Chapter 2: The Very First—and Still Biggest—Triumph
The most consequential change of public policy in American history was the abolition of slavery. It took a terrible war and generations of suasion to make that transformation of opinion and law complete. But it was philanthropists who launched and sustained this revolution in human freedom and racial equality—and later donors like George Peabody, John Rockefeller, Julius Rosenwald, and George Eastman who continued the process through Reconstruction and beyond. The abolition movement showed that there is no cause too big for philanthropy, if backers possess adequate courage, determination, and patience.
Decades of private charity by givers large and small sustained the campaign to end slavery. Individuals and private associations purchased slaves in order to free them. Volunteers served as guides and stationmasters along the Underground Railroad. Donors built schools and colleges where white children could be taught to disdain bondage, and black children could be offered literacy and practical instruction for the first time. Hundreds of privately funded publications, meetings, and conventions built arguments against human chattel, drawing on everything from Christian morality to economic self-interest. Philanthropic efforts to fulfill the promise of our Declaration of Independence that all men are created equal were backed by the time and treasure of many thousands of Americans.
Even the individuals who funded the radical activities of John Brown and sent guns to Kansas and raiders to Harper’s Ferry were public-policy philanthropists in their own peculiar ways. Central New Yorker Gerrit Smith is a prime example. The family fur-trading fortune made him the largest landowner in New York, but he lived simply so he could donate the modern equivalent of a billion dollars to undo slavery and heal its wounds. His spending ranged from buying enslaved families and giving them their freedom, to funding Frederick Douglass’s newspapers, to organizing civil disobedience and rescues in response to the Fugitive Slave Law, to gun-running with John Brown, to paying the bail to free Jefferson Davis after the Civil War as an act of reconciliation.
Wealthy businessmen Arthur and Lewis Tappan were among the most devoted and successful philanthropic campaigners for abolition. Brothers born in Northampton, Massachusetts, the Tappans made their fortunes in Boston and New York. Arthur, who was two years older, was particularly famous for hard work and frugality. He worked from a cubicle, and did not provide chairs for visitors to prevent lingering meetings and preserve more time for productive work. Lewis partnered with his brother on some ventures, and eventually founded the Dun & Bradstreet Company, an institution for identifying and rewarding companies for rectitude and honest finance, which continues as an important American financial-information agency today.
Raised in an evangelical home, both Tappans were deeply committed to Christian giving. Their initial philanthropic forays were mostly conventional donations to assist the indigent, but they soon became quite inventive. When Lewis heard that British philanthropists had opened savings banks for the working class so their earnings might accumulate interest, he started his own version in Boston. More and more, religious enthusiasm began to dominate the Tappans’ giving, and by the 1820s Arthur was the most generous philanthropist in Boston. “Money was his passion; to give it away his security,” wrote historian Bertram Wyatt-Brown.
The Tappans supported a wide range of organizations that shared similar goals, supplying them with money as well as administrative advice. Arthur underwrote the American Bible Society (which aimed to provide the Good Book to every family in the U.S.), the American Sunday School Union (offering religious education in the frontier towns of the Mississippi valley), and the American Tract Society (which published religious sermons). He also helped launch Oberlin College, which today has a Tappan Hall and a Tappan Square. “This is enjoying riches in a high degree,” Lewis once wrote of the family giving.
By the 1830s, the Tappans had turned deliberately to philanthropy that aimed to modify public policy. They first became involved with government practices in a push to end postal deliveries on Sunday. This was part of the effort known as Sabbatarianism, which aspired to clear a day for rest and spiritual reflection by workers and families.
As with other evangelicals of their time, the Tappans were soon swept deeply into the cause of eliminating slavery. Arthur’s first major action took place in 1830, when he learned that a libel conviction had put William Lloyd Garrison behind bars. Garrison would eventually become a household name but at this time he was an obscure journalist whose crime was to have exposed the slave profiteering of a Massachusetts businessman. Tappan paid his fine, even though Garrison was a stranger to him.
Later, Arthur helped Garrison launch the Liberator, a weekly newspaper that would become a major voice of radical abolitionism. “I might have died within those prison walls, if your sympathizing and philanthropic heart had not prompted you, unsolicited, to send the needed sum for my redemption,” wrote Garrison in an 1863 letter to Arthur.
The Tappans tried anything that seemed to have a chance of advancing the cause of manumission. In 1834, for instance, Arthur gave $5,000 to the American Bible Society to distribute Bibles to slaves in the South—a controversial gift, and perhaps a quixotic one given the general illiteracy of slaves. Arthur and Lewis started the American Anti-Slavery Society, which would become an important organ of abolitionism. One of its main achievements was to help bring escaped slave Frederick Douglass to prominence as a public speaker.
Although they were not afraid to court controversy, much of the Tappans’ abolitionist philanthropy was done in secret, partly for reasons of modesty, partly out of necessity. They were early supporters of the Underground Railroad, for instance, which would have exposed them to legal recourse if done openly. “He was always ready to help the flying fugitive on his way to Canada, or elsewhere, and was active in this benevolent work,” observed Lewis of his brother.
As Arthur stepped away from public action in the later 1830s, Lewis became the dominant brother in philanthropy to change slave laws and practices. His great success came in 1839, when the human cargo aboard a slave transport called the Amistad took up arms against their captors. They gained control of the ship and intended to sail for Africa, but their navigators—hostages from the crew—tricked them into making for the United States. The mutineers wound up in New Haven, Connecticut, where authorities imprisoned them for piracy and murder. The decision to treat the Africans as criminals for trying to free themselves outraged Lewis, who formed a committee to aid them.
First Lewis had to solve the language barrier. He eventually discovered from the wharves of New York City a cabin-boy named James Covey who, from his wanderings at sea, knew the Mendi tribal dialect spoken in what is now Nigeria. Lewis hired Covey as a translator, and paid Yale students to tutor the jailed Africans in English and American social practice. Lewis then arranged and paid for top-flight legal counsel, and even recruited former President John Quincy Adams to represent the Africans before the Supreme Court, which ultimately ordered the release of the prisoners in 1841.
Lewis realized that the Amistad trial was a vivid teachable-moment for the American public. It brought the moral arguments around slavery onto the nation’s front pages for many months, and highlighted the horrors of the slave trade. It became a public-relations coup for abolitionists, and built emotional support for their claims of justice. It also gave the famously fractious abolitionist movement a cause behind which it could come together.
After the favorable decision, Lewis helped fund transportation of the captives back to their native land. One of his hopes was that they would serve as Christian missionaries in Africa. With this experience as a springboard, Lewis also created and oversaw the American Missionary Association, which aimed to spread the message of abolition around the world. In the U.S., the association also founded colleges for freed slaves, including Howard University in Washington, D.C., and Fisk University in Nashville.
Arthur and Lewis Tappan gave deeply of both their talents and their money in the effort to change slavery policies. For their troubles they endured savage attacks from opponents, including burnings of their homes and personal possessions, murder attempts, and regular vilification. Both brothers lived to see the end of the Civil War, though, and enjoyed the satisfaction of knowing that slavery, at long last, had been banished from American society.
Policy Player Profile: The Koch Brothers
Charles and David Koch—variously celebrated or vilified as “the Koch brothers”—are a bookish pair who have made it their central philanthropic mission to expose people to the ideas of liberty. In their lives as titans of capitalism, they head Koch Industries, the Kansas-based company founded by their father that is now the second-largest privately held firm in the U.S. But wide reading and strong philosophical bents have also led them, through their family foundations, to become highly visible champions of economic and cultural liberty. They have channeled large amounts of their own time and money into efforts to motivate others to value freedom as they do. “If we want to restore a free society and create greater well-being and opportunity for all Americans, we have no choice but to fight for those principles,” concludes Charles.
The Kochs fight this philosophical battle through philanthropy—and in recent years their efforts have attracted enormous attention and scrutiny. “On the Left, ‘the Koch brothers’ became a political meme, a crude caricature of corporate fat cats subverting democracy and science as they secretly advanced their plutocratic agenda,” wrote Daniel Schulman in his 2014 biography, Sons of Wichita.
In 2010, Jane Mayer of the New Yorker devoted nearly 10,000 words to arguing that the Kochs were more than just “the primary underwriters of hard-line libertarian politics in America”—their giving was a selfish effort to increase their personal wealth. This was an odd allegation to level at men who have given away hundreds of millions of dollars in areas ranging from medical research to education to the arts. Just as strange was the article’s headline: “Covert Operations.” As David commented in the Daily Beast: “If what I and my brother believe in, and advocate for, is secret, it’s the worst covert operation in history.”
The Kochs have used philanthropy to encourage liberty-oriented policies in many ways. Back in the 1970s, for instance, they pursued a fairly simple “build a think tank” strategy to create the Cato Institute. Today Cato is the most prominent and influential libertarian policy-research group in the nation’s capital. Over the years, the brothers have adopted many additional causes and organizations—and increasingly complex philanthropic mechanisms—as levers for encouraging liberty-oriented public policies.
In 2006, Charles suggested to Brian Doherty, author of the 2007 book on the American libertarian movement Radicals for Capitalism, that libertarians “need an integrated strategy, vertically and horizontally integrated, to bring about social change, from idea creation to policy development to education to grassroots organizations to lobbying to litigation to political action.”
This all-of-the-above approach is not the result of indecision, but rather of careful planning and accretion of additional strategies through years of experience. Richard Fink, a former academic who is a longtime executive with the Kochs, described their philanthropic strategy in the pages of Philanthropy magazine in 1996. “Universities, think tanks, and citizen activist groups all present competing claims for being the best place to invest resources,” he wrote. “While they may compete with one another for funding and often belittle each other’s roles, we at the Koch Foundation view them as complementary institutions, each critical for social transformation.”
Koch giving, wrote Fink, takes an insight from Friedrich Hayek on the three stages of production in a market economy: Businesses generate raw materials, convert them into products, and finally deliver them into the hands of consumers. Successful public-policy philanthropy works much the same way, supporting intellectuals who generate ideas, think tanks that propose specific policies, and advocacy groups that shape the hearts and minds of voters and political leaders. There is a need for all three kinds of work.
“At the higher stages we have the investment in the intellectual raw materials...exploration of abstract concepts and theories,” wrote Fink. This means financial support for scholars, research, and conferences. In the latest five years examined by Schulman (2007-2011), the Kochs donated $31 million to endow professorships, sponsor academic forums, and underwrite scholarships. Academic centers and professors at some 200 colleges and universities have received financial support from the brothers, including Nobel Prize-winning economists James Buchanan and Vernon Smith.
The problem with academics, of course, is that they often speak only to each other—the ideas they generate must be packaged into a “usable form,” as Fink puts it. “This is the work of think tanks and policy institutions.” The Kochs have played indispensable roles in founding the Cato Institute and the Mercatus Center at George Mason University, and have been important supporters of other think tanks as well. They have reinforced many public-policy nonprofits by funding internships and fellowships for college students and young professionals, placing them at the disposal of such organizations for four days of the week while offering them instruction in economics and political philosophy on the fifth day.
Finally, the Kochs have sought to involve everyday people in political advocacy. In the 1980s, they established Citizens for a Sound Economy, which later evolved into Americans for Prosperity and claims more than 2 million activists at present. “What we needed was a sales force that participated in political campaigns or town hall meetings, in rallies, to communicate to the public at large much of the information that these think tanks were creating,” said David Koch, in an interview with the Weekly Standard in 2011.
It all played into the plan Fink described 15 years earlier: “Citizen activist or implementation groups are needed in the final stage to take the policy ideas from the think tanks and translate them into proposals that citizens can understand and act upon. These groups are also able to build diverse coalitions of individual citizens and special-interest groups needed to press for the implementation of social change.”
From Nobel winners to leading think tanks to some of the country’s most active grassroots organizations, this is quite a legacy. But the inexorable growth of government supervision of private life from the 1970s to the first decade of the new millennium left the Kochs wholly unsatisfied with policy trends. “It was obvious we were headed for disaster,” Charles told the Weekly Standard. So they decided to go beyond just their own giving, to reach out for allies among other philanthropists, hoping to achieve a multiplier effect. The result was the Koch Seminars, which seek to expose major conservative and libertarian donors to opportunities in public-policy philanthropy.
The first of these twice-yearly meetings took place in Chicago in 2003. It started small, attracting fewer than 20 participants. “Back then, these invitation-only confabs, where presenters bored attendees senseless with marathon economics lectures, held little mystique,” wrote Schulman. As the conferences became more polished they gathered in size and strength. Within a decade they were attracting hundreds of business and philanthropic leaders. Participants networked with each other, and learned about groups they could support to promote freedom, prosperity, and enterprise.
One of the big differences between the early Koch Seminars and the later ones involves the role of politicians. The Kochs have long been much more interested in ideas and policies than in politics and campaigning. “It was only in the past decade that I realized the need to also engage in the political process,” wrote Charles in the Wall Street Journal in 2014. The more recent seminars have featured forums with elected officials and candidates.
In their philanthropy, the Kochs believe in holding beneficiaries accountable for success or failure at meeting expressed goals. The Kochs generally also resist major, ongoing support. A 2011 profile of Charles Koch in Philanthropy magazine noted that he “is willing to play a key role in the founding of institutions.... He can be a leading supporter in an organization’s early years. But a key element of the experimental discovery process involves the deliberate decision to step back. If a group is creating real value in the marketplace of ideas, other funders will step forward to support it.” Too much reliance on a single donor, Koch believes, can cause a nonprofit group to see a major philanthropist as a customer rather than an investor.
The Kochs encourage fellow philanthropists to take risks. “In business there will be more failures than successes,” says Charles. Likewise, in philanthropy, “we don’t mind failures. It’s just that when you have something that’s not working, you have to cut your losses.”
The Kochs urge donors to take an active role in their philanthropy. Invest your own time, they urge, and write out not just mission statements but concrete examples of what you hope to achieve, so when you are not around there will something to keep your investments focused on the efforts you truly believe in. Charles has expressed optimism that his foundation will continue to represent his principles well past the end of his life. “There are no sunset provisions,” he told Philanthropy. “The main thing is to have the right board, and I have people on the board who are very dedicated to these ideas.”
Like the Tappan brothers, the Koch brothers have been demonized by some for diving into national policy arguments. In a 2014 Wall Street Journal essay entitled “I’m Fighting to Restore a Free Society,” Charles warned that “Instead of encouraging free and open debate, collectivists strive to discredit and intimidate opponents. They engage in character assassination. I should know, as the almost daily target of their attacks.” (Other leading donors have likewise had to weather the excoriation that sometimes comes with policy activism. See John Arnold’s experience on page 87.)
Koch announced, however, that he would not be driven away. Principled participation in battles over the vision and direction of our nation, he wrote, is essential to national success. And worth fighting for as a philanthropist.
Policy Player Profile: Chester E. Finn, Jr.
Chester Finn entered the policy arena in the late 1960s as a liberal who was optimistic about ending poverty through education. He evolved into a conservative attentive to the unintended side-effects of social engineering. He remains an advocate of energetic public-policy reform, a proponent of private giving as an alternative to bureaucratic social programs, and one of the nation’s leading experts on excellent education.
“I was drawn into education by a desire to improve the world. Lyndon Johnson persuaded me that the path to ending poverty ran through education. So I went to a school of education and became a social studies teacher, then later realized I wanted to work on a larger canvas, in public policy. But donors in those days were mostly just paying for programs that would benefit people directly.” Few philanthropists were involved in efforts to change public policy in education. Except for the Ford Foundation.
“The most famous policy intervention by a donor at that time was the Ford Foundation’s effort to bring local control to the schools in New York City. This was a pet project of McGeorge Bundy, who had been the White House national security adviser before becoming president of Ford. They decided that the New York City school system should be turned over to the people of New York at the neighborhood level. That unexpectedly led to all sorts of awful stuff: racism, anti-Semitism, and the first major teacher strike in the country’s history.”
“That scared donors away from governance change in education. Funders generally opted for safer and simpler solutions. ‘Let’s build a library.’ ‘Let’s give scholarships to 87 kids to go to private school.’ ‘Let’s donate computers.’”
But a gradual push toward more fundamental governance reform began to simmer in the donor community. Three approaches emerged beginning in the 1980s. “One was focused on curricular standards and school accountability. Another promoted school choice. A third emphasized teacher quality.”
“Each strand had its own dedicated philanthropic funders. And for the most part, donors concentrated on one particular strand. Walton from the beginning was about school choice. Gates emphasized standards. Carnegie and others pushed for teacher professionalism.”
“As fresh ideas for reform began to bubble up, more and more reformers started to seek private funding. To launch their new mechanism for change, many sought out private donors, not government. Whether they were providing direct services, research, or policy advocacy, the venture capital for educational experimentation often came from philanthropy.”
And funders became more and more devoted to hands-on philanthropy. There remained practitioners of the old style, who would just write checks to worthy organizations. But many of the most generous and active foundations developed their own strategies for breaking the decades-long gridlock of declining schools, and actively managed giving to advance policy agendas.
To improve the chances of real and lasting change, “a lot of philanthropists added political engagement to their foundation work. Outside of their tax-exempt, charitable work they made donations to 501(c)(4) advocacy groups and to political action committees that supported political campaigns, as well as to 501(c)(3) advocacy organizations that ‘educate’ and nudge policymakers. Now donors are very mindful of groups like StudentsFirst (founded by Michelle Rhee), 50CAN, and the Policy Innovation in Education (PIE) Network that are pushing for dramatic school reforms. Donors like the Fishers, Eli Broad, the Waltons, the Gates Foundation, and others strategize together and even coordinate their work to counteract political and policy sclerosis.”
“My own Fordham Institute is an example of this. Our roots are in Ohio, and recently it became one of our top priorities to get Ohio’s messed-up charter-school law rewritten. Toward that end, we undertook what the IRS calls a 501(h) election, so that our institute can legally engage in part-time lobbying, even though we’re a 501(c)(3) nonprofit. We are cultivating a policy strategy that includes working with other groups whose legal status allows them to engage in political reform even more directly. We’re doing this because the Ohio charter law is so bad and truly needs to be changed.”
“In other places, we’re engaged in public policy as a kind of defense. We at Fordham have, for example, turned into significant defenders of the Common Core academic standards, which are under political assault in some states.”
“The foundation side of Fordham also continues to fund projects that provide good services directly to needy people. That will always be the heart of philanthropy. But there are so many bad policies in education that beg for change. The bad policies get in the way of good works, and can swamp any benefit you do.”
Before it entered combat in Ohio, Fordham built a base of facts. “We’re starting with two research studies that are both philanthropically funded. One is an evaluation of charter-school performance that documents how much these schools vary depending on how they are structured, and how mediocre our Ohio schools are. The other study is a forensic analysis of current charter laws in Ohio. We are identifying the many statutory elements that get in the way of good charter schools in Ohio.”
This is classic nonprofit research pursued in the public interest. It provides the public with useful information. It allows the foundation to set an accurate and useful agenda. It helps Fordham set smart priorities in its push against counterproductive policies.
“We’re also quietly rallying allies to join a coalition that will inform and encourage legislators to support changes. We won’t quarterback a change team. It needs to be a grassroots, local, popular coalition. But we are helping to recruit players, and carrying water to the people on the field.”
“And then there’s a public case we need to make. We have to persuade John Q. Public and members of the media that there’s a problem. That we have viable solutions. And that there’s a moment of opportunity to act.”
While Fordham’s effort to rewrite the Ohio charter law is a state effort, the foundation’s work to help defend the Common Core standards is both local and national. “Donors are giving money to coalitions of organizations in states where Common Core standards are in jeopardy. On the ground, people are developing materials and public information. They are networking. They are visiting legislators and testifying at their hearings.”
“My organization is making intellectual and advocacy contributions to Common Core defense. Across the country we’re contributing op-eds, and testimony to legislators. We’re brainstorming with state-based advocacy groups, and with leading national organizations. Our work is not political—a 501(c)(3) organization can’t do that—but it’s got elements that are hard to distinguish. For example, I flew to Michigan recently to testify before their House Special Committee on Academic Standards on why I think the Common Core is better than what Michigan has been using.”
As a former Senate and Cabinet-department staffer, Finn knows that measuring impact is tricky in this kind of work. “Every policy change has opponents, and even if they lose they will do their best to undo the change as soon as they can. Things don’t stay done. So it requires constant vigilance in order to keep improvement on track. And the payoff can be very slow in coming. Funders always want evidence of impact. But kids take years to demonstrate what they learn.”
“Meanwhile, defenders of the status quo are usually more deeply invested than those who want change. Beneficiaries of an existing system know exactly what they will lose if change occurs. They’re fighting for their present benefits and advantages—and sometimes their jobs.”
“In comparison, the benefits of change are just a future abstraction, until and unless they actually take place. They’re only something promised, not a real thing. A parent hears, ‘Your kid’s odds of getting a good teacher will rise if this law passes.’ But a teachers thinks, ‘I will lose my job if this law passes.’ Guess who fights harder?” That’s one of the reasons donors are so important. They can help balance the incentives. They can promote long-term promise over short-term expediency. They can risk the ire of politically powerful interests.