Chapter 7: The Power of Invention
At a 2002 dinner hosted by the Heritage Foundation in honor of former British Prime Minister Margaret Thatcher, Heritage president Edwin Feulner noticed a tear welling in the eye of beer mogul Joseph Coors. The old man leaned over, gestured to the assembly of 900 national leaders, and said, “Heritage is my legacy.” This was a powerful statement. Coors, after all, had led an extraordinarily successful life in business, turning his grandfather’s regional beer company into America’s third-largest brewer. Yet he held this product of his public-policy philanthropy in even higher regard.
Sometimes, investing in good work done by the top existing organizations is the best way for philanthropy to take on problems in public policy. Other times, though, a public-policy challenge may require a fresh approach that only a new organization can provide. This entails a high level of risk for donors. Just as most small businesses shutter within five years of their start, most nonprofits fail to thrive. Yet the flip side of risk is reward, and a smart investment in an unproven idea can lead to dramatic results. Without risk-taking philanthropists willing to back new creations, vital organizations like the Heritage Foundation and the Brookings Institution would not exist, leaving serious holes in national policy debates.
The story of the Heritage Foundation begins in the late 1960s and early 1970s, when conservatives in Congress complained that they could not keep up with liberals. Their rivals enjoyed the services of the Brookings Institution and other well-established organizations that reinforced the seemingly inexorable growth of the federal government. Conservatives lacked competing idea-generating groups. When several Congressional staffers learned that Joseph Coors was interested in helping conservative political causes, they invited him to Washington, D.C., and arranged a meeting with a handful of senators and congressmen. The lawmakers explained how much they needed a new action-oriented, fast-moving think tank, and urged Coors to fund one.
The brewer was intrigued, but torn by the alternative of making a safer investment in the American Enterprise Institute, a free-market think tank that had already enjoyed solid success for several decades. Coors was ultimately persuaded that a new think tank was needed. The capability conservatives were then missing was offering timely and conveniently bite-sized information to Members of Congress—before they had to make legislative votes.
In 1971 and 1972, Coors contributed $250,000 to a new venture, first called the Analysis and Research Association but soon retitled the Heritage Foundation. The support from Coors not only paid the initial bills but also gave other public-policy philanthropists confidence to make their own donations. If the Heritage Foundation was good enough for Coors, they reasoned, it was good enough for them as well. William Brady, the Samuel Roberts Noble Foundation, and Richard Mellon Scaife became significant backers. Many more followed, underwriting the Heritage Foundation’s steady growth as it provided conservatives with the quick and reliable issue-research that was so badly needed.
Coors was known as the first American beverage company to package its product in aluminum cans. Now the Heritage Foundation became the first think tank to pour its research aimed at members of Congress into quick and convenient eight-page “backgrounders” on the topic of the moment. “A congressman or other public official had to be able to fit a Heritage paper in his briefcase and read it on the go,” said William Simon, the Olin Foundation president and former Treasury Secretary. “By so doing, and I know this from personal experience, Heritage reshaped the world of think tanks and Washington policymaking.”
Joseph Coors continued to make large donations to the Heritage Foundation his whole life long, believing that good organizations deserve ongoing support from philanthropists rather than abandonment. He also served on its board, where he persuaded the think tank to act more like a business than a charity. He demanded that it create an operating reserve, and hammered away at the supreme importance of marketing, even for merchandise as ephemeral as ideas. By the time Coors died in 2003, just a few months after the tribute dinner for Margaret Thatcher, the Heritage Foundation had become one of the most influential public-policy organizations in the country. In 2013, it had an annual budget of $77 million.
Coors identified a need, realized that existing institutions could not meet it, and discovered a capable group of policy entrepreneurs worthy of a major investment as they built something entirely new. His venture was especially successful, but the effort was hardly unique. The creation of new groups to satisfy unmet needs is one of the major paths to success in public-policy philanthropy.
Indeed Heritage, as mentioned, was a response to the earlier creation of the Brookings Institution, whose success inspired admiration and envy. Heritage never tried to mimic Brookings, but it sought to provide its conservative allies with data and research needed to win battles on Capitol Hill as effectively as the Brookings Institution did in its own way for liberals. In serving as Heritage’s founding angel, Joe Coors was actually following in the footsteps of Robert Brookings.
An amazingly successful salesman who took advantage of the business boom in St. Louis following the Civil War, Brookings retired in 1895 at the age of 47, then devoted much of the rest of his life to improving society. An early foray into traditional charity did not go well: He asked police officers to point him toward needy families at Christmastime, only to discover that the officers received kickbacks from the families Brookings tried to help. He went on, however, to become one of his generation’s great philanthropists in public policy.
While serving on a public commission during the First World War, Brookings observed the desperate need in government for reliable economic data. When the fighting was over, Brookings acted. Instead of starting a brand-new organization, he took control of a moribund group, the Institute for Government Research, and injected new life into it. He gave it not just money but also leadership, raising funds from friends in order to build an organization capable of supplying the federal government with the basic information Brookings felt it needed.
He was dogged in enlisting other donors. “Do you want things to go on in the haphazard fashion of the past? Do you want a log-rolling or a scientific tariff? Do you want pork-barrel bills or a budget?” he would ask his friends.
Brookings did not intend to push a personal program or ideology. His passion really was the gathering and distribution of facts. His biographer, Hermann Hagedorn, called Brookings the “Maecenas of research,” referring to a Roman patron of arts and culture.
“Nearly every interest in the country is now organized and has permanent representation in Washington, all striving to further their own interests,” Brookings wrote to John Rockefeller Jr., one of his supporters. “We are the only research activity in Washington which is just simply collecting evidence in the interest of the truth, and making our findings known.” One of his organization’s early accomplishments was the creation of a more orderly federal budget process, something government seemed unable to accomplish itself before philanthropists came to the rescue.
In addition to funding and promoting the Institute for Government Research, Brookings started a new organization in 1922: the Institute of Economics. It would advocate for specific policies. In 1927, the two institutes merged, becoming the Brookings Institution. For all practical purposes, it was the first modern think tank, mixing basic research with policy advice aimed at improving government.
Robert Brookings died in 1932, so although he glimpsed his group’s potential, he did not see it become hugely influential. Eventually, though, its scholars and researchers helped create the Marshall Plan, the United Nations, and the Congressional Budget Office. It defended, refined, and reinforced many of the institutions of the New Deal and Great Society. And it remained relevant over many decades—in 2012, a University of Pennsylvania survey named it the world’s leading think tank.
Other prominent think tanks have creation stories that remind us how often powerful forces in public policy begin with acts of philanthropy. In 1977, oilman Charles Koch provided the seed money for Ed Crane to start the Cato Institute, which would become the dominant research organization for libertarians. They wanted their own version of Heritage or Brookings: “not an above-the-fray educational institute, but an in-the-debate public-policy house,” as Brian Doherty put it in Radicals for Capitalism. Cato opened in San Francisco, moved to Washington in 1981, and established a reputation for sound work on Social Security privatization, school choice, and free trade.
The Manhattan Institute was willed into existence by philanthropist Antony Fisher (see 1978 entry in this book’s Annex). It has been generously supported by many of the country’s most prominent public-policy donors throughout the decades since its founding. The Manhattan Institute played an important role in thinking through welfare reform, crime control, entitlement and budget issues, and many other topics of public governance. It was a strong influence on Rudy Giuliani’s great successes as mayor.
A generation later, liberals who had become disenchanted with the perceived moderation and passivity of Brookings, which had always been reluctant to embark on starkly partisan projects, founded the Center for American Progress, a group with no such shyness. The former chief of staff in the Clinton administration, John Podesta, relied on funding from banking entrepreneurs Herb and Marion Sandler to start a nonprofit organization with two distinct wings—a 501(c)(3) that conducts traditional policy research, linked with a 501(c)(4) that engages in partisan advocacy.
In the New York Times, Podesta described CAP as “a think tank on steroids.” Others were more specific: “With the Center for American Progress, Podesta was trying to create something new: a think tank that doubled as a campaign war room,” wrote Byron York in The Vast Left Wing Conspiracy. The center’s initial donors had hoped it would help Democrats capture the Presidency in 2004. That didn’t happen, but the group helped to pave the way for Democratic success in the congressional elections of 2006, as well as the race for the White House in 2008.
CAP’s aggressive partisan style was so influential that its bête noire offered the ultimate compliment: In 2010, the Heritage Foundation imitated the center’s main innovation. Heritage launched a parallel 501(c)(4) action group of its own.
Policy Player Profile: Dick Weekley
“Making money is fun, but nothing compares to this,” says Dick Weekley, the homebuilder who brought legal reform to Texas as a public-policy philanthropist. “Other than family, trying to make society better is the most rewarding thing you can do in life.”
In the early 1990s, Weekley didn’t know any of this. He just knew that his home state of Texas faced a litigation crisis and somebody had to fix it. “I wanted to help, but had no time to lead the effort,” he says. “But since nobody else agreed to take the time to lead, I finally drew the black bean.”
That’s a Texan’s way of saying he drew the short straw—the reference comes from the 1840s, when a group of Texas Republic soldiers tried to escape from their Mexican guards. The Mexicans recaptured 176 of them and, as punishment, condemned roughly one out of every ten to death. They filled an earthen jar with 159 white beans and 17 black beans. The men who drew black beans were shot.
It’s a grim metaphor, and Weekley didn’t consider himself fortunate when he agreed to take on the most powerful special-interest group in his state—the Texas Trial Lawyers Association, known as “the Trials.” For a generation, the Trials had preyed on hospitals and businesses, driving up the cost of everything. “There was no effective opposition,” says Weekley. “It seemed like this problem was in the process of destroying the state, as well as the country, if it didn’t get solved.”
The organization he helped found, Texans for Lawsuit Reform, enjoyed early success though. And it then continued to be politically relevant. Today, TLR remains one of the most powerful reform forces in the state, and a model for other philanthropists.
Weekley was born and raised in Houston and attended Southern Methodist University, graduating in 1967. After serving in the Navy for three and a half years, including a tour of duty in Vietnam, he returned to Houston to work at a real-estate company. It wasn’t exactly his dream. “I just needed a job and was offered one in real estate.” Yet it turned into a calling: Two years later, Weekley started his own firm, and later expanded into homebuilding and commercial development. By the late-1980s, he was a wealthy man.
In 1993, though, Weekley attended a presentation detailing how litigation was driving businesses out of Texas, how doctors were leaving their medical practices or retiring early, and how businesses were reluctant to expand in the state because of out-of-control and abusive lawsuits.
At first, Weekley and several of his friends, also successful businessmen, tried to address the problem by supporting existing organizations. Nothing seemed to work, though. “Before long, we recognized that we needed to try something different—we needed a new organization that would think out of the box and go about things in a new way,” he says.
That’s when he drew the black bean. Weekley became the full-time volunteer leader of Texans for Lawsuit Reform, founded in 1994. “I thought it would take a couple of years,” he says. “Then two years turned into 22.”
He recalls a conversation with his brother, David, who is his business partner. “David asked me if I wanted to spend my time building more shopping centers, or if it was more important to change Texas. It dawned on me that there were things more important than simply making money.”
Although Weekley and his allies had a vision, they were not sure how to achieve it. “I felt like I had been dropped into the middle of the Atlantic Ocean and didn’t know whether to swim north, south, east, or west. I didn’t know anything about public policy or politics. I was in the real-estate and development business!”
“We started by assembling a bunch of capable people in a room and deciding, initially, what the biggest problems were. Then we worked on which of the various solutions were the most efficacious. Finally we figured out how to piece things together to accomplish our goals.”
One of the group’s first insights was to reject the established methods of changing public policy. “The conventional business lobby wasn’t enough,” says Weekley. “The weakness of that model starts with their aversion to risk. Nobody wants to make an enemy or become a target.”
“Moreover, mainline business lobbies spread their resources across a wide spectrum of issues and concerns. In the case of lawsuit reform, they are going up against an extremely wealthy group of personal injury lawyers with a narrow self-interest. The lawyers had been working the legislature for decades and had massive influence. There was a total mismatch of capabilities. That’s why there was a need for a new organization with a new approach that provided a laser-like focus on lawsuit reform.”
A year after the launch of Texans for Lawsuit Reform, a breakthrough was achieved. “That’s the year we broke the lock,” says Weekley. “It wasn’t just one piece of legislation. It was the cumulative effect of putting eight bills together.” The eight separate pieces of legislation that got passed reined in the unbridled power of the Trials in a variety of ways—from capping punitive damages, to prohibiting venue shopping.
There remained plenty to do. “We still had huge holes to plug,” says Weekley. Over the next several years, Texans for Lawsuit Reform pushed their legislative allies for more reforms. (See 1994 entry on Annex list of Major Projects in U.S. Public-Policy Philanthropy.)
Arguing for bills on their merits went only so far, though. “We also needed to engage in politics, and help to elect legislators who had the courage to vote with their conscience and their constituents for lawsuit reform. A lot of state reform groups focus on research and advocacy. And that’s important. But it’s not enough,” says Weekley. “You need to help elect legislators who have similar beliefs, and back them politically.”
So in addition to performing the traditional work of a think tank, Texans for Lawsuit Reform created TLR PAC, which funded candidates willing to solve the state’s litigation problems. In 2002, it played a key role in the Republican takeover of the Texas House of Representatives, which Democrats had controlled since Reconstruction. A flood of reforms followed, making Texas courts more balanced, and fairer to retailers, manufacturers, and doctors. By 2006, the Pacific Research Institute’s “U.S. Tort Liability Index”—which evaluated every state on its legal climate—ranked Texas as best in the nation.
That same year, Texans for Lawsuit Reform published Template for Reform, describing how Weekley and his allies met their objectives. The document, which Weekley uses like a playbook, is available on the group’s website (tortreform.com). He summarizes some of its lessons for other philanthropists who might be contemplating taking on an entrenched public problem.
First, he encourages thinking big: “We’re totally against gradualism and halfway measures. We kept hearing that this was how things were done in Austin—one bill at a time, always watered down, legislative session after legislative session. We didn’t accept that. We weren’t willing to wait for decades.”
It’s important to brace for a fight that can turn dirty. “There are vested interests on the other side, and often tens of billions of dollars at stake when you change public policies. It’s going to get rough.” He tells stories of journalistic hit jobs, office break-ins, phone lines being tapped, and even death threats.
Volunteer leadership is essential. “Unless there are committed volunteers at the top, people won’t get out of their chairs to help,” says Weekley. Much of his work involves raising money to meet multimillion-dollar budgets. “A lot of days, I feel like a university president, laying out a vision and asking for donations,” he says. “But this isn’t a one-time task, like chairing a campaign for a campus building or a church. The effort is constant.”
In addition to promoting legal reform, Weekley has been a leader in local efforts to improve the quality of life in Houston. He has, for instance, helped create more parks and green space in his growing city. In 2014, the Texas Business Leadership Council named its annual policy-reform prize the Richard Weekley Public Policy Leadership Award.
Drawing the black bean, apparently, was Dick Weekley’s lucky day. Does he ever think he might have made more money if he hadn’t become a public-policy philanthropist? “Maybe I would have,” he says. “Or maybe I would have gone bankrupt. I have no regrets about any of this. I’m really happy to have made this choice of how to spend my time.”
Policy Player Profile: Paul Brest
Paul Brest, former dean of the Stanford law school and retired president of the William and Flora Hewlett Foundation—one of America’s largest givers—is painting a mental picture. “Suppose you’re supporting a social program to reduce teen pregnancy, or to improve outcomes for disadvantaged kids in a charter school. After the program is established you can not only measure the outcomes (pregnancies, test scores), but also expect to see similar results year after year. Once you’ve built a good program, success is a pretty linear process.”
“With policy advocacy, progress is totally nonlinear. You’re trying to persuade policymakers to do something. It may or may not happen, depending on the political environment as much as on anything you do. And even after a policy is adopted, there remains the question of whether it’s going to be implemented. So it’s much harder to proclaim success via public-policy philanthropy than it is with a typical social intervention.”
When the Hewlett Foundation decided to act on global warming during Brest’s tenure, they encountered this abstract problem as a practical reality. “Our efforts started with a decision that global warming was a problem. We decided, first, through grantees, to encourage policymakers to adopt policies that would mitigate climate change. And, second, we provided technical assistance to help different sectors reduce carbon dioxide emissions (supporting, for instance, organizations encouraging transportation efficiency, appliance efficiency, and more efficient cities).”
“At the magnitude that we felt it needed to be done, we decided the campaign to mitigate climate change called for a separate organization. That was the genesis of ClimateWorks.” The official ClimateWorks goal was a giant one: To slash emissions of carbon dioxide and other greenhouse gases by 50 percent by the year 2030.
“We thought it would be helpful to combine forces with other funders who were trying to achieve the same ends, so there were two other major co-funders at the beginning. One was the Packard Foundation, and the other was the McKnight Foundation. Over time, other foundations and wealthy individuals either funded ClimateWorks or funded organizations in parallel.”
“ClimateWorks is a re-granter. Hewlett and the other funders put hundreds of millions of dollars into the organization, and it then made grants, in effect substituting for our own staff in doing the grantmaking.” (For some additional details, see 2007 entry on Annex list of Major Projects in U.S. Public-Policy Philanthropy.)
“ClimateWorks was heavily involved in encouraging countries to reach an international agreement in Copenhagen in 2009. It didn’t succeed.” Rather than setting up an international regime of carbon-dioxide controls, the U.N. conference collapsed in disarray.
“It’s not a surprise that it failed. Given how complicated and costly carbon limits would be, the likelihood of success was very small. But we thought that the magnitude of the success if it happened justified the cost. It’s not very different from an early-stage venture capitalist who thinks the likelihood of success is not very great but hopes that every once in a while, there’ll be a home run.”
“Imagine you’re a philanthropist responding to malaria. An intervention that has a high probability of success is providing people with malaria bed nets for use at night. You have data and can be pretty sure how much that’s going to reduce malaria. But your could also try to end malaria by investing in developing a malaria vaccine. That has a low probability of success, but if you get it, the effects would be large. That’s the way philanthropists should think about risky investments.”
“Philanthropists, like other people, tend to be somewhat risk-averse. And they love to see obvious successes. So many would rather buy the bed nets that they know are going to make a difference, and it’s only foundations like Gates who take a risk on a vaccine. An alternative option would be a mix of grants—fund some things where the outcome is certain, so you feel psychologically good about that, plus some risky things.”
“The worst possibility is when the board says, ‘Yes, we’re willing to take a high risk,’ and then the initiative fails and they feel really bad about it and blame the foundation president and staff. At Hewlett, when Copenhagen crashed, the board never blamed the staff. The board said, ‘We knew this was risky. It didn’t work.’ And they moved on.”
“Philanthropists should take risks when the risk has the possibility of making a real difference. Government policymakers avoid risky decisions because they’re worried about getting re-elected and reappointed. Foundations have the wonderful advantage of not being accountable.”
“We often think of the lack of accountability as a source of criticism, but actually the independence of donors is a great source of power. The power ought to be used wisely. But I think taking risks that politicians won’t is a very good use of philanthropic resources.”