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Foundations and Power: Beyond Advocacy

April 11, 2011

(Mark Rosenman, a long time nonprofit sector activist and scholar, directs Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good. A version of this piece appeared on the Huffington Post.)

Rosenman_headshot Grantmaking foundations are being taught an important lesson, but most of them don't seem inclined to learn it. The Tea Party movement has shown that building political power is of much greater consequence to the causes foundations care about than is their support for innovative and scaled-up programs in the nonprofit sector.

Although foundations desperately want to be "more impactful" than current practices allow, they generally settle for becoming more effective at what they already do. Rarely does any truly fresh approach to grantmaking get serious consideration. And in spite of this being a "teachable moment," too few funders fully recognize the importance of government and even fewer are willing to talk about power. Unfortunately, that has become the essential conversation.

The import of government for foundations has long been clear to some funders, many of whom have pushed themselves and their peers to provide greater support for critical public policies and programs. Today's challenge to philanthropy, however, goes far beyond its support for advocacy and an often narrow focus on parochial interests.

Indeed, what is at stake today is nothing less than who has the power to define government's role with respect to the common good. The lesson being taught foundations is that without the power to implement advocated policies, problems of concern to philanthropy will rapidly grow more complex and intractable.

Most of the troubles we face as a society, and that foundations seek to address, reflect failures of government to effectively moderate the forces that created those problems in the first place. Whether those problems originate in the failures of the market and the sometimes-destructive behavior of corporations, in the poor performance of public and private institutions, or in the dysfunctional conduct of individuals, governments can and should do something about them.

Markets and corporations need effective regulation to ensure the orderly conduct of business and to provide public protections. Institutions need leadership, accountability, and resources to promote the public interest. And individuals can both be encouraged and helped to behave in their own and society's best interests. Government is a critical player in each of these realms and an essential partner to philanthropies that seek to address problems in all of them.

The current arguments for smaller, cheaper, and weaker government are, at least in part, a response to the perceived inadequacy of the public sector's efforts to provide effective protections and deliver programs and services efficiently. Yet, while some believe that the scope of laws, regulations, social programs, and taxes exceeds acceptable limits, the majority of Americans continue to want better safeguards and services; many are even willing to pay higher taxes to make sure that appropriate regulations and programs are available.

Simply advocating for that position and/or improved government responsiveness isn't sufficient in our current political reality. The momentum in the pro-/anti-government debate has swung toward the latter -- a development that hasn't happened spontaneously. It is, instead, the result of some funders, even a few foundations, understanding that it's all about power.

In funding citizen-engagement work and by using sympathetic media outlets, uber-wealthy conservatives like the Koch brothers, the folks at the Sarah Scaife Foundation, and many other like-minded philanthropists have helped build the Tea Party movement into an important force in our democracy.

The anti-government ideology advanced by those donors and activists holds profound negative consequence for most of organized philanthropy and its causes. But few foundations have come to a recognition that they ought to support a counterbalancing power, one that serves aggregated interests across the nonprofit world.

Because foundations and charities are prohibited from partisan political spending, some content themselves with efforts to strengthen democratic participation. Few really focus on it. But while electoral politics appropriately remains a forbidden zone for tax-exempt entities, foundations are free to encourage robust civic engagement and to support and develop social movements in pursuit of the common good.

Unfortunately, most of philanthropy steers clear of such efforts, even though the exercise of political power today is undercutting work long championed and supported by foundations. Evidence of attempts to undermine hard-won victories can be seen in:

  • the relaxing of environmental protections won in legislatures and the courts over decades, even as climate change and its associated disasters grow worse;
  • cuts in desperately needed services for those living with physical and mental disabilities;
  • reductions in education funding, even as the United States has fallen further behind other industrialized nations in terms of high school and college graduation rates;
  • zeroing out support for arts and culture, even as long-cherished institutions go dark before our eyes;
  • the curtailing of housing assistance programs, even as the twin crises of foreclosures and homelessness get worse; and
  • efforts to reverse recent consumer financial protections in spite of the fact that prior deregulation of banks and Wall Street resulted in huge costs to the Treasury and individual Americans.

Some of this retrenchment is clearly a function of government deficits, which are real and compelling. But while tax-cutting has been a priority for many, few politicians have bothered to recognize or acknowledge its impact on deficits. The $20 billion estate-tax give-away to the wealthiest in society (i.e., the top one-quarter of 1 percent of all Americans) -- money that otherwise would have made its way into foundation endowments and to public purposes -- only exacerbates matters.

Indeed, the kowtowing by Congress to the richest elites at the expense of "the people" is just the latest instance of the long-running "starve the beast" strategy advocated by conservatives. That such a strategy has caused our national debt and deficit to explode while driving arbitrary and ill-considered cuts in public programs and services -- many established through foundation-funded advocacy -- should concern us all.

Rolling back successful campaigns on behalf of consumer, environmental, and workplace protections not only hurts regular people, it costs money and adds to the deficit over the long term. Alas, public-sector approaches to the problems we face as a nation -- problems that frame both the missions and operating contexts for most foundations -- are not based on technical policy arguments about best solutions. Rather, they reflect conscious decisions made by those with political power and the interests they serve. Continuing to ignore questions of political power will only serve to accelerate the movement away from government for the people in favor of government by the few.

We might not like to admit it, but the momentum behind tax cuts and public-sector retrenchment is unlikely to fade unless foundations undertake a new kind of grantmaking, one that goes beyond funding services and advocacy and aims explicitly at building power in support of a government committed to, and capable of, taking action on the myriad problems that confront us -- including rational and humane approaches to deficit reduction.

This will require direct organizing as well as efforts to educate the public about vital government programs and regulations that work. We need significant investment in projects that mobilize the grassroots. To support such movement-building, we also need additional funding for public policy work, for advocacy, for mass media, and for social networking campaigns.

Even though they provide less than 2 percent of total nonprofit sector revenues, foundations can play a unique, some might even say a heroic, role in energizing and mobilizing the millions upon millions of Americans involved in charitable work to stand up for their concerns through greater engagement in our democratic process. It is time for philanthropy to step up and help build popular political power for the common good.

-- Mark Rosenman

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Posted by Barbara Masters  |   April 11, 2011 at 01:44 PM

Mark Rosenman is exactly right. Many leaders in philanthropy have been talking about movement building but there hasn't been a clear framework for what it it takes to actually do support it. In a recent article, movement leader, Torie Osborn, and I offer such a framework of five key elements, as well as a means to monitor progress.

Posted by Philippe Boucher  |   April 11, 2011 at 09:04 PM

it is clear that the small (for them) investments by the Koch brothers (and a few others) to support like minded candidates for Congress has had a huge return. Can Bill Gates and other Mike Bloomberg understand that their best (maybe only) way to promote their philanthropic goals is to fund like minded politicians and civic movements. I think the Gates Foundation has made another significant strategic mistake: by allocating 75% of its grants to "foreign aid" it has very largely neglected the "domestic" issues. The 75/25% equation was maybe valid before the recession but once the economic crisis hit, there should have been a revision to deal more with the domestic issues. Ironically this demonstrates that there are no viable solutions without adequate policies at the federal and state level and that requires progressive elected officials.

Posted by Lucy Bernholz  |   April 12, 2011 at 01:24 PM

Hear! Hear! This sums it up "Indeed, what is at stake today is nothing less than who has the power to define government's role with respect to the common good."

Well said.

Lucy Bernholz

Posted by Geri Stengel  |   April 12, 2011 at 04:58 PM

Hear, hear! Thank you for speaking up about this important topic. If foundations stand back from the fray, they’ll soon find their grantees overwhelmed by new clients among the newly poor. A nonpartisan step foundations might well take is to educate the public -- with compelling ads -- about the effects of the proposed cuts in their own communities. Do people really know what will happen when safety nets dissolve? Where will the disabled go? Into doorways to sleep? What will seniors or families do for money at the end of the month if food pantries are unfunded. And who will respond to a fire or a break-in if station houses close because money is short? I think publicity aimed at what we all take for granted -- reasonable class sizes for our children, hospitals, doctors who will see us no matter what our insurance, research into new medicines, etc. -- might stop a few “government is evil” people in their tracks.

Posted by Mark  |   April 13, 2011 at 11:40 AM

Thanks for your note, Barbara. I know some of your work on social movements and have commended it to friends in foundations.


Posted by Mark  |   April 13, 2011 at 11:58 AM

I appeciate your sentiments, Phillipe. Although it would be illegal to use foundation funds to support politicians, it is absolutely appropriate for tax-exempt philanthropic dollars to be dedicated to public education, civic engagement and movement-building around the issues you address -- and foundations need to do a lot more of it.

Posted by Mark  |   April 13, 2011 at 12:02 PM

I'm deeply appreciative of your comment, Lucy, and can only hope that some significant portion of the multitudes who follow your own blog writing will agree with you and me.


Posted by Mark  |   April 13, 2011 at 12:11 PM

You clearly frame a critical agenda, Geri, and I'm grateful that you've taken the time to do so. As you know, it's important for foundations to get beyond trying to patch holes in the safety net or to make up for other shortfalls. Funders need to turn to questions of power in defining what government is to be and in making decisions on both revenue (tax) and expenditure sides, as well as about public protections and safeguards.

Posted by David Jacobs  |   April 14, 2011 at 06:05 PM

I first would note that the repeated use of the term "anti-government" above is in fact, incorrect. The proper term would be smaller or limited government instead.

As for the main thrust of this interesting piece - I have mixed feelings about it. I support the right and duty of any foundation to educate the public on their particular issues of interest. However, it seems to me that Mr. Rosenman is making the case for a push for foundations to build political capital to advocate in one direction, and I'd hate to see the field become a de facto arm of one political movement or another, or just as bad, another special interest group.

Philanthropy is a wonderfully diverse and inclusive universe, it has room for both the Koch Brothers and George Soros, and we shouldn't want it any other way. I'd dare to say that among the field, would be many different definitions of the term "common good", some of which Mr. Rosenman would have his differences with. All foundations in the sector are trying to do "good" by their own lights - even if you may disagree with their definition.

I'd expect trying to create a unified movement may be like trying to herd cats. And maybe that's really a good thing.

Posted by Aaron Dorfman  |   April 15, 2011 at 02:49 AM

Thanks for this great piece, Mark. Powerfully written. Every word hitting its target.

Posted by Mark  |   April 15, 2011 at 02:07 PM

I indeed am urging foundations to help build a strong movement that supports an active government serving the common good. While David Jacobs is correct in asserting that there are many definitions of that term (which I explore in both the body and an appendix of "Foundations for the Common Good," available as a free download or in hard copy for $15 at www.caringtochange.org), the prevailing and correct sense is that it encompasses much more than an aggregation of individual foundations' missions.

It is, I suggest, in organized philanthropy's interests to be pro-government (and, yes, most of those I hear arguing for smaller government reflect a specific and often pronounced anti-government sentiment) since it is only government that can intervene in a fashion and on a scale essential to the problems which confront us today.

Posted by Mark  |   April 15, 2011 at 02:09 PM

I really appreciate your support and very kind words, Aaron.

Posted by David Jacobs  |   April 17, 2011 at 08:30 PM


"since it is only government that can intervene in a fashion and on a scale essential to the problems which confront us today"

-- I would put it to you that government is ill-equipped to respond to even one of the many problems which confront us today, let alone so many.

The issue of where the money would come from pops up immediately. Even if I grant you an immediately imposed confiscatory tax rate on the "rich", that doesn't even close our current deficit projections, let alone pay for the massive overhead required.

Which problem gets tackled, in what order? Do the foundations trying to cure disease have to vie with the foundations that seek to improve education for government action? Which readers here would consent to have their organization's cause be pushed down on the official priority list?

What about expertise? I'd say that for the majority of issues we face today, no faceless government bureaucrat or accounting office could hope to match the knowledge base of the people that have been living and breathing these issues day in and out.

If you want to say that it's good practice in general for philanthropy to cultivate political power, well that's a hard statement to argue against. But if you're hoping for philanthropy to inspire comprehensive government action on any of these multiple issues, or to act as some sort of grass roots counterweight to the Tea Party, I think that may be a waste of precious resources

Posted by Mark  |   April 19, 2011 at 10:27 AM

First, to the question of a government with sufficient resources to attend to public problems. Rather than imposing a “confiscatory tax rate on the ‘rich’,” I’m suggesting that it is in the interests of foundations to build a movement insisting on the restoration of a public revenue base adequate to the common good.

You will note by checking http://www.offthechartsblog.org/top-ten-tax-charts/ that the effective tax rates on the wealthiest Americans have fallen dramatically since 1992, that since 1979 the after-tax income of the wealthiest 1% of us has gone up 281% while those of us in the middle have had income grow by about 25%, that the top 1%’s share of all after-tax income has more than doubled, that corporate and average family tax revenues are at historic lows (with some highly successful corporations paying zero), and on and on.

Of the top 20 industrialized nations, we come in next to last in terms of government revenues against GDP. I’m not calling for confiscation, but rather for a moderation of greed.

Whatever their immediate mission, how can foundations think that they can direct sufficient resources to public problems without reversing political power favoring the private interests of the wealthy over the public’s interest in a government serving the common good? It isn’t a question of having a cause “pushed down on the official priority list.” It is exactly a matter of making sure that government has more revenue to direct to that and other causes of concern to organized philanthropy.

It certainly is not a waste of foundations’ resources to make grants to build political power that will leverage increased funding and other attention for their area of concern.

Second, it’s not all about the revenue side or what gets cut to reduce deficits. There are other reasons foundations should invest in building a strong government attentive to the common good. The same tea party forces that work against reasonable levels of taxation also work against public protections, regulatory safeguards that are important in almost every area of philanthropic concern. Political power is necessary to make sure that previously achieved and newly needed foundation-supported advocacy efforts are not reversed by anti-government (not small government) forces.

To suggest that public officials and employees lack the expertise to deal effectively with policy issues and funding streams is to perpetuate another anti-government myth. These people, no more faceless than foundation board members and executives, also have years of experience and commitment to causes of concern and, I would add, are more often open to public comment and expert testimony, more transparent and accountable for their decisions, than are those making foundation grants.

Posted by Michael Seltzer  |   April 19, 2011 at 04:40 PM

Dear Mark,

Thank you for stimulating this very important discussion on the key issue of the day -- the social contract between government and its citizens. I would like to add a few points to the conversation:

1) I don't believe Bill Clinton anticipated when he announced that the "era of big government is over" that so much of FDR's progressive legacy to the nation would be on the chopping block today.

Today, we see schizophrenic members of Congress running down the federal government of which they are a part. Some of them also seem to believe that their only responsibility is to represent the views of their constituents --i.e.. those who voted for them -- rather than the nation's interest.

2) Government -- big and small -- can work effectively. The Ford Foundation demonstrated that over several decades through its sponsorship of the Kennedy School's Innovations in Government Awards program. Hundreds of local, state and federal initiatives and programs were honored for creating and operating effective solutions to pressing urban and rural community problems. Respected individuals with affiliations to both parties served as competition judges.

3) In spite of the large footprint of the Gates Foundation, relatively few U.S. foundations fund outside this country. And compared to the great robber baron era, today's corporations and corporate titans derive a greater percentage of their profits and personal fortunes from international operations. So I don't buy the argument that Philippe Boucher puts forward that the Gates Foundation "has made a strategic mistake" in allocating a high percentage of its grant funds internationally. His argument masks a colonialist mentality -- it is all right to reap profits from other countries, but not to return some of those profits, in the form of philanthropic investments, in the countries where they were earned. One can also make the argument on humanitarian grounds. As hard as life is for many Americans, their quality of life is immeasurably better than that of hundreds of millions of people in many parts of the global south (though conditions in many low-income urban and rural areas in the U.S., especially among people of color, are not unlike those in many parts of the global south).

4) Finally, saddled with the huge cost of defending itself from German and Italian fascism, the United Kingdom during World War II imposed a substantial tax on corporations. Yes, it cost the country in the short term, but the majority of British corporations rebounded quite well and grew substantially in the years following the end of the war. I'm not an expert in British history, so I can't vouch for British corporations' willing acceptance of this "war tax". However, I'd like to think that business leaders in the UK considered it their patriotic duty.

Thank you again, Mark, for launching this discussion.

Michael Seltzer

Posted by Mark  |   April 21, 2011 at 11:00 AM

I’m indebted to you, Michael, for yet again offering your wise and informed contributions to the debate on a range of philanthropic issues. I’ve long appreciated your work and your words.

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