disability program more than tripled from 2000 to 2015, to an annual charge of $65 billion, and is still rising fast. The budget of the Department of Veterans Affairs is now ballooning more rapidly than any other major department of the federal government.
Despite all this, efforts to create a more humane and effective system for assisting wounded warriors have failed in Congress. There are simply too many interest groups with a stake in the status quo. To get around this public-policy gridlock, donors launched a bold effort in 2015 to find a better way of operating. Their privately funded experiment will turn disability benefits on their head—instead of trickling a lifelong stream of small monthly checks to vets that keep them in low-income dependency, the program will make heavy upfront investments in veterans with mild to moderate injuries so they can acquire the skills for their dream jobs, start businesses or trades, and otherwise upgrade their lives to the point where they can then support themselves in dignity. A wide variety of medical, technical, motivational, and economic incentives will be offered to each volunteer participant.
A wide variety of medical, technical, motivational, and economic incentives will be offered to each volunteer participant. In return they must commit themselves to stepping away from the disability dole and working toward self-reliance instead. In preliminary focus groups, 80-90 percent of disabled veterans leapt to take this deal.
The Independence Project was launched with a million-dollar grant from the Anschutz family of Colorado, then $4.1 million of funding from the John and Laura Arnold Foundation, another million-dollar grant from the Daniels Fund, $5 million from the Diana Davis Spencer Foundation, and support from the Milbank, Wilf, Morgridge, Weinberg, Snider, Kirby, Bradley, and Kovner foundations.
The program will allow a careful test of the “recovery and self-reliance” approach with groups of disabled vets. When results accumulate, the philanthropic backers will use the research findings for a public-education and policy-reform campaign aimed at remaking the major Veterans Affairs disability programs in this healthier and more fiscally sustainable form.
UPDATE: The Independence Project is currently enrolling qualified participants at https://independenceproject.org.
“When I was working with the Slovaks, I realized there are no books written, no roadmap, for a country to transition from an authoritarian government to a free society. Studying countries that have made the successful transition to democracy gives us an opportunity to help nations that are in the process. We’re talking about people having the opportunity to come out from under the thumb of authoritarian rule, and with that freedom to have a better life for themselves and their children, as well as freedom from fear of their government, their police, and even their neighbors.”
Those were the words of Ron Weiser on announcing his $25 million gift in 2014 to the University of Michigan’s Weiser Center for Emerging Democracies, following an earlier $10 million founding gift. After founding a national real-estate investment firm, Weiser served as U.S. ambassador to Slovakia from 2001 to 2004. His academic center aims to “assure and extend freedom and democracy” by encouraging and supporting movement away from oppressive government in Eurasian countries.
Philanthropists have been funding lawsuits as a way to improve public policies for more than a century. Booker T. Washington secretly financed the Giles v. Harris case back in 1903, and throughout the rest of his life paid for other litigation aimed at undoing racial disenfranchisement (see details in the 1903 entry). Today, public-interest law philanthropy is funded by innovative donors interested in topics such as school reform, and carried out by nonprofits like the Institute for Justice and the Goldwater Institute.
One charitable litigator is Silicon Valley entrepreneur David Welch, who spent several million dollars between 2011 and 2016 building a court case that California’s teacher-tenure laws deprive students of the right to be educated as guaranteed by the state constitution—by, for instance, granting permanent employment after just 18 months on the job, making it nearly impossible to fire even the most terrible teachers, and requiring school districts to lay teachers off based on seniority rather than competence. Welch and his wife had first tried traditional education philanthropy, giving money to bring new teaching methods and technology into schools. They soon realized, though, that in many public schools, incompetent teachers made necessary educational improvements impossible. So in 2011 they founded a group called Students Matter and gathered facts about the forces blocking school reform.
Nine students told Welch their education had suffered after they were stuck in classrooms with poor teachers. The donor hired a top-flight legal team to help them assemble a court case. He also funded an accompanying public-relations campaign to fend off the massive counterattack by teacher unions that predictably followed.
In 2014 a judge of the Los Angeles Superior Court ruled that “there are a significant number of grossly ineffective teachers currently active in California classrooms” and that this causes thousands of students to fall years behind in math and reading. “The evidence is compelling. Indeed, it shocks the conscience,” wrote Judge Rolf Treu in his Vergara v. State of California decision striking down seniority-based job protections for unionized teachers. This prompted other philanthropists and education reformers to consider similar donor-funded lawsuits in states like New York, Connecticut, New Jersey, New Mexico, and Oregon, with the aim of eliminating rigid procedures that block dismissal of incompetent teachers.
The California education bureaucracy and unions appealed the Vergara decision. And in 2016, a three-judge panel overturned the verdict, bringing widespread criticism from legal scholars and newspaper editorial boards. California’s Supreme Court declined further review of the case, 4-3, despite urging from one its justices that “the questions presented have obvious statewide importance, and because they involve a significant legal issue on which the Court of Appeal likely erred, this court should grant review.” David Welch’s nonprofit, Students Matter, asked the California legislature to act where the courts would not, by improving the state’s laws on evaluation, retention, and dismissal of teachers.
New York City is home to one of the most successful charter-school expansions in the U.S., from its initial handful of students in the fall of 2000 to 95,000 enrollees at the start of the 2015 school year. In some poor neighborhoods a quarter of all youngsters were attending charter schools by that time, with powerful results. For instance, Success Academy Harlem 4, a school with 97 percent minority children, scored No. 1 in the state in math achievement by fifth graders. Stanford University research shows that, on average, New York City charter students absorb five months of extra learning per year in math, and one extra month in reading, compared with counterpart children in conventional schools.
Yet when Mayor Bill de Blasio took office in 2014 with strong support from unionized teachers, he made it clear that he intended to clip the wings of philanthropically supported charters. He announced almost immediately that he was canceling a $210 million construction fund important to the schools, ending space-sharing with them, and intended to charge them rent (unlike other public schools that have their buildings provided by the city).
Charter allies responded to these threats. Early on, thousands of families marched across the Brooklyn Bridge to demonstrate their concern. Advocates like the group Families for Excellent Schools, backed by the Broad, Walton, and Buck foundations and many individual donors, aired a series of advertisements spelling out the achievements of New York’s charters and urging legislators to oppose de Blasio’s crimps. Then on a freezing March 2014 day, 11,000 parents and children rallied in defense of charters in the state capital of Albany. (Donors helped pay for buses and such.) Telling them “Parents deserve a choice,” New York governor Andrew Cuomo promised, “You are not alone. We will save charter schools.” Nine days later, the state Senate passed a budget resolution containing several provisions that effectively annulled the new mayor’s squeeze on charter schools.
Pierre Omidyar, the billionaire founder of eBay, first pursued an interest in media operations that promote “good government” when he funded a digital “newspaper” devoted to investigative reporting, public policy, and politics in his home state of Hawaii. His appetite whetted, Omidyar considered buying the Washington Post, before fellow tech-tycoon and donor Jeff Bezos did so for $250 million in 2013. Instead, Omidyar decided to devote the same pile of money—$250 million—to create his own muckraking publications from scratch. In 2014 he unveiled his first venture: the Intercept, an online magazine devoted to “adversarial journalism on national security, criminal justice” and related topics. It was formed around a trio of hard-left reporter-commentators: Jeremy Scahill of the Nation, filmmaker Laura Poitras, and Glenn Greenwald, who led publication of the Edward Snowden leaks.
Omidyar’s next publication was to be a scathing forum called Racket that would “attack Wall Street and the corporate world.” Before the venture even published its first story, however, the attacker-in-chief hired by Omidyar to run the publication clashed with his bosses and was accused of sexual harassment by an underling. The venture collapsed and it was announced that the staff hired to run it would be let go.
One year after Omidyar’s announcement that he was going to loose on the world a whole stable of digital news sites “that will cover topics ranging from entertainment and sports to business and the economy,” the only functioning element was the Intercept, and the founding donor was at war with many of the journalistic crusaders he hoped to lead into society-altering news coverage. The effectiveness of this investment is thus yet to be seen. Its sheer size, however, and the interest it has sparked among other donors and a press corps obsessed with new media, guarantee that it will be looked back upon as a milestone in public-policy philanthropy, whether of a positive or negative sort.
he national rankings of top graduate schools in public policy have held pretty steady for some years, centered on Syracuse University’s Maxwell School, the Kennedy School at Harvard, Indiana University, University of Georgia, and the Woodrow Wilson School at Princeton. Recent philanthropic gifts aim to move another entity up that list. The University of Chicago’s Harris School of Public Policy is a relative newcomer established in 1988 (thanks to leadership and an endowment gift from businessman Irving Harris). It enrolled 410 graduate students in 2014, and is particularly known for its quantitative training. In 2014, DeVry University co-founder Dennis Keller donated $20 million, and the family of Irving Harris gave another $12.5 million, to build a new home for the graduate school. This will allow expansions into leadership training, with the goal of anointing more trailblazers in public policy.
Detroit may be America’s most ill-governed, and saddest, city. That’s the public’s verdict: The city’s population plummeted from 1.9 million in 1950 to just 680,000 in 2014, just after Detroit filed the nation’s largest-ever municipal bankruptcy, estimating that it was $20 billion in debt.
Private philanthropies have tried for years to stanch the worst of Detroit’s bleeding. The only streetlights that work in midtown are the ones paid for by the Hudson-Webber Foundation. In 2013, the Kresge Foundation and some partners donated 100 police cars to the city (where the average response time to a 911 call is 58 minutes). These and other donors poured at least $628 million into the city between 2007 and 2011, particularly hoping to soften life for children and other innocent victims of the misgovernance, and to spark a bit of private-sector economic activity.
Then in late 2014, a coalition of 15 foundations—both local and national—plus some corporate and individual donors pledged $466 million to shore up the city’s insolvent pension system and transfer the Detroit Institute of Arts from city to nonprofit ownership, so that its great works and building wouldn’t have to be sold for cash. This philanthropic help was the key to negotiation of a grand bargain of concessions, cuts, and contributions that allowed the city to emerge from bankruptcy. Whether Detroit will ever become a healthy community again remains to be seen, but the donors who had been protecting city residents for decades at least gave the city and the state breathing space to create more responsible and sustainable public policies.
Though he is no longer mayor of New York City, Michael Bloomberg continues to nudge public policy—these days as a donor. In 2014 he put up $50 million to create an educational nonprofit (with separate lobbying and campaign-donation arms) to push for stricter gun control. To put that in perspective, $50 million is about two and a half times what the National Rifle Association spent that same year to campaign for gun-owner rights.
In the run-up to the 2014 election, Bloomberg’s groups surveyed candidates on gun issues, and bought millions of dollars of TV issue ads. The allied political action committee made campaign donations to selected candidates at the state and federal levels. Ad Age calculated that Bloomberg’s money allowed gun-control groups to outspend gun-owner groups by 7:1 on television advertising.
Even still, gun controllers didn’t do well in the 2014 election. Bloomberg is swimming against inhospitable policy currents. According to the Pew Research Center, public support for gun control deteriorated steadily over the last two decades. When asked “Is it more important to control gun ownership or protect the right of Americans to own guns?” the public flipped from favoring gun control 57-34 percent in 1993, to favoring gun-ownership rights 52-46 percent in 2014. A sharp drop in the rate of murder committed with firearms between 1993 and 2011—from 6.6 victims to 3.2 victims per 100,000 population—corresponds with a large rise in gun ownership during that same period. Americans owned 310 million firearms in 2009, up from 192 million in 1994.
The University of Colorado at Boulder is famous as a citadel of “progressivism,” for which it is sometimes referred to as the “Berkeley of the Rockies.” All faculty members, for instance, are encouraged to put a prepared statement in their initial class materials telling students they are free to choose a different gender pronoun for themselves if that would make them feel more comfortable.
In the hope of introducing missing perspectives into the university’s teaching, and broadening political discussion on campus, a group of Boulder-area donors including local banker Earl Wright and former Boulder mayor Bob Greenlee proposed to fund within the political-science department a new position in Conservative Thought and Policy. After more than 20 area donors raised a million dollars, a three-year pilot program was set up to bring a series of visiting scholars to campus on annual rotations.
Political scientist Steven Hayward, CU-Boulder’s first Visiting Scholar of Conservative Thought and Policy, taught four classes during the 2013-2014 school year: two on Constitutional law, one on free-market environmentalism, and another on American political thought. In addition to teaching, he organized debates and guest lectures that brought center-right scholars to campus. In 2014, the second visiting scholar arrived—Hillsdale College historian Bradley Birzer. The third visiting scholar, economic historian Brian Domitrovic, arrived on campus in 2015.onmentalism, and another on American political thought. He also organized more than a dozen debates and guest lectures that brought center-right scholars to campus. In the fall of 2014, the second visiting scholar arrived—Hillsdale College historian Bradley Birzer.
The Searle Freedom Trust was founded in 1998 by Dan Searle with proceeds from the sale of the G. D. Searle pharmaceutical company. The foundation has been a major funder of university professors, supporting career development and detailed, esoteric, long-term research with the goal of bolstering academics working outside of reigning liberal orthodoxies. The trust has also been underwriting online higher education as a way to make college instruction less monolithic.
More recently, Searle has influenced public policy via support for important litigation. “Our biggest victories lately have come in the legal arena,” says president Kim Dennis. “There have been numerous Supreme Court decisions that we helped to fund. These produced decisions in policy arenas as diverse as voting rights, environmental regulation, education, and health care.”
“Of course these things can all be changed by one heart attack on the Supreme Court,” notes Dennis. “But there are also state courts. There’s a lot you can do in litigation.”
The Charles Koch Institute was founded in 2011 by the billionaire industrialist to run educational programs that give students and professionals a deeper understanding of markets and politics. Its main work in influencing future generations is done through four programs.
The year-long Koch Associate Program places young people in full-time jobs at public-policy organizations in the Washington, D.C., area while providing a full day each week of classroom training. The Koch Internship Program is a similar venture that works with college students for just one semester. The Koch Fellows Program is much the same but places students in organizations across the country. And the Institute’s Liberty@Work effort offers Web-based professional training based on a similar economics-and-politics curriculum. More than 3,000 alumni of these programs had graduated into permanent careers by the end of 2015, and about 350 additional individuals are trained every year.
Charles Koch also makes grants to hundreds of colleges around the country to support student programs, particularly those emphasizing entrepreneurship, and citizenship. A $10 million gift went to Catholic University in 2016, for instance, and in 2017 the Koch Foundation and the Huntsman Foundation combined on a $50 million gift to Utah State University for business and civics instruction and research.
In 1987, the J. Roderick MacArthur Foundation awarded a group called Alternatives to Militarism the first known grant to challenge military regulations on homosexual behavior. The topic worked its way into politics, and during the 1992 Presidential race Bill Clinton said he would be willing to sign an executive order permitting homosexuality in the armed forces. The compromise that eventually resulted, known as the “don’t ask, don’t tell” policy, went into effect in 1993.
Almost immediately, gay activists and their philanthropic supporters went to work to overturn all remaining strictures. The Servicemembers Legal Defense Network was created in 1993 and fueled by more than $7 million in foundation grants. It provided counsel to troops who ran afoul of the ban on open homosexual behavior, ran media campaigns against the rule, and organized the first legislative efforts to go beyond it. Similar work was carried out by other nonprofits operating with donations earmarked for this cause. The American Civil Liberties Union, Lambda Legal, the Gay and Lesbian Alliance Against Defamation, the Center for American Progress and others “played a critical role in mobilizing grassroots support, taking on early legal battles, monitoring media debates, and publishing position papers,” according to the Chronicle of Philanthropy.
The most dogged and focused efforts on this front were carried out by the Center for the Study of Sexual Minorities in the Military, which changed its name to the Palm Center after receiving a $1 million contribution from the Michael Palm Foundation in 2006. The center produced a steady stream of papers criticizing “don’t ask, don’t tell” and circulated them through academe and the media. Their work was central to the 2011 establishment of a new policy protecting overt homosexuality in the military. Since overturning “don’t ask,” the Palm Center’s main project has been to end strictures on transgender service and sex changes among military personnel.
Grants of more than $12 million were used to undo “don’t ask, don’t tell,” with the Evelyn and Walter Haas Fund and the Wells Fargo, Gill, and Arcus foundations being other lead donors. Three quarters of that money was offered as super-flexible general operating funding. More than 20 donors supported the organizations leading the charge for at least five years in a row, with many of them loyally providing funds every year for over a decade.
The public-pension gap—the retiree and health benefits that have been promised to government workers but not funded—is the single gravest economic threat to the U.S. today. That is the position of the Laura and John Arnold Foundation. It’s a strong claim, but there are scary numbers behind it: unfunded state and local promises to civil servants now total a breathtaking $2 trillion.
There are ways out of that deep, deep hole—switching from defined-benefit to defined-contribution pensions (as almost all private companies did decades ago), asking public workers to make co-contributions and co-payments. But these reforms are politically difficult. To make them easier, the Arnold Foundation has offered its services around the country as a kind of pro bono think tank—helping states and cities calculate exactly how much they’ve overpromised, and then advising them on ways to stem their flood of red ink. The foundation offered important technical and communications help that allowed Rhode Island to pass the first major pension reform, heading off a Detroit-like disaster from taking place on the state level. Laura and John Arnold complemented that assistance with personal contributions in support of political leaders and groups fighting for pension reform.
Working with the Pew Center on the States, Arnold then offered research and other help to additional locales with runaway pension costs. Kentucky, San Jose, San Diego, Utah, and other jurisdictions acted. Many others are still scrambling, often with Arnold Foundation aid. In its first three years working on this subject, the foundation spent about $11 million to help formulate more sustainable pension policies, with much additional policy assistance to come. Election contributions to officeholders backing reform (from the Arnolds as individuals) came on top of that funding and protected the project from being undermined by political opposition.
While working for the governor of North Carolina in the 1980s, Art Pope became frustrated by a lack of organizations able to supply well-developed ideas for conservative political reform. After leaving government, he decided to do something about it. Over the next three decades he used his family foundation to donate more than $60 million (earned through the family’s privately owned chain of discount stores) to build a robust network of think tanks and advocacy groups in North Carolina. In the process, he turned North Carolina into a swing state where conservative ideas and policymakers are able to match liberal ideas and politicians.
First, Pope created the John Locke Foundation in 1990. The Raleigh center has become one of the most influential state-based free-market think tanks in the country. Legislators now routinely look to the group for alternative state budgets and suggestions on changing taxes. In 2007, its work helped voters around the state defeat a series of county-level tax-hike initiatives. In 2010, former Democratic governor Mike Easley was convicted on federal corruption charges, in part due to the investigative work of the Carolina Journal, published by JLF.
With an annual budget of about $3.5 million, the think tank now has a variety of donors, but the John William Pope Foundation (named for Art’s father) has remained its major underwriter. Art Pope has also funded the Civitas Institute (which promotes grassroots activism), the North Carolina Institute for Constitutional Law (which litigates), and the Pope Center for Higher Education Policy (which monitors colleges and universities in the state). Left-of-center policy groups still outnumber right-of-center groups by two or three to one in North Carolina, but Pope has created a real competition of ideas in the state.
This new public-policy infrastructure gradually helped change the climate for political reform in North Carolina. In the 2010 elections, voters flipped both the state Senate and House from Democrat to Republican control—the first time since 1870 that a Republican majority had existed in both chambers. In the 2012 elections, voters also picked a Republican governor for the first time in 20 years, and elected three new Republicans to Congress, shifting their state’s representation in the U.S. House from 7-6 D to 9-4 R.
Art Pope took a leave from the foundation to become the new governor’s budget director, and the state government enacted a burst of dramatic reforms over the next two years—flattening and cutting taxes, reducing the growth rate of the state budget, and reforming education. In the 2014 elections, this new political alignment was largely ratified by North Carolina voters, and the incumbent Democrat U.S. senator was defeated by a Republican.
In the summer of 2008, the three largest unions of government employees and a collection of left-wing organizations including ACORN, MoveOn.org, the Center for American Progress, Alliance for a Just Society, and USAction announced the creation of Health Care for America Now—a political pressure group with a single goal: to pass the Affordable Care Act, popularly known as Obamacare. The group had a $40 million budget, primarily to be used for political ads and organizing. At their launch event that July they unveiled their initial $1.5 million ad purchase. “We began the campaign by attacking the insurance industry as the chief villain in the story,” the group summarized in its online history. “This message mobilized the progressive base and moved people in the ‘middle’.”
It was Atlantic Philanthropies, the foundation created by Duty Free Shoppers Group co-founder Chuck Feeney, that made all of this activity possible. Atlantic launched the Health Care for America Now coalition with a 2007 grant, and put a total of $26.5 million into the cause over a two-year period. This direct intervention in political action was made easier by the fact that Atlantic is headquartered in Bermuda, freeing it from the federal prohibition on lobbying by U.S. foundations.
In the end, the Affordable Care Act passed without a single vote to spare in the U.S. Senate. Absent the investment by Atlantic Philanthropies, noted the Huffington Post and other observers, it is unlikely the legislation would have taken effect. And the Atlantic-financed campaign didn’t end with passage of the legislation.
“Once the bill became law,” explains HCAN’s online history, the group “fought back hard against the ACA-attacks in a myriad of ways. Working with unions like AFSCME and SEIU and our field partners, HCAN broadened its ‘which side are you on’ organizing around Obamacare to protecting Medicare and Medicaid and calling for wealthy Americans and big corporations to pay their fair share in taxes.” Once it exhausted its funds, HCAN finally closed down as an organization.
Retired investor Roger Hertog has made it a centerpiece of his philanthropy to create first-rate intellectual seminars that can inspire an interest in politics among top students who are likely to be involved in setting national policies in the future. His Hertog Foundation describes itself as “an educational philanthropy whose mission is to bring the very best ideas in defense of Western civilization to a new generation of intellectual and political leaders.” It operates a half-dozen different seminars toward this end.
The Hertog Political Studies Program brings college students to Washington for six weeks of classes on political theory and practice. The foundation’s Economic Policy Studies Program is a two-week immersion in the politics and finances of the welfare state. The War Studies Program is a similar session on military and foreign policy. Various Advanced Institutes tutor students and young professionals in specialized areas like Lincoln’s political thought or the lessons of the Iraq war. An American History Scholars program is designed for high-school students.
Each of these programs is taught by prominent scholars hired by the foundation. The Hertog Foundation also supports special seminars at Macaulay College and Columbia University to inspire talented students to become engaged citizens acquainted with the best of classic political thinking. The ultimate effects of this work will be felt as graduates of Hertog classes enter positions of influence in government, academe, and other fields.
Drilling horizontally into shale and then cracking it by pumping in water under high pressure—a process known as “fracking”—has had stunning effects on U.S. oil and gas production, turning the U.S. into the world’s leading producer of natural gas and cutting our oil imports sufficiently to crash the world price of oil. The contributions of fracking include more than a million jobs, over $110 billion of GDP, and a reduction in pollution and carbon emissions (due to substitution of gas for coal in electricity production) that has actually pushed U.S. emissions well below our level of the previous ten years, despite population and economic growth.
Even with these dramatic benefits, fracking became a controversial process in recent years, and much of that is due to the effort of a foundation in upstate New York that supports left-wing media, and activist and environmental groups. In 2010 the Park Foundation approached a Cornell University marine ecologist about writing an academic article making the case that shale gas is a dangerous, polluting product. They gave him a $35,000 grant, and when his paper came out a year later scientists from across the ideological spectrum with geology and energy expertise were sharply critical. But a New York Times reporter leapt on the article and turned its negative view of natural gas into a cause célèbre, spawning hundreds of spinoff stories.
This was just one of hundreds of interventions in the fracking debate by Park over the last few years. The foundation also offered scores of small grants to activist groups and publications to support anti-fracking articles, conferences, rallies, and legislative campaigns. The Gasland films attacking fracking were also funded by Park. By carefully targeting about $3 million per year to a mix of sympathetic academics, ideological publications, and pressure groups, this one medium-sized foundation was able to make a large impression on public policy.
Indeed, this effort was sufficient to get fracking banned in Park’s methane-rich home state of New York, and to stimulate similar bans or moratoriums in Maryland, Vermont, a number of U.S. cities and towns, and even locations abroad where the energetic advocacy campaign against shale gas and oil managed to alarm public opinion.
Hedge funder Thomas Steyer made lots of money developing new coal mines in Asia. More recently, he decided fossil fuels are evil, and developed a taste for policy fights on this subject. In 2010 Steyer personally launched and funded a $25 million campaign to defeat a voter proposition in California that would have suspended the state’s global-warming law (which requires a statewide reduction of greenhouse gases to 1990 levels) until the state unemployment rate fell below 5.5 percent (it was then above 12 percent). The year before, Steyer had given $40 million to Stanford to bankroll a climate and energy center, and the year after he pledged $25 million to Yale for a similar environmental center.
By the time the next election rolled around in 2012, Steyer had funded a California voter proposition of his own. This one would raise about a billion dollars of taxes and steer much of the money into “clean energy” spending. Steyer poured tens of millions of dollars into getting the referendum passed. Next, he started funding and appearing in a series of 90-second ads attacking the Keystone XL pipeline; they were instrumental in stalling that project. The philanthropist has recently been a strong supporter of the Energy Foundation (see 1991 entry).
In 2013, Steyer stepped out as America’s No. 1 public policy and politics donor on the left. He spent $11 million to help elect Terry McAuliffe as governor of Virginia, millions more on the Democrat primaries in Massachusetts, and then invited a couple dozen other top liberal donors to one of his vacation homes to announce his creation of NextGen Climate—his own politics and policy organization focused on global-warming activism. He donated $50 million to the group and asked others for matches so they could seat 2014 candidates favoring global-warming controls. In the end, Steyer poured around $73 million into various 2014 campaign races. For the 2016 election season Steyer reoriented NextGen almost completely away from policy formation and toward political efforts on climate issues.
Steyer has become the largest funder not only of climate causes, but also of the Democratic Party and of the left-wing Democracy Alliance (see 2005 entry). According to the Center for Public Integrity, he gave more than any other political donor in the U.S. in 2014. After the election, his chief strategist told the New York Times that “Steyer’s spending was a down payment on a multiyear strategy aimed at ensuring that climate change stays at the center of the political debate.”
Back in 1987 the Milwaukee-based Lynde and Harry Bradley Foundation provided a $2.8 million startup grant to launch the Wisconsin Policy Research Institute, a think tank focused on the economic and social health of its home state. The institute published a steady stream of research reports on education problems, the business environment, state pension imbalances, and other concerns.
Then in 2009 and 2010, WPRI rang alarms over runaway government-employee costs and a state budget deficit heading past $3.6 billion. At that time, Democrats controlled both houses of the state legislature as well as the governorship. The 2010 election, though, swept in a Republican governor and flipped control of both the Assembly and state Senate.
Anticipating this power shift, the Bradley Foundation had given the Wisconsin Policy Research Institute a million-dollar grant in 2009 (on top of its normal $400,000 in annual support) to produce a special policy document entitled Refocus Wisconsin. “We saw how much the Reagan administration relied on the Heritage Foundation and how much Mayor Rudy Giuliani relied on the Manhattan Institute in New York City,” said Bradley president Michael Grebe. “We wanted to support a project that provided a similar level of policy assistance to our own governor and lawmakers.” The 154-page publication offered information and policy recommendations on budgeting, taxes, public pensions, and education. The Wisconsin Institute for Law and Liberty and the MacIver Institute, also Bradley grant recipients, offered additional ideas for improving governance in their home state.
When Governor Scott Walker and the new legislative class took office in 2011, they enacted a Budget Repair Bill that dramatically reformed state government—requiring public employees to contribute to their pensions for the first time, trimming the power of public-employee unions (whose membership dropped by half after state and local employees including public-school teachers were allowed to opt out), establishing controls on medical costs, and so forth. After protests, work refusals, legislators going fugitive, and a recall vote on the governor (which he won with a larger percentage of the vote than in his initial election), the reforms stuck, and immediately became an influence on other states.
In his capacity as a private citizen, not a foundation CEO, Grebe chaired Governor Walker’s re-election campaign in 2014. Walker was returned to office, and the GOP majorities in both state houses were enlarged.
Take one scoop of donors looking for new ways to affect public opinion and government policy, mix with three scoops of mainstream journalism bleeding red ink in the face of new Internet-based competition, and you get a layer-cake of donor-funded reporting operations. The grandaddy of these creations is ProPublica, founded by hyperactive liberal donors Herb and Marion Sandler to be a twenty-first-century muckraker, with a special focus on topics like gun control, civil rights, health care, fracking, campaign-finance limits, labor laws, the climate change, Guantanamo, and other policy hot buttons. With more than $35 million of checks written by the Sandlers, ProPublica quickly hired a deep stable of reporters and editors and started churning out heavily researched exposés. The organization posts articles on its own website and lets newspapers run them for free. The operation quickly became a favorite of the journalistic establishment, and was awarded the first Pulitzer Prize for investigative reporting given to an online publication. It now receives support from large foundations like Ford, MacArthur, Annie E. Casey, and Hewlett.
Many local variants of ProPublica, and a few national ones, followed with their own angel funders. These range from the Texas Tribune, funded by Democratic Party donors in that state, to the MinnPost, launched by four public-minded families in Minneapolis, to the Honolulu Civil Beat financed by eBay founder Pierre Omidyar. Watchdog.org, a project of the Franklin Center, was established as a miniature version of ProPublica digging from the right in 29 states as of 2015, and the American Media Institute is struggling to launch itself as another investigative reporting operation positioned on the right side of the political spectrum.
All of these are digital-only publications to contain costs, and they all depend on philanthropic support—primarily annual operating grants, supplemented by small donations from readers. All have demonstrated some ability to influence local or national debates on policy and politics.
Pete Peterson became a billionaire as co-founder of the Blackstone investment firm, but he was the son of poor Greek immigrants and never lost his distaste for profligacy and waste. He watched horrified as the federal budget went from a slight surplus in 1960 to a deficit of 2.6 percent of GDP at the end of the 1970s, and 4.1 percent of GDP (that’s $680 billion) as of 2013. Since 2008 Peterson has put more than a billion dollars of his own money into educating policymakers and the public on the dangers of that kind of fiscal imbalance. He warns that “on our current course, our children will not do as well as we have. For years, I have been saying that the American government, and America itself, has to change its spending and borrowing policies.”
The Peterson Foundation sponsors conferences, reports, debates, films, and television ads on the dangers of massive federal debt. In 2010 it launched a series of annual fiscal summits for national political leaders. The latest versions included Bill Clinton, Michael Bloomberg, Chris Christie, Nancy Pelosi, Alan Greenspan, and others. In 2011, and then again in 2012 and 2015, the foundation funded several think tanks, positioned on both the left and the right, to create plans that would eliminate federal deficits. These were then promoted to lawmakers.
This is somewhat unusual territory for philanthropy, but recently one other donor has become active on the same topic. Hedge-fund founder Stanley Druckenmiller began speaking actively to college students in 2013, warning that out-of-control entitlement spending threatened to degrade the standard of living of their generation.
In 2004, Colorado was a solidly Republican state: the governor, both U.S. Senators, and five of seven House members belonged to the GOP, and President George W. Bush won the state’s nine electoral votes. By the end of the 2008 elections, everything had reversed: the governor, both U.S. Senators, and five of seven House members were Democrats, and Barack Obama carried the state. National political trends explained some of this transformation. The rest was the work of four liberal philanthropists who set out to remake Colorado through a mix of public-policy giving and campaign donations—software entrepreneur Tim Gill, venture capitalist Rutt Bridges, Internet businessman Jared Polis, and heiress Pat Stryker.
In 1999, Bridges founded the Bighorn Center for Public Policy, a think tank that swiftly altered state campaign-finance rules. The liberal Bell Policy Center was established immediately after. Then came a Colorado version of the national MoveOn.org pressure group, called ProgressNowAction.org. Colorado Media Matters was created in 2006 to influence state reporters and editorial writers. A litigation group, Colorado Ethics Watch, was set up the same year, along with an online newspaper called the Colorado Independent and several blogs like ColoradoPols.com and SquareState.net, all oriented to promoting progressive policies and investigating and criticizing opponents. A new academy to train liberal activists, the Center for Progressive Leadership Colorado, was also funded.
The Denver Post characterized the mechanics of the nonprofits set up by the “Four Millionaires” and their allies this way:
A liberal group with a nonpartisan name like Colorado First puts out a list of polluters and demands official action. A Republican running for Colorado office is on the list. Paid liberal bloggers chatter. An online liberal publication with a newspaper-like name writes an article about the candidate and his company polluting Colorado’s streams. A liberal advocacy group puts out a news release, citing the group and the pollution, which sound reputable to an ordinary voter. They mass e-mail the release and attach a catchy phrase to it like “Dirty Doug.” At some point, the mainstream media checks out the allegations.
In the 2004, 2006, and 2008 elections, the Four Millionaires spent more than $20 million trying to tip Colorado from Republican to Democrat via a mix of political attack ads during election season and long-term funding for what political analyst Fred Barnes described as “a vast infrastructure of liberal organizations that produces an anti-Republican, anti-conservative echo chamber in politics and the media.” They were wildly successful: After 2008, Democrats controlled not only all of the national offices described in the first paragraph above, but also the governor’s mansion and both chambers of the state legislature. By 2012, according to the Denver Post, liberal Super PAC contributions exceeded conservative ones at a rate of 150:1.
Observing this triumph—which became known as the Colorado Model—other donors launched or intensified similar efforts in other “purple” swing states. The Coors Foundation also worked to help Colorado conservatives learn from the progressives’ success, and in the deep-red 2014 election, Republicans finally reclaimed one of the two U.S. Senate seats in Colorado. But the other Senate seat and three of the seven House seats remained with Democrats. The incumbent Democrat governor won a tight re-election. Republicans narrowly took control of the state Senate, and they pared down Democrat control of the state Assembly from 37-28 to 34-31. Colorado was purple again. But the Gill/Bridges/Polis/Stryker nonprofit infrastructure remains in place.
A year and a half before the Presidential election, the foundations of Bill Gates and Eli Broad—which together had already given more than $2 billion to various education-reform causes—announced a $60 million effort to make education a central issue in the political debate. Under the tagline “ED in ’08,” their campaign launched elaborate communications efforts, celebrity endorsements, fancy campaign paraphernalia, petitions, swing-state advertising, other media efforts, and meetings with candidates and staff.
Despite being what the New York Times described as “one of the most expensive single-issue initiatives ever in a Presidential race,” this effort produced no significant increase in the political salience of educational issues. Both parties adopted their usual platform planks on schools, and over the course of the Presidential debates 20 education-related questions were posed to the candidates—not significantly different from previous election cycles. By the time they had spent $25 million, the Gates and Broad foundations announced that no further money would be put into the initiative.
Reflecting on the aborted project shortly after the election, Bill Gates observed that “most of what we were causing people to do was mouth platitudes.” Fuzzy, generalized efforts to influence policy while dancing around controversial details may not be worth the effort, many observers and donors concluded.
“Left unattended, human-induced climate change could overshadow all our other efforts to cure diseases, reduce poverty, prevent warfare and preserve biodiversity. Global, collective action is paramount.... How can philanthropists turn the tide against global warming?”
Those were some of the opening sentences of a 2007 report that the Hewlett, Packard, Doris Duke, Energy, Oak, and Joyce foundations commissioned in hopes of finding ways to “win in the battle against climate change.” These donors had long been activists on the global-warming issue, and the study they paid for, called Design to Win, laid out a strategy for blocking coal-fired power plants and other producers of carbon dioxide in the short term, then creating new policies in the longer term to drastically reduce energy use and greenhouse gas emissions. The report called on climate-concerned philanthropists to increase their giving in this area from the existing $177 million per year to $525 million to $660 million per year.
The very next year, an activist organization called ClimateWorks emerged out of this. The Hewlett Foundation pledged $100 million annually over five years to get it launched, and the Packard Foundation has kicked in $40 million to $60 million per year of crucial support. The Packard and Hewlett foundations are the two largest philanthropic funders of global-warming activism in the world, having between them granted more than a billion dollars over the most recent decade just to their two favorite recipients—ClimateWorks and the Energy Foundation.
These two mega-donors were joined in setting up ClimateWorks by the McKnight, Ford, Rockefeller, Kresge, Moore, and other foundations. The organization channels their donated money to affiliated organizations, and presses for strong new government policies and environmental controls. According to the latest-available IRS filings, ClimateWorks collected $170 million from donors in 2012. The group’s official goal is to slash emissions of carbon dioxide and other greenhouse gases by 50 percent by the year 2030.
Jon Stryker, the billionaire heir to the Stryker medical-instruments fortune, set up the Arcus Foundation in 2000. It almost immediately became a national force for lawmaking and electioneering on behalf of gay rights, thanks to $78 million of targeted donations to gay groups in just its first ten years.
Stryker also used his giving to change the political calculus in his home state of Michigan. At the same time he and his sister, Pat, were using their inherited billions to help flip Colorado into the political blue column (see 2008 entry), he was carrying out a similar game plan on the Great Lakes. He employed philanthropic donations plus $5 million of PAC spending to help flip the Michigan State House from Republican to Democrat control, and to help Jennifer Granholm defeat Dick DeVos in the governor’s race.
Robert Rosenkranz made a fortune in insurance and investing, and when he began to give money away his first interest was in efforts to improve public policy and governance. He supported the Federalist Society and Manhattan Institute. He funded Rosenkranz Hall to house Yale University’s political science department and international relations program.
But Rosenkranz mourned the disappearance of respectful, meaty, intelligent public debate, seemingly squeezed out by the rise of personal, partisan, and emotional political wrangling on Internet and media outlets. Then during a trip to London in 2005 he took in a high-quality Oxford-style debate organized by a new group called Intelligence Squared. He purchased the rights for an American version of Intelligence Squared, hired a former Nightline producer to orchestrate, and debuted the first debates before live New York City audiences in 2006. Rosenkranz immersed himself in the process—choosing many of the topics, suggesting sparring partners on opposite sides of important public questions, and delivering opening remarks that framed the issues being argued over.
The Intelligence Squared U.S. debates quickly became popular, both as live events and as media and Internet phenomena—most of them are aired over NPR, streamed and posted as videos on the Web, and offered as podcasts. Not only the audience but also website visitors are given a chance to vote their own position on the debate topic, both before it takes place and right after. The statistical change in opinion as a result of the back-and-forth on stage is used to judge who won the argument.
As of 2015 there had been about 120 jousts, on hot topics in public policy like “Too many kids go to college,” “A booming China spells trouble for America,” “Global warming is not a crisis,” and “FDA caution is hazardous to our health.” Many constructive and enjoyable discussions, along with several awards for best public-affairs programming, have resulted from the mix of top-flight thinkers and lively controversialists arguing within a fair and scrupulously structured discussion format. Rosenkranz remains a central funder of the effort, but other philanthropists like Paul Singer and Gerry Ohrstrom, plus foundations like Rupe, Sackler, and Bradley, have also provided grants to keep the smart arguments flowing.
A year after a group of liberal donors set up the Democracy Alliance, the same forces joined together to establish the Committee on States in 2006. Just as the Democracy Alliance (see 2005 entry) is a conduit for steering donor money to approved left-wing national political organizations, the Committee on States is a conduit for steering money to left-wing political organizations working on the state level. In every state where it operates, the group recruits major donors and recommends places to send money. The funds pay for political data and analysis, grassroots organizing, opposition research, fundraising, and messaging. The goal is to elect officeholders who will enact liberal policies and be in a position to influence the redrawing of election districts in the states after the 2020 census.
The committee is a nonprofit 501(c)(4) advocacy organization. Under IRS rules, such groups can advocate for public policies without limitation, can urge particular votes on issues, and can depict candidates in positive or negative ways, but must not make active electioneering their primary purpose. Donations to a (c)(4) are not tax-deductible, but the Committee on States has set up a parallel 501(c)(3) whose more research-related work does allow supporters to deduct their giving.
During the 2014 election cycle the committee coordinated about $50 million of donations made in 20 different states—including $9 million of spending in Wisconsin, $7 million each in North Carolina and Minnesota, and $6 million each in Colorado and Florida. The group hopes to create donor networks in seven more states for the next election. The intent is to establish durable political machines in each place, and the Committee on States aims to increase spending to $100 million per year by 2020.
Liberal philanthropists are funding not only this electoral organizing but also efforts to link liberal officeholders in affinity groups, and supply them with ideas and legislative ammunition. The Public Leadership Institute has established a Progressive Leaders Network that connects 13,000 left-leaning city, county, and state officials. A new group called the State Innovation Exchange was kicked off in 2014 by the donors of the Democracy Alliance. That organization plans to raise $10 million a year in donations “to boost progressive state lawmakers and their causes—partly by drafting model legislation…while also using bare-knuckle tactics like opposition research and video tracking to derail Republicans and their initiatives,” according to Politico.
Rob Stein had worked for the Democratic National Committee, the Clinton-Gore campaign and administration, and a private-equity firm. Then he set out on a new task: to convince wealthy liberal donors to pay for political infrastructure that would beat conservatives in policy and electoral contests. He put together a PowerPoint cautionary, traveled the country, and in 2005 kicked off a new group: the Democracy Alliance.
The philanthropic and political giving club invites to its closed-door meetings individuals who have donated at least $200,000 to one of its favored activist organizations. It has about 100 members, who have included major donors like George Soros, Tim Gill, Chris Hughes, Patricia Stryker, and Tom Steyer, plus the leaders of unions that command large political funds like NEA, AFT, and SEIU. The alliance doesn’t collect money itself but rather encourages and coordinates donations to political groups it selects and endorses—21 “core” groups plus 180 other organizations designated to fill a role on its “Progressive Infrastructure Map.” These include operations like the Center for American Progress, Media Matters, the Center on Budget and Policy Priorities, and a variety of electioneering groups (America Votes, Catalist, Emily’s List, Organizing for Action, etc.).
Beneficiaries of Democracy Alliance funding include a wide mix of groups: There are 501(c)(3) nonprofits (for which donations are tax-deductible and public) that must mostly steer clear of lobbying and politics. There are also 501(c)(4) social-welfare groups who can lobby and advocate for public policies, and get involved in modest amounts of electioneering (donations to them are not deductible, but are anonymous). And there are 527 Political Action Committees and SuperPACs, both of which give directly to political candidates (with donations being publicly disclosed and non-tax-deductible).
Donations earmarked through the Democracy Alliance total about $70 million per year. Including funds raised from other sources, just the 21 core groups in the Democracy Alliance portfolio set in motion $374 million of spending to boost liberal policy causes and political candidates in the 2014 midterm election, according to Politico. In private meetings held after the 2014 conservative wave, the alliance formulated a giving plan with four goals: Increase funding for liberal groups. Motivate progressives. Persuade independents. Divide the right and reduce its funding.
Movies with a political message are hardly a new phenomenon, but never before has a donor made social change via film the main focus of his philanthropic investing. In 2004, eBay co-founder Jeffrey Skoll founded Participant Media, into which he poured “hundreds of millions of dollars…with much more to follow,” understanding that “everything I put into Participant, I don’t expect to get back.” The company began to produce films with a liberal-activist tilt, paired with accompanying media campaigns aimed at translating public sentiment stirred up by the films into legislation or other political action.
By 2015 Skoll’s venture had produced more than 65 films, convinced stars like Matt Damon, Gwyneth Paltrow, Tom Hanks, Julia Roberts, Benedict Cumberbatch, and George Clooney to take roles for far less than their normal fees, and charmed Hollywood into more than 30 Oscar nominations. The movies included titles like An Inconvenient Truth (which won Al Gore his Nobel Peace Prize for climate-change alarmism), Citizen Four (extolling Edward Snowden’s national security leak), Food, Inc. (attacking modern farming), Good Night, and Good Luck (skewering McCarthyism), Syriana (big oil threatens the world), Charlie Wilson’s War (right-wing Americans planted the seeds of al-Qaeda), The Help (on mistreatment of African-American domestic workers), and many others. Corporate abuses, violence against women, gay rights, and environmental and union causes are other favorite topics of the studio. One of the studio’s early films, Waiting for Superman, drew acclaim from school reformers on all parts of the political spectrum.
Each Participant movie is launched with a companion “social action campaign” (coordinated by a separate division) that prompts consumers to take some political or economic action, promotes the film for use in school, holds special screenings for legislators and journalists, and so forth. Participant has even teamed up with the Gates and Knight foundations to fund work at University of Southern California’s Annenberg School for Communication and Journalism that aims to create reliable measures of whether, and how, entertainment can spur citizens to become social activists.
Though none have made a commitment to “filmanthropy” on the scale of Jeff Skoll, other philanthropists have funded moviemaking in an attempt to influence cultural and political trends. These have included AOL founder Ted Leonsis, backer of a website for short documentaries known as SnagFilms, and businessman Philip Anschutz, who financed major movies like the Narnia series, and others based on classic children’s books, in order to encourage popular entertainment that is more friendly to families raising youngsters.
As they prepared for the 2004 presidential election and beyond, a small group of liberal donors led by bankers Herb and Marion Sandler concluded that the Left needed a new kind of think tank that would combine public-policy research with political activism. Joined by real-estate magnate Steve Bing, insurance mogul Peter Lewis, and investor George Soros, they bankrolled the Center for American Progress, to be directed by Clinton-administration operative John Podesta. They were motivated by a sense among many liberals that Republicans benefited from an infrastructure of conservative think tanks, and that Democrats enjoyed nothing similar. The Brookings Institution, numerous academic centers at universities, and many liberal advocacy organizations existed, but these funders did not consider them as effective as groups like the Heritage Foundation, Cato Institute, and American Enterprise Institute. A series of reports from the left-wing National Committee for Responsive Philanthropy on how the right-leaning think tanks had been built by donors was also influential in sparking wealthy liberals to act.
Podesta’s idea was to create a nonprofit organization that would have a traditional think-tank arm (a research group eligible for tax-deductible donations), as well as a legislative advocacy arm (not eligible for tax-deductible donations). This combination of 501(c)(3) and 501(c)(4) was an innovation for large-scale research institutions. “With the Center for American Progress, Podesta was trying to create something new,” wrote journalist Byron York, “a think tank that doubled as a campaign war room.” Podesta himself described CAP as “a think tank on steroids.”
The donors did not achieve their immediate objective of electing a Democrat to the Presidency in 2004, but CAP became an aggressive part of the left-wing political machine. Its “communications” department became its largest office, and dispatching the organization’s employees for “rapid response” media attacks on conservative arguments or proponents became the central function of the group. Its influence on the political discourse aided Democratic triumphs in the 2006 congressional elections, and Barack Obama’s victories in 2008 and 2012.
CAP attempts to hide its financial information as much as possible. By 2014, though, the group’s budget was more than $45 million. Copying Podesta’s model, the Heritage Foundation launched its own 501(c)(4) group seven years after the creation of CAP.
Early in the war on terror, elected Democrats mostly avoided harsh criticism of the commander in chief. But liberal donors George Soros and Peter Lewis were vehemently opposed to President Bush and the military actions launched after 9/11, so they jointly donated about $40 million to a political-influence effort called America Coming Together, a 527 political action committee. With that seed money, the organization collected another $200 million in large and small gifts from liberal donors, and used the funds to set up voter-mobilization machinery in every battleground state, flooding the airwaves with issue-advocacy commercials during the 2004 elections. ACT was the largest nonprofit political action effort in history to that point, and succeeded in increasing turnout on the left. Nonetheless, George Bush defeated John Kerry for President, and Soros and Lewis, expressing “disappointment,” pulled all their funding. ACT, which had intended to become a permanent force in liberal politics, shut down.
Among many other public-policy causes, the Open Society Foundations funded by financial speculator George Soros have been leading donors to gay rights. Their Lesbian, Gay, Bisexual, Transgender, and Intersex program gives $5-10 million per year to upwards of 70 advocacy groups. Their most consequential grants in this area may have come between the years of 2000 and 2005, when they invested millions in political and legal efforts to promote gay marriage. They were among the first significant funders of two of the groups that led this campaign: Freedom to Marry, and the Civil Marriage Collaborative. In 2004, Massachusetts became the first state to establish gay marriage, and from then on activist funders like the Gill and Overbrook foundations and the Evelyn and Walter Haas Fund piled onto the cause. Open Society, however, was a pioneer.
Twenty-three years after the Tides Foundation invented the funding collective for public-policy causes (see 1976 entry), liberty-minded donors created a counterpart organization. Called DonorsTrust, it helps philanthropists create donor-advised funds that encourage “limited government, personal responsibility, and free enterprise.” The entity was founded in 1999, just as donor-advised funds were taking off as funding mechanisms for all sorts of charitable purposes.
Since opening its doors in northern Virginia, DonorsTrust has channeled $850 million toward causes favored by its donors. Philanthropists attracted to DonorsTrust run the full spectrum of the Right, from libertarians to conservative traditionalists. The beneficiaries of their grants range widely—economic-research organizations, religious groups, hawkish foreign-policy advocates, outfits working to reduce imprisonment rates, you name it. Grants also go to hospitals, schools, camps, and other causes not related to public policy.
Like the Tides Foundation, notes co-founder Kim Dennis, DonorsTrust was inspired by the creativity of its donors to eventually expand beyond just administering donor-advised funds. The group can now also help incubate new charities and projects. And as with Tides, part of the power of DonorsTrust is that it helps philanthropists magnify the effect of their donations by bundling them together with funds from other likeminded contributors.
To make sure that donations go to the purposes philanthropists actually intend (rather than causes favored by administrators acting after the donor is out of the picture—a problem at many foundations), DonorsTrust recommends that accounts should “sunset” (be fully spent) while givers are still around to help set priorities. As a “fail-safe” to preserve donor intent, the organization allows no perpetual trusts. “Only the original donor can name successor advisers, and accounts should be closed 20 years after a donor’s death,” explained then-president Whitney Ball.
Unhappy at the prospect of Bill Clinton’s impeachment, software entrepreneurs Joan Blades and Wes Boyd set up an online petition that soon grew into a major force for mobilizing liberal donors and voters via the Internet. The MoveOn.org website became a hub for communication and fundraising for left-wing causes, including environmental controls, liberal social issues, and opposition to the war on terror. The group has used a 501(c)(4) advocacy arm, a Political Action Committee, a 527 political fund, hundreds of Internet petitions, and other mechanisms to influence policies and politics with its donations. The group’s growth was accelerated by multimillion-dollar gifts during the 2004 election cycle from Linda Pritzker, George Soros, Peter Lewis, and other large patrons. It also accumulated many small donors and volunteer activists and claimed 8 million participants as of 2015. In its first decade-and-a-half of existence, MoveOn raised and spent close to $100 million to promote favored policies.
Investor Theodore Forstmann and Walmart heir John Walton were disappointed by waffling in Congress in the mid-1990s over a school-choice pilot program. There were proposals, enthusiastically backed by local residents, to help Washington, D.C., families trapped in miserable public schools place their children in private or parochial alternatives, but the plans were going nowhere. The Congressional indecision “was a joke,” Forstmann concluded. “So we said, ‘Okay, we’ll do it. Let’s get this program going and see if it works.’”
Forstmann and Walton joined forces in 1997 to donate $6 million to the Washington Scholarship Fund. The fund was a roaring success, with low-income families in the nation’s capital lining up several deep for every available scholarship. (This inspired Walton and Forstmann to collaborate in 1998 on a national version of their project: the Children’s Scholarship Fund, which they launched with contributions of $50 million each. For more information on this and other private philanthropy advancing school choice, charter schooling, and other innovations in school reform, see the companion list of achievements in Education giving.)
Because all of this happened right in Congress’s backyard, the philanthropic effort influenced politics and national opinion. In 2004, legislation finally passed creating the D.C. Opportunity Scholarship Program, the first federally funded school voucher program in the U.S. As of 2015 it provides scholarships of $8,000-$12,000 to low-income families so they can send their children to private or religious schools of their choice, benefiting more than 5,000 children.
Houston real-estate developer Dick Weekley worried that runaway litigation costs in trial-lawyer-friendly Texas were imperiling the state’s business environment. So in 1994 he and several allies founded a nonprofit called Texans for Lawsuit Reform. The group’s mission statement called lawsuit abuse “the No. 1 threat to Texas’s economic future.”
At first, Weekley contributed his time to the project. Before long, he was contributing his money and raising additional funds from other Texans. Within two years, TLR had convinced the state legislature to put some limits on punitive-damage awards. As the organization pushed for more changes and helped finance the campaigns of like-minded political candidates, it attracted a mass following. In 2014, TLR had more than 16,000 individual supporters, representing 1,266 different trades and professions, from 857 towns across the state. “Membership continues to grow because Texans recognize that a small, powerful group of plaintiff lawyers are abusing the system for financial gain, resulting in harm to consumers and the Texas economy,” said Weekley. “Other groups have raised more money,” wrote Texas Monthly in 2011, “but none have been so singleminded in their pursuit of an ideological goal.”
TLR’s biggest breakthroughs came in 2003. To supplement its research and educational work, the organization had added a political-action arm, TLR PAC, to fund candidates. The PAC’s donations played a key role in the 2002 Republican takeover of the Texas House of Representatives (which Democrats had controlled since Reconstruction). A flood of reforms followed in the next legislative year. Lawmakers overhauled the rules on medical-malpractice lawsuits, for example, adopting a cap on non-economic damages.
By 2008, TLR could take credit for almost two dozen important reforms, and Texas had transformed itself from lawsuit mecca to leader in legal moderation. An economic analysis calculated that 8.5 percent of the state’s economic growth since 1995 was due to lawsuit reform. It credited lawsuit reform with bringing 499,000 new jobs, a 21 percent reduction in medical liability insurance costs, and health insurance coverage for 430,000 formerly uninsured Texans. After raising more than $100 million from donors in its first 20 years, TLR continues to pursue adjustments to the state civil-justice system in each legislative session.
In 1994, Tim Gill, founder of the software company Quark, set up his Gill Foundation with a fierce focus on changing public policies and officeholders to advance gay rights. A decade later he established a political-action arm focused directly on influencing elections, and formulated a specific plan to legalize gay marriage within ten years. Gill subsequently devoted more than $300 million of personal and foundation gifts to these causes, to great effect.
Gill’s gay-marriage goals were largely achieved within his ten-year time frame. And his donations also helped swell AIDS funding, create new hate-crime categories, defeat a Constitutional amendment to define marriage in traditional ways, repeal the military’s prohibitions on overt homosexuality, undo religious-freedom protections in federal and state laws, and promote the Employment Non-Discrimination Act legislation making sexual orientation and gender identity protected categories in labor law. “Normalizing LGBT people in the eyes of the public” has been at the heart of his effort.
Gill made a special push to turn his home state of Colorado into a model. Working with three wealthy colleagues, he set out to establish a cautionary for policymakers in other places by defeating political candidates viewed as hostile to gay causes. The heavily funded effort succeeded at flipping Colorado politics for a period of years (see 2008 entry), a success that public-policy donors in other states subsequently worked to copy.
In 2014 it was reported that Gill will spend at least $25 million over the next few years to remake policies and attitudes in Southern and Western states into forms more friendly to gay rights. This funding will help nonprofit groups like the Human Rights Campaign and the ACLU bring in new staff for major initiatives to shift law and culture in culturally conservative states.
In the decade between 1994 and 2004, philanthropists proclaiming the importance of “taking the money out of politics” spent more than $140 million on politics. Eight liberal foundations supplied 88 percent of this funding that sought to restrict paid speech in political campaigns, with the Pew Charitable Trusts alone spending more than $40 million. Grants went to organizations such as the Center for Responsive Politics, the Center for Public Integrity, Democracy 21, and the League of Women Voters Education Fund. Large grants also went to liberal media organizations like NPR and the American Prospect to pay for stories on campaign-finance reform.
“The idea was to create an impression that a mass movement was afoot—that everywhere [members of Congress] looked, in academic institutions, in the business community, in religious groups, in ethnic groups, everywhere, people were talking about reform,” explained former Pew program officer Sean Treglia at an academic conference after campaign-finance reform had already passed Congress. He added that he “always encouraged the grantees never to mention Pew” because the disclosure would clash with an image of grassroots activism.
Whatever the motives and tactics, the results were clear: In 2002, the so-called McCain-Feingold campaign reform act, a sweeping measure that regulated both dollars and words in political campaigns, was passed into law. Almost immediately, however, this legislative victory turned into a legal rout. Judges repeatedly trimmed the law’s limits on what campaigns, corporations, and labor unions could do and say. The biggest blow came in 2010, with the Citizens United ruling in which the U.S. Supreme Court found that the First Amendment to the Constitution prohibits government from restricting independent political expenditures by nonprofits, corporations, labor unions, and other associations.
The Pew Charitable Trusts halted its philanthropy in this area in 2008, and the philanthropic enthusiasts for throttling campaign spending gradually recognized that they had reached an impasse.
When Arizona and California became the first states to approve the “medical” use of marijuana in 1996, it was currency speculator George Soros who, as the New York Times put it, “almost singlehandedly” made these victories possible. He made million-dollar donations on behalf of ballot referenda and other organizing efforts.
With the door cracked open by “medical marijuana,” Soros continued to contribute several million dollars every year to promote wider drug legalizations. He backed organizations like the 501(c)(3) nonprofit Drug Policy Alliance and its political-campaign arm, Drug Policy Action. These organizations first expanded legalization of medical marijuana to 20 states, then pushed through open-ended sanctionings of recreational use of marijuana products—first in Colorado and Washington state, followed by Alaska, Oregon, and D.C.
From 1994 to 2014, George Soros poured at least $80 million into efforts to undo drug prohibitions, prompting Joseph Califano of Columbia University’s National Center on Addiction and Substance Abuse to label him the “Daddy Warbucks of drug legalization.” Nearly matching Soros in funding the relaxation of drug laws was Peter Lewis, former chairman of Progressive Insurance and an active pot smoker himself. In the decades before his death in 2013, Lewis donated up to $60 million for the cause of legalization. Between them, Soros and Lewis provided more than two thirds of the funding for the groups that drove marijuana legalization in states like Colorado and Washington.
In 1982, social scientists George Kelling and James Q. Wilson published an article arguing that speedy public reaction to petty disorders like a broken window could head off more serious crimes—which often spike when perpetrators get the sense that no one is paying attention. With support from the Olin Foundation and other donors, this argument was developed further at the Manhattan Institute (where Kelling became a senior fellow), and then empirical studies showed the theory to be accurate.
One of those listening was Rudolph Giuliani. When he became New York City mayor in 1994 he and police commissioner William Bratton rolled out a radically different policing style, cracking down on small crimes like subway fare jumping and aggressive panhandling, pushing officers out onto streets, and using detailed crime data to allocate police resources and hold precinct commanders accountable. Within five years, major crimes in New York were cut in half (homicides dropped by two thirds), and those declines continued for years thereafter. The new policing techniques were copied in many other cities, and the safety and savor of urban life in America was dramatically changed for the better.
Shortly after Bill Clinton’s election, Republican operative Bill Kristol raised $1.3 million from conservative foundations and New York donors to fund a nonprofit activist organization to resist nationalized health care. Clinton had promised a health-care overhaul as a signature effort, and tasked First Lady Hillary Clinton and top aides to come up with a proposal. Their solution, critics noted, would have had the government take direction of one seventh of the American economy.
Kristol and a few donor-financed assistants were among the chief organizers of opposition to the plan. They drafted strategy memos and broadcast them to politicians and journalists via fax machines (then a cutting-edge technology). At a time when polls indicated wide support for a new health-care law, the organization insisted that “there is no health-care crisis.” Eventually, rising public opposition forced the White House to abandon its massive reform, and set the stage for Republican domination of the 1994 elections—which broke the Democrats’ grip on Congress for the first time in decades.
From this success sprouted the Project for the New American Century, which continued the strategy of faxed memos but in the service of a hawkish foreign policy, and then creation of the Weekly Standard, a conservative magazine launched in 1995 with Kristol as editor.
The Robert Wood Johnson Foundation began a long-term public crusade against tobacco use in 1991. Moving far beyond traditional medical efforts and using all the levers of public-policy advocacy, the group invested more than $700 million of its own funds and recruited allies to contribute more. This massive philanthropic investment hastened many changes in law and policy that damped smoking: the Synar Amendment requiring states to prohibit the sale of tobacco to minors, public-health warnings against secondhand smoke, smoking bans on airplanes and in public spaces, bans on tobacco advertising, and agreements with Hollywood to stop glamorizing smoking in movies and TV. Starting in 1998, the Master Settlement Agreement transferred billions of dollars from cigarette companies to state governments to settle suits over the public costs of treating smoking-related illness.
In 1996, Johnson joined the American Cancer Society, American Heart Association, American Medical Association, and others in launching the National Center for Tobacco-Free Kids. The foundation put $84 million into that effort over the next 11 years.
The foundation pushed hard for higher cigarette taxes to suppress use. “Raising tobacco taxes is our No. 1 strategy,” said one collaborating activist. “The tobacco industry...can’t repeal the laws of economics.” RWJ devoted $99 million to its SmokeLess States program. When the campaign was over, more than 30 states had increased cigarette taxes and six had approved indoor-air laws that proscribed smoking in workplaces and restaurants. The federal government doubled cigarette excise taxes in 2009.
It’s not clear what would have happened to tobacco use absent this intervention led by the Robert Wood Johnson Foundation. The decline in smoking in the U.S. has actually been quite steady since the first U.S. Surgeon General report warning of tobacco’s dangers appeared in the mid-1960s. In any case, the fraction of active cigarette smokers in America fell from 27 percent in 1994 to 15 percent in 2015, and it is estimated that more than 8 million lives have been saved as a result of reduced tobacco use—which proceeded faster and further in the U.S. than in most other countries.
Even with these sharp changes, smoking remains America’s largest preventable cause of death, and donors continue to support anti-smoking education. In 2016, the CVS Health Foundation committed $50 million over five years to reduce youth smoking, with initial grants to nonprofits like the National Association of School Nurses.
In 1991, former Reagan administration lawyer Chip Mellor approached philanthropist Charles Koch with an idea for a “national law firm on liberty” that he would co-found with litigator Clint Bolick. Koch pledged up to $500,000 per year for three years. The Institute for Justice never needed this full amount, though. It quickly raised additional funds from other sources, especially as it began accepting and winning cases.
IJ rapidly became one of the leading firms pursuing “public interest” cases in the courts, usually for no fee, by aggressively litigating in four areas: economic rights, private-property protection, school choice, and free speech. It has taken numerous cases all the way to the U.S. Supreme Court. In Zelman v. Simmons-Harris (2002), for instance, the high court endorsed public funding of private-school vouchers. In Kelo v. City of New London (2005) the justices rejected IJ’s call to forbid use of eminent domain for economic development, but a public backlash stirred up by the case and harnessed by IJ resulted in 44 states passing laws that restrict eminent domain—highlighting the success of IJ’s model combining good lawyering with strategic research, media savvy, and political activism.
The organization’s second donor, retired investor Robert Wilson, helped fuel it to new heights when, after years of making annual gifts of $35,000 and promising more only “when the time is right,” he issued a challenge grant in 2008. Over a period of five years, he donated $15 million on the condition that IJ raise $2 of additional new contributions for every $1 he donated. This $45 million total infusion allowed the organization to expand significantly and become one of the nation’s leading litigants for liberty. In 2014, futures trader and longtime IJ supporter William Dunn revived the 1:2 challenge with an offer to give IJ $5 million if the organization would raise $10 million to match it.
In 2010, IJ launched an initiative to challenge civil forfeiture, which allows law-enforcement officials to permanently seize private property including homes, cars, and cash even if the owners haven’t been charged or convicted of a crime. Applying its trademark mix of research, cutting-edge litigation, media campaigning, and legislative advocacy, IJ set out to end or limit the practice. Its research report, “Policing for Profit: The Abuse of Civil Asset Forfeiture Laws” graded every state forfeiture law and found that only three states received a B or higher. The institute simultaneously launched litigation in Georgia, Massachusetts, and Philadelphia, and lawsuits against the federal government as well, challenging currency seizures.
Early in 2015, the U.S. Department of Justice announced it was suspending its program for sharing proceeds of civil forfeitures with police departments, and would review how it uses the law. At the same time, legislation was introduced in the House and Senate to rein in civil-forfeiture practices.
By this time, the Institute for Justice had more than 80 employees (about half of them lawyers), five state offices in addition to its headquarters, and a clinic at the University of Chicago where small businesses can get legal help. Individual donors supplied 85 percent of the institute’s $19 million budget in 2014.
Charitable donations aimed at influencing policy can occasionally lead to disaster, particularly if they are entangled with taxpayer money. That’s the lesson of Fannie Mae and Freddie Mac, so-called government-sponsored enterprises created by Congress to lubricate the housing market. The two agencies were allowed to operate almost like corporations—including in setting up foundation arms and making large donations to nonprofits, even though they were neither real private companies nor real philanthropists.
Fannie Mae had become insolvent during the 1980s, and government officials were exploring ways of ending the government privileges (like loose capital standards) that kept it and Freddie Mac afloat. In 1988, the White House Commission on Privatization called for an end to “all federal benefits and backing for Fannie and Freddie.” In the 1990 reconciliation act, the Congressional Budget Office was asked to study the financial risks to taxpayers created by these government-sheltered housing subsidizers.
To fight back, Fannie Mae hired the political operator who had run Walter Mondale’s presidential campaign. When Jim Johnson became CEO in 1991, two of his first ventures were to 1) allocate $10 billion for low-income people to borrow money to buy houses, and 2) establish a string of “partnership offices” in congressional districts across the U.S. where Fannie Mae would distribute grants to local nonprofits and win allies. As a Fannie Mae executive told New York Times reporter Gretchen Morgenson, “the partnership offices gave us an enormous advantage when Congress was debating further regulations. We were able to call…upon all our partners in the cities where we had these offices and say you have to weigh in. Write to Congress.”
Johnson put $350 million into Fannie Mae’s foundation and started making hundred-thousand-dollar gifts to scores of advocacy groups and nonprofits. In the words of the Times reporter, Fannie’s CEO made the foundation “a powerhouse in charitable giving that targeted organizations associated with favored politicians, or located in their areas.” For instance, a nonprofit founded by the mother of Barney Frank (who became chairman of the House Financial Services Committee) was twice given an “Award of Excellence” by Fannie Mae.
In addition to myriad local nonprofits, national activist groups like ACORN, the National Council of La Raza, and the National Low Income Housing Coalition were showered with grants and attention. Poverty and minority advocates were charmed when Johnson announced in 1994 that Fannie Mae would spend $1 trillion on “affordable housing” over the next seven years. When the bills aimed at reining in reckless mortgage underwriting finally came up in Congress, Fannie and Freddie literally wrote much of the language, according to the New York Times. Not only was privatization of the agencies fended off, but so were stricter operating standards.
Fannie and Freddie’s share of the mortgage market soared from 5 percent in 1990 to ten times that much in 2008. And at that point the entire U.S. housing market melted down, made toxic by mortgages pumped into non-creditworthy households. The economic trauma caused by the subprime-mortgage mess damaged family incomes and national prosperity for years thereafter.
Three large foundations—Rockefeller, MacArthur, and the Pew Charitable Trusts—pledged a combined $20 million in 1991 to found a new organization devoted to political-campaign-style efforts to change U.S. energy policy: reducing energy use, promoting renewable sources, and (most recently) pushing the U.S. economy away from “yesterday’s fossil-fuel technologies” via proposed government caps and taxes. The Energy Foundation is the resulting conduit. It collects money from large givers, then re-grants it to groups scrambling to change policy. The original donors were eventually joined by the Packard, Hewlett, and McKnight foundations, and a few wealthy donors like Jeff Skoll, Tom Steyer, Julian Robertson, and James Simons.
The Energy Foundation was influential in convincing around three dozen states to set controversial regulations requiring utilities to generate a minimum fraction of their electric power from renewable or alternative sources, passing on the increased costs to their customers. The EF also helped convince regulators in California to require that one out of every six cars purchased in the state by 2025 be a zero-emission electric plug-in. The foundation then helped export the California standard to a dozen other states.
The Energy Foundation now funnels approximately $80 million per year from its supporting philanthropists to about 500 different action groups.
During the 1980s, scholars such as Thomas Sowell developed intellectual arguments against the racial preferences advocated by the civil-rights establishment. By the end of the decade, conservative foundations were ready to translate these new ideas into law and policy. In 1988, attorneys Michael Greve and Michael McDonald persuaded the Bradley, Olin, and Smith Richardson foundations to provide seed money to start the Center for Individual Rights, which filed suit against public universities over their use of racial quotas and preferences to shape their student bodies. The center won Hopwood v. Texas in federal court in 1996, marking the first victory against color-coded admissions. In 2003, a pair of CIR-driven cases involving the University of Michigan went to the Supreme Court, which accepted the constitutionality of race-based admissions for particular purposes, establishing a stalemate in use of racial preferences.
A range of donor-backed organizations now argues both in courts of law and in the court of public opinion for limits on race-conscious policies. The California Civil Rights Initiative, approved by California voters in 1996, banned the use of race in that state’s public employment, contracting, and college admissions. Ward Connerly of the American Civil Rights Institute led the campaign on its behalf, and later became involved in similarly successful efforts in Arizona, Michigan, Washington, and elsewhere. For other recent philanthropically supported cases see 2013 entry on “Supreme Assistance.”
In the 1970s, the conventional wisdom in international aid organizations was that the biggest hurdles to the economic development of poor nations were external factors like the legacy of colonialism and ongoing exploitation by rich countries. With the help of the Smith Richardson Foundation and other donors, Peruvian economist Hernando de Soto conducted research which showed that, actually, the most serious impediments to growth in poor nations were self-inflicted government policies that interfere with property ownership and business enterprise.
In 1989’s The Other Path, de Soto demonstrated that many of the world’s poor made most of their income in the black market, and would be dramatically helped if entrepreneurship and private property were protected rather than discriminated against in law. De Soto’s Peruvian think tank, the Institute for Liberty and Democracy, pushed for land-title reforms, recognition of underground small businesses, and other market-based reforms. Developing countries in South America and elsewhere that instituted pro-market policies with ILD assistance experienced a brought a burst of prosperity in the two decades following.
In Peru, the war of ideas was also a war of bombs and bullets, and the Maoist rebel group known as the Shining Path targeted de Soto for death. During this tense period, the Smith Richardson Foundation offered protection. “The foundation is an old and loyal friend which, when the ILD was being bombed and shot at during the early 1990s, provided us with a bullet-proof vehicle, thus enabling us to continue with our work,” wrote de Soto in the acknowledgments to his 2000 book, The Mystery of Capital.
De Soto is now one of the world’s most influential development economists.
In 1988, the Pew Charitable Trusts, whose resources derive from Sun Oil, offered a $120,000 gift to the University of California at Santa Barbara to study “the impact of climate change on northern temperate forest reserves.” Since then, climate change has been a major priority of Pew, one of the largest and most powerful philanthropies in the country.
In 1998, for instance, Pew put up $12 million to launch the Pew Center on Global Climate Change. It produced nearly 100 reports, had witnesses testify before Congress 30 times, and worked to influence regional and international talks on setting new climate and energy policies. The organization is now known as the Center for Climate and Energy Solutions, and continues its work with an annual budget of around $4 million and support from the Hewlett, Rockefeller Brothers, Energy, and Alcoa foundations.
In 2002, Pew converted itself from private foundation to public charity, so it could not only provide funds for public-policy causes but also lobby and raise funds from others on their behalf, putting “an emphasis on action.” In 2007, for instance, it played a major role in launching the U.S. Climate Action Partnership, a group wholly focused on lobbying for government controls on greenhouse gases. The Pew Charitable Trusts currently spend about $300 million every year, with a strong focus on influencing public policy.
When Michigan auto-parts executive Edgar Prince visited Christian radio personality James Dobson in Colorado in 1988, he learned that Dobson was trying to raise $1 million to jumpstart the Family Research Council, a small and languishing think tank. Prince immediately pledged the full amount, a contribution that allowed Gary Bauer to join FRC as its president. This launched a phase of rapid growth for FRC, giving religious conservatives and Americans concerned with family breakdown an institutional voice they previously lacked in Washington public-policy circles. By the late 1990s, the FRC had grown into a major organization, with a budget of $14 million, 120 employees, and its own building in the nation’s capital. The organization played a role in Supreme Court confirmation battles, passage of child tax credits, the ban on partial-birth abortion, and many other issue debates.
In 1986, the Lynde and Harry Bradley Foundation built an intellectual coalition for welfare reform. Its $300,000 grant assembled top conservative and liberal social scientists to see if agreement could be found on ways to reduce the destructive effects of welfare programs on family structure, work rates, crime levels, and other social factors. Members of the new group on both sides of the political divide made concessions, and a final report entitled “The New Consensus on Family and Welfare” was drafted under the leadership of Michael Novak.
The conservatives acknowledged that government has a role to play in the alleviation of suffering. The liberals admitted that welfare programs often produce dysfunctional levels of dependency. The report sketched the outlines of revised programs, with work requirements and supports that would be healthier for U.S. society. This new synthesis proved to be the kernel of the welfare-reform compromise that was eventually debated and passed into law during the Clinton administration.
Another bit of seminal philanthropy was the 1982 funding from the Olin Foundation that helped Charles Murray write his influential critique of the existing welfare state, Losing Ground. Olin grants also supported two books by Lawrence Mead that made the case for work requirements in return for cash payments. The Bradley Foundation sped welfare reform as well by paying for the research that led to Marvin Olasky’s book The Tragedy of American Compassion—which uncovered the forgotten but highly effective religious-based charity of the nineteenth century, reviving interest in faith-based social work.
The most direct way Bradley advanced welfare reform, though, was by helping set a successful template in their home state of Wisconsin. The foundation established the Wisconsin Policy Research Institute to take some of the fresh theory being generated by national scholars and reformers and translate it into practical new policies that could improve the lot of the poor in Milwaukee and the rest of the state.
This activity emboldened Wisconsin Governor Tommy Thompson to launch demonstration projects overhauling welfare in a couple of Wisconsin counties. Soon these experiments were expanded to the entire state. Instead of handing out welfare checks as automatic entitlements, the state began to require certain constructive behaviors from recipients, such as finding employment or pursuing an education, while offering them help with child care, transportation, and other practical barriers to work. When he needed additional scholarly help in designing these reforms, and encountered resistance from academics at the University of Wisconsin, Thompson turned to the Hudson Institute, also supported by Bradley (and Olin).
These late-1980s experiments resulted in dramatic reductions in welfare dependency across Wisconsin, rising work rates, and improved child welfare. That in turn inspired the federal welfare-reform legislation signed into law by President Clinton in 1996, which quickly cut national welfare caseloads in half, chopped poverty rates, and brought other healthy results. By using its home state of Wisconsin as a “laboratory of democracy,” the Bradley Foundation proved that smart local philanthropy could yield powerful national results.
Since establishing its LGBT Project in 1986 (to expand lesbian, gay, bisexual, and transgender rights), the American Civil Liberties Union has received about $20 million of earmarked donations to support that work. Lawsuits brought by the organization have upended numerous public policies at both the state and national level. ACLU litigation was crucial, for instance, in eventually undermining voter initiatives passed in California (barring same-sex marriage) and Colorado (barring the granting of protected status to homosexuals), effectively blocking popular verdicts on these issues. In 1997 an ACLU suit in New Jersey established the first right of gay couples to adopt children. ACLU lawsuits in scores of states were vital in gradually creating a right to same-sex marriage. And it was an ACLU case that invalidated the Defense of Marriage Act that had been passed by Congress and signed by President Clinton. The organization’s LGBT Project continues to have strong effects on law, policy, and public opinion in all of these areas, along with a growing advocacy for individuals who decide to change their sex—helping them in child custody, college housing, military service, health-insurance, public-restroom usage, and other disputes.
Thomas Roe, founder of the construction-supply firm Builder Marts, was an active public-policy donor until his death in 2000. When he expressed an interest in the “New Federalism” proposed by Ronald Reagan, which would allow states to solve their own problems as an alternative to standardized programs from Washington, Reagan challenged him to “do something about it.” Roe decided that supporting market-oriented think tanks in every state would help. In 1986 he founded the South Carolina Policy Council in his native place.
Simultaneously, activists favoring decentralized and limited government started similar policy centers in other states—like the Independence Institute in Colorado, and the Mackinac Center in Michigan. With Roe’s encouragement and financial support these organizations began to collaborate and learn from each other. In 1992, they organized the State Policy Network, a consortium of free-market think tanks focused on improving public policy in state capitals rather than via federal legislation in D.C.
Roe served as SPN’s founding chairman and its major financial backer. At its launch, SPN had a dozen think tanks as members; by 2014 it numbered 64 think tanks representing all 50 states, with combined budgets exceeding $80 million. In addition to the traditional think-tank work of policy analysis, they are increasingly becoming involved in new ventures like nonprofit journalism and public-interest litigation.
One of the first major initiatives of the Lynde and Harry Bradley Foundation was to bring school choice to its home city of Milwaukee. In so doing, it both revolutionized local schooling and created a powerful demonstration project for the rest of the country. This required policy and political alliances with black community activists in Milwaukee and the administration of Republican governor Tommy Thompson, who were jointly developing legislation that would allow low-income children trapped in poor public schools to attend private and parochial schools. A small program was launched and grew steadily in size and strength. During the 1990s it survived repeated legal assaults and political challenges, becoming the country’s longest-living and most-watched private school-choice program in the United States. (See 1986 entry on our companion Education list.) By the 2014-15 academic year, more than 26,000 students were attending 113 schools under the Milwaukee Parental Choice Program.
Milwaukee’s successes inspired similar voucher and school-choice programs in Florida, Pennsylvania, Arizona, Ohio, Indiana, and other states. Research on student performance indicates that school choice improves high-school graduation rates, college admittance, and college persistence. While participants typically enter their choice schools one to two years behind grade level, achievement test results at choice schools are equal to or higher than at public schools. Voucher programs save taxpayer dollars (the Milwaukee program reduced state spending by $52 million in 2011) and encourage public schools to improve by applying competitive pressure.
The Milwaukee program came under renewed pressure in 2011 when the ACLU and Disability Rights Wisconsin filed a complaint alleging that the private schools that parents were choosing for their children were not following disability law. In 2013 the Obama administration’s Department of Justice Civil Rights Division sent the Wisconsin education superintendent a letter pressing the ACLU’s arguments, and threatening that “the United States reserves its right to pursue enforcement through other means.” The Wisconsin Institute for Law & Liberty, a public-interest law firm partly funded by the Bradley and Kern foundations, defended the program.
Following President Ronald Reagan’s landslide re-election in 1984, moderate Democrats sought ways to push their party away from doctrinaire liberalism and toward the political center. Party loyalist Al From organized wealthy benefactors in a series of private retreats, then tapped them for donations with which to found the Democratic Leadership Council—dedicated to supporting more moderate so-called “New Democrats.” The DLC functioned as an alternative and rival to the Democratic National Committee, causing controversy within party ranks but also preparing the way for future victories.
In 1989, the DLC formed a nonprofit research arm, the Progressive Policy Institute, to operate as a think tank for centrist Democrats. Wall Street magnate Michael Steinhardt served as PPI’s board chairman, pledging hundreds of thousands of dollars to the organization. By 1992, this “pint-sized think tank” with a budget of just $700,000 had become the primary idea-generator for Bill Clinton’s campaign for President. Once in the White House, Clinton staffed his administration with numerous alumni of the Democratic Leadership Council and the Progressive Policy Institute, looking to them for ideas on trade promotion, welfare reform, and streamlining government. By 2001, the DLC and PPI had a combined budget of $7 million.
With the resurgence of liberalism inside the Democratic party during the first decade of the twenty-first century, the DLC and PPI struggled to remain relevant. In 2011 the DLC formally dissolved and donated its archive to the Clinton Foundation. The Progressive Policy Institute continues to seek policies it views as centrist and sensible.
In 1984, currency speculator George Soros established the first private foundation in a communist country, in his native Hungary. The government in Budapest hoped that by sponsoring Hungarian students to study in Western countries the Soros Foundation-Hungary would improve the regime’s scientific knowledge. But the returning students also brought back pro-Western ideas. In addition, the foundation equipped Hungarian libraries with copy machines, making it easier for dissidents to publish underground newspapers and spread samizdat literature.
“The formula was simple,” wrote Soros. “Any activity or association that was not under the supervision or control of the authorities created alternatives and thereby weakened the monopoly of dogma.” As the Cold War ended, Soros spent $123 million, between 1989 and 1994 to establish similar foundations across Central Europe, aiming to encourage the development of democracy and human rights.
Later, Soros started operations in Africa, Asia, and the Caribbean. Everywhere he went he called for the creation of “open societies,” which he defined as threatened by both communism and what he dubbed “market fundamentalism.” Critics, as in a 1997 Forbes cover story, noted that Soros projects generally “have an exclusively left-wing bias.”
Richard Neuhaus, a Catholic priest who had been an anti-war activist in the 1960s, took a look at the rise of the Religious Right in the 1970s and found himself in democratic sympathy. The gatekeepers of culture, he concluded, had largely banished from public discourse any serious expression of religion—the most important element in the life of many Americans. He predicted “a deepening crisis of legitimacy if the courts persist in systematically ruling out of order the moral traditions in which Western law has developed, and which bear for the overwhelming majority of the American people a living sense of right and wrong.”
Neuhaus began to deepen these ideas with funding from the Lilly Endowment. He received grants from the Bradley and Olin foundations to write a book he ultimately titled The Naked Public Square, which came out in 1984. Both his title and his thesis went mainline, and even commentators who “subscribed to exaggerated notions of church-state separation,” as Neuhaus put it, began to acknowledge that America is harmed when all moral calculus is stripped from public discussion and policy. With continuing donor support, Neuhaus subsequently published the influential journal First Things, which deepened and extended this understanding of religion’s healthy role in public life.
From the mid-’70s to mid-’80s, brothers Charles and David Koch contributed to public-policy philanthropy mainly by building the Cato Institute, Mercatus Center, and other research organizations capable of formulating detailed critiques of national problems (see 1977 and 1980 entries). In 1984 the Koch brothers took a step toward more direct advocacy. They provided about a million dollars a year to help launch Citizens for a Sound Economy, which quickly attracted additional funding from other foundation and business donors. The group distributed studies, analysis, polling, and other information to promote a vision of “less government, lower taxes, and less regulation.” It attracted prominent staff like former U.S. Office of Management and Budget director James Miller, economist Larry Kudlow, and retired Congressman Dick Armey. The group rescued the Tax Foundation, since 1937 an invaluable collator of tax data.
In 2004, Citizens for a Sound Economy restructured into two new organizations: FreedomWorks (which over the next few years organized several million activists interested in individual liberty and limited government) and Americans for Prosperity (which built a similar following, including 2 million members, 35 state chapters, and financial support from 100,000 contributors) in order to “educate citizens about economic policy and mobilize those citizens as advocates in the public-policy process.” Both groups were important in building the organizational and intellectual resources of the so-called Tea Party movement as an alternative channel for activism by libertarians and conservatives frustrated with the Republican party establishment.
Over a period of decades, the Koch brothers contributed more than $200 million to three dozen or so advocacy organizations focused on free-market reforms. (Meanwhile they have been only light contributors to political candidates.) In 2003 the Kochs also started convening semi-annual free-enterprise seminars where other donors interested in public policies were invited to discuss topics like budget control, health care, climate change, tax reduction, and respect for Constitutional limits on government, and then encouraged to contribute to advocacy groups promoting market-oriented solutions to such problems. The first seminars included less than 20 people, but donor participation gradually grew, and over a decade several hundred million dollars were donated by attendees to organizations active in public-policy debates. The recent Koch seminars have been attended by as many as 450 donors, with the goal of encouraging hundreds of millions in annual donations to groups active in policy and political advocacy.
The Institute for Educational Affairs, a group backed by the Olin, Earhart, JM, Scaife, and Smith Richardson foundations, provided a grant of $15,000 in 1982 to underwrite a legal conference on federalism put on by law students with an interest in conservative politics. Speakers at the forum, which took place at Yale, included future Supreme Court Justice Antonin Scalia and federal appeals judge Robert Bork. Using the successful conference as a springboard, several of the organizers—including future Senator and energy secretary Spencer Abraham and future Congressman David McIntosh—decided to form a national group with student-run local chapters, calling it the Federalist Society for Law and Public Policy.
Strong interest among students, and additional foundation support, allowed the group to grow rapidly. By the 1990s the Federalist Society had become one of the most influential legal groups in the country. On appointments to the federal judiciary, its influence arguably surpassed even the American Bar Association.
In 2015, the Federalist Society had chapters at every accredited law school in the United States, 10,000 student members, 60,000 members of its Lawyers Division, and a budget of around $16 million. Inspired by its success, several philanthropists have tried to adapt its model to business schools (the Adam Smith Society), medical schools (the Benjamin Rush Society), and schools where students are trained in foreign policy (the Alexander Hamilton Society).
Philanthropists bothered by the conformity of liberal orthodoxy on college campuses have long supported outposts where alternative views could be offered to a new generation of young students. The founding of the Intercollegiate Studies Institute in 1953 was an early effort to reintroduce students to the deep Western values behind America’s founding. Many other such efforts followed.
In 1981, the John M. Olin Foundation awarded $50,000 to professor Allan Bloom at the University of Chicago to seed a new center for exploring political philosophy and democracy. In addition to funding a series of lectures, conferences, and fellowships, this support allowed Bloom to write a pathbreaking book warning of the perils of cultural relativism and declining intellectual standards on campus. The Closing of the American Mind became an unlikely bestseller in 1987, occupying the top spot on the New York Times bestseller list for four months with withering criticisms of modern universities for dismissing great books and timeless truths in favor of trendy ideology.
The bestseller Illiberal Education by Dinesh D’Souza, which extended this argument and popularized the term “political correctness,” was also produced with support from Olin. Olin likewise funded a series of faculty fellowships that nurtured unconventional young scholars like John DiIulio, Frederick Kagan, and John Yoo. Other donors sponsored similar initiatives to open higher ed to points of view differing from the liberal conventions that dominate campuses. The group ACTA was founded in 1995 to mobilize trustee and alumni donors.
The James Madison Program in American Ideals and Institutions at Princeton University was founded by professor Robert George in 2000 with startup funding from the Olin and Bradley foundations, then donations from Princeton alumni, followed by other campus-specific groups. With financial support from a range of donors, the Intercollegiate Studies Institute, the Fund for American Studies, the Institute for Humane Studies, and similar organizations run summer programs, reading groups, websites, and special networks that aim to round out student educations with ideas, scholars, and philosophical perspectives not otherwise represented on most college campuses. The National Association of Scholars is a similar effort to support dissenting professors; funded by donors since 1987, it has 3,000 members, holds conferences, and publishes a quarterly journal. The Veritas Fund for Higher Education is a more recent creation that allows donors to fund professors who teach America’s founding principles and history.
Another venture to improve civics knowledge among American undergraduates is the Jack Miller Center. It has established 58 on-campus institutes dedicated to study of our classic national texts, with funding from the entrepreneur who helped create the Staples company. As of 2015, he and other donors had committed over $60 million to the undertaking.
Coincident with the election of President Ronald Reagan, a “nuclear freeze” movement sprang up to oppose research and development of nuclear technology, advocate for disarmament, criticize American “belligerence,” resist a general U.S. defense buildup, and vehemently oppose the placement of missiles in Europe to balance Soviet missile growth. In 1981 the movement went public with its first rally and garnered endorsements from pacifist, religious, and union groups. Referenda declaring “nuclear-free zones” were placed on ballots in many cities. The “freeze” agitation peaked in a large 1982 gathering in New York City during a U.N. special session on disarmament, and culminated with inclusion of freeze rhetoric in the Democratic Party platform during the 1984 race for President.
At the heart of these efforts were a handful of major donors, and a new philanthropic entity. From 1974 to 1982 three foundations—Ford, the Rockefeller Brothers Fund, and Rockefeller Family Fund—spent about $7 million to build up anti-nuclear groups. Then in 1981, the Ploughshares Fund was started by an ACLU San Francisco board member who argued that “the threat of nuclear war overshadows everything else.” The fund was established specifically to coordinate donations to disarmament and peace groups, and guide creation of their strategies.
Ploughshares has since channeled more than $100 million to peace groups, making it the largest philanthropy on this topic. It still exists today, its $11 million of 2014 income coming from about 2,000 individuals plus foundations like the Carnegie Corporation, the Compton, Ford, MacArthur, Turner, Rockefeller, and Hewlett foundations, and the Open Society Institute. It re-grants roughly half of its revenue to peace groups, and does some of its own programming with the rest.
Joan Kroc, heiress to the McDonald’s fortune, also became a passionate nuclear disarmer in the 1980s. In 1985 she spent millions on advocacy, including ads in major publications calling for disarmament. She also reprinted and publicly distributed the book Missile Envy by Helen Caldicott. Kroc endowed two major academic centers for “peace studies”—the Kroc Institute for International Peace Studies at the University of Notre Dame, and a similar institute at the University of San Diego.
In 1980, Irving Kristol encouraged donors to support a new conservative student publication at the University of Chicago. Before long, the John M. Olin Foundation and other donors were building the Collegiate Network, a consortium of conservative and libertarian student publications that voiced an alternative to conventional wisdom on campus and trained a generation of writers and editors. Since 1995 the Collegiate Network has been administered by the Intercollegiate Studies Institute.
Thanks to donor support that paid for printing costs, most of the country’s top colleges and universities had a conservative student publication by the 1990s. Many prominent writers emerged from these publications, including Pulitzer-winner Joseph Rago (Dartmouth Review), ABC News correspondent Jonathan Karl (Vassar Spectator), New York Times columnist Ross Douthat (Harvard Salient), commentator Ann Coulter (Cornell Review), National Review editor Rich Lowry (Virginia Advocate), blogger Michelle Malkin (Oberlin Forum), author and Silicon Valley investor Peter Thiel (Stanford Review), author Dinesh D’Souza and radio host Laura Ingraham (both Dartmouth Review), and many others. “If everything we have done since was stripped away, leaving only the Collegiate Network as our legacy,” said longtime Olin Foundation head James Piereson in 2004, “we would still proudly say our work yielded enormous success.”
In 1980, the mother of a 13-year-old California girl who was killed by a repeat drunk driver founded a nonprofit to fight back. Mothers Against Drunk Driving helped set the drinking age at 21 in all states, promoted tougher sanctions and the deployment of new technology against impaired driving, and rated states on DUI enforcement. In the first five years of the group’s existence, annual traffic deaths related to alcohol were reduced by 20 percent—representing 6,000 lives saved. By 2015, alcohol-related deaths had been roughly cut in half, a total saving of about 300,000 lives.
Even still, alcohol-related crashes remain the most frequently committed violent crime in the U.S. On average, one American is killed by a drunk driver every 40 minutes. Economic losses exceed $114 billion per year.
In the 1990s MADD began to receive significant amounts of money from the federal government. The organization grew into a large bureaucracy, spending $20 million on annual staff salaries by 2009.
After the liberal economist John Galbraith filmed The Age of Uncertainty, a television series for the BBC, several American philanthropists and corporations looked for a way to even the ideological balance sheet. They turned to Nobel Prize-winning economist Milton Friedman, who guided viewers through economic successes and failures around the globe, including their social effects, in a ten-part television series that appeared on PBS in 1980. The Sarah Scaife Foundation led the way, with a grant of $500,000. The John M. Olin Foundation contributed $250,000, Getty Oil Company $330,000, and the Reader’s Digest Association $300,000. Other supporters included the Lilly Endowment, and the National Federation of Independent Business.
The show made a vigorous intellectual case for capitalism and was a smashing popular success. A book co-authored by Milton’s wife, Rose, and published as a companion to the television series hit the bestseller lists in the United States and abroad. In the wake of his Free to Choose series and book, Friedman was perhaps the most popular and influential economist on the planet.
The Human Rights Campaign began its life in 1980 as a PAC—a mechanism for funneling campaign donations to elect gay-friendly politicians. In 1982 the organization distributed $140,000 to 118 congressional candidates. Four decades later, HRC was the largest gay-advocacy group in the country, and electoral campaigning was still a huge part of its purpose. In the 2012 Presidential campaign year, HRC raised or contributed more than $20 million to influence referenda on same-sex marriage, elect pro-gay members of Congress, and re-elect Barack Obama.
In 1995, when HRC was a $6 million organization with both 501(c)(3) advocacy and 501(c)(4) political action arms, it reorganized—adding new family projects and work projects, and expanding all research, communications, and public-relations efforts. The nonprofit grew rapidly into a $57 million-per-year operation by 2014. Major donors now supply 22 percent of its income; smaller individual contributions total 38 percent; bequests come to 5 percent; and investments, merchandise, and special events provide a quarter of the group’s revenue.
The Human Rights Campaign operates a sophisticated and effective lobbying effort in Washington, D.C. It recruits attorneys from major law firms to provide pro bono litigation services. And it has worked hard to make allies among other activist groups on the political left so it can later call in chits for its priorities.
HRC has also assiduously cultivated the entertainment industry. Producers, writers, actors, musicians, and others have been honored at dinners, given awards, and involved in marketing efforts. This has yielded not only many celebrity endorsements and financial contributions, but also television story lines that have brought gay-friendly ideas and characters into the living rooms of everyday Americans over two decades—which the organization has found invaluable to its political and policy advocacy.
A center devoted to market-based economics and philosophy, called the Austrian Economics Program, was established at Rutgers University in the late-1970s with a grant from philanthropist Charles Koch. It was promptly squeezed by a hiring freeze. The president of George Mason University, just across the Potomac from Washington, D.C., invited the program to relocate to his campus in 1980. There, it eventually became known as the Mercatus Center (mercatus is Latin for “marketplace”), and with steady donations from the Charles Koch Charitable Foundation it grew into a very active academic hub and economic think tank.
More generally, a stream of Koch support that eventually totaled tens of millions of dollars was crucial in turning the George Mason economics department into one of the best in the nation. Two GMU economists have been awarded Nobel prizes: James Buchanan in 1986 and Vernon Smith in 2002. Public-choice theory and other concepts used to assess government policies today have been honed at the northern Virginia institution.
In 1985, George Mason University also became home to the Institute for Humane Studies, another quietly influential product of long-term Koch support. With online instructional materials, lectures, debates, seminars, and scholarships that help students pursue further studies, IHS now trains hundreds of thousands of students in principles of liberty and economic success. Over 1,700 of its alumni have become professors, and they will teach an estimated 10 million students over their careers. Some will also shape public policy through their research.
The Charles Koch Foundation has greatly expanded its giving to higher education over the last decade. “Currently we’re fortunate to support over 350 programs, and over 250 colleges and universities across the country,” says John Hardin, director of university relations at the foundation. Grants underwrite everything from guest lectures by leading scholars to special student seminars, from course-development assistance for faculty to student research fellowships.
In a 1978 referendum, nearly two thirds of California voters approved Proposition 13, which lowered and capped the state’s property taxes and heralded the coming of a nationwide “tax revolt” that helped sweep Ronald Reagan into office in 1980. Behind the success of Proposition 13 stood thousands of grassroots philanthropists. The sponsor organization, the United Organization of Taxpayers, relied on 50,000 small donors who offered up $440,000 and an estimated one million hours of volunteer time to get the measure on the ballot.
The New York Times described the measure’s passage as “the beginning of a tax revolt—a modern Boston Tea Party.” During the two years following, California property and sales taxes were cut by more than $4 billion. In 1980 the tax revolt moved to Washington. Reagan cut tax rates sharply during his first year in office, and chopped the top income tax rate down to 28 percent in 1986.
Shortly before businessman John MacArthur died, as one of the two or three wealthiest men in America, the insurance and real-estate magnate created a foundation. He was a selfish and misanthropic man, however, and gave little thought to how its board would execute the philanthropy carried out in his name. “You people, after I’m dead, will have to learn how to spend it,” he told his lawyer. MacArthur’s son from the first of his two marriages, Rod, eventually launched a pitched battle for control of the trust, and won. Ever since, the John D. and Catherine T. MacArthur Foundation has been one of America’s largest funders of left-of-center public causes.
The foundation is perhaps best known for its “genius grants,” which are no-strings-attached fellowships that pay $500,000 over five years, typically to artists, scientists, and political activists. Yet that makes up only a small portion of MacArthur’s overall giving. During the days of the Soviet Union, the foundation was a major financier of the arms-control movement, pouring money into groups such as the Arms Control Association, the Center for Defense Information, the Federation of American Scientists, and the Union of Concerned Scientists. Other prominent recipients of MacArthur support include the American Civil Liberties Union, the Brookings Institution, the Carnegie Endowment for International Peace, the NAACP, and Planned Parenthood. In 2014, the foundation held assets exceeding $6.3 billion.
While visiting the U.S. after World War II, entrepreneur Antony Fisher was impressed by the work of agriculturalists at Cornell University who were transforming chicken farming from a cottage industry into an efficient modern process. When he went back to Britain he set up similar operations growing chickens on a large scale, which altered Britain’s diet and made Fisher a wealthy man. With some of the first profits from this business he set out to feed new thinking in his home country.
Discouraged to see centralizing economic policies sweep Britain after a war that had been fought to preserve freedom, Fisher visited free-market thinker Friedrich Hayek and told him he was considering entering politics. Hayek argued that the better course would be help change the intellectual currents running in the direction of socialism. In response, Fisher founded London’s Institute of Educational Affairs, one of the world’s early think tanks, which produced new ideas and experts that subsequently redirected both British and American politics. In recognition of Fisher’s achievement, Nobel economist Milton Friedman wrote that “the U-turn in British policy executed by Margaret Thatcher owes more to him than any other individual.”
Though business reversals later cost Fisher his fortune, he kept raising money for additional think tanks—this time in North America. In New York he was the progenitor, in 1978, of today’s Manhattan Institute, which quickly shaped national debate by supporting landmark books on supply-side economics (Wealth and Poverty by George Gilder) and welfare reform (Losing Ground by Charles Murray). In the 1990s, New York City Mayor Rudy Giuliani looked to the Manhattan Institute for crucial ideas on law enforcement and other subjects.
Fisher was also behind the launch of the Pacific Research Institute in San Francisco, the National Center for Policy Analysis in Dallas, and the Fraser Institute in Vancouver. He created the Atlas Economic Research Foundation, which raises capital to launch new free-market groups in parts of the world that have inadequate experience in capitalism. Atlas has seeded more than 400 market-oriented organizations in over 80 countries.
By funding fresh ideas, and thinking of change in terms of decades rather than months, Antony Fisher helped create an international backlash against statism during the second half of the twentieth century.
When businessman Charles Koch learned that Libertarian Party leader Ed Crane was thinking about leaving politics, he asked what it would take to keep him involved. Crane suggested that libertarianism needed a think tank: a public-policy organization that would join political debates with deep research and a crisp point of view. Koch agreed to fund its launch.
The Cato Institute—named for Cato’s Letters, a set of eighteenth-century essays on freedom—opened its doors in San Francisco in 1977. It published newsletters and policy reports and provided radio commentaries. In 1981 it moved to Washington, D.C. Over the next three decades Cato grew rapidly into one of the country’s prominent policy-forming organizations. It is best known for championing free-market policy reforms like Social Security privatization, school choice, and free trade, along with libertarian causes like open-borders immigration, drug legalization, and a dovish foreign policy.
From their founding days, Charles and David Koch’s accumulated gifts to the Cato Institute come to about $30 million. The institute raised a total of $400 million during that period, from tens of thousands of donors. In 2015, Cato had 124 staffers and revenue exceeding $37 million (86 percent of that from individual donors).
Decades of research have shown that the large majority of working journalists define themselves as political liberals. Conservatives who consider this a problem have made efforts, with donor support, to train young journalists who are more open to including conservative perspectives in their stories. The oldest of these programs is the National Journalism Center, which since 1977 has offered budding reporters the chance to intern with media outlets in Washington, D.C., while attending journalism classes taught by experienced professionals, many of them alumni of the program. Now operating under the sponsorship of Young America’s Foundation, NJC has put 2,000 beginning practitioners through its 12-week internship program.
The newest effort to introduce more political balance into journalism is the Student Free Press Association, launched in 2010 to give conservative-leaning campus journalists a national website where they can release their work, as well as paid fellowships with publishers of political journalism. And back in 1994 the Phillips Foundation launched the Robert Novak Journalism Fellowship, awarding about $7 million over the next two decades to 130 young reporters in the form of $25,000 part-time or $50,000 full-time fellowships, giving them a year to produce a deeply researched story. In 2013 the program was transferred to the Fund for American Studies.
A fourth program for nurturing conservative or libertarian journalists is the Buckley Journalism Fellowship. Since 2009 it has installed one or two top young writers per year at National Review, the leading conservative politics magazine. The $75,000 cost for each fellow is covered by donations.
Campus protestor and student activist Drummond Pike took a position in 1970 at a youth group funded by the Ford Foundation. There he met philanthropists looking for ways to use their money to alter public policy. In 1976, Pike and Jane Bagley Lehman, heir to the Reynolds tobacco fortune, co-created the Tides Foundation to bankroll left-wing groups and causes.
Tides pioneered the use of donor-advised funds for public-policy purposes, allowing wealthy liberals to fund social change. An early coup was helping Hollywood producer Norman Lear create People for the American Way, one of the leading left-activist groups of the 1980s. Tides also helped establish the National Network of Grantmakers to unite “progressive” donors. (Later, Pike went on to serve as treasurer of the Democracy Alliance—see 2005 entry.)
Today the Tides Foundation manages 373 donor-advised funds averaging several hundred thousand dollars each. Through them, the foundation distributes around $100 million every year to promote causes like “global warming, AIDS treatment and prevention, and economic disparity,” to quote its website. The San Francisco-based organization also operates the Tides Center, created in 1996, to sponsor nascent “social justice” nonprofits, offering them technical, administrative, financial, human-resources, and public-relations services while guiding their activism, and connecting them with donors willing to fund their projects. This and other Tides subgroups spend about as much again as the foundation, making Tides as a whole an approximately $200 million-per-year operation.
The area where John Olin invested more donated resources than any other—the Law and Economics movement—was a matter of abiding personal interest for the philanthropist. Olin became persuaded that studying the interplay between laws and economic behavior was an important new academic discipline that could have potent implications for governance and public policy. Hoping to nudge America’s dominant lawyer class toward a more sophisticated understanding of markets and economic discipline, Olin’s foundation made its first grant for Law and Economics training in 1974—awarding $100,000 to a center run by Henry Manne at the University of Miami. It sponsored fellowships allowing students with graduate degrees in economics to receive legal training, and staged educational seminars introducing judges to important economic concepts.
Much more Olin funding would follow during the next two decades. The original Law and Economics Center migrated from Miami to Emory University and finally to George Mason University. And additional centers were endowed by the foundation at many top law schools, including Chicago, Harvard, Stanford, Virginia, Michigan, Columbia, Cornell, and Yale. By the time the Olin Foundation closed in 2005, it had spent more than $68 million to root the Law and Economics movement on campuses and in courthouses.
Olin’s efforts began bearing rich fruit as early as the 1980s, as economic understanding and reasoning became much more visible within American jurisprudence. Judges and legislators paid greater attention to incentive effects, to regulatory costs, and to the benefits of competition. Most every year, beginning in 1985, there was at least one Olin Fellow from a Law and Economics center represented among the clerks selected for the U.S. Supreme Court. Legal scholar Bruce Ackerman described the Law and Economics movement as “the most important thing in legal education since the birth of Harvard Law School.”
Public debate over the Tax Reform Act of 1969 stirred up some basic questions about and criticisms of the role of private philanthropy in America. Several public figures decided it would be a good idea to examine and address some of these controversies with a blue-ribbon commission. It was a suggestion from John Rockefeller III that sparked creation of the panel, and his family provided $200,000 to organize and fund its investigation. More than 700 other individuals and organizations also helped underwrite the Commission on Private Philanthropy and Public Needs.
Rockefeller invited Aetna Insurance chairman John Filer to lead the commission of two dozen prominent Americans, and it became popularly known as the Filer Commission. The group commissioned 85 studies and convened many meetings over a two-year period. In 1975 it issued a 240-page report full of data and recommendations.
The commission described a “third sector,” distinct from government and business, that plays a unique role in American life. “Private support is a fundamental underpinning for hundreds of thousands of institutions and organizations,” said the report. “It is the ingredient that keeps private nonprofit organizations alive and private, keeps them from withering away or becoming mere adjuncts of government.” The commission defended tax deductibility of contributions made to charity and suggested self-policing and consistent rules to protect the integrity and positive social effects of independent giving.
At a time of rumblings against independent giving, the Filer Commission’s work is credited with heading off possible political intrusions into philanthropy—thus protecting the right of Americans to direct their money into private solutions to public problems.
After backing Ronald Reagan’s Presidential bid in 1968, beer magnate Joseph Coors concluded that an intellectual infrastructure for shaping public policies was just as important as good candidates. Liberals already had a policy infrastructure in universities and organizations like the Brookings Institution. Coors decided that conservatives needed think tanks of their own—so in 1972 he wrote a $250,000 check to begin the Heritage Foundation. Other philanthropists like the Samuel Roberts Noble Foundation and Richard Mellon Scaife joined the cause, but the Coors cash was catalytic, and also consistent. Coors continued to invest in the Heritage Foundation over many years, including a $300,000 gift in 1980 that allowed it to move to improved offices.
As Ronald Reagan finally took office in 1981, the Heritage Foundation issued Mandate for Leadership, a book of nearly 1,100 pages that became a policy blueprint for his administration. The think tank became active in virtually every area of government action, from welfare transfers to national defense. It eventually grew into the biggest and at times most influential think tank on the right.
Coors was also a principal backer of the Free Congress Foundation (a D.C. think tank focused on social issues), the Mountain States Legal Foundation (a public-interest law firm), and the Independence Institute (a Colorado-based free-market think tank). Yet Heritage remained his largest legacy. “There wouldn’t be a Heritage Foundation without Joe Coors,” said longtime Heritage president Edwin Feulner. In 2014, the organization spent $78 million, 75 percent of it raised from individual donations.
In 1972, Ford Foundation president McGeorge Bundy pledged “to investigate grantmaking possibilities in the area of women’s rights and opportunities.” Between that moment and the end of the 1970s, dedicated women’s programs accounted for more than one out of every 20 dollars the foundation spent.
At first, the Ford Foundation moved to create special programs within organizations it already supported. So the Women’s Rights Project was promoted at the American Civil Liberties Union. The Minority Women’s Employment Program was funded at the NAACP Legal and Educational Defense Fund, and the Chicana Rights Project got money at the Mexican American Legal Defense and Educational Fund.
The most influential of these was the ACLU project, co-founded in 1972 by Ruth Bader Ginsburg. Ginsburg’s strategy was to file lawsuits based on a new reading of the Fourteenth Amendment’s equal protection clause, leading the courts to wipe out gender distinctions in everything from employment rules to family law. In 1993, Ginsburg became a justice of the U.S. Supreme Court.
In 1980, Ford’s trustees turned up the flow of money even further, committing the foundation to spending more than 10 percent of its resources on explicit women’s causes. In addition to paying for various legal challenges, the foundation put money into supporting abortion, research on sex stereotypes, and increasing female leadership at unions. By 1986, Ford had spent $70 million in these areas, and women constituted a majority of its professional staff. “Ford’s early funding for women’s organizations and women’s issues,” philanthropic consultant Mary Ellen Capek concluded, “lent credibility” to feminist organizations.
Environmental conservation was a part of the Ford Foundation’s program as early as 1952, when it provided seed money to Resources for the Future to conduct economic research on nature issues. Over the years, Ford dedicated tens of millions of dollars to RFF. In the 1960s, however, the foundation’s focus shifted.
Ford had been experimenting with shaping public policy by sponsoring litigation from public-interest law firms like the NAACP Legal Defense and Educational Fund (see 1967 and 1969 entries). Now it sought to apply this lawsuit model to the new environmental movement. One of its initial grants supplied $100,000 to the Rachel Carson Fund of the Audubon Society to sue for restrictions on the use of DDT for mosquito control.
In 1970, the question of whether groups dedicated to filing environmental lawsuits should quality as tax-exempt was resolved in favor of the activists, and the Ford Foundation began a period of vigorous financial support. A grant of $410,000 launched the Natural Resources Defense Council, and by 1977 that group had received $2.6 million of Ford money—which it used to sue the Army Corps of Engineers over dams, push for the expansion of the Clean Air Act, and block oil drilling in the Arctic National Wildlife Refuge. By 2014, NRDC was raising $129 million per year.
The Ford Foundation also helped launch the Environmental Defense Fund ($994,000 in grants between 1971 and 1977), the Sierra Club Legal Defense Fund ($603,000 over the same period), and the Southern California Center for Law in the Public Interest ($1.6 million). These donations built a network of legal institutions that allowed environmental activists to become involved in countless lawsuits and regulatory disputes. Litigation is now one of the most influential tools by which the environmental movement changes society.
In 1970, RESIST, a Massachusetts-based funder that had supported draft resistance and opposition to the Vietnam War, awarded what is believed to be the first foundation grant to a gay and lesbian organization. The precise amount given to the Gay Liberation Front, a short-lived political group, is lost to history, but the gift marked the birth of a new field of philanthropy. As recently as 1986, giving to gay and lesbian causes was still tiny ($772,000 that year) but it proceeded to grow explosively—to $11 million in 1998, $49 million in 2004, and $129 million in 2013.
During the 1980s, the overwhelming majority of gay philanthropy involved health services, in response to the spread of HIV and AIDS. First there was donor funding for direct medical care at clinics. Then came a giant advocacy push for more government spending—which rose meteorically from $8 million (1982) to $30 billion (2014) at the federal level alone.
With radical groups like ACT UP and Queer Nation using protests to gain political traction, discrimination and “human rights” issues soon moved to the fore. Philanthropic giving became increasingly oriented toward public policy. Groups like the National LGBTQ Task Force (organizing), GLAAD (advocacy), PFLAG (support groups), Lambda Legal (litigation), and Human Rights Campaign (advocacy and lobbying) began to rake in tens of millions of dollars in contributions. During the decade starting in 2004, promotion of gay marriage became a dominant issue, with nonprofits like Freedom to Marry receiving multimillions for action campaigns.
In 2013, more than half of all philanthropic donations to gay causes came either from foundations wholly focused on gay issues (37 percent) or anonymous givers (12 percent). Of the remaining gifts, 44 percent came from multi-issue foundations, and 7 percent from corporations. The top funders that year (after the $17 million given anonymously) were the Arcus ($17 million), Ford ($15 million), Gill ($8 million), and Haas ($6 million) foundations.
The vast portion of this philanthropy is directed toward advocacy, litigation, media campaigns, political organizing, and other policy-related work. Only 11 percent of gay-related giving from 1970 to 2010 went for direct services to gay populations.
In the past decade, about 800 institutions and thousands of individual donors have given nearly a billion dollars to gay causes. With more than nine tenths of gay-oriented giving having emerged within the last decade and a half, this new field is likely to continue to mushroom in the future.
Upon deciding to make a major push for black rights during the 1960s, the Ford Foundation started funding the NAACP Legal Defense and Educational Fund (see 1967 entry). It quickly expanded that effort by setting up similar organizations to launch lawsuits on behalf of other minority groups. (This went beyond lawsuits alone. Ford also funded groups like the Mexican American Youth Organization, a militant arm of the Chicano movement that preached separatism, disseminated revolutionary literature, sponsored visits to Cuba, and registered voters.)
One ethnic litigator receiving Ford Foundation money was the Mexican American Legal Defense and Educational Fund. MALDEF received its first Ford grant in 1969: $2.2 million of startup sponsorship. By 1973, MALDEF had attracted additional donors, but the Ford Foundation still supplied about half of its budget. The group plunged into voting-rights battles, guaranteeing the creation of Hispanic-majority jurisdictions around the country. In 1982, it won a Supreme Court ruling that public schools must open their doors to illegal aliens. The organization filed lawsuits on affirmative action, immigrant rights, and election redistricting. It had a budget of more than $6 million in 2013.
The Native American Rights Fund was also bankrolled by Ford, starting with a pilot grant of $155,000 in 1970, another $95,000 the next year, and a three-year grant of $1.2 million in 1972. NARF had grown into a $9.4 million-per-year organization by 2013.
The Ford Foundation also supported the creation of the Puerto Rican Legal Defense and Education Fund in 1972. Many of its lawsuits focused on language rights. Today the group is known as LatinoJustice, with a budget just under $3 million. It frequently works in conjunction with NAACP-LDF and MALDEF.
Between 1967 and 1975, the Ford Foundation spent $18 million specifically to create and build up civil-rights litigation groups; their lawsuits redirected many aspects of American public policy and social practice in ensuing years.
In 1967, the Carnegie Corporation announced formation of the Carnegie Commission on Higher Education, headed by Clark Kerr, who had just been fired as president of the University of California for failing to overcome campus unrest. The commission was promised at least five years of funding and the effort ended up running for a full dozen years, with the foundation devoting about $12 million to its work.
Between 1967 and 1979 this initiative churned out 37 policy reports and 137 research and technical reports. The most consequential result was a push for greater federal responsibility for higher education. “One of the most urgent national priorities for higher education,” insisted a 1968 clarion call, “is the removal of financial barriers for all youth.” The recommendations were characterized as a “G.I. bill” for the poor.
Members of Congress duly proposed legislation based on the Carnegie suggestions. Within a few years, the federal government had established an elaborate apparatus of grants and loans for college students. Today, Pell Grants are probably the best-known element of the system. In 2014, nearly 9 million students received about $30 billion in federal Pell Grants.
In 1967, the Ford Foundation decided to become a major funder of the civil-rights movement. By 1970 it was spending 40 percent of its grantmaking on minorities. Much of the money went to advocating for new government policies or spending aimed at economic enrichment of minorities. Another important slice went to litigation for civil-rights causes.
The foundation started with a 1967 grant of $1 million to the NAACP Legal Defense and Educational Fund. This organization had been involved in the 1954 desegregation suit Brown v. Board of Education and many other cases since its establishment in 1940. With Ford as a backer, the NAACP-LDF ratcheted up the lawsuits, and migrated from a commitment to equal opportunity and toward an embrace of equal results.
In 1971, the LDF’s Griggs v. Duke Power case established the principle of disparate impact—which held that even policies of colorblind neutrality would be considered discriminatory if they produced uneven racial outcomes. The NAACP-LDF went on to become a major promoter of racial preferences in public employment, contracting, and education.
The organization also functioned as an incubator of politicians and advocates. Obama Attorney General Eric Holder, Massachusetts Governor Deval Patrick, Harvard Law School professor Lani Guinier and others worked for the NAACP-LDF. In 2014 it had a budget of about $16 million.
From the time of the Gilded Age—when many political and journalistic careers were built by taking shots at robber barons—wealthy donors and large foundations tended to be skittish about taking up controversial political causes. It wasn’t until the 1960s that public-policy philanthropy became popular, and the individual who did the most to light that fire was Ford Foundation president McGeorge Bundy. Having moved into his post directly from the Johnson White House, it was a short step for Bundy to plunge his new employer into racial issues, ethnic politics, environmental lawsuits, poverty policy, and feminist litigation.
The foundation didn’t lobby directly, but formulated ideas and promoted strategies that would lead to legislation, regulations, and court cases advancing liberal policies like affirmative action, disarmament, and welfare transfers. Litigation by new “public-interest” legal groups was a special focus. (For some details, see the five Ford-related entries on this list between 1967 and 1972.)
The Council for Public Interest Law—which was created by the Ford Foundation specifically to help coordinate legal activism on the left—surveyed 86 groups pushing “public-interest law” in 1975. It found that 70 percent of them had popped up from1969-1974, when Ford was seeding this oyster bed. These groups reported receiving $61 million from donors during that five-year period, with more than half of that total coming from Ford itself. Fully 589 salaried attorneys were then employed by these 86 groups, which have since grown into even more potent policy-shapers like the Natural Resources Defense Council and the Center for Law and Social Policy.
Bundy viewed this effort as an extension of earlier policy-related maneuvering by Ford. In the 1950s and ’60s, Ford funding powered much of the urban renewal movement—which demolished slums, built new government-run subsidized housing, and launched an array of social programs for residents. Ford programs were picked up directly by Lyndon Johnson as germs of his “Great Society” expansion of welfare spending and social activism.
But the aggressiveness with which Bundy moved into advocacy philanthropy (including paying for enormous amounts of litigation) produced lots of friction and political backlash. Ford’s 1968 funding for radical community school boards in New York City, for instance, was a spectacular failure that inflamed race relations in that metro area for an entire generation. Resentment over what was viewed as the
Ford Foundation’s over-aggressive involvement in political questions spurred heavier regulation of foundations in the 1970s, and new controversy about whether charitable donations should even be tax deductible.
Founded by businessman Edward Filene in 1919, the Twentieth Century Fund (rechristened the Century Fund in 1999) shaped the course of arts philanthropy by sponsoring the work of Princeton University economists William Baumol and William Bowen. In a 1965 academic paper, they described a phenomenon that has earned the nickname “Baumol’s cost disease.” A society’s rising wealth threatens its artistry, they argued, because the wages of artists increase but not their productivity. “The output per man-hour of the violist playing a Schubert quartet in a standard concert hall is relatively fixed.” To continue flourishing, the professors contended, the art world would require subsidies from the government.
Baumol and Bowen turned their Twentieth Century Fund work into a 1966 book, The Performing Arts: The Economic Dilemma, that became a kind of bible for advocates of public spending on the arts. A few other philanthropists were promoting a similar line: The Rockefeller Brothers Fund underwrote a study led by Nancy Hanks (who subsequently became the second chairman of the National Endowment for the Arts) that also pressed for federal funding of the arts.
The NEA had just been set up by the federal government in 1965. Its initial appropriation of a mere $3 million immediately spiked upward. The endowment’s budget reached $175 million in 1992. Its involvement in political controversies later reduced its annual funding, but in 2014, the NEA received more than $146 million in federal support.
As policymakers began to focus on improving the performance of public schools, they felt the need for accurate ways to track student achievement. In 1963, U.S. Commissioner of Education Francis Keppel turned to the Carnegie Corporation for help. The foundation immediately sponsored a pair of conferences, and in 1964 created the Exploratory Committee on Assessing the Progress of Education.
Carnegie rapidly disbursed more than $2.4 million to develop a set of standard tests that would allow U.S. educational performance to be reliably measured and assessed over time. Carnegie’s grants led to the National Assessment of Educational Progress, now known as “the nation’s report card.” The NAEP tests are taken by American students every two years, and have become “the largest nationally representative and continuing assessment of what America’s students know and can do in various subject areas.” If educators, policymakers, media, and the public are to gauge the improvement or decline of American schools—accurately, across eras, without ax-grinding or wishful thinking—there has to be a consistent, widely accepted yardstick. NAEP is that accountability device, and it has been essential to the rise of the educational excellence movement over the last 30 years.
In the 1980s, additional important refinements of the NAEP testing regimen were made with philanthropic support from the Lyle Spencer Foundation. In NAEP’s early days, education bureaucrats worried about unflattering comparisons got state-by-state data collections and comparisons banned. A panel headed by Spencer’s Thomas James and Tennessee governor Lamar Alexander managed to have that prohibition removed, and since then, state comparisons have become a powerful force for motivating higher educational standards in places that are lagging.
The biographer of billionaire investor and donor Warren Buffett describes him as having “a Malthusian dread” of population growth among the poor. In 1964 he set up an Omaha foundation centered on stopping that growth, both domestically and abroad, and to this day, the New York Times summarizes, “most of the foundation’s spending goes to abortion and contraception.” Buffett and his first wife put several billion dollars into the foundation, making it the third largest in the country as of 2015. He heads it along with his children, and both its domestic and international programs are directed by veteran abortion activists. (For other causes, Buffett channels his money through the Bill & Melinda Gates Foundation.)
Buffett has put time and energy as well as money into this issue. He and his investment partner and fellow donor Charlie Munger were quite involved in People v. Belous, a 1969 case paving the way for abortion in California on privacy grounds, which was cited during the Roe v. Wade debate. After abortion was allowed in California but still illegal in most states, Buffet and Munger set up a “church” which they dubbed the “Ecumenical Fellowship,” and used it as a kind of underground railroad to transport women to Los Angeles and other cities for quick abortions. The Buffett Foundation has even promoted the partial-birth method of abortion (in which a later-term child is partially delivered but dismembered before emerging from the birth canal). The foundation financed early lawsuits and legal work to overturn bans on partial-birth abortion. These went all the way to the U.S. Supreme Court before a federal ban ultimately was upheld.
After examining his foundation’s IRS filings, the Media Research Center reported that Buffett’s grants to abortion groups just from 1989 to 2012 (with the tax returns from 1997 to 2000 missing) totaled at least $1.3 billion. And the Buffett Foundation’s spending in this area was accelerating rapidly as the 2000s unfolded. Beneficiaries of Buffett’s giving include Planned Parenthood ($300 million), NARAL, National Abortion Federation, Catholics for a Free Choice, Abortion Access Project, Population Council, Marie Stopes International, Center for Reproductive Rights, and dozens of other such advocates.
Buffett Foundation donations were instrumental in creating the abortion drug RU-486 and pushing it through clinical trials. The family foundation has funded many programs that teach clinicians how to perform abortions. And it has given hundreds of millions of dollars—more than any other foundation in existence—to groups providing contraception, sterilization, and abortion to poor women overseas.
The arms control and disarmament movement is a product of philanthropy. The earliest influential donor was Andrew Carnegie, an internationalist and pacifist who felt sure that war could be banished through stronger international laws and group efforts for peace. (See 1910 entry about the Carnegie Endowment for International Peace.)
Another longstanding donor-supported organization with a focus on disarmament is the Council for a Livable World. Founded in 1962 as a 501(c)(4) advocacy organization, the nonprofit is active in lobbying against military spending and in favor of dovish defense policies. It was a major backer of the nuclear-freeze movement (see 1981 entry), and has throughout its history been heavily involved in steering giving to candidates for political office who are devoted to disarmament. The organization has a special fund that earmarks campaign donations, and a separate PeacePAC.
In 1980 the council spun off a sister organization, the Center for Arms Control and Non-Proliferation. It promotes pacific positions on homeland security, defense budgets, and weapons development, and urges accommodation to the nuclear-weapons programs of Iran and North Korea. The center is largely supported by individual donors.
Another prominent voice for disarmament is the Arms Control Association. It was established in 1971 by the Carnegie Endowment for International Peace as part of its effort to modernize the pacifist message. The association continues to receive Carnegie funding, as well as grants from funders like the Ford, MacArthur, Mott, and Hewlett foundations, and the Ploughshares Fund.
Pierre Goodrich was a successful Indianapolis businessman; as son of a former governor he had a deep interest in public affairs; and he loved to read the great classic books. Convinced that a commitment to human liberty and moral goodness needed to be nurtured anew in each generation, he established the Liberty Fund in 1960. Its mission, he wrote, was to contribute “to the preservation, restoration, and development of individual liberty through investigation, research, and educational activity.” When Goodrich died in 1973 he left most of his estate to the fund; further bequests from his widow gave it assets of about $300 million.
Through most of the 1970s the Liberty Fund was a grantmaking foundation. In 1979, it transformed itself into an operating foundation that sponsors its own programs. By 2014, it had hosted about 3,500 small, invitation-only conferences for scholars and students on topics such as “Liberty and Markets in the Writings of Adam Smith” and “Shakespeare’s Conception of Political Liberty.” It has published more than 300 new editions of classic books, such as Democracy in America by Alexis de Tocqueville and Human Action: A Treatise on Economics by Ludwig von Mises. In addition to the conferences and books, the Liberty Fund maintains a free online library of important writing on freedom, dating back hundreds of years, and including 459 authors writing in a wide range of fields.
When Louis Schweitzer heard that a thousand boys had languished in a Brooklyn prison for at least ten months without trial, he was astonished and disappointed. Schweitzer, an immigrant from Ukraine who had thrived in the United States, thought of the Eighth Amendment in the U.S. Constitution’s Bill of Rights with its prohibition on “excessive bail.” The boys were not necessarily guilty, but they were too poor to pay an appearance bond.
Schweitzer engaged the services of Herb Sturz, a young journalist who had written on the Bill of Rights, to examine the problem. This was the birth of the Vera Foundation. Its first effort was called the Manhattan Bail Project.
With a seed grant of $95,000 from Schweitzer, then $25,000 in each of the next two years, Sturz examined the backgrounds of thousands of defendants, trying to determine which ones posed flight risks (and therefore required incarceration) and which ones could be released with reasonable confidence that they would show up for trial. Factors like work history, family structure, previous criminal history, military service, and so forth were tested in various weightings. With the cooperation of New York City mayor Robert Wagner, which Schweitzer procured, a three-year experiment was run where more than 3,500 accused people were released without bail, based on the recommendations of Vera. Only about 60 of them failed to appear at trial for reasons within their control.
Based on these results, New York courts overhauled their bail procedures, informed by the Bail Project algorithms. In 1966, crediting the influence of the Vera Foundation’s work, President Lyndon Johnson signed the Bail Reform Act. Vera eventually turned its attention to other areas, spinning off a series of nonprofit groups involved with employment, drug addiction, immigration, and victim services. Now known as the Vera Institute for Justice, the group is a $31 million-per-year organization that studies criminal-justice policy and supports demonstration projects. At this point only one third of the Institute’s funding comes from private donations, the rest is now provided by federal or state governments.
Beginning in 1959, the Ford Foundation gradually established a network of law-school-based legal clinics that became a powerful tool of liberalism. Many professors resisted the effort at first, because the clinics are expensive to operate and can distract students from their academic training. As the Ford Foundation poured millions of dollars into the efforts during the 1960s, however, faculty opposition collapsed. The number of law schools allowing students course credit for clinical work leapt from just 12 in 1968 to 125 in 1972 (out of a total of 147 law schools in the country).
From the start, the agenda was much more than offering useful vocational training to students. The goal favorably cited in a contemporary Ford Foundation report was to “reinforce the social consciousness of certain law students and professors through confrontation with injustice and misery.” The clinics, which were openly built on political activism, would also be a tool for changing the cities where they operated. The one at Columbia University Law School pledged to use the law to fight “poverty, racism, inequality, and political tyranny.”
Many Ford-funded, student-fueled clinics opened across the country, and over time they were remarkably successful at pushing liberal policies. Among many other achievements, Ford-funded clinics forced New Jersey to fund abortions, compelled Princeton University’s eating clubs to admit women, and put the public schools of Berkeley, California, under judicial control in order to take over the disciplining of black and Hispanic students.
Drawing on the long American tradition of religious missionary work abroad, Harlem minister James Robinson founded Operation Crossroads Africa with donated money in 1958. Several trips to Africa had convinced him of the need for an interracial service program that would assist poor Africans on a people-to-people basis outside of political considerations. During the summer of 1958, about 60 American students traveled to Cameroon, Ghana, Liberia, Nigeria, and Sierra Leone, where they built schools, assisted with manual labor, and formed friendships with the locals. They each collected donations and put in money out of their own pockets to fund this work.
The Crossroads service model and its philanthropic projects were an inspiration for the Peace Corps. “This group and this effort really were the progenitors of the Peace Corps,” said President Kennedy in 1962. Weak management has slowed the program in recent decades, but more than 11,000 volunteers have served in Operation Crossroads Africa since the nonprofit’s creation, and about 50 students still go abroad to work on village projects each summer.
Katharine McCormick had grown up in a prominent Chicago family, struggled through eight difficult years to become the second woman to graduate from MIT, then married the emotionally disturbed youngest son of Cyrus McCormick (reaper of the International Harvester fortune). Their marriage was probably never consummated, and her husband soon spiraled into horrifying mental illness and decades of institutionalization. Katharine poured her energies into the nascent women’s movement. She became an officer of the National American Woman Suffrage Association, was heavily involved in organizing and funding the campaign to ratify the Nineteenth Amendment to the Constitution, and became vice president of the League of Women Voters after ratification.
When her mother died in 1937, Katharine inherited $10 million, and the death of her husband in 1947 left her additional tens of millions. It took five years to conclude family battles and pay inheritance taxes, but once the estate was settled Katharine was rich. She asked Margaret Sanger (the founder of what would become Planned Parenthood and a friend made through suffrage politics) for advice on where she might make a difference with her money.
Sanger had long dreamed of a means of preventing pregnancy that would be as easy as taking an aspirin, so in 1953 she introduced McCormick to a scientist she thought might be able to pull off such a creation. Gregory Pincus was a brilliant biologist but so unobservant of conventional ethical scruples that he had been fired by Harvard and was scraping by in a small lab of his own in Worcester, Massachusetts. At their first meeting, McCormick wrote a check to Pincus for $40,000. She funded him steadily thereafter at $150,000-$180,000 per year—eventually investing more than $2 million in his quest to develop a daily birth-control pill.
McCormick was the sole and entire funder of this work. In today’s dollars her contributions come to approximately $20 million. And she was involved in more than just funding. She brushed off suggestions from Sanger and others that she support broad basic research, and spread her contributions across many labs. McCormick wasn’t seeking scientific advance; she wanted a consumer product available as soon as possible. She eventually moved from California to Massachusetts to monitor development of the pill and pushed constantly for the researchers to speed the drug trials.
At a time when 30 states still had laws on the books that nominally forbade the sale of contraceptives, the philanthropist and her scientists were intentionally obscure about much of their work. Live trials were conducted on women without their consent or even knowledge. And the drugs had been tested on only about 60 women, for a year or less, when Pincus announced publicly that they had a working birth-control pill. He did this to generate public pressure for FDA approval, which followed quickly in 1957.
The pill was subsequently credited with kicking off the Sexual Revolution and sparking dramatic changes in family life, economic behavior, and social order. Katharine McCormick’s indispensable impetus in bankrolling creation of the pill has often been overlooked, but she herself reveled in her accomplishment—even getting a prescription, as a matron in her 80s, so she could buy some of the first birth control in her local pharmacy. Not because she needed it, but because she wanted it.
Founded in 1938 by a group of businessmen aiming to strengthen “free, competitive enterprise,” the American Enterprise Association had been only mildly effective when William Baroody arrived in 1954, quitting a comfortable job at the U.S. Chamber of Commerce to do so. Within a generation, he transformed the think tank—renamed the American Enterprise Institute—into one of the great conservative forces in Washington, rallying corporate and philanthropic dollars to make it happen.
Libertarian economist Milton Friedman became an AEI academic adviser, and conservative intellectuals like Irving Kristol, Arthur Burns, Antonin Scalia, Herb Stein, and Michael Novak began long associations with the think tank. At a dinner honoring Baroody’s twentieth anniversary at AEI, President Richard Nixon sent a message that praised him for breaking liberalism’s “virtual monopoly in the field of ideas.” By the time of Ronald Reagan’s election, AEI had a budget of $8 million and a stable of innovative thinkers. It helped fill the new administration with personnel like Jeane Kirkpatrick, an AEI foreign-policy expert who became Reagan’s ambassador to the United Nations.
AEI’s finances sagged in the 1980s, but new president Christopher DeMuth revived donations and lifted the organization to another peak during his 22 years at the helm. He built around scholars and fellows like James Q. Wilson, Charles Murray, Lynne Cheney, Glenn Hubbard, Leon Kass, Robert Bork, Michael Barone, John Bolton, Newt Gingrich, Christina Sommers, and Arthur Brooks. He attracted a large paid circulation for the institute’s monthly current-affairs magazine The American Enterprise. AEI researchers led policy in many areas: a group convened by Michael Novak set groundwork for the 1994 welfare reform; Frederick Kagan helped the Bush Administration develop the successful troop surge in Iraq; Peter Wallison gave advance warnings of the looming mortgage crisis, and the government role in causing it.
Economist Arthur Brooks became AEI’s president in 2009. He greatly expanded the institute’s communications capacities, continued to add scholars, became a nationally popular speaker, book writer, and commentator himself at newspapers like the New York Times and Wall Street Journal, and demonstrated a flair for fundraising. Gifts of $100 million allowed the group to renovate an historic building on Washington’s “Think Tank Row” into its new headquarters. In 2014, AEI raised $41 million, 41 percent of that donated by individuals, 34 percent coming from foundations, and 19 percent contributed by corporations.
When global population passed 2½ billion in the early 1950s (it is now more than 7 billion), John Rockefeller III was among those convinced that catastrophe was on the way. He believed his family foundation bore some of the responsibility for rising numbers—because its health programs had reduced death rates in poor countries. So he convened a panel of experts for advice on blunting population growth. They called attention to the cultural, religious, and political sensitivities that would complicate any intervention into matters of sex and fertility, and the Rockefeller Foundation refused to adopt “overpopulation” as an area of interest.
John III, however, was adamant. With a personal grant of $100,000 he founded a new group called the Population Council, and followed that soon after with a $1.25 million donation. Soon, the Rockefeller Brothers Fund joined the cause. Before long, the Ford Foundation pitched in $600,000, followed by a $1.4 million Ford grant later in the 1950s. (Ford continues to be a significant donor to the council today.) Eventually the Rockefeller Foundation itself became a major donor. Foundations like Mellon, Hewlett, Packard, and Gates became involved later, and the Population Council now operates in scores of countries, spending $87 million in 2014.
From its beginning, the Population Council was associated with eugenics. Its first president, Frederick Osborn, was a founding member of the American Eugenics Society. Eugenics and alarm about population growth were entwined for decades, and there has been no shortage of wealthy philanthropists willing to spend money to reduce births among poor families in other countries.
This topic has always generated controversy. In 1959, reacting to a proposal for U.S. government funding for fertility control in other countries, President Dwight Eisenhower declared that he “could not imagine anything more emphatically a subject that is not a proper political or governmental activity.” But by 1965 President Lyndon Johnson was asserting that “five dollars invested in population control is worth a hundred dollars invested in economic growth.”
Coercive measures controlling family size in China, India, and other countries led to protests and suspensions of international funding on several occasions. Even amid backlashes against eugenics, coercive fertility control, and population alarmism, donors ranging from the MacArthur and Scaife foundations to Ted Turner and Warren Buffett have made large donations to a cause they viewed as a crisis. And government agencies like the World Bank, United Nations, and the U.S. Agency for International Development have also been heavily committed to reducing births in foreign countries. Fully 69 percent of the Population Council’s $75 million of grant revenue in 2014 came from governments.
During America’s Cold War with the Soviet Union, many philanthropists hoped that the confrontation could be settled peacefully through a competition of ideas rather than with weapons. In the end, it was. Early on, the big foundations—Carnegie, Ford, and Rockefeller—spent tens of millions of dollars creating new “area studies” programs at universities to churn out experts with the language, cultural, and historical skills needed for diplomacy, analysis, popular communications, and intelligence-gathering in communist countries. (See 1952 item on our companion list of achievements in Education.)
Many foundations battled Marxist ideas in partnership with the Central Intelligence Agency. The initial meeting of the Congress for Cultural Freedom, a group of anti-communist liberals, was held in Berlin in 1950, sponsored by a mix of philanthropic money and CIA grants. “Friends, freedom has seized the offensive!” declared Arthur Koestler, author of the influential book Darkness at Noon and a CCF organizer.
The CCF would thrive over two decades, growing to employ 280 staffers and operating in 35 countries, making the positive case for cultural and economic liberalism. The goal was not only to confront the Soviet Union, but also to fend off communism in countries like Greece and Turkey, and to balance the communist parties that actively vied for influence in elections in France, Italy, and other western European nations. The CCF published a number of anti-communist magazines, including Encounter, a well-read London-based literary journal founded by poet Stephen Spender and intellectual Irving Kristol, whose contributors included individuals like Albert Camus, George Kennan, Isaiah Berlin, Vladimir Nabokov, Arthur Koestler, Jorge Luis Borges, and V. S. Naipaul.
More than a hundred U.S. foundations worked with the CIA in funding such causes early in the Cold War, out of patriotic duty and alarm over the spread of totalitarianism. When parts of the American press began to criticize these efforts in the later 1960s, CIA funds dried up and foundations began to refuse to cooperate, especially as liberals abandoned anti-communism during the Vietnam War. Much of the intellectual capital that allowed the West to successfully resist the spread of communist governance, however, was built up during the opening stages of the Cold War by this quiet partnership between philanthropists and intelligence analysts.
William Volker was a millionaire by age 47, and could have been so earlier had he not begun each workday by meeting with anyone who asked and writing checks to help many of them, giving away perhaps one third of his income. He had been powerfully impressed as a young boy when his German-immigrant family arrived in Chicago shortly after the Great Fire and saw “a vast spontaneous system of relief supported by charitable persons.” When he grew up he did his part to keep such neighborly assistance alive. “Mr. Anonymous” was a devout Christian and very active in the civic life of his adopted Kansas City, Missouri.
In 1910, Volker helped the Kansas City government create the nation’s first municipal welfare department. He was soon disillusioned, however, by political manipulation of the funds. “Political charity isn’t charity,” Volker concluded. Later in his life Volker discovered the free-market thinker Friedrich Hayek, whose analysis of the ways government is often kidnapped by special interests helped Volker make sense of his experience.
When Hayek, amid Western Europe’s flirtation with Marxism, was trying to organize a meeting of free-market economists in Mont Pelerin, Switzerland, he worried that no Americans would attend due to the high cost of travel. Volker’s foundation came to the rescue with a check that allowed 17 Americans to fly across the ocean for the 1947 gathering. The American attendees included Milton Friedman, Henry Hazlitt, Leonard Read, George Stigler, and Ludwig von Mises (who was not an American but was teaching in New York). The Mont Pelerin Society, as the resulting group came to be called, went on to become a leading hub of free-market thinking. Eight of its members have won the Nobel Prize in economics. Many others have held important government posts in the U.S. and elsewhere.
Under the influence of Volker’s nephew and business partner, Harold Luhnow, the Volker Fund continued to play a role in the re-emergence of free-market thinking during the twentieth century. At a time when few other philanthropists showed any interest, it supported organizations that made the case for liberty in the Western cultural tradition.
In 1956, the Volker Fund sponsored a series of lectures by Milton Friedman that evolved into his seminal book Capitalism and Freedom. “This series of conferences stands out as among the most stimulating intellectual experiences of my life,” wrote Friedman in the preface. The Volker Fund also underwrote the fellowship that allowed Friedrich Hayek to teach at the University of Chicago for many years (which helped cement that campus as a center of classical liberalism and home for subsequent scholars like Milton Friedman, George Stigler, Ronald Coase, Gary Becker, Eugene Fama, Robert Fogel, Lars Hansen, and Robert Lucas—all winners of Nobel Prizes in economics), as well as grants that supported Ludwig von Mises at New York University.
There was recognition after World War II that one of the important factors allowing the U.S. to win the war was an unprecedented mobilization of scientific and industrial resources by a combination of private companies, philanthropists, and government. (See, for instance, 1940 item on the creation of radar on our list of Prosperity achievements.) In 1946 the U.S. Army launched an effort to institutionalize such cooperative research free from government bureaucracy, calling it Project RAND (for research and development). In 1948, the Ford Foundation provided a $1 million interest-free loan, plus a guarantee on a private bank loan, to allow the organization to become an independent nonprofit called the RAND Corporation. This was the first of many grants from Ford to RAND.
National-security issues dominated RAND’s initial research agenda. Its first report, involving satellites, was issued a decade before Sputnik. The group’s experts subsequently formulated nuclear strategies, proposed new weapons, and started fresh fields like terrorism studies and systems analysis (which aims to improve organizational decision-making). RAND’s early research on computers helped develop the Internet, and its researchers sped magnetic-core memory, video recording, and other technologies.
The nonprofit gradually evolved into a broad “think tank” (one of the first progenitors of such organizations). Today, RAND remains active on military topics but also studies everything from obesity to educational accountability. In 2014, it had revenues of $270 million, with about half coming from the Pentagon and most of the rest from non-military government agencies. Roughly 10 percent came from philanthropic contributions.
When the United Nations was created in 1945, after the trauma of World War II, it lacked a home. The organization initially met in cramped quarters at Manhattan’s Hunter College and on Long Island. The inadequate arrangements forced the new body to look for permanent accommodations in other cities or overseas. Switzerland was a possibility. Hours before a final decision was due, John Rockefeller Jr. swooped in with an irresistible offer: He would buy 17 acres along the East River in Manhattan and donate it to the international organization. The U.N. quickly accepted the multimillion-dollar gift.
Rockefeller was motivated by a hope that the U.N. could help avert future catastrophes like the previous world wars, and that having the organization in the United States made it less likely that it would stray into mistaken or irrelevant policies. He also saw practical benefits: New York City would enjoy economic benefits, American diplomats would have easy access to counterparts in a convenient location, and U.S. intelligence could keep an eye on foreign officials.
In 1935, the board of the Carnegie Corporation expressed interest in “Negro problems” in the United States, and the extent to which they could be reduced through education. This led to a decision to commission a study of the issue. For reasons of objectivity, the foundation sought a European scholar to conduct the work, settling in 1936 on Swedish economist Gunnar Myrdal, who had spent 1929 and 1930 in the U.S. as a Rockefeller Foundation Fellow, and who later went on to win the Nobel Prize in economics. The Carnegie Corporation arranged a two-month tour of the South for Myrdal, guided by a knowledgeable official of Rockefeller’s General Education Board. They gave Myrdal $300,000 of funding, with which he commissioned 40 research memoranda from experts on different aspects of race issues. Beyond this, the foundation gave Myrdal wide latitude for his investigation.
Drawing from the research papers and his own observations during his Southern tour, Myrdal wrote a 1,500-page book called An American Dilemma, which the Carnegie Corporation published in 1944. The book took a basically positive view of the potential of black Americans and the ability of U.S. society to transform itself to accommodate them as productive and equal citizens, and strongly influenced the public view of race relations. It sold over 100,000 copies, and its second edition published in 1965 influenced the civil-rights activism of that time. The study was cited in five different Supreme Court opinions, including the Brown v. Board of Education case that ushered in full racial integration.
Charles Garland, age 21, told the executor of his father’s estate that he would not accept the inheritance left to him because it came from “a system which starves thousands.” When they saw press reports describing this decision, radical activists Upton Sinclair and Roger Baldwin urged Charles to accept the money and devote it to left-wing political causes. Baldwin, who had just founded the American Civil
Liberties Union, managed to persuade the young man. Garland used his father’s money to establish the American Fund for Public Service, commonly known as the Garland Fund, in 1921.
A board was appointed whose members included the prominent socialist Norman Thomas and Benjamin Gitlow, a founding member of the Communist Party USA. Garland attached few requirements, letting the trustees decide how to disburse the money. The fund resolved not to support political parties or religious organizations, preferring radical journalism, labor unions, and Marxist causes.
The ACLU turned out to be the fund’s most consequential grantee. Garland money was crucial in helping the ACLU grow into an influential policy organization promoting free speech, secularism, gay rights, and other liberal causes. By 2015, annual spending by the ACLU topped $134 million.
The Garland Fund dissolved in 1941 after spending all of its assets.
In its early years, Andrew Carnegie’s main foundation, the Carnegie Corporation, had a Republican board that was anxious to improve the quality of American governance without increasing the size of government. Toward this end, the corporation began to make grants creating independent advisory groups that aimed to elevate the quality of information available to government officials. Beginning in 1919, Carnegie and allied funders set up a whole series of private research institutes and scientific councils that, as historian Ellen Lagemann puts it, “would be accessible to the federal government but not controlled by it.” The aim was to encourage an “associative state,” where experts supported by private philanthropy could improve the policymaking process and help solve national problems while preserving America’s traditionally limited sphere of government action.
Carnegie and Rockefeller funds led this effort by establishing the National Research Council during World War I. It was tasked with helping solve important military problems by serving as a “department of invention and development.” Drawing on numerous scientists, the council brought the government many military advances, including nascent sonar systems for detecting submarines, intelligence tests used to classify army recruits, and range finders for airplanes. In 1919 the Carnegie Corporation donated $5 million to make the National Research Council a permanent adviser to government, under the wing of a revived National Academy of Sciences. A headquarters building and a permanent endowment were created with the Carnegie money, and today the NRC conducts hundreds of studies every year to guide and improve federal operations.
Other donors followed this with similar efforts to capitalize private think tanks and advisory organizations with the aim of refining government policies and enhancing the performance of public agencies. Thanks to philanthropic money from Ford, Russell Sage, Rockefeller, Eastman, Rosenwald, and many others, independent organizations like the RAND Corporation, the Social Science Research Council, and the American Council of Learned Societies began to appear, elevating governance via better information.
Fresh from leading humanitarian relief efforts during World War I, future President Herbert Hoover founded the Hoover Institution on War, Revolution, and Peace at Stanford University in 1919. His goal was to create an archive on the Great War so that future generations would learn its lessons. With an initial gift of $50,000, Hoover funded scholars to travel to Europe so they could hunt down relevant historical documents and bring them back to Stanford. The Hoover Institution soon focused on other aspects of twentieth-century history—most notably the Russian Revolution and the development of the Soviet Union. Hoover encouraged ambitious scholarship and publication, with an eye toward warning Americans about the dangers of communism.
Following his one term as President (1929-1933), Hoover returned to his namesake organization. He eventually came into conflict with the increasingly liberal faculty at Stanford, and in 1959 wrested control of the Hoover Institution from the professors, ensuring its independence while maintaining a link to the university. His statement to the Stanford trustees that year outlines the mission of his organization:
This Institution supports the Constitution of the United States…and its method of representative government. Both our social and economic systems are based on private enterprise from which springs initiative and ingenuity…. Ours is a system where the Federal Government should undertake no governmental, social or economic action, except where local government, or the people, cannot undertake it for themselves…. This Institution is…to recall man’s endeavors to make and preserve peace, and to sustain for America the safeguards of the American way of life.
Major donors to the Hoover Institution in its early decades included Alfred Sloan Jr., Jeremiah Milbank, and the Lilly family. Over time, the organization grew into an important think tank. Its experts provided public-policy advice to Ronald Reagan when he was governor of California. Top-flight scholars took up residence—like Robert Conquest, Milton Friedman, and Thomas Sowell.
Even as it became an important policy generator, the institution remained true to its historical mission, providing a home for the papers of Friedrich Hayek, for Hoover himself outside of his years in national government (those records are at his Presidential library in Iowa), and for rich archives in areas like communism, war and peace, intelligence, business and commerce, and more.
The Hoover Institution’s budget was $47 million in 2014, with 59 percent of its income coming as philanthropic gifts, and 39 percent more deriving from earnings on its endowment of several hundred million dollars.
Robert Brookings made a lot of money in St. Louis manufacturing and selling housewares, then devoted much of his fortune and energy to building up Washington University and other institutions in his home city. At the start of World War I he agreed to serve as co-chairman of the War Industries Board, where he became the link between hundreds of private companies and a federal government trying to organize emergency war production. The experience convinced him that federal policymakers needed better economic data and better informed civil servants.
So in 1916 Brookings organized the Institute for Government Research, the first private organization aimed at bringing a factual and scientific approach to policymaking and governance. Other donors to the effort included J. P. Morgan and John Rockefeller, and companies like Fulton Cutting and Cleveland Dodge. Brookings also established the Institute of Economics in 1922 and a graduate school in 1924.
In 1927 the three organizations merged, becoming the Brookings Institution, which is generally regarded as the first think tank. Brookings researchers later contributed to the Marshall Plan, establishment of the United Nations, creation of the Congressional Budget Office, and many other national efforts. Employees of the Brookings Institution often moved back and forth between government posts and their perches at the think tank.
Although normally associated with mainstream liberalism, the Brookings Institution has also contributed to causes associated with conservatism. These include welfare reform, school choice, tax reform, and regulatory rationalization. A University of Pennsylvania survey has named the Brookings Institution the world’s leading think tank.
Early in the twentieth century, concerns about poor children led a rag-tag alliance of progressive politicians, early feminists, and dissident philanthropists to promote what they called mothers’ pensions—direct government aid to impoverished mothers of minor-age children. Mainstream organizations such as the Russell Sage Foundation and the National Conference of Charities and Corrections opposed the initiative, fearing that public relief would encourage dependency, invite political corruption, and deflate private anti-poverty efforts that involved extensive personal contact and behavioral counseling.
A group of Jewish philanthropists, led by Hannah Einstein of the United Hebrew Charities, dissented from these concerns within the charitable establishment, however. They pushed for direct government payments, and some activists like Jane Addams joined them. In 1911, Illinois passed the first statewide program of mothers’ pensions. Thanks to continuing pressure on legislatures, 40 states had approved their own versions by 1920.
Funding proved more difficult. Most of the programs focused on widows with children, as opposed to unmarried women, because they were regarded with the most sympathy. Critics also complained that the pensions were too stingy. The mothers’ pension movement cast a long shadow, though—providing the model for the Aid to Families with Dependent Children welfare payments created in 1935 as part of the Social Security Act, and establishing a precedent for the subsequent rise of a dense system of federal payments to individuals lacking income.
“To hasten the abolition of war, the foulest blot upon our civilization.” That was the utopian aim when Andrew Carnegie handed over a $10 million startup grant in 1910 to create the Carnegie Endowment for International Peace. The charter written by the optimistic Carnegie actually made plans for what the organization should do next after it ended armed conflict: “When the establishment of universal peace is attained, the donor provides that the revenue shall be devoted to the banishment of the next most degrading evil or evils, the suppression of which would most advance the progress, elevation, and happiness of man.”
Pacifists dominated Carnegie’s initial board, and rosy hopes abounded. In the 1920s, the endowment pushed for the adoption of the Kellogg-Briand Pact, whose signatories foreswore the use of war to resolve conflicts. Nicholas Butler, president of the Carnegie Endowment for International Peace actually won the Nobel Peace Prize in 1931 for his promotion of Kellogg-Briand. The pact’s real-world effect, however, was nil: Its signatories included Nazi Germany, imperial Japan, and the Soviet Union.
Disappointed in its efforts to ban war, the endowment turned its attention in the 1950s and ’60s to promoting the United Nations and training young foreign-service officers from newly independent countries. In the 1970s, in what the organization called a “second founding,” the endowment moved from New York to Washington, D.C., and began to focus on influencing U.S. foreign policy. It launched the Arms Control Association to advocate for disarmament, and took control of Foreign Policy magazine, a voice for liberalism in international affairs.
Additional think tanks have been spun off of the endowment, including the Henry Stimson Center (a similar group promoting liberal security policies), the Institute for International Economics (now the Peterson Institute), and the Migration Policy Institute. In 2007, the endowment announced plans to become “the world’s first global think tank,” opening offices in Moscow, Beijing, Beirut, and Brussels. All of this has been possible because the group maintains an endowment of more than $300 million, thanks to Andrew Carnegie’s original investments.
Born into slavery, Booker T. Washington went on to become the best-known African American of his generation, primarily as the leader of the Tuskegee Institute, which prepared thousands of black students for skilled occupations. Washington was a prolific fundraiser and received support from Northern industrialists who admired his self-help philosophy and his practical organizing skills. Among his “sainted philanthropists” were Andrew Carnegie, Collis Huntington, John Rockefeller, Julius Rosenwald, and Jacob Schiff.
Some critics, however, particularly modern ones, have complained that Washington’s reluctance to stir up social conflict was too accommodating. Long after he died in 1915, though, historians discovered that Washington had another non-public face. He was also a philanthropist himself, secretly making personal donations to fund legal challenges to Jim Crow laws.
Washington quietly supported the Giles cases of 1903 and 1904 that took on black disenfranchisement. They went all the way to the Supreme Court before ultimately failing in their claims for black voting rights. In the Rogers case of 1904, Washington supported a winning argument. The Supreme Court ordered the retrial of a convicted black man because qualified blacks had been deliberately kept off the jury.
Major legal and political advances for black Americans would not arrive until decades later, but the modest gains of Booker T. Washington’s hidden philanthropy gave him and others solace. He credited the Rogers decision, for example, with giving “the colored people a hopefulness that means a great deal.”
When John Rockefeller put up a million dollars to create the General Education Board, his mission was to improve public education in the Southern states—particularly high schools. In many places (rural towns, black districts) public high schools didn’t even exist, and where they did they were usually inadequate. State law actually prevented Georgia from using public dollars for secondary education.
In addition to devoting millions of its own dollars to building up decent high schools (see 1902 entry on our Education list), the GEB created a strategy aimed at getting governments to meet their educational responsibilities. In particular, the GEB asked state universities to appoint professors of secondary education onto their faculties, paying for their salaries and expenses with Rockefeller money. Once in place, these specialized educators often pressed legislators and the public on the importance of improving high schools.
With remarkable speed, these state-college professors were able to build convincing cases, overcome local resistance, and convince lawmakers to pass enabling statutes. In the case of Georgia it required an amendment to the state constitution. After securing successes at the state level, the GEB-backed education professors began encouraging local communities to improve their schools. They promoted bond proposals to finance local construction of schools. They pushed for a longer academic year. They suggested improved curricula.
Across the South, the GEB transformed attitudes toward secondary education, and for the first time high schools became widely available to ordinary Southerners.
In 1895, with the help of private philanthropy, Jane Addams published Hull House Maps and Papers, a collection of articles calling public attention to the Chicago housing and working conditions that her Hull House organization aimed to alleviate. Addams’s original mission was to defeat poverty and encourage assimilation through education, services, and counsel supplied by successful members of the community. Over the years, she shifted toward more collective and impersonal action. She pushed for legislation on housing regulations, law-enforcement issues, factory inspections, child labor, women’s suffrage, worker’s compensation, prostitution, international pacifism, and other topics. She took high-profile roles in the Progressive Party, the Women’s International League for Peace and Freedom, and the founding of the American Civil Liberties Union.
A difficult upbringing under a fanatical father turned John Muir into a loner and wanderer who spent long stretches isolated from other people in remote places. Once he had formulated his own quasi-religious gospel of nature, however, he recognized that he needed to enlist other people, and ideally government, in his crusades against exploitation of natural areas. So in 1892 he and some likeminded activists founded the Sierra Club. He was president for 24 years, until his death.
One of the Sierra Club’s founding goals—“to explore, enjoy, and render accessible the mountain regions of the Pacific Coast”—echoed the purpose of the Appalachian Mountain Club started on America’s opposite coast 16 years earlier. (See 1876 entry on the Roundtable’s list of philanthropic achievements in Nature.) But the Sierra Club’s third goal became its distinguishing characteristic: “To enlist the support and cooperation of the people and government in preserving the forests and other natural features of the Sierra Nevada.” Rather than becoming an operating entity aimed at the enjoyment of land, the Sierra Club turned into a protectionist group focused on lobbying.
Sustained in its early years by small donations, the group eventually reached a dominant financial and political position amid the growth of the environmental movement. Muir’s popular writings on nature continued to attract followers long after his death in 1914. And in recent decades new generations of activists have been inspired by the radicalism of his previously unpublished work, which includes rejections of people-centric policy, capitalism, nationalism, and Christianity. The Sierra Club is now a large national organization at the center of environmental politics, with a budget exceeding $104 million as of 2013.
The long, hard campaign to ban slavery was the first, and still largest, triumph of public-policy philanthropy in the U.S. When it began in earnest in the 1830s, private donations from hundreds of thousands of Americans were used for everything from dogged journalism, literature creation, and tract distribution, to the creation of schools for slaves and former slaves, to special events like the Amistad trial (see 1841 entry). From the beginning there were also acts of civil disobedience—as by the volunteers and financial donors who aided furtive transport of escaped slaves to northern states or Canada via the Underground Railway.
As decades passed, some abolitionists edged closer to active, physical resistance. Gerrit Smith’s family had partnered with John Jacob Astor in the fur trade and became the largest landowners in New York state. But Gerrit lived simply so that he could give most of his money to favorite causes, primarily his passion for eliminating slavery. Smith donated to every kind of anti-slavery effort. He was the main funder of Frederick Douglass’s newspapering. He paid large sums to buy the freedom of slaves and whole slave families. He supported the building of schools. He gave money and land to create a village of new freedmen surrounding his own home in central New York state.
Smith was not a vindictive man, as shown by the fact that he also bailed Jefferson Davis out of jail after the Civil War, and argued against criminal prosecutions of Southerners in order to hasten national healing. In the decades of stalemate before the war, however, Smith became frustrated with mainstream efforts to change public law on slavery. In 1848 he met for the first time with John Brown, who was countenancing lawbreaking.
In 1850, Smith organized and underwrote the Cazenovia Convention that urged Americans to disobey and nullify the Fugitive Slave Law. Its resolution, written by Smith, called on slaves to use all means necessary to escape, including stealing and force. Over the next decade, Smith brought John Brown to his home for meetings several additional times, and he secretly began to finance Brown’s running of guns into Kansas, and then his attack on the federal arsenal at Harper’s Ferry. “I can see no other way,” he said.
These violent acts of resistance were an exception to Smith’s mostly pacific philanthropy, and they led him to a nervous breakdown. But they were part of his indefatigable use of his personal fortune to end legal slavery, and of course the Harper’s Ferry attack ultimately sparked the Civil War. Gerrit Smith’s abolitionist philanthropy totaled about a billion dollars of donations, in current value. There is no question that this giving accelerated the most important national policy change that our nation is ever likely to undergo.
Led by a mix of evangelical pastors and funded by Lewis Tappan and other public-minded philanthropists, the American Missionary Association was created in upstate New York in 1846. It promulgated Christian principles, opposed slavery, educated blacks, and promoted racial equality. By linking eastern abolitionists with those in Ohio, Illinois, and other parts of what was then “the West,” the group exerted an important influence on American politics and culture.
The association supported missions for runaway slaves in Canada and for liberated slaves in Jamaica. It paid teacher salaries for schools serving African Americans in border states. It helped American Indians, Chinese immigrants in California, and the poor in Hawaii, Sierra Leone, Thailand, Egypt, and other overseas locations. The AMA helped anti-slavery ministers plant hundreds of new churches across the Midwest.
In the lead-up to the Civil War, Lewis Tappan and other AMA leaders denounced the Democratic Party as pro-slavery, and nurtured anti-slavery political parties that eventually coalesced in the birth of the Republicans. During the Civil War itself, the AMA fielded a corps of missionaries and teachers that followed in the wake of the Army. They seized every opportunity to educate, comfort, and evangelize.
After the war, the AMA aided freedmen, and founded schools. The association also chartered eight colleges that became the core of what are now referred to as America’s historically black colleges and universities. By 1888, 7,000 teachers trained by the American Missionary Association were instructing hundreds of thousands of pupils in Southern states.
In 1839, a group of Africans captured by Spanish slavers and then sold into bondage in Cuba rose against the crew of the ship transporting them. They eventually came to shore on Long Island, where they were put on trial for murdering a crewmember. Abolitionist financier Lewis Tappan immediately recognized this as a potential teaching moment for public understanding of slavery.
Tappan collected donations from some fellow abolitionists and set off for Connecticut, where the 36 Africans were locked up. The defendants were clothed and fed by Tappan and questioned with the aid of interpreters he brought in. Tappan subsequently retained respected lawyers to represent their interests, and hired Yale students to tutor them in English, American manners, and Christianity.
After criminal charges were dismissed, the case was referred to civil trial. Lewis Tappan initiated a suit charging the Spanish ship owners with assault and false imprisonment of the Africans, which got the Spaniards arrested. The case became a national and international cause célèbre, drawing large crowds and banner headlines.
The courtroom struggle eventually reached its final appeal before the U.S. Supreme Court, and Tappan convinced former President John Quincy Adams to join the all-star legal team. Ultimately, though five of its nine justices were Southerners who either owned or had owned slaves, the court ruled that the Africans were kidnap victims, not property, with a right to defend themselves. They were declared wholly free.
Lewis Tappan had almost single-handedly financed and organized the defense. He attended every day in court. He engineered much of the publicity and reporting that transfixed many Americans in sympathy with the Africans. Some months later he helped finance the excursion which returned the Africans to their native lands. Hundreds of donors moved by the Amistad trial also contributed funds, which were used to supply the returnees and help them resettle. Abolitionism had turned a corner toward a wide popular following.
The powerful religious and moral revival in America during the early 1800s, known as the Second Great Awakening, spawned an outpouring of voluntary giving and the creation of many new charitable societies aimed at spreading Christianity and reducing social ills like drunkenness, violence, and slavery.
One of the most consequential of these new charities was the American Anti-Slavery Society. It was established in 1833 with financing from major philanthropists Arthur and Lewis Tappan and Gerrit Smith, along with many small donors mobilized by an army of religious female fundraisers. Within two years the society had 200 local chapters, and there were 1,350 by 1838, mobilizing an estimated 250,000 members. Given the controversial cause, historian Kathleen McCarthy calls this “a stunning level of recruitment, accounting for almost 2 percent of the national population within the scant space of five years in an era of primitive communications.” As a fraction of the national population, the society was larger than today’s Boy Scouts, National Rifle Association, National Wildlife Federation, or Chamber of Commerce.
In the process, abolitionism became a national crusade. Advocates presented the following arguments for reform: No one has the right to buy and sell other human beings. Husbands and wives should be legally married and protected from involuntary separation. Parents should maintain control of their children. It is wrong for slaveowners to be able to severely punish a slave without trial. Laws prohibiting the education of slaves must be repealed. Planters should pay wages to field hands instead of buying slaves.
In the summer of 1834, slavery apologists reacted violently to this new opposition. During a riot in New York City, leading AAS donor Arthur Tappan escaped with his life only by barricading himself and his friends in one of the family stores well supplied with guns. The home of his brother Lewis Tappan was destroyed, with all of his family possessions pulled into the street and burned while some leading citizens looked on passively.
Despite their narrow escapes, the Tappan brothers were undeterred. Lewis left his house unrepaired, to serve, he said, as a “silent anti-slavery preacher to the crowds who will flock to see it.” More substantively, the Tappan brothers decided to flood the U.S. with anti-slavery mailings over the next year. They founded and subsidized several important magazines to popularize anti-slavery arguments, including the high-circulation Emancipator, the children’s magazine the Slave’s Friend, the Record illustrated with woodcuts, William Lloyd Garrison’s the Liberator, and the journal Human Rights.
These publications and other abolitionist tracts and papers were flurried across the country by the American Anti-Slavery Society. The campaign was powered by $30,000 of donations. It targeted ministers, local legislators, businessmen, and judges, using moral suasion to make the case against enslavement. The society’s publications committee, headed by Lewis Tappan, mailed over a million pieces in the course of ten months, harnessing new technologies like steam-powered presses plus the religious enthusiasms of thousands of volunteers to mobilize public opinion. The National Postal Museum has described this as America’s first-ever direct-mail campaign.
As McCarthy notes, defenders of slavery had “kept the leavening potential of civil society in check…watchfully curbing any trend which might contribute to the development of alternative, independent power bases.” So the enemies of abolition struck back against this civil information campaign. In his 1835 message to Congress, President Andrew Jackson called for a national censorship law to shut down mailing of these politically “incendiary” writings. He encouraged his postmaster general to suppress the deliveries or at least look the other way while local postmasters did, and in many places abolitionist tracts were pulled out of the mail and subscribers were exposed and threatened.
Arthur and Lewis Tappan and other philanthropists subsidizing the effort were subject to additional violence. Lewis was mailed a slave’s ear, a hangman’s rope, and many written threats. An offer of $50,000 was made for delivery of his head to New Orleans. A Virginia grand jury indicted him and other members of the American Anti-Slavery Society. As his only weapon, Lewis carried a copy of the New Testament in his breast pocket.
These thuggish reactions helped turn public opinion against slavery, especially among Northern churchgoers, and fueled the rapid spread of AAS chapters described above. The Tappans, meanwhile, continued their dogged efforts to change national policy on this issue. See their contributions, for instance, in the nearby 1841 entry on the Amistad decision, and the 1846 entry on the American Missionary Association. Combining abundant generosity with personal passion and a genius for organizing and public relations, the Tappan brothers made giant contributions to the most consequential public-policy reform in the history of the United States.