“Bill and Melinda Gates believe every life has equal value.”
-www.gatesfoundation.org/AboutUs/
David Horowitz has attacked this topic with his DiscoverTheNetwork.com effort. Looks like a good effort, and far more extensive than my own meager offerings in this neglected chapter of AMPP (same conclusions though).
Two resources for discovering who foundations finance, are ActivistCash.com and CapitalResearch.org.
from the Seattle Times, 2009-May-20, by Kristi Heim:
What really happened at the billionaires' private confab
Yes, it's true. A dozen of the richest people in the world met for an unprecedented private gathering at the invitation of Bill Gates and Warren Buffett to talk about giving away money.
The May 5 meeting at Rockefeller University included Gates, Buffett, New York Mayor Michael Bloomberg, George Soros, Eli Broad, Oprah Winfrey, David Rockefeller Sr. and Ted Turner, among others. The meeting came to light only this week when it was reported by the Web site IrishCentral.
"It really was a group of friends and colleagues who share a commitment to philanthropy discussing ideas in a round table," said former Gates Foundation Chief Executive Patty Stonesifer, who attended the gathering.
In a phone interview today, Stonesifer sought to dispel notions and reports on the Web that the meeting was somehow veiled in secrecy.
"It wasn't secret," she said. "It was meant to be a gathering among friends and colleagues. It was something folks have been discussing for a long time. Bill and Warren hoped to do this occasionally. They sent out an invite and people came."
"This was about philanthropy and this group sharing their passions their interests," said Stonesifer, who is chairwoman of the Smithsonian Institution. "They each learned from each other about what could really make a difference."
But the Manhattan philanthropy salon raised interest for its uniqueness, and the fact that so many on the Forbes world's wealthiest list were able to meet almost completely under the radar. Other reports about the meeting came out here and here.
"As far as anything we've ever seen before, this group of philanthropists that are so high powered in the same room... I think it's unprecedented," said Chronicle of Philanthropy editor Stacy Palmer, who has been covering philanthropy for 20 years.
The members of the meeting have donated more than $72 billion to charity since 1996, according to The Chronicle.
"Given how serious these economic times are, I don't think it's surprising these philanthropists came together," Palmer said. "They don't typically get together and ask each other for advice."
There was no agenda, and the topics were as diverse as the group, Stonesifer said: "everything from U.S. education to efforts of the U.N. to emergency response in [Hurricane] Katrina and many international issues."
The three hosts [Gates, Buffett and David Rockefeller] "wanted to have a private gathering to discuss with others what motivated their giving, the areas of focus, lessons learned and thoughts on how they might increase giving going forward," Stonesifer said.
The elite group met from 3 p.m. through dinner in the President's House on the university campus. There were no 15-minute speeches, and very little of the conversation focused on the economy, Stonesifer said.
The meeting also didn't produce a clear result. "There was lots of shared information that may lead to more things," she said. "There was no action plan associated with it."
One theme critics of the Gates Foundation have seized upon is a lack of transparency, which a wealthy private confab may not help.
"Now they're in a tricky public perception problem," said Palmer. "This is not just for Gates but Soros or any philanthropists that have as much money to spend as small governments."
"It just gives the impression they were trying to coordinate in some way, which makes some people uncomfortable," she said.
"This is a group of people that are in the spotlight," Stonesifer responded. "They use that spotlight for good to draw attention to these issues. The only reason it wasn't more public was that it was a private and informal gathering to discuss these issues."
And there may be more such forums in the future. "I'm sure these folks will convene in one form or another," Stonesifer said. "This area of giving requires people to collaborate and learn lessons from each other."
from ABC News, 2009-May-20, by Russell Goldman and Eileen Murphy:
Meeting of America's Richest About 'Need,' Attendee Says
Oprah Winfrey, Bill Gates, Warren Buffett Discuss Coming Together 'to Do More'Under a cloak of secrecy, some of the world's wealthiest people gathered in an unprecedented meeting early this month in New York City "to see how they can join together to do more," according to one attendee.
Invited by the world's two richest men Bill Gates and Warren Buffett, along with David Rockefeller, a Who's Who of American wealth and influence gathered around a long table in a window-lined private room overlooking the East River on May 5.
"The overwhelming reason for the meeting was need -- that was the issue that galvanized everyone to participate," Patricia Stonesifer, senior advisor to the Gates foundation's trustees, Bill and Melinda Gates and Warren Buffett, told ABCNews.com. "This was a group very committed to philanthropy coming together to see how they can join together to do more."
Gates and Buffett were joined by billionaire moguls Oprah Winfrey, Ted Turner and New York City Mayor Michael Bloomberg along with heavyweight philanthropists George Soros and others.
Together the attendees have donated more than $70 billion to charity since 1996, according to the Chronicle of Philanthropy.
A clandestine meeting of the country's rich and powerful, left off their public calendars and hidden from the press, is enough to spark the imaginations of conspiracy theorists everywhere, but attendees told ABC News.com the meeting was "100 percent about philanthropy" and it was not meant to be a secret.
"It was meant to be a private exchange but it wasn't a secret really, just a private meeting," Stonesifer said.
First reported by IrishCentral.com, ABCNews.com confirmed each of the attendees' presence at the meeting held at the residence of the Rockefeller University president on the campus of the Manhattan medical school.
It lasted about five hours, beginning in mid-afternoon and continuing through dinner, Stonesifer said.
"This particular group had never come together as a group before but many of the attendees had met in the past either individually or in smaller groups -- but never all at once," she said. "This was a great discussion and they agreed to continue the dialogue and meet again in the future. There were a lot of good ideas."
She said that the discussion "ranged from emergency relief efforts to scholarship efforts, to U.S. education efforts to global health." Another attendee who asked to remain anonymous described the meeting as "a private gathering of friends and colleagues to share their history and excitement about their philanthropy. [It was] a group together discussing a range of things they are working on."
When again asked about the meeting following ABC News.com's initial report Mayor Bloomberg said he sometimes holds private meetings that are "not going to be on the public schedulues. There are meetings all over this city and there are some very powerful people in this city."
Bloomberg who would not directly comment on the meeting or its outcome said: "You know I am very interested in private philanthropy, I think it has a unique place in our society in that with private dollars you can try new things, things that you can't do with public dollars."
There remain as many questions about the meeting's details as there are about the logistics behind its organization. How did some of the world's most public figures coordinate their schedules, travel, and security with no one in media knowing about it?
Charities Suffer in Recession
The meeting was reminiscent of the 1907 salons of America's foremost financiers held in the study of J.P. Morgan to discuss how private citizens could stop the economic panic. IrishCentral reported that each of the participants was given 15 minutes to propose how to best direct their charity given the global economic climate.
Charities are suffering during the crisis, and America's top philanthropists likely met to chart a new course for global charity, said Stacy Palmer, editor-in-chief of the Chronicle of Philanthropy.
A meeting of the country's top philanthropists is "extraordinary" and "really unusual," Palmer said.
"I can't think of another time they've all been in the same room to talk about philanthropy," she said. "It's unprecedented."
Gates and Buffet have publicly committed their vast fortunes to the same philanthropic efforts, and Rockefeller, the chairman of Rockefeller Financial Services, comes from a long line of philanthropists.
Gates, the founder and former CEO of Microsoft, who topped the Forbes' Richest People list this year, has dedicated his foundation to eradicating infectious disease worldwide.
According to Portfolio magazine, Gates, who is worth about $59 billion, donated $3.7 billion from 2002 to 2006 and $10 billion from 2007 to 2008.
Warren Buffett, CEO of conglomerate Berkshire Hathaway, was ranked the second-richest man by Forbes this year with a net worth is estimated at $52 billion. Though his giving in the past year is not disclosed, he donated some $46.1 billion between 2002 and 2006, according to Portfolio.
In 2006, Buffet pledged $31 billion, the bulk of his fortune, to the Bill and Melinda Gates Foundation, doubling the organization's endowment virtually overnight.
Though the charitable interests of the participants differ, they have some things in common, said Bob Ottenhoff, CEO of Guidestar, a service that tracks nonprofit organizations.
For the most part, the attendees are all self-made. Their donations come from money they made in their own lifetimes, rather than old family fortunes, and they have committed to giving away their fortunes while still alive rather than through bequests after their deaths.
One exception is Rockefeller, scion of the Rockefeller fortune. In 2008, Rockefeller gave $137 million to charity.
Philanthropic Groups Have Global Reach
Though the philanthropic focus of each of the participants differs, many of their foundations have a global dimension.
"Each has their specialty. Gates focuses on world health, [CNN founder Ted] Turner on the environment and the UN, Soros is involved in civic engagement," Ottenhoff said.
Between 1997 and 2006 Turner has donated $1.6 billion, the bulk of which, $1 billion, went to the UN Foundation in 1997.
Soros, a fund manager worth $9 billion, gave $1.1 billion from 2002 to 2006 and $475 million from 2007 to 2008. Much of Soros giving goes to his family's Open Society Institute.
"These sorts of meetings don't happen very often. It is difficult for large philanthropic organizations to work together. The fact that these are all very engaged living donors means very interesting things can happen," Ottenhoff said.
Both Ottenhoff and Palmer agreed that it was likely the financial crisis that brought everyone together.
Charitable giving has taken a serious hit in recent months, and the power players likely discussed how to keep some nonprofits afloat.
"Nonprofits are going through a difficult time. The endowments of many foundations have dropped significantly," Palmer said. "Many people are not as able to give as much money as the used to.
"They are making a statement that donors should continue to give. They are likely planning on a sending a message that philanthropy needs to continue worldwide," she said.
Few of the participants, Palmer said, gave money quietly and she anticipated that the secret meeting was the first step in a plan that would eventually be made public.
A number of other people attended the meeting including: Winfrey, worth $2.7 billion, who donated some $50 million in 2007; Bloomberg, founder of Bloomberg LP and Mayor of New York City, who is worth $11.5 billion and donated $205 million from 2007 to 2008; financier Eli Broad who donated $100 million in 2008; and financier Peter Peterson, who committed $1 billion in 2008.
from the Telegraph of London, 2006-Jun-27:
A foundation with very deep pockets
With the addition of more than $30 billion from Warren Buffett, the Bill and Melinda Gates Foundation will be worth $60 billion.
That is almost twice as great as the gross domestic project of the five countries of east Africa, slightly more than the annual revenue of the carmaker Fiat and slightly less than that of the Tesco supermarket chain.
Observers estimate that the foundation's annual spending will now increase from $1.3 billion to $3 billion.
That figure is greater than the 2004 gross national income of 60 countries, including Moldova, Chad and Mongolia. It is a sum more than 10 times larger than the entire economic worth of Samoa.
The foundation's annual outlay is set to be slightly lower than the sum Britain's Department for International Development spends on assistance, ranking it just below the five biggest donor countries: the US, Japan and Germany, the UK and France.
from the Wall Street Journal, 2008-Nov-22, by Collin Levy:
The Apotheosis of Soros
The billionaire gets his moment in the sun.Hedge-fund billionaire and left-wing political activist George Soros has become one of the Democratic Party's most important players. Now that Barack Obama is in the White House, his influence is due to expand even further as the web of activist groups he funds becomes the new brain-trust of the incoming administration.
Mr. Soros has been a friend to Barack Obama since Mr. Obama first ran for Senate in Illinois in 2004. Because of a special provision of the campaign finance law that allows greater contributions to candidates who are running against millionaires, Mr. Soros was able to donate $60,000 to Mr. Obama's campaign against primary opponent Blair Hull and then against Republican Jack Ryan. Four members of the Soros family also donated to Mr. Obama's Senate campaign, making Mr. Obama one of only a handful of candidates -- including Hillary Clinton, Tom Daschle and Barbara Boxer -- to receive the richest Soros nod.
Mr. Soros's influence on Democratic policy has been years in the making, through groups like the Center for American Progress, which he helped underwrite back in 2003 (along with film producer Stephen Bing) to the tune of several million dollars. CAP is currently headed by former Clinton Chief of Staff John Podesta, now Mr. Obama's transition team leader. With 180 staffers and a $27 million budget, the group is expected to play a role in the Obama administration similar to that played by the American Enterprise Institute during the Bush years, as a feeder for staff and a pusher of liberal ideas.
The problem for Mr. Obama, of course, is that not all Mr. Soros's ideas fly as well with voters as with the New York and D.C. cognoscenti. The Soros connection already created trouble for Mr. Obama last year over the billionaire's comment that Democrats should "liberate" themselves from the influence of the pro-Israeli lobby. Mr. Soros also is a prominent advocate of drug legalization. So while the hedge-fund legend may pour money and staffers into the Obama administration, Warren Buffett is likely to remain the billionaire Mr. Obama still prefers to share photo-ops with.
from the New York Sun, 2006-Jun-26, p.8:
Buffett the Benefactor
When Warren Buffett and William H. Gates III, the two richest men in America, walk into the New York Public Library this morning, they will pass by the oil paintings and marble panels that carry the names of those who created the library, whose full corporate name is The New York Public Library, Astor, Lenox and Tilden Foundations. John Jacob Astor, James Lenox, and Samuel Tilden would no doubt be smiling to know that the first thing the Sages of Omaha and Seattle did after announcing what looks to be the largest philanthropic transfer of wealth in history was to meet in New York at an institution that is one of the great successes of private philanthropy.
Mr. Buffetts decision to give away to charity Berkshire Hathaway stock valued at about $37 billion, much of it to the Bill and Melinda Gates Foundation, is the sort of bold move that has made so many Americans admirers of Mr.Buffett. As an avowed supporter of the estate tax, Mr. Buffett could have let the government take its share of his estate after he dies. But just as Mr. Buffett has accumulated his vast wealth without paying much personal income tax, he has found a way to avoid the tax man in this maneuver as well, even writing in his letter to Bill and Melinda Gates that a condition of the gift is that the foundation must continue to satisfy legal requirements qualifying my gifts as charitable and not subject to gift or other taxes.
On the estate tax, watch what Mr. Buffett does, not what he says. The Gates Foundation isnt the only recipient of his largesse three foundations headed by Mr. Buffetts three children, Susan, Howard, and Peter, will get hundreds of millions of dollars. Tax documents show that in 2004, Peter Buffett and his wife Jennifer each took a $40,000 a year salary for what they reported was 30 hours a week each of work on the foundation. Mr. Buffett has told Fortune (which broke the gift story) Love is the greatest advantage a parent can give, and no doubt he is right about that. But that isnt all hes giving his own children.Which is as American as the New York Public Library or as a sundae from one of Berkshire Hathaways Dairy Queens.The moment will remind us that new giants to rank beside the Astors, Lenoxes, and Tildens can be handed up by each generation.
Inspired by this, James Taranto writes in his Best of the Web of 2006-Jun-26, “When billionaires back the death tax, keep in mind that they have no intention of actually paying it. They are being "generous" with other people's money. This is the way in which the superrich wage class warfare against the merely affluent.”
from the Telegraph of New South Wales, 2006-Jun-27:
Buffett gives away $37bn
New York -- THE world's second richest man is giving away a vast chunk of his fortune - most of it to the only man richer than he is. Warren Buffett plans to give away $37 billion later this year, with the majority of the money going to a charity run by Bill Gates.
It is the largest individual charitable donation in US history.
"It makes sense," Mr Buffett, 75, told Fortune magazine.
The decision marks a reversal for the plain-spoken $60 billion man, dubbed the Oracle of Omaha, because he never left his hometown in the US heartland, despite his reputation as the world's savviest investor.
He still lives in the modest Nebraska home he bought 50 years ago.
Fortune said the donations would amount to about 85 per cent of Mr Buffet's total wealth.
Mr Buffett, a widower, had previously said he would wait until he died to hand over his vast wealth to charity.
But he has now decided his friend Bill Gates can do the most good right now.
"What can be more logical, in whatever you want done, than finding someone better equipped than you are to do it?" Mr Buffett said.
He also described Mr Gates as a master manager who was uniquely equipped to put his billions to good use.
"Who wouldn't select Tiger Woods to take his place in a high-stakes golf game?" Mr Buffett asked.
"That's how I feel about this decision about my money."
The shares will go to five foundations. But more than 83 per cent of the stock will go to the Bill and Melinda Gates Foundation, which already has a kitty of about $40 billion which is used to underwrite medical research and give educational grants.
The Gates foundation will get a first gift of $1.5 billion this summer, with hefty annual cash infusions to follow.
The Gateses said they were stunned by the generous gift.
"We are awed by our friend Warren Buffett's decision to use his fortune to address the world's most challenging inequities," they said.
Besides the Gates gifts, Mr Buffett also plans to give smaller amounts to foundations run by family members.
Mr Buffett said although he had been given a clean bill of health, the death of his wife Susan almost two years ago had influenced his decision to distribute his wealth now.
He said: "She and I always assumed that she would inherit my Berkshire stock and be the one who oversaw the distribution of our wealth to society".
Mr Buffett made his billions from astute investments. Virtually all of the money is concentrated in the holding company Berkshire Hathaway - a holding company that owns a diverse mix of more than 60 companies, including insurance, furniture, carpet, jewellery, restaurant and utility firms.
It has logged spectacular returns over the years.
A single share of Berkshire Hathaway's class A stock now costs $92,100, while one share of class B goes for about $3000.
from the Telegraph of London, 2006-Jun-27, by Francis Harris:
The world's richest men in £32bn giveaway
Washington -- The world's richest men, the computer magnate Bill Gates and the financier Warren Buffett, announced a $60 billion (£32 billion) alliance yesterday to attack global poverty and disease.
The decision by Mr Buffett to hand most of his vast personal fortune to a foundation run by Mr Gates and his wife Melinda is unprecedented both in scale and ambition.
It marked the latest chapter in America's great philanthropic tradition which, for more than 150 years, has encouraged the country's extremely wealthy to give money to the poor.
During a joint appearance in the grandiose New York Public Library, itself a monument to early 20th century philanthropy, Mr Gates said of the gift: "It's almost scary. If I make a mistake with my own money it just doesn't feel the same as making a mistake with Warren's money."
Mr Buffett, known as the "Sage of Omaha" for his uncannily successful investment record, caused some laughter by promising not to assess Mr Gates's efforts more than once a day.
Looking at the Microsoft founder, he explained: "You can do a better job of giving it away than I can."
Mr Buffett was asked time and again why he had not handed all the money to his three children and responded: "I am not an enthusiast for dynastic wealth, particularly when the alternative is six billion people having much poorer 'hands' in life than we have."
But the financier, 75, did give stock worth several billion dollars to foundations run by his three children. Around 80 per cent of his $44 billion fortune will go in annual instalments to the Bill and Melinda Gates Foundation for as long as the couple live.
Mr Gates, the chairman of Microsoft, recently announced that he would be spending less time with his company and more time on his philanthropic interests.
His foundation aims to reduce inequality, particularly in the developing world and to improve education in America. It says it is "guided by the belief that every life has equal value".
It has funded large programmes to fight mass killers in the Third World such as Aids, malaria and tuberculosis, as well as to public libraries in America.
Mr Buffett said the couple had committed themselves "to a few extraordinarily important but underfunded issues, a policy that I believe offers the highest probability of your achieving goals of great consequence".
The sums of money involved are huge. The gift is the largest in American history and will allow the foundation to spend close to $3 billion (£1.7 billion) a year, about a quarter of the United Nations annual budget.
That will greatly increase the already substantial influence enjoyed by Mr and Mrs Gates, to whom few doors are closed.
The couple said they were "awed" by the contribution and invited Mr Buffett to join them on the foundation's board. Their work presented "a tremendous opportunity to make a positive difference in people's lives", they said.
In some ways, Mr Buffett is an odd companion for Mr Gates. He has steered clear of technology stocks for years and represents an older and less self-conscious America.
Known for his titanic thirst for Coca-Cola and appetite for red meat, he has a reputation for frugality.
But he also has a long-stated admiration for Mr Gates. "If Bill had started a hot-dog stand he would have become the hot-dog king of the world. He will win in any game," he said.
Mr Buffett, who still lives in the Omaha home he bought for $30,000 (£17,000) and nicknames his private jet "The Indefensible", has long warned his children that they would not get all his money.
Instead 53-year-old Susie, 53, a housewife, 51-year-old Howard, a photographer, and 48-year-old Peter, a musician, will receive large bequests to run their own foundations.
"They'll be wealthy, there's no question about that, but the idea of dynastic fortune turns me off," he once said. "The idea that you hand over huge positions in society simply because someone came from the right womb I just think it's almost un-American."
Mr Buffett denied suggestions that his decision might be linked to poor health.
"My doctor tells me that I am in excellent health and I certainly feel that I am," he said.
That will be a relief for American investors, who have a well-grounded faith in all Mr Buffett's doings. Anyone who invested $1 in his company 40 years ago would have seen it grow to $20,000. That amounts to 100 times the stock market return over the same period.
Although Mr Buffett and Mr Gates are confronting some of the most intractable problems in the world, experts have judged positively the foundation's efforts so far.
Followers of Mr Gates believe that his business acumen will help achieve better results than those of charities and governments working towards the same ends. The foundation has 275 staff, which is now expected to grow to around 500. Based at an anonymous building in Seattle and devoid of signs, some have nicknamed it "The Undisclosed Location".
from the Wall Street Journal, 2005-Apr-1, by Martin Morse Wooster:
Too Good to Be True
Certain organizations--Pew is one--are routinely treated as benign and neutral, beyond partisan politics. They're not.It was one of those "gaffe" moments when a truth long hidden--but long suspected--is finally spoken out loud. At a recent conference in California, Sean Treglia, a former program officer at the Pew Charitable Trusts, stated that the "mass movement" demanding campaign-finance reform, culminating in 2002's McCain-Feingold bill, was orchestrated by Pew and other like-minded foundations, including the Ford Foundation, the Carnegie Corp. of New York and the Open Society Institute.
In a tape obtained by Ryan Sager of the New York Post--who broke the story--Mr. Treglia was heard to admit that his foundation's lavish support of such groups as Common Cause and the Center for Public Integrity was designed to convince Congress that there was widespread public demand for campaign-finance reform when, in fact, there wasn't. Campaign-finance partisans, according to Mr. Treglia, had lost legitimacy in Washington, lacking "a constituency that would punish Congress if they didn't vote for reform." So, "to convey the impression that this was something coming naturally from outside the Beltway, I felt it best that Pew stay in the background."
What is striking about this confession has less to do with campaign-finance reform--a bust anyway--than with the stealth politics of Pew and foundations like it. There are certain do-good entities, and Pew is one of them, that enjoy a charmed life: On NPR and in David Broder columns, to take a couple of leading indicators, they are treated as benign truth-tellers, so high-minded as to be beyond politics. But they are, naturally, as partisan as any "special interest" could be.
Campaign-finance reform hasn't been Pew's only grasp at political influence. In 2004, the charity poured $9 million into the New Voters Project to register 18- to 24-year-old voters in six "battleground states." Though the drive was allegedly nonpartisan, the project was a joint venture of George Washington University and the Nader-created State Public Interest Research Groups, a nonprofit openly hostile to the GOP. It is safe to say that few of the project's boosters expected those new young voters to favor Mr. Bush.
Which leads to a deeper question: What, exactly, is Pew's agenda? Its founders derived their wealth from Sun Oil and were all Republicans. "When I speak of the free enterprise system," J. Howard Pew said in 1938, "I mean when it is entirely free--free from monopoly, private or governmental." (It is easy to imagine how he would feel about restricting speech in electoral campaigns.) Howard's brother Joseph in 1940 called the New Deal "a gigantic scheme to raze U.S businesses to a dead level and debase the citizenry into a mass of ballot-casting serfs."
The Pews' philanthropy increased in the 1940s and '50s when they created several new charities. The J. Howard Pew Freedom Trust, founded in 1957, had the most decisive charter. J. Howard instructed that it be used to acquaint the American people with "the evils of bureaucracy" and "the values of a free market" and "to inform our people of the struggle, persecution, hardship, sacrifice and death by which freedom of the individual was won."
But by 1980 all the founders of the Pew trusts were dead, and Pew philanthropy drifted away from its donors' intent. The drift became a purposeful rush when Rebecca Rimel became Pew's executive director in 1988.
The Philadelphia Inquirer reported in 1992 that Pew grants going to local organizations--a tradition of the Philadelphia-based family--fell to 23% of all giving in 1991 from 56% in 1980, with organizations long favored by the family cut off. More important, Pew moved left. The "political ghosts" of the Pews "were gone," Ms. Rimel told Foundation News in 1991. That year she told Town & Country: "If we could reinfuse the idealism of the Sixties into our work, it could get the country out of this morass that problems are insoluble."
It has been the Summer of Love at Pew headquarters ever since. Ms. Rimel put it more nobly in a statement last year, declaring that Pew does "independent, nonpartisan research on key topics and trends. On issues where the facts are clear, we are a forceful advocate for policy solutions and positive change." But Pew's politics are about as nonpartisan as Hillary Clinton's. Its assumption is that if voters only understood how much "positive change" government can bring about, they would want more of it. And if the right and the left got together and talked about America's problems, compromises would be reached and the country would move forward, as the cliché goes.
Pew expresses this woolly faith in many ways. Between 1991 and 2001, it pumped $12 million into the "civic journalism" movement, which argued that newspapers need to run many series about the inner workings of city and state bureaucracies, the better for us to care about what they do and could, supposedly, do better. (J. Howard Pew's resistance to the "evils of bureaucracy" had nothing to do with it.) Pew eventually dropped the project--there were too many complaints about a private foundation setting the agenda of for-profit publishers. But it still tries to influence the press through publishing polls and hectoring newspapers to send more reporters to state capitols.
Pew also loves to create commissions. One such thinks that we ought to save more for retirement. Another wants more government funding of preschool education. National conferences are a favorite, too. About a pointless 1997 Pew conference on "voluntarism," Philadelphia mayor Ed Rendell remarked that Pew might as well have thrown its $1.4 million "out on Market Street." Pew has held conferences in Hershey, Pa., to teach members of Congress to be nice to each other--to overcome "partisanship." So far, no luck.
For more than a decade, Pew has tried to bring America's environmentalists into a centralized hierarchy under the command of longtime Pew environmental czar Joshua Richert. Not that environmentalists have always cheered. "I don't think you make social change happen on the basis of paid staff in Washington and paid ads anywhere," Sierra Club executive director Carl Pope told the New York Times in 2001. Beth Daley, of the liberal National Committee for Responsive Philanthropy, had earlier told National Journal: "Some of us were joking that we should have a Pew liberation front committed to getting environmental organizations off the Pew dole."
Pew's most recent evolution makes explicit what was long implicit: In 2004, it transformed itself from a foundation into a giant nonprofit. It can now use 20% of its budget for lobbying. Last fall, Pew combined seven of its public-policy shops into the Pew Research Center--Washington's third-largest liberal think tank, after Brookings and the Center for American Progress. Clearly Pew intends to be a major player in Washington political debates, even as it pretends to nonpartisanship.
There is no reason that Pew should not do all it can to encourage the castor-oil liberalism that it so loves. But it might help if the rest of us took note of Mr. Treglia's belated honesty and treated Pew as something other than neutrality incarnate. And it might help if, out of simple fairness, the trust dropped the name Pew in the same way it has dropped the principles that guided its founders.
Mr. Wooster, a senior fellow at the Capital Research Center, is the author of "The Great Philanthropists and the Problem of Donor Intent."
from the Wall Street Journal, 2009-Apr-4, by Naomi Schaefer Riley:
Carl Schramm
Giving Capitalism Its Due
The head of the Kauffman Foundation on the importance of entrepreneurship.Carl Schramm doesn't buy the idea that some businesses are "too big to fail." That notion, says the president of the Kansas City-based Kauffman Foundation, only creates obstacles for entrepreneurs. Instead, he sees the failure of big companies as the "moment when 1,000 flowers can bloom."
The Kauffman Foundation, known to National Public Radio listeners and a few others as "the foundation for entrepreneurship," is difficult to categorize, but its president seems to like it that way. Last Sunday afternoon at the largely deserted Harvard Club in New York, I sat down to talk with Mr. Schramm, an unassuming man with distinctive round spectacles who oversees an almost $2 billion endowment.
Kauffman was founded in 1966 by pharmaceutical magnate Ewing Marion Kauffman. In 1950, he launched a drug company in the basement of his Kansas City home. Forty years later, when he sold the business to Merrell Dow, it had become a diversified health-care company with nearly $1 billion in annual sales and more than 3,000 employees.
Kauffman gave a lot of thought to his journey from poverty to wealth, according to Mr. Schramm. "He saw this as the central theme of his life."
So what exactly is a foundation for entrepreneurship? Aren't foundations supposed to give money to charity? And aren't entrepreneurs supposed to get money from investors, not philanthropists?
On the theoretical level, Mr. Schramm, who started his own health-care company and merchant bank, believes that the foundation has a duty to foster an environment hospitable to entrepreneurship. And so, for instance, Mr. Schramm brags that Kauffman has "dragged economists into considering the importance of firm formation to the overall growth of the economy." The foundation has commissioned some 6,000 papers on this and related topics in the past several years.
Then there is the question of the public perception of entrepreneurship. In the most recent survey that the foundation sponsored, pollsters found that 63% of respondents "prefer giving individuals the incentives they need to start their own businesses as opposed to allowing the government to create new jobs directly." Conducted last month, the survey also showed that instead of the government's stimulus package, two-thirds of respondents would prefer "reducing legal barriers and red tape for new business development" as a way to jump-start the economy. Finally, 89% of respondents said that "capitalism is still the best economic system for our country."
Despite this popular attitude, Mr. Schramm worries that there is a tendency on the part of some citizens to want the government to prevent market chaos. Prior to the financial meltdown this fall, "I think we were in full tide of entrepreneurial capitalism and now there's an introspection, where the vocabulary is all about regulation and the importance of the government to restart the economy," he says. While Mr. Schramm believes that the government has a role to play, he argues that "historically through the last seven recessions it's been entrepreneurs who essentially restarted the economy."
Kauffman is dedicated to cultivating such innovators. Mr. Schramm is intent on dispelling the common misperception that "If you don't have it done by the time you're 19 or 21, it ain't gonna happen," and according to Inc. magazine, he says, "the fastest growing firms in the United States are started by people who are 39 years old" on average.
In order to educate young people about the history of entrepreneurship in America, the foundation has partnered with 18 college campuses. "When I was in high school, the word entrepreneur was in zero use, it was not part of the American vocabulary. If you were to ask about inventors, they were pretty much dead people, you know, George Westinghouse and George Eastman." Today, Mr. Schramm thinks that kids do see more entrepreneurship around them with Internet startups and the like, but schools still don't encourage it. Even business schools, Mr. Schramm says, seem to offer only a "very rigid formalistic perspective about writing business plans."
Kauffman has tried to provide more direct and practical aid to those trying to start their own businesses. Through a program called FastTrac, for instance, Kauffman will help 1,000 current and new small-business owners in New York City over the course of the next year learn the skills they need to succeed.
FastTrac helps budding entrepreneurs with the important decision of picking a lawyer, for instance. "The bad choice of a lawyer at the start of a business or the bad choice of an accountant can screw the business up in a way that is fatal," says Mr. Schramm. The program also advises budding entrepreneurs never to let their lawyers or accountants invest in the company. "You have to develop your own sense of the value of the advice you're getting. And the minute people say well I want to own 25% of the company, all the alarm bells ought to go off."
Finally, the foundation goes out of its way to support minority entrepreneurship. Mr. Schramm doesn't use any social-justice lingo to explain the program, but reverts to a kind of charming nerd-speak. He says that after a lot of analysis, Kauffman has found that there is "the greatest delta among black males." In other words, for a given amount of entrepreneurial investment, that group will see the greatest improvement in its economic status. While there are many activists out there saying that foundations should give more to minorities, you won't find many who offer the Kauffman philosophy: "We should have a proportionate number of black billionaire owners of businesses as exists in the majority community," says Mr. Schramm.
In addition to encouraging entrepreneurship of all sorts, Mr. Schramm says the foundation itself is supposed to act entrepreneurially. In the past couple of decades, a veritable army of professional nonprofit workers has grown up. But Mr. Schramm was not among them. Before arriving at Kauffman, he taught at Johns Hopkins (he has a law degree and a doctorate in economics). When he applied to foundations for funding during his time as a professor, he recalls, "You had to be very good at using language to sound like you were out on the frontier, but in fact you couldn't go too far because . . . foundations are very cautious."
For a while, he wondered what was behind that tendency. He concluded that "the foundation culture had developed a sort of consensus": Foundation money is "quasi-public." In a prescient article that Mr. Schramm wrote for the Harvard Journal of Law and Public Policy in 2006, he notes that "the foundation appears to lack any coherent theory of its own role in society and the economy." The result, he warned, is that "government can impose expectations that may destroy the foundation's ability to achieve the purposes for which it was conceived."
Lately, some in the government have been trying to do exactly that. A few members of Congress, including Rep. Xavier Becerra (D., Calif.), have recently suggested that foundations need to be giving a greater percentage of their dollars to minority groups and other "marginalized communities." And various activist groups, including the National Committee for Responsive Philanthropy and Greenlining, have made the case that philanthropic dollars really belong to the public since they are tax exempt. Mr. Schramm responds: "I don't think as a legal matter that it holds because under that theory my 401(k) is public money."
So who are the real stakeholders in foundations? Mr. Schramm can think of only one: the donor. "At Kauffman I think the trustees and I are very, very clear: We work for Mr. Kauffman," says Mr. Schramm, acknowledging that his boss passed away in 1993. Kauffman not only left extensive writings but also videotape of himself describing how he wanted the foundation to operate. Mr. Schramm says that one board member told him he was hired because he was the only candidate who had read Kauffman's book.
Despite, or perhaps because of, his familiarity with Kauffman's thought, Mr. Schramm did not have an easy time taking over the foundation in 2002. Over time Kauffman had grown unwieldy, with one of the highest overhead costs of any foundation in the country. And its mission had become diluted. For example, Mr. Schramm notes, Kauffman said he was interested in education. "What was read into it was he was really more interested in general youth development. So we found ourselves supporting sports programs." Kauffman owned the Kansas City Royals for a time and Mr. Schramm notes that "he loved sports, but when it came to his foundation, he was crystal clear about what he wanted to have done and the word 'sports' never shows up in hundreds of pages of discussion."
And so within a year of taking over, Mr. Schramm began a serious overhaul of the foundation. He laid off about half of its 150-person staff and cut off funding to some of its biggest grantees, many in Kansas City. There was a public outcry from local nonprofits and from some former members of the board. One told the New York Times that "Carl doesn't seem to understand that there isn't an 'I' in team." It reached the point where Missouri's then attorney general, Jeremiah Nixon, launched an extensive investigation. He determined that Mr. Schramm had not led the foundation astray. What ultimately saved his job, says Mr. Schramm, were the detailed writings that Kauffman left before his death.
"What happened was not atypical in foundations. Often around 10 years after the death of the donor there's a moment of truth." People who were close to the donor will say, "Yes, he said that but he didn't mean that." Mr. Schramm concludes: "If there was one piece of advice I'd give to someone who was starting a foundation it is this: Think very, very hard of the long term and write down what you want your foundation to look like in 30 years or 40 years."
Despite the fact that the foundation's endowment has fallen by $722 million since the end of 2007, Mr. Schramm sees this as Kauffman's "moment." While "no one hopes for a recession," it's during economic crises that entrepreneurs "challenge companies that have gotten big and lazy." The downturn, he says, will even challenge Kauffman to "think about how we can do our work better, like every business." In fact, Mr. Schramm adds, "The only people immune from thinking hard in moments like this are in government."
Ms. Riley is the Journal's deputy Taste editor.
from The Times-Record of Fort Smith Arkansas, 2004-Nov-26, by Margaret Brogley:
Letter to the editor
Big Foundations Main Support For ACLU
Recently, a lady wrote the Times Record, asking where the American Civil Liberties Union gets its money to operate. They receive a lot of support from large foundations. According to their own publications, they tell us they receive generous contributions from the John D. and Catherine McArthur Foundation, Rockefeller Foundation, Open Society Institute, Ford Foundation and other foundations. No wonder they have untold millions in their coffers.
What they don't tell us is that, in 1953, former President Rowan Gaither of the Ford Foundation told Norman Dodd (research director for the House of Representatives Reece Committee) that the Ford Foundation was working to comfortably merge the United States with Russia. This set the stage for implementation of education geared to behavior and values changes that have demoralized the schools and our nation.
Neither does the ACLU tell us that Roger Nash Baldwin (a socialist) and John Dewey (a socialist/humanist and father of Progressive Education) both helped to organize the ACLU. Until his death, Baldwin was committed to the organization from its inception about 85 years ago. He has been quoted as saying, “The ACLU is always in trouble. And it should be. It's always there defending unpopular causes.” Therein lie so many of our problems. While the ACLU claims to protect our freedoms, they strategically plot to lead us down the godless road of socialism.
Keep your eye on the ACLU!
Margaret Brogley
Van Buren
from the New York Times, 2005-Aug-21, by Jodi Wilgoren, with Jack Begg, David Bernstein and Alain Delaquérière contributing:
Politicized Scholars Put Evolution on the Defensive
SEATTLE - When President Bush plunged into the debate over the teaching of evolution this month, saying, "both sides ought to be properly taught," he seemed to be reading from the playbook of the Discovery Institute, the conservative think tank here that is at the helm of this newly volatile frontier in the nation's culture wars.
After toiling in obscurity for nearly a decade, the institute's Center for Science and Culture has emerged in recent months as the ideological and strategic backbone behind the eruption of skirmishes over science in school districts and state capitals across the country. Pushing a "teach the controversy" approach to evolution, the institute has in many ways transformed the debate into an issue of academic freedom rather than a confrontation between biology and religion.
Mainstream scientists reject the notion that any controversy over evolution even exists. But Mr. Bush embraced the institute's talking points by suggesting that alternative theories and criticism should be included in biology curriculums "so people can understand what the debate is about."
Financed by some of the same Christian conservatives who helped Mr. Bush win the White House, the organization's intellectual core is a scattered group of scholars who for nearly a decade have explored the unorthodox explanation of life's origins known as intelligent design.
Together, they have mounted a politically savvy challenge to evolution as the bedrock of modern biology, propelling a fringe academic movement onto the front pages and putting Darwin's defenders firmly on the defensive.
Like a well-tooled electoral campaign, the Discovery Institute has a carefully crafted, poll-tested message, lively Web logs - and millions of dollars from foundations run by prominent conservatives like Howard and Roberta Ahmanson, Philip F. Anschutz and Richard Mellon Scaife. The institute opened an office in Washington last fall and in January hired the same Beltway public relations firm that promoted the Contract With America in 1994.
"We are in the very initial stages of a scientific revolution," said the center's director, Stephen C. Meyer, 47, a historian and philosopher of science recruited by Discovery after he protested a professor's being punished for criticizing Darwin in class. "We want to have an effect on the dominant view of our culture."
For the institute's president, Bruce K. Chapman, a Rockefeller Republican turned Reagan conservative, intelligent design appealed to his contrarian, futuristic sensibilities - and attracted wealthy, religious philanthropists like the Ahmansons at a time when his organization was surviving on a shoestring. More student of politics than science geek, Mr. Chapman embraced the evolution controversy as the institute's signature issue precisely because of its unpopularity in the establishment.
"When someone says there's one thing you can't talk about, that's what I want to talk about," said Mr. Chapman, 64.
As much philosophical worldview as scientific hypothesis, intelligent design challenges Darwin's theory of natural selection by arguing that some organisms are too complex to be explained by evolution alone, pointing to the possibility of supernatural influences. While mutual acceptance of evolution and the existence of God appeals instinctively to a faithful public, intelligent design is shunned as heresy in mainstream universities and science societies as untestable in laboratories.
Entering the Public Policy Sphere
From its nondescript office suites here, the institute has provided an institutional home for the dissident thinkers, pumping $3.6 million in fellowships of $5,000 to $60,000 per year to 50 researchers since the science center's founding in 1996. Among the fruits are 50 books on intelligent design, many published by religious presses like InterVarsity or Crossway, and two documentaries that were broadcast briefly on public television. But even as the institute spearheads the intellectual development of intelligent design, it has staked out safer turf in the public policy sphere, urging states and school boards simply to include criticism in evolution lessons rather than actually teach intelligent design.
Since the presidential election last fall, the movement has made inroads and evolution has emerged as one of the country's fiercest cultural battlefronts, with the National Center for Science Education tracking 78 clashes in 31 states, more than twice the typical number of incidents. Discovery leaders have been at the heart of the highest-profile developments: helping a Roman Catholic cardinal place an opinion article in The New York Times in which he sought to distance the church from evolution; showing its film promoting design and purpose in the universe at the Smithsonian; and lobbying the Kansas Board of Education in May to require criticism of evolution.
These successes follow a path laid in a 1999 Discovery manifesto known as the Wedge Document, which sought "nothing less than the overthrow of materialism and its cultural legacies" in favor of a "broadly theistic understanding of nature."
President Bush's signature education law, known as No Child Left Behind, also helped, as mandatory testing prompted states to rewrite curriculum standards. Ohio, New Mexico and Minnesota have embraced the institute's "teach the controversy" approach; Kansas is expected to follow suit in the fall.
Detractors dismiss Discovery as a fundamentalist front and intelligent design as a clever rhetorical detour around the 1987 Supreme Court ruling banning creationism from curriculums. But the institute's approach is more nuanced, scholarly and politically adept than its Bible-based predecessors in the century-long battle over biology.
A closer look shows a multidimensional organization, financed by missionary and mainstream groups - the Bill and Melinda Gates Foundation provides $1 million a year, including $50,000 of Mr. Chapman's $141,000 annual salary - and asserting itself on questions on issues as varied as local transportation and foreign affairs.
Many of the research fellows, employees and board members are, indeed, devout and determinedly conservative; pictures of William J. Bennett, the moral crusader and former drug czar, are fixtures on office walls, and some leaders have ties to movement mainstays like Focus on the Family. All but a few in the organization are Republicans, though these include moderates drawn by the institute's pragmatic, iconoclastic approach on nonideological topics like technology.
But even as intelligent design has helped raise Discovery's profile, the institute is starting to suffer from its success. Lately, it has tried to distance itself from lawsuits and legislation that seek to force schools to add intelligent design to curriculums, placing it in the awkward spot of trying to promote intelligent design as a robust frontier for scientists but not yet ripe for students.
The group is also fending off attacks from the left, as critics liken it to Holocaust deniers or the Taliban. Concerned about the criticism, Discovery's Cascadia project, which focuses on regional transportation and is the recipient of the large grant from the Gates Foundation, created its own Web site to ensure an individual identity.
"All ideas go through three stages - first they're ignored, then they're attacked, then they're accepted," said Jay W. Richards, a philosopher and the institute's vice president. "We're kind of beyond the ignored stage. We're somewhere in the attack."
Origins of an Institute
Founded in 1990 as a branch of the Hudson Institute, based in Indianapolis, the institute was named for the H.M.S. Discovery, which explored Puget Sound in 1792. Mr. Chapman, a co-author of a 1966 critique of Barry M. Goldwater's anti-civil-rights campaign, "The Party That Lost Its Head," had been a liberal Republican on the Seattle City Council and candidate for governor, but moved to the right in the Reagan administration, where he served as director of the Census Bureau and worked for Edwin Meese III.
In late 1993, Mr. Chapman clipped an essay in The Wall Street Journal by Dr. Meyer, who was teaching at a Christian college in Spokane, Wash., concerning a biologist yanked from a lecture hall for discussing intelligent design. About a year later, over dinner at the Sorrento Hotel here, Dr. Meyer and George Gilder, Mr. Chapman's long-ago Harvard roommate and his writing partner, discovered parallel theories of mind over materialism in their separate studies of biology and economics.
"Bruce kind of perked up and said, 'This is what makes a think tank,' " Dr. Meyer recalled. "There was kind of an 'Aha!' moment in the conversation, there was a common metaphysic in these two ideas."
That summer of 1995, Mr. Chapman and Dr. Meyer had dinner with a representative of the Ahmansons, the banking billionaires from Orange County, Calif., who had previously given a small grant to the institute and underwritten an early conclave of intelligent design scholars. Dr. Meyer, who had grown friendly enough with the Ahmansons to tutor their young son in science, recalled being asked, "What could you do if you had some financial backing?"
So in 1996, with the promise of $750,000 over three years from the Ahmansons and a smaller grant from the MacLellan Foundation, which supports organizations "committed to furthering the Kingdom of Christ," according to its Web site, the institute's Center for Science and Culture was born.
"Bruce is a contrarian, and this was a contrarian idea," said Edward J. Larson, the historian and author of a Pulitzer Prize-winning book on the Scopes Monkey Trial, who was an early fellow at the institute, but left in part because of its drift to the right. "The institute was living hand-to-mouth. Here was an academic, credible activity that involved funders. It interested conservatives. It brought in money."
Support From Religious Groups
The institute would not provide details about its backers "because they get harassed," Mr. Chapman said. But a review of tax documents on www.guidestar.org, a Web site that collects data on foundations, showed its grants and gifts jumped to $4.1 million in 2003 from $1.4 million in 1997, the most recent and oldest years available. The records show financial support from 22 foundations, at least two-thirds of them with explicitly religious missions.
There is the Henry P. and Susan C. Crowell Trust of Colorado Springs, whose Web site describes its mission as "the teaching and active extension of the doctrines of evangelical Christianity." There is also the AMDG Foundation in Virginia, run by Mark Ryland, a Microsoft executive turned Discovery vice president: the initials stand for Ad Majorem Dei Glorium, Latin for "To the greater glory of God," which Pope John Paul II etched in the corner of all his papers.
And the Stewardship Foundation, based in Tacoma, Wash., whose Web site says it was created "to contribute to the propagation of the Christian Gospel by evangelical and missionary work," gave the group more than $1 million between 1999 and 2003.
By far the biggest backers of the intelligent design efforts are the Ahmansons, who have provided 35 percent of the science center's $9.3 million since its inception and now underwrite a quarter of its $1.3 million annual operations. Mr. Ahmanson also sits on Discovery's board.
The Ahmansons' founding gift was joined by $450,000 from the MacLellan Foundation, based in Chattanooga, Tenn.
"We give for religious purposes," said Thomas H. McCallie III, its executive director. "This is not about science, and Darwin wasn't about science. Darwin was about a metaphysical view of the world."
The institute also has support from secular groups like the Verizon Foundation and the Gates Foundation, which gave $1 million in 2000 and pledged $9.35 million over 10 years in 2003. Greg Shaw, a grant maker at the Gates Foundation, said the money was "exclusive to the Cascadia project" on regional transportation.
But the evolution controversy has cost it the support of the Bullitt Foundation, based here, which gave $10,000 in 2001 for transportation, as well as the John Templeton Foundation in Pennsylvania, whose Web site defines it as devoted to pursuing "new insights between theology and science."
Denis Hayes, director of the Bullitt Foundation, described Discovery in an e-mail message as "the institutional love child of Ayn Rand and Jerry Falwell," saying, "I can think of no circumstances in which the Bullitt Foundation would fund anything at Discovery today."
Charles L. Harper Jr., the senior vice president of the Templeton Foundation, said he had rejected the institute's entreaties since providing $75,000 in 1999 for a conference in which intelligent design proponents confronted critics. "They're political - that for us is problematic," Mr. Harper said. While Discovery has "always claimed to be focused on the science," he added, "what I see is much more focused on public policy, on public persuasion, on educational advocacy and so forth."
For three years after completing graduate school in 1996, William A. Dembski could not find a university job, but he nonetheless received what he called "a standard academic salary" of $40,000 a year.
"I was one of the early beneficiaries of Discovery largess," said Dr. Dembski, whose degrees include a doctorate in mathematics from the University of Chicago, one in philosophy from the University of Illinois and a master's of divinity from Princeton Theological Seminary.
Money for Teachers and Students
Since its founding in 1996, the science center has spent 39 percent of its $9.3 million on research, Dr. Meyer said, underwriting books or papers, or often just paying universities to release professors from some teaching responsibilities so that they can ponder intelligent design. Over those nine years, $792,585 financed laboratory or field research in biology, paleontology or biophysics, while $93,828 helped graduate students in paleontology, linguistics, history and philosophy.
The 40 fellows affiliated with the science center are an eclectic group, including David Berlinski, an expatriate mathematician living in Paris who described his only religion to be "having a good time all the time," and Jonathan Wells, a member of the Unification Church, led by the Rev. Sun Myung Moon, who once wrote in an essay, "My prayers convinced me that I should devote my life to destroying Darwinism."
Their credentials - advanced degrees from Stanford, Columbia, Yale, the University of Texas, the University of California - are impressive, but their ideas are often ridiculed in the academic world.
"They're interested in the same things I'm interested in - no one else is," Guillermo Gonzalez, 41, an astronomer at the University of Iowa, said of his colleagues at Discovery. "What I'm doing, frankly, is frowned upon by most of my colleagues. It's not something a 'scientist' is supposed to do." Other than Dr. Berlinski, most fellows, like their financiers, are fundamentalist Christians, though they insist their work is serious science, not closet creationism.
"I believe that God created the universe," Dr. Gonzalez said. "What I don't know is whether that evidence can be tested objectively. I ask myself the tough questions."
Discovery sees the focus on its fellows and financial backers as a diversionary tactic by its opponents. "We're talking about evidence, and they want to talk about us," Dr. Meyer said.
But Philip Gold, a former fellow who left in 2002, said the institute had grown increasingly religious. "It evolved from a policy institute that had a religious focus to an organization whose primary mission is Christian conservatism," he said.
That was certainly how many people read the Wedge Document, a five-page outline of a five-year plan for the science center that originated as a fund-raising pitch but was soon posted on the Internet by critics.
"Design theory promises to reverse the stifling dominance of the materialist worldview, and to replace it with a science consonant with Christian and theistic convictions," the document says. Among its promises are seminars "to encourage and equip believers with new scientific evidence that support the faith, as well as to 'popularize' our ideas in the broader culture."
One sign of any political movement's advancement is when adherents begin to act on their own, often without the awareness of the leadership. That, according to institute officials, is what happened in 1999, when a new conservative majority on the Kansas Board of Education shocked the nation - and their potential allies here at the institute - by dropping all references to evolution from the state's science standards.
"When there are all these legitimate scientific controversies, this was silly, outlandish, counterproductive," said John G. West, associate director of the science center, who said he and his colleagues learned of that 1999 move in Kansas from newspaper accounts. "We began to think, 'Look, we're going to be stigmatized with what everyone does if we don't make our position clear.' "
Out of this developed Discovery's "teach the controversy" approach, which endorses evolution as a staple of any biology curriculum - so long as criticism of Darwin is also in the lesson plan. This satisfied Christian conservatives but also appealed to Republican moderates and, under the First Amendment banner, much of the public (71 percent in a Discovery-commissioned Zogby poll in 2001 whose results were mirrored in newspaper polls).
"They have packaged their message much more cleverly than the creation science people have," said Eugenie C. Scott, director of the National Center for Science Education, the leading defender of evolution. "They present themselves as being more mainstream. I prefer to think of that as creationism light."
A watershed moment came with the adoption in 2001 of the No Child Left Behind Act, whose legislative history includes a passage that comes straight from the institute's talking points. "Where biological evolution is taught, the curriculum should help students to understand why this subject generates so much continuing controversy," was language that Senator Rick Santorum, Republican of Pennsylvania, tried to include.
Pointing to that principle, institute fellows in 2002 played important roles in pushing the Ohio Board of Education to adopt a "teach the controversy" approach and helped devise a curriculum to support it. The following year, they successfully urged changes to textbooks in Texas to weaken the argument for evolution, and they have been consulted in numerous other cases as school districts or states consider changing their approach to biology.
But this spring, at the hearings in Kansas, Mr. Chapman grew visibly frustrated as his supposed allies began talking more and more about intelligent design.
John Calvert, the managing director of the Intelligent Design Network, based in Kansas, said the institute had the intellectual and financial resources to "lead the movement" but was "more cautious" than he would like. "They want to avoid the discussion of religion because that detracts from the focus on the science," he said.
Dr. West, who leads the science center's public policy efforts, said it did not support mandating the teaching of intelligent design because the theory was not yet developed enough and there was no appropriate curriculum. So the institute has opposed legislation in Pennsylvania and Utah that pushes intelligent design, instead urging lawmakers to follow Ohio's lead.
"A lot of people are trying to hijack the issue on both the left and the right," Dr. West said.
Dr. Chapman, for his part, sees even these rough spots as signs of success.
"All ideas that achieve a sort of uniform acceptance ultimately fall apart whether it's in the sciences or philosophy or politics after a few people keep knocking away at it," he said. "It's wise for society not to punish those people."
from the Wall Street Journal via OpinionJournal.com, 2004-Jul-21, by James Piereson:
You Get What You Pay For
Conservative philanthropists invested in ideas, and the payoff was huge.The Capital Research Center recently reported that in 2002 Teresa Heinz Kerry presided over the disbursement of more than $65 million in grants through various Heinz family philanthropies. A large proportion of these grants went to liberal advocacy groups such as the Natural Resources Defense Council and the League of Conservation Voters, which promote further regulation of business and higher taxes on the American people. Thus do the Heinz philanthropies join George Soros, Ted Turner, the Ford Foundation and scores of other donors in funding left-leaning causes.
This report is simply the latest sign that organized philanthropy, like the academic world, remains firmly in the grip of orthodox liberalism. Among the largest foundations in the United States, liberal foundations have been well represented by such stalwarts as the Ford, Rockefeller and MacArthur foundations, the Carnegie Corporation and the Pew Charitable Trusts--which list combined assets of some $25 billion and annual expenditures of more than $1.2 billion. By contrast, there is not now, nor has there been in the recent past, a conservatively oriented foundation with sufficient assets to make this list. These liberal foundations alone outspend the main conservative foundations by a factor of at least 10 to 1. When smaller foundations--like the Heinz Foundations--are added to the list, the disparity is more like 20 to 1.
Yet this imbalance in resources is one that conservative donors have always faced, and have succeeded in overcoming to a surprising degree. In the immediate future, however, conservative philanthropy will face a challenge that may prove far more daunting.
The conservative foundation movement took shape a generation ago, in the mid-1970s, when Irving Kristol penned a series of articles in The Wall Street Journal challenging businessmen to use their charitable funds to strengthen the system of private enterprise and limited government. At about the same time, William Simon, the controversial Treasury secretary in the Nixon and Ford administrations, published a best-selling book, "A Time for Truth," which contained a similar plea.
Liberals were advancing, they argued, because they dominated the nation's intellectual discourse. Conservative philanthropists should underwrite their own "counter intelligentsia" that would support scholars who were oriented in favor of liberty rather than against it. Simon also announced in that book that he had been invited by the donor to serve as president of the John M. Olin Foundation, a new philanthropy that would pursue precisely this mission.
Messrs. Kristol and Simon understood that a defense of capitalism required also a defense of the deeper cultural assumptions that gave meaning and order to a commercial civilization. Free markets could not be defended without reference to the rule of law, religion, the family and the evolution of our political institutions. This task required a full-blown engagement with the world of ideas--a world traditionally dominated by the left.
They understood also that they were swimming against the intellectual tide in the 1970s, when the future seemed to point in the direction of an ever-expanding welfare state. Nevertheless, while corporate leaders ignored their call to arms, a handful of entrepreneurial foundations took their message to heart. These included the John M. Olin Foundation (where I have been executive director for the past 18 years), along with the Sarah Scaife, Earhart, JM and Smith Richardson foundations. Their efforts were later augmented by the creation of the Bradley Foundation in the mid-1980s.
These foundations were unusual among conservative philanthropies because they were interested in ideas and in developing intellectual talent. They took the long view, investing to build institutions that might take a decade or more to mature. They also adopted a broad agenda that went far beyond business and economics to include such subjects as foreign policy, law, religion, history and even cultural criticism. Indeed, one of their early collaborative ventures was to provide seed money to launch The New Criterion, a distinguished cultural review edited by Hilton Kramer and Roger Kimball.
The conservative investment in ideas, though modest by liberal standards, has paid large dividends. There exists today, in contrast to the 1970s, an impressive network of think tanks, journals and university programs supported by conservative foundations, which are engaged in different ways in promoting the cause of liberty and limited government. As a result, there is now a robust debate in American intellectual life between conservatives and liberals. The one-sided debate, dominated by the left, is a thing of the past.
This historical reversal was noted a few years ago by the late Daniel Patrick Moynihan. He observed that, though universities and the media were still overwhelmingly liberal, the intellectual initiative in American life had shifted from the left to the right. Conservatives, he said, had displaced liberals as "the party of ideas." The conservatives were now writing the books, publishing the magazines, and advocating policies that shaped public debate.
It was an important achievement--but will it last? That is the question, and the new challenge.
Liberal ideas are not widely popular today, but they have achieved effective control over key institutions thanks to the support provided by large liberal philanthropies. That support will continue and perhaps increase in the years ahead. Meanwhile, the war on terrorism has reignited anti-American and anticapitalist passions on the far left. The battle of ideas, far from being over, is now being joined with new energy and fervor.
At the same time, the foundations that helped to make conservatives "the party of ideas" are undergoing changes of their own. Death and retirements, along with changing circumstances, have brought changes in leadership and focus to many of these institutions. The end of the Cold War, the collapse of socialism as an alternative to market capitalism, and the terrorist attacks of September 11, 2001, have forever changed the political framework that shaped the strategy and programs of the conservative foundations. The John M. Olin Foundation, one of the mainstays of the movement, will close its doors next year in accordance with the instructions of its late founder, who feared that his foundation might eventually be captured by people with views hostile to his own.
The conservative foundation movement that took shape in the 1970s thus seems to have run its course. Looking back, we have a good sense of what it accomplished. But what can we say about the future?
There are few final victories in the contest of ideas. The ground gained by conservative ideas in recent decades can be quickly lost if those ideas are not renewed and persistently articulated in public forums. This requires talent, energy--and money.
The historic achievements of the past generation did not happen by accident, but because our nation was guided to a great extent by conservative principles. These principles must maintain a central place in the debates over our future--and a new generation of conservative philanthropists is needed to make sure that they do.
Mr. Piereson is executive director of the John M. Olin Foundation.
from Inside Liberty, 1999-Apr, by R.W. Bradford:
Review
The Great Philanthropists & the Problem of "Donor Intent,"
by Martin Morse Wooster. (Capital Research Center, 1998, 198 pages)
Legacy & Betrayal
In 1923, George Eastman, founder of Eastman Kodak, explained why he had given away so much of the huge fortune he had amassed. "If a man has wealth, he has to make a choice, because there is the money heaping up," he said. "He can keep it together in a bunch, and then leave it for others to administer after he is dead. Or he can get it into action and have fun, while he is still alive. I prefer getting it into action and adapting it to human needs, and making the plan work."
Which is pretty much what George Eastman did. Having no wife or children, and doubtful about the wisdom of endowing one's family with great wealth (people who do that create "wastrels, race-track touts and whoremongers of their sons and gilded parasites of their daughters"), Eastman gave his money away. By the time he died, he'd given millions to universities (mostly to M.I.T., the University of Rochester, the Hampton Institute and Tuskegee Institute) and millions more to a host of causes in his hometown, Rochester. Many of his donations were made anonymously.
Of course, things were different when robber barons like George East-man walked the earth. For most of his life, Americans were free to earn as much as they could, spend it as they wanted, and not even tell the government or anyone else what they did with it. They could give it away, as Eastman chose to; spend it on lavish living, as Diamond Jim Brady chose to, or leave it to their children, as Hetty Green ("the Witch of Wall Street") chose to.
Today, things are not so simple. There's another reason for people to give away their money. The U.S. government snatches a portion of the estate of any American citizen or resident who dies owning property worth $650,000 or more. And the more he's worth, the more they snatch. Most U.S. states also grab a share, sometimes even of smaller estates.
Shortly after the estate tax was instituted in a major way in the U.S., owners of large enterprises found a method of passing control of their companies to their children, even if they couldn't transfer much wealth to them. They'd set up a charitable foundation and leave the bulk of the stock in the family-controlled corporation to it. The foundation would be controlled by family members and friends, leaving the heirs with effective control of both the corporation and the foundation. In addition to retaining control of the family company, the heirs and friends could see to it that the income produced by the foundation went to the kinds of causes the original donors wanted.
Or so it worked in theory.
But, as Martin Morse Wooster points out in The Great Philanthropists & the Problem of "Donor Intent," from the creation of the first large charitable foundations early in this century, something very strange occurred: professional bureaucrats gradually took over the foundations and perverted their purposes. Thus the Rockefeller Foun-dation, set up by the billionaire Baptist businessman, soon became a major source of funds for "progressive" (i.e., anti-business, anti-religious) causes.
This happened even in many cases where the person who created and funded the foundation went to great lengths to see that it focused on promoting free enterprise. Consider the case of J. Howard Pew of Sun Oil. During his lifetime, he was a tireless champion of free markets and individualism. In 1957, he created the J. Howard Pew Freedom Trust, with instructions that it use its funds to "acquaint the American people" with "the evils of bureaucracy," "the values of the free market," and "the paralyzing effects of government controls on lives and activities of people," to "inform our people of the struggle, persecution, hardship, sacrifice and death by which freedom of the individual was won" and to educate them about how "Socialism, Welfare statism [and] Fascism
. . . are but devices by which government seizes the ownership or control of the tools of production." In accordance with those wishes, the Freedom Trust funded mostly libertarian and conservative activities, as long as its board consisted of Pew family members and friends.But as the family members and friends died off, they were replaced by others who gradually reoriented its spending, first toward mainstream activities, then gradually toward the very activities that the trust had been set up to oppose. In 1994 it gave $6 million to left-liberal causes and just $150,000 to conservative or libertarian efforts.
The experience of the MacArthur Foundation was similar. John D. MacArthur amassed a fortune in the insurance and real estate businesses between the 1930s and his death in 1978. Not surprisingly, he spent much of his time fighting the government, and held a special animosity for environmentalists. When he died, he created the John D. and Catherine T. MacArthur Foundation, to be run by a five-man board, consisting of his old friend, conservative news commentator Paul Harvey, two business associates, his attorney and his son. Within a decade, it was firmly controlled by forces that would have scandalized old John, and it was spending heavily to support socialists and environment-alists.
Wooster chronicles the story of how the Rockefeller, MacArthur, and Pew family fortunes (among others) were squandered on agendas repugnant to their founders. If you've ever wondered how conservative or libertarian foundations end up financing socialism, this is the place to find out. Wooster also tells the story of a few fortunes that were spent according to the wishes of their owners. The secret, he argues, is limiting the life of the foundation to a relatively short time period — the expected lifespan of the board set up to administer it — and requiring that it divest all its assets during that period.
Wooster (or his publisher) seems to have a genius for concocting dreary titles: the sequel to The Great Philanthropists & the Problem of "Donor Intent" is titled Should Foundations Live Forever? A Question of Perpetuity. But don't be put off by its title, or by a subject matter one would expect to find desperately dry. The Great Philanthropists is a surprisingly good read. I literally couldn't put it down until I had read every word.
Part of the reason for this is Wooster's clear and very readable style. But part of it is the inherently fascinating stories he relates — fraught, as they are, with important insights about the attempts of individuals to work their will in an increasingly collectivized society. Where else, for example, could I have learned that in 19th century England, among those charities bound by the wishes of their founders was one established by a man named Greene to provide green clothing for the poor, one by a man named Grey to provide gray clothing to the poor, and one by a man named Rose to insure that his hometown always had plenty of rose bushes?
The inheritance tax produces relatively little revenue for the government, but thanks to inflation, today it even forces the sale of family farms and small businesses when a patriarch dies. The simple fact is, if the property you own when you die is worth $650,000 or more, you either leave a substantial portion of it to charity or lose a big chunk to the government.
This presents a special problem for those who believe that giving money to the government is like giving booze to a dipsomaniac. If you don't want your money going to impose American will by force of arms on people in Latin America, the Middle East, or wherever else the U.S. feels it has a right to rule (i.e., anywhere on the planet), or to help finance the arrest and imprisonment of a peaceful citizen who happens to possess cannabis sativa, or to pay a huge sum to a government-certified artist to produce works of art that range from the repulsive to the merely banal, then you had better give away most of your money during your lifetime or leave it to a charitable enterprise when you die.
But if you leave the bulk of your estate to charity to keep it from falling into the hands of government, the chances are very good that a substantial portion of it will support causes that you oppose, as the experiences of Rockefeller, Pew, MacArthur and many others demonstrates. What can you do about this?
Well, if you're a middle class American whose estate barely reaches the threshold of inheritance taxes, you can leave a reasonable sum to your family and donate the remainder to causes that you believe will spend it wisely. This presents problems, as anyone who has reviewed the financial records of tax-exempt foundations can attest. (It's amazing how many executives of tax-exempt foundations enjoy huge salaries and fringe benefits and how little money sometimes goes to pursue the foundations' ostensible purposes.) But a prudent person can investigate and avoid the foundations that waste money.
Indeed, this is something that I believe libertarians who are in danger of dying with a net worth of more than $650,000 ought to do — and since death comes to every human being, this means every libertarian worth $650,000 or more ought to make the necessary arrangements to see that as much as possible of his estate passes to his family or friends and the remainder to worthwhile causes that will use the money prudently.
But what if your estate exceeds an amount that can reasonably be given to a few operating foundations? If you set up a foundation to disburse it gradually to worthy causes, I suggest you follow Wooster's suggestion: require that the foundation disburse all its assets in a period in which its board members can sensibly be expected to live and remain active on the board. Or better still, do what George Eastman did: "get it into action and have fun, while [you are] still alive."
from the Wall Street Journal, 2009-May-12, p.A15:
Leona Helmsley, who died in 2007, left the bulk of her $5 billion estate to a foundation, the Leona M. and Harry B. Helmsley Charitable Trust. Her will did not say how the money was to be used. But in 2004 she filed a "mission statement" for the foundation, which though it did not have any legal standing, directed the trustees to disburse the funds for "(1) purposes related to the provision of care for dogs; and (2) such other charitable activities as the trustees shall determine."
An outcry arose, as the great and wise opined that the cause of canine welfare didn't deserve such riches. The trustees of her estate and the New York Attorney General sought a ruling on whether they were bound by the mission statement. In February, Manhattan Surrogate Judge Troy Webber gave the trustees sole discretion in spending the money, and last month they announced their first grants. The dogs got the scraps. Of the $136 million in grants, only $1 million went to animal rights and welfare. The American Society for the Prevention of Cruelty to Animals got $100,000, while Mount Sinai Medical Center received $10 million for a Helmsley Inflammatory Bowel Disease Center.
The Helmsley trustees are doing what so many other foundation trustees have done, which is to throw donor intent out the window and use the money as they please. Donors who don't want to have their intentions similarly distorted have a couple of options: Be very specific about how you want your money spent after you die, or give the money away while you're still alive.
from http://www.worth.com/articles/Z9611C01.html, revealing how the fuel supply of the foundation/establishment engine is guaranteed:
[...]
The tax code, it's true, provides some comfortable enhancements of the Schedule A deduction for contributions. Deferred giving, for instance, allows you to pledge assets to the old school, the assets to be transferred only after your death, while you enjoy both the onetime tax deduction and the income from the assets during your lifetime. Other options, available even to the moderately well off, may save actual dollars in return for painless gifts. You may be able to give development rights on your property to the local land trust. The trust will preserve the land, and you'll get a tax break.
As is the case everywhere in the tax code, with more money to work with, more interesting deductions present themselves. One afternoon in his Manhattan office, James E. Hughes Jr., a lawyer specializing in the tax implications of charitable giving, took me through some of the possibilities. "There are two basic instruments," he said, "the charitable remainder trust and the charitable lead trust."
He explained that the charitable remainder trust is essentially a glorified version of the deferred gift to Yale. "A lot of people who sell their businesses do this. You avoid paying the capital-gains tax on the stock sale, and you use the charitable deduction to offset income. Then ultimately the principal can pass to a family philanthropy."
I asked Hughes if there is a way a family can establish a "family philanthropy" and end up with more money in their pockets than they would have had otherwise. "Actually there is a way," he said. "Let's say a client has an estate of $4 million to $5 million, and a million of that is in a tax-deferred retirement plan. That million will be taxed at the rate of 88 to 92 percent. If you use it to establish a family philanthropy, the rate drops to 15 percent. Now the law allows that family members may receive modest compensation for their work in a family foundation. In many cases the 'modest compensation' is larger than what they'd receive as inheritance after taxes."
The charitable lead trust accomplishes something similar in the avoidance of estate taxes, and it can work on a far larger scale. In this case, the principal remains in the hands of the benefactor, or the heirs, while the income goes to charity for a specified length of time, ideally long enough to offset the taxes that would otherwise be due.
[...]
from Philanthropy Magazine, Winter 1997, by Alan Reynolds, Director of Economic Research at the Hudson Institute:
Death, Taxes And Giving: The Conventional Wisdom and Why It is Wrong
Announcing its four-hundred wealthiest Americans for 1996, Forbes was unrestrained in its excitement about the transformation that has occurred in the nature of wealth creation in America. "Forget America's 50 families. Forget old money. Forget silver spoons. Great fortunes are being created almost monthly in the U.S. today by young entrepreneurs who hadn't a dime when we created this list 14 years ago."
Indeed, new money is displacing -- and out-performing -- the old at an unprecedented rate in American business today. More than 60 percent of the Forbes 400 turned over between 1982 and 1990 -- and since then, almost half of these elite rankings have changed hands yet again. In 1996, nearly one in nine were newcomers.
But if wealth creation has changed, what comes next -- call it wealth disposal -- has remained remarkably static. The American families that created some of the nation's largest fortunes also created the nation's largest foundations. The names are familiar: Ford, Rockefeller, Carnegie, Mellon, Kellogg, Lilly and Duke. They started out big, have endured, and are growing still more wealthy. Measured in 1992 dollars, foundation assets more than doubled between 1983 and 1994, rising from $92.7 billion to $195.8 billion. This huge stockpile of tax-exempt wealth, moreover, is highly concentrated among a very small number of giant foundations. More than 50 percent of foundation assets, says the IRS, are held by the top one-half of one percent of foundations.
As the Forbes 400 reminds us, new fortunes are being created with astonishing frequency in America these days. In addition, the tremendous wealth of the post-World War II boom is preparing to be passed to the next generation. How -- and indeed, if -- this wealth enters the philanthropic realm depends on many things, not the least of which is the tax code. As the endurance of the institutions of the "old" money stand in impressive testimony, the economic incentives and disincentives created by the current tax system artificially encourage foundation creation, growth and perpetuation. The conventional wisdom has long held that anything that is injurious to this is injurious to charity itself. But as the current debate over the wisdom of foundation perpetuity shows, the conventional wisdom is increasingly being challenged. For those who are concerned about the growing clout of foundations, the answers may lie, not with the institutional structure of foundations, but with the factors that influence individual giving.
NO PAIN, LOTS OF GAIN
As any unsuccessful dieter knows, when you take in more than you burn off, the results end up on your thighs. Foundations are no exception. Figure 1 shows that foundation assets are expected to double in the next decade. Under current policies -- including estate, income and capital gains taxes and the rules governing foundations -- foundation growth is actually outstripping the growth of the economy as a whole. From just over 1.5 percent of GDP in 1978, foundation assets are projected to reach over 3.5 percent of GDP by 2006.
The reason for this growth is straightforward. The real growth of foundation assets since 1978 has been quite impressive -- 10.5 percent per year, adjusted for inflation. The rate of foundation giving, however, has been a good deal less spectacular. Since the minimum payout of five percent of invested assets was established in 1969, the ratio of foundation grants to assets has stuck stubbornly close to the grantmaking floor. In other words, foundations -- particularly the largest ones -- are more likely than not to treat the five percent minimum payout as the maximum.
One result of this stinginess is that, except during recessions, about 70 percent of new foundation grants (71.7 percent in 1994) are typically matched by new contributions. This means that most of the income from tax-exempt interest and dividends on foundation assets, or from tax-exempt capital gains from the sale of stocks, bonds and real property is pure fat -- net additions to foundation wealth.
THE COMING "BOOMER BOOM"
In addition to accumulating ever larger asset bases, foundations will account for a rising share of philanthropic giving if current trends continue. The amount Americans give away has long remained very close to 1.9 percent of GDP (though slightly higher since 1986 than before). Foundation assets, as we have seen, are rising much faster than GDP. These two facts make it a virtual certainty that foundation grants will continue to account for a rising share of total giving. Figure 2 shows foundation grants rising from 7.3 percent of all giving in 1995 to 9.2 percent by 2006.
There is at least one good reason, however, to suspect that projected increases in the size of foundations may be too modest. As the post-World War II generation -- the parents of the Baby Boomers -- passes from the scene, it will transfer a very large stock of wealth to some combination of heirs, charities and foundations over the next 10-15 years. Cornell University Professor Robert Avery forecasts the bequests of Baby Boomers themselves will approach $3 trillion by 2010, and $10 trillion by 2040. To whom this wealth is transferred, and how, will depend to a significant extent on what changes are made in the federal tax code regarding taxes on income, capital gains, gifts and estates. If tax policy remains largely unchanged, that portion of the "boomer boom" that ends up on the balance sheets of foundations could be even greater -- probably much greater -- than what I have projected above.
FUNDING THE LEFT
The huge -- and growing -- stockpiles of wealth held by the country's largest foundations represent enormous influence over which public policy, social program or artistic endeavor will succeed or fail. The greater the foundation asset base, of course, the greater this influence. Critics of this expanding influence are faced with an apparent dilemma: In the short run at least, legislative or regulatory efforts to encourage or compel foundations to use more of their wealth to make grants will only increase their influence.
And who are the likely recipients of increased foundation grantmaking? The broad pattern of foundation giving has traditionally been different from that of individual donors. Most significantly, foundations devote very little to religion -- 1.7 percent compared with 45.3 percent for all sources. Interestingly, foundations devote a significantly smaller portion of their giving to human services, accounting for only about 6.4 percent of the funding for human service groups as compared with the 7.3 percent share of personal and corporate giving that goes to human services.
In fact, contrary to many of the claims made in the welfare debate, individuals rather than foundations contribute disproportionately to human services. While individuals account for just over 80 percent of all giving, they are the source of over 88 percent of gifts to human services -- and these figures don't include the significant human services provided by religious organizations, which receive virtually no support from foundations or corporations. Thus we arrive at a conclusion that may strike many as counter-intuitive, but which is nonetheless true: if foundation giving continues to account for a rising share of total giving, then even secular human services are likely to be relatively underfunded, as compared with, say, hospitals and universities.
Another important difference is that a much larger share of foundation giving is designed to influence public policy. This includes, according to Forbes, about $100 million every year given to state and local governments. A significant number of foundation grants, moreover, make their way into government indirectly, through state universities and quasi-governmental agencies. Three campuses of the University of California and the state of Georgia, for example, were among the recipients of the 50 largest grants made in 1993.
FACING THE TAX-EXEMPT MUSIC
Whatever the ultimate size and focus of foundation giving, all agree that foundations exist to serve the public weal. In a forthcoming study for the Independent Institute, Florida State University economist Randall Holcombe points out that the taxpaying public must make up for the diminution of public revenues created by foundations' tax-exempt status by paying higher taxes. For this reason, the public "has a right to ask in exchange that foundations have a public purpose and that their activities in the public interest more than compensate the public for the loss of revenues." But defining the "public interest" and thereby making philanthropic foundations more accountable is easier to say -- and it is being said with increasing frequency -- than to do.
If accountability is interpreted to mean making foundations accountable to political authorities, the cure could prove to be worse than the disease. Ceding discretionary authority to a political entity over which grants are acceptable and which are not would invite the most pernicious forms of abuse. The danger here is similar to the controversy surrounding selective Federal Election Commission (FEC) threats of removing 501(c)(3) status from certain organizations -- the Christian Coalition, for example -- said to be too involved in political activities. Even now, the IRS has the power to ban the funding of policy research which attempts to influence legislation, which could include just about anything. The IRS has usually been reasonable about this -- so far.
Lacking this discretionary authority, government has attempted to enforce a kind of limited accountability on foundations through regulation. Congress has placed restrictions on how foundation assets may be managed, ostensibly to avoid "risky" investments. In addition, myriad regulations cover grantmaking.
These regulations, however, have had the unintended consequence of lessening the public accountability of foundations. The massive paperwork burden associated with any grants made directly to needy individuals or organizations which are not 501(c)(3)s, for example, has had the effect of limiting the potential for innovative alternatives in charitable organizations. Instead, foundation grants are merely channeled to existing charitable organizations, as defined by the IRS. And potential donors considering establishing new foundations are severely circumscribed, as a result of IRS regulations, in their ability to try anything new. As a practical matter, the best they can do is fund programs and projects that others have designed.
A more defensible aspect of the 1969 Act was the establishment of a minimum payout, which was generally reduced to five percent of invested assets in 1976. But here again, the purpose of this regulation -- to prevent foundations from accumulating ever-increasing stockpiles of assets without spending their income for charitable purposes -- has not been realized. As we have seen, the minimum payout requirement has certainly not prevented the rapid growth of foundation assets, particularly when even a conservative portfolio of stocks has yielded a return of 14 percent for many years. The current tendency for large foundations to minimize current grants in order to build larger and larger tax-exempt financial empires seems to contradict the whole purpose of foundations, which is to give money to worthy causes.
SHARK-INFESTED TELEOLOGICAL WATERS
One way to wring greater accountability from foundations -- and recapture "donor intent" and institutional purpose -- would be to remove the perpetual tax exemption. The question of whether or not "perpetuity" is a positive good for philanthropy has been dealt with elsewhere (see Should Foundations Exist in Perpetuity? by Heather R. Higgins and Michael S. Joyce, published by The Philanthropy Roundtable), and I won't duplicate this interesting (and necessary) debate here.
But the controversy over perpetuity offers important clues as to how to manage the trend toward foundation control of a rising share of charitable giving. The idea of placing a limit on the tax-exempt lifetime of foundations forces the question of whether these institutions are, over time, inherently "good" or "bad." If they are generally good, they should be preserved; if they are generally not a force for good, however, better to limit the damage they can do by limiting their existence.
But these are shark-infested teleological waters, with little prospect of establishing a workable consensus on one side or the other. There is, however, a more promising reform begging the attention of those concerned about the growing clout of foundations. They should consider focusing, not on the giving patterns of institutions as the perpetuity debate does, but on the giving patterns of individuals. It is with individual wealth, after all, that philanthropy begins. Foundations, considered in this context, are merely middlemen, intermediaries for good or ill between individuals and charities. It is worth taking a look, then, at the many ways in which our tax system artificially encourages individual giving through the relatively cumbersome, delayed and indirect device of foundations.
LIFE IS SHORT, GIVE HARD
Individual giving is, to a great extent, merely a question of timing. There is, after all, a trade-off between giving in life and giving in death -- if you give away more during the former, you have less to leave to charities (and heirs) after the latter. The timing of giving, in turn, bears on the form of giving. Gifts in life are often smaller, direct grants of cash or assets to charities, whereas contributions in death are typically delayed gifts, gradually channeled through foundations. Taxes -- particularly the gift, estate and capital gains taxes -- play a critical role in both the timing and the form of individual charitable giving.
Groups of nonprofits and grantmakers have long considered taxes within a "static" economic analysis that fails to look beyond their immediate impact. This analysis has led to the belief that high taxes -- particularly the estate and gift taxes -- increase philanthropic giving by encouraging both charitable bequests and the creation of foundations. A higher estate tax, it is reasoned, decreases the cost of delaying giving until death and thus increases the incentive to create charitable bequests. A lower estate tax, of course, is predicted to provide the opposite incentives. The end result, Independent Sector assures us, is not different patterns of giving but less giving. A "tax policy that reduces taxation at death," they opine, "could lead to a further decline in the amount left in charitable bequests."
This unshakable belief that higher taxes are good for philanthropy has led groups like Independent Sector to lobby on behalf of keeping estate taxes at current high rates. But there is considerable evidence to suggest that this is not the healthiest course for charitable giving. This analysis wrongly assumes that the size of estates is unaffected by the tax on estates. A higher estate tax may increase bequests in the short run, but it does so at the expense of higher giving during life. And this change in the timing of giving, as we have seen, affects the form of giving. In other words, a higher estate tax encourages placing appreciated assets in foundations after death rather than making direct gifts of either assets or cash during life. There are no logical or empirical bases for the presumption, however, that these changes have an effect on the total amount given.
THE PARADOX OF THE 1980s
For those who cling to the belief that, when it comes to giving, higher taxes are better, the 1980s present a troubling paradox. Despite predictions that lower marginal rates on income would decrease generosity, real annual giving by individuals rose by 27.8 percent as taxes fell between 1982-89 -- a rate far above the postwar trend.
But income taxes were not the only thing that fell during the 1980s. The estate tax also fell. Between 1981 and 1987, the highest tax rate on estates was gradually reduced from 70 percent to 50 percent. More important, the amount exempted from any estate tax at all was raised from $60,000 in 1976 to $600,000 by 1987. Here, again, the real-world results of lower taxes confounded expectations and giving increased. Measured in 1994 dollars, the level of annual bequests averaged $8.6 billion from 1986 to 1990, up from $6.1 billion from 1976 to 1980. And the growth of bequests (rather than the level) was most rapid from 1980 to 1987, while estate tax rates were coming down.
A THEORY OF RELATIVITY
It is interesting to note, however, how the tax changes of the 1980s affected both the timing and the form of charitable giving in a way that continued to encourage foundation growth. Although both the income and the estate taxes fell during this decade, income taxes fell even further. At the end of the decade, the highest income tax rate was down to 28 percent, while the highest estate tax was still 50 percent. The relatively higher estate tax lowered the relative price of gifts made at death rather than during life. Bequests grew, and the creation of foundations rose accordingly. More independent, family-owned foundations were created in this decade than at any time before or since. There were 2,618 foundations with assets above $1 million created in the 1980s, compared with just 811 similar foundations created in the previous decade.
Moreover, the 1986 tax bill created additional incentives for foundation creation by increasing the capital gains tax from 20 percent to 28-33 percent, and by instituting an alternative minimum tax for wealthy filers who write off too high a percentage of their income. After the 1986 bill, taxpayers could easily avoid both these taxes by neither selling nor giving away property that had risen in value. This provided a strong incentive to postpone contributions of appreciated property until death, when any amount above the $600,000 tax exemption could be used to set up a foundation, thus avoiding the estate tax. (While gifts of appreciated property were subject to the alternative minimum tax after 1986, this was not true of appreciated property used to establish or enlarge a foundation.) Viewed with these incentives in mind, it is even more remarkable that inter vivos giving rose so impressively in 1988-89. Such giving, no doubt, would have risen even more if gifts of appreciated property had not been subject to the minimum tax.
INCENTIVES MATTER
But if it is true, as was posited earlier, that giving is basically a constant fraction of GDP, what difference can tax changes make on the overall level of charitable giving? The answer is simple: A lot, because marginal tax rates influence the growth of real output and real income.
It is a basically accepted fact that giving is a fixed percentage of national income. Indepen-dent Sector estimated giving at 2.28 percent of national income in 1973, 2.27 percent in 1989 and 2.29 percent in 1993. The critical variant for philanthropy, then, is national income. Anything that makes that grow faster, makes giving grow faster.
However, the outlook for future giving may actually be more optimistic than a fixed percentage of GDP would suggest. To see this, we have to compare individual giving with family income. Figure 3 shows that, even as total giving has remained a basically constant fraction of GDP, individual giving has been rising steadily relative to median family income. One likely explanation for this is the rising percentage of American families earning relatively high incomes. This growth was particularly impressive during the 1980s. The percentage of families earning more than $75,000 (measured in 1993 dollars) increased from 7.5 in 1970, to 10.9 in 1980, and to 15.9 in 1989, dropping slightly to 15.5 in 1993.
Although it may not be polite to say so, it turns out that the surest way to increase the amount of charitable giving is to increase the number of families earning high incomes. Demographics will accomplish part of this. A rapidly rising proportion of the population will become middle-aged over the coming decade. This is the age when earnings -- and, consequently, giving -- are usually at a lifetime peak. One 1993 estimate shows average cash contributions at $1,241 for the 45-54 age group, compared with $520 for those aged 25-34.
But what demographics will not accomplish must be achieved through public policy. In addition to altering the timing and form of charitable contributions, estate taxes affect work and saving habits in ways that have important consequences for income and, as a consequence, for philanthropy. The estate tax discourages the accumulation of assets beyond the exempt amount. This makes capital more scarce than otherwise, slowing the growth of productivity and real wages. Reducing or eliminating the death tax, accordingly, would provide greater incentives to accumulate larger estates. The result would be a larger national capital stock, and a larger future flow of capital income to be used for all purposes -- including charities.
CONCLUSION
The assets of grantmaking foundations have been expanding by more than ten percent a year in real terms. This is partly due to the creation of new foundations, but more importantly to an apparent tendency among the largest foundations to treat asset accumulation as their primary objective. If past trends continue, a rising share of charitable giving will become institutionalized, channeled through increasingly professionalized foundation trustees rather then given directly to the charities that individual donors choose.
This trend has important implications for how -- and indeed if -- the coming intergenerational transfer of wealth finds its way into the philanthropic sector. But again, rather than spend our time trying to ferret out the flaws in foundations -- be they institutional, human, or both -- it may be time to shift our focus back to philanthropy's source: individual giving.
As our experience with the tax cuts of the 1980s demonstrates, higher taxes do not encourage greater individual giving -- quite the opposite, in fact. But what higher taxes do help achieve -- particularly higher estate, gift and capital gains taxes -- is more individual giving through foundations. Reduction of these taxes -- at least to a level no higher than the highest personal and corporate income tax rates -- could be expected to slow the creation of foundations, but also to increase the relative share of giving while donors are still alive.
The dynamism of the American marketplace so apparent in the Forbes 400 will not be replicated in the philanthropic sector without changes in the economic incentives and disincentives created by the tax code. There is no better time than now, as philanthropy stands on the threshold of an era of awesome growth, to consider these changes.
from the Jewish Telegraphic Association, 2003-Oct-16, by Edwin Black:
Anti-Israel activists at Durban were funded by Ford Foundation
WASHINGTON, Oct. 16 (JTA) — In August 2001, thousands of human rights activists from around the globe gathered in Durban, South Africa, for a United Nations conference that participants hoped would address racial injustice plaguing humanity, from Rwanda to Sri Lanka to the United States.
But after more than a year of preparatory conferences held in Iran, Switzerland, Chile, France and Senegal, it became clear to Israeli officials and Jewish organizational leaders that Palestinian non-governmental organizations, or NGOs, and their allies, had manipulated the agenda of the U.N. World Conference Against Racism into a focused indictment of Israel as an illegitimate apartheid, colonial and genocidal regime.
Moreover, the proposed language of conference resolutions would deny or dilute the Holocaust and espouse an openly anti-Semitic stance.
Many Western leaders, including U.S. Secretary of State Colin Powell, declined to attend what U.S. Rep. Tom Lantos (D-Calif.), a member of the American delegation to the conference, termed “a transparent attempt to de-legitimize the moral argument for Israel’s existence.”
As expected, anti-Israel agitation, anti-Zionist propaganda and blatant anti-Semitism permeated the eight-day Durban affair. Posters displaying Nazi icons and Jewish caricatures, anti-Israel protest marches, organized jeering, inciting leaflets and anti-Jewish cartoons were everywhere, as was orchestrated anti-American agitation.
A virulent resolution drafted by non-governmental organizations at the Durban conference declared Israel a “racist apartheid state” guilty of “genocide and ethnic cleansing.” The spectacle was so noxious that Powell withdrew the American delegation.
Who financed a number of the groups at Durban that printed and distributed these materials, purchased advertising and conducted workshops?
“No one knew where the money was coming from to fund all these NGOs,” remembers Judith Palkovitz of Pittsburgh, Hadassah general secretary and a delegate to Durban. “I assumed it was a foreign group — say Saudi Arabia.”
When asked, one Jewish communal leader after another, and several State Department officials, also guessed: Saudi Arabia.
They were wrong.
The Ford Foundation, one of America’s largest philanthropic institutions — and arguably the most prestigious — was a multimillion-dollar funder of many human rights NGOs attending Durban.
That is the conclusion of a two-month JTA investigation, involving interviews with dozens of individuals in seven countries, as well as a review of more than 9,000 pages of government and organizational documents.
Ford — which was endowed with funds donated by Henry and Edsel Ford but no longer maintains any ties to the Ford Motor Company — has long been known as a funder of Palestinian causes.
But most observers did not suspect the extent of the foundation’s involvement in funding of groups that engage in anti-Zionist, anti-Semitic and pro-Palestinian activities both inside and outside the Middle East.
With hundred of millions of dollars being pumped into Mideast NGOs by numerous private foundations here and in Europe, government and communal officials are raising significant questions about transparency, how the money in Palestinian areas is being used and whether funders such as the Ford Foundation are exercising proper controls.
Increasingly, federal agencies concerned with fighting terrorism are asking: When money goes in one NGO’s pocket, where does it go and whom does it benefit?
The Jewish representatives at Durban “didn’t understand the efforts, the financing and the organization that went into hijacking the conference,” recalls Reva Price, Washington representative of the Jewish Council for Public Affairs and a Durban delegate.
“We knew we were walking into problems because of what happened in the early meeting in Teheran,” Price said. “But we didn’t understand how organized the opposition and what a well-financed campaign it was.”
Many Jewish organizational officials who participated in the long process complained that a key organization responsible for the methodical hijacking of the conference was the Palestinian Committee for the Protection of Human Rights and the Environment, which operates under the acronym LAW.
LAW officials took leadership positions on the Durban conference steering committees, conducted workshops and even sponsored a pre-conference mission to the West Bank and Gaza Strip for South African delegates, to convince them that Israel was an apartheid state.
“LAW was instrumental in creating the anti-Zionist and anti-Semitic focus at Durban,” confirmed Andrew Srulevitch, executive director of U.N. Watch, a Geneva-based group that monitors the world organization.
But it was not just LAW. The Palestinian NGO Network, or PNGO, an umbrella organization of some 90 Palestinian NGOs, as well as many of its constituent groups, diligently became embedded in the conference bureaucracy that created the hostile environment at Durban.
PNGO led the move to craft an NGO resolution that would “call upon the international community to impose a policy of complete and total isolation of Israel as an apartheid state,” including “the imposition of mandatory and comprehensive sanctions and embargoes, [and] the full cessation of all links (diplomatic, economic, social, aid, military cooperation and training) between all states and Israel.”
Durban was not a one-time investment for the Ford Foundation — a major funder of LAW and PNGO.
Indeed, through its Cairo office, Ford has extended more than $35 million in grants to some 272 Arab and Palestinian organizations during the two-year 2000-2001 period alone — the most recent years for which data is available — plus 62 grants to individuals that total more than $1.4 million, according to Ford’s Web site, as accessed in mid-October 2003.
Since the 1950s, the foundation’s Beirut and Cairo offices have awarded more than $193 million to more than 350 Middle East organizations, almost entirely Arab, Islamic or Palestinian.
Ford’s Web site, at www.fordfound.org, offers detailed information about its Middle East grants. On the site as of mid-October, “Palestine” is frequently mentioned on its Mideast pages, but Israel’s name is absent. Moreover, the Web site’s shaded map of the geographical region from Egypt to Lebanon and Jordan blanks out over Israel’s territory, even though Ford does make grants to both Jewish and Arab organizations in Jerusalem.
Initially, despite more than two dozen requests by phone and in writing over a period of several weeks, the Ford Foundation’s communications vice president Alex Wilde, deputy media director Thea Lurie and media associate Joe Voeller refused to answer any questions or clarify any issues regarding the foundation’s funding of groups engaged in anti-Israeli agitation and anti-Semitic or anti-Zionist activity.
However, after this investigation was completed, Wilde did send a six-page written statement, declaring, “We have seen no indication that our grantees in Durban or elsewhere engaged in anti-Semitic speech or activities. The Foundation does not support hate speech of any kind.”
Wilde added: “Some of our human rights and development grantees have certainly been critical of policies and practices of the Israeli government insofar as these discriminate against Palestinians or otherwise violate their rights, according to internationally agreed human rights standards and international law.”
“We do not believe that this can be described as ‘agitation,’ ” the statement asserted.
Both LAW and PNGO confirmed that their Ford funds were pivotal.
“Ford has made it possible for us to do much of our work,” a senior LAW official in Jerusalem said in an interview.
Since 1997, LAW has been the recipient of three Ford grants, totaling $1.1 million, to engage in “advocacy” and participate at international conferences, according to LAW officials. A Ford Foundation official’s check of the charity’s confidential computer databases confirmed the information.
Reached in Ramallah on her cell phone, PNGO program coordinator Renad Qubaj recalled her coordination of activities in Durban.
“In Durban, for sure we published posters saying, ‘End the occupation,’ things like that,” Qubaj said, “and we published a study, had a press conference, organized our partners and protest marches.”
Asked about finances, she added, “Unfortunately we are very dependent on the international funds. Not just PNGO but all the Palestinian NGOs — 90 of them in our group. We get very little money from the Arabs — just needy family cases. Ford is our biggest funder.”
Allam Jarrar, a member of the 11-person PNGO steering committee network, and one who helped organize the events at Durban, explained that Ford money allows PNGO to have a global scope.
“We do lots of international advocacy conferences and regional forums,” Jarrar explained in an interview, “and we always try to represent our political view to Europe. We attended some women’s conferences [in Europe], plus Durban.”
“Our biggest donations come, of course, from Ford,” Jarrar added. “We have been in partnership with Ford for a long time — a real partnership, a real understanding of our needs.
“Of course, when we go to an international conference, we try to get extra funds from one of their special budgets,” Jarrar said. “Or sometimes the conferences’ organizers, if they have their own Ford Foundation funding, they send us the finances to attend.”
From 1999 to 2002, PNGO received a series of Ford grants totaling $1.4 million, plus a $270,000 supplement, according to an examination of the Ford Foundation’s IRS Form 990 filings, Web site databases and annual reports. PNGO continues to receive at least $350,000 annually from Ford, according to the data.
LAW and PNGO were hardly the only Ford-backed groups at Durban. The conference was a major enterprise for the Ford Foundation.
In a Ford Web site commentary written prior to Durban, Bradford Smith, Ford’s vice president for peace and social justice, wrote that the conference’s issues were “at the core of the Ford Foundation’s mission since its inception.”
More than a dozen activist organizations — from Brazil to Sri Lanka — received well over $1 million in Ford grants specifically earmarked for the production of advertising materials, public meetings and advocacy at the Durban conference.
“Does all this mobilizing, networking and drafting of statements have real impact on people’s lives?” Smith asked in the statement. His answer: Yes, “because for years to come they [Ford grantees] and the foundation will work together to implement the [Durban] Conference Plan of Action.”
Since the Durban conference, LAW has continued its public crusade against Israel and Zionism, and PNGO, as well as many of its 90 members, continue organizing efforts to try Israeli officials as war criminals, boycott the Jewish state and label Israel a racist, illegitimate state that must be stripped of its Jewish identity.
While a number of the Ford-financed organizations at Durban, such as LAW and PNGO, engaged in anti-Israel and anti-Zionist agitation, certainly many did not.
Either way, Ford Foundation money, as intended, was a prime mover in the production of the advocacy pamphlets, posters, workshops and other materials at the conference that shaped the overall atmosphere.
“I saw the Ford representative at Durban,” remembers Palkovitz, the Hadassah delegate, who spotted him in connection with African American reparations issues. “There was no way to miss the anti-Semitism. The Ford guy would have to be blind. It was the most anti-Semitic and anti-Zionist stuff you ever saw.
“I told the Ford representative I thought it was a mistake because the whole meeting was being hijacked,” she related. “He disagreed. He said he believed what the conference was doing was correct.”
“We are struck,” said David Harris, executive director of the American Jewish Committee, “by the scores of Palestinian NGOs funded by Ford, a number of which have deeply disturbing and troubling records on Israel and Jews.”
from the Jewish Telegraphic Association, 2003-Oct-16, by Edwin Black:
How aware is Ford Foundation of way its funds are being used?
WASHINGTON, Oct. 16 (JTA) —The Ford Foundation disburses approximately $500 million annually through 13 offices worldwide, to grantees of all descriptions, in dozens of countries.
Each year, the foundation, with an estimated $10 billion in assets, makes some 2,500 awards spanning the realms of art, education, development and social justice.
In the process, Ford practices globalization just as a multinational commercial corporation would, deftly weaving monies in and out of its offices and recipients, in a complex web of funding.
But the Ford Foundation’s product is not commercial — it is philanthropic. A large portion of that annual philanthropic expenditure is devoted to what it terms “human rights and social justice” — that is, not to traditional relief and aid programs, but to advocacy, activism and agitation.
Ford carefully monitors all programs and materials enabled by its funds, maintains Alex Wilde, the foundation’s vice president for communications.
Various grantees also confirmed that Ford requires detailed submissions of printed items and Web site development plans, sometimes two or three times per year. Hence foundation officials remain keenly aware of the fruits of their philanthropy.
There is no easy way to identify how much money the scores of anti-Israel and Palestinian advocacy groups and non-governmental organizations, or NGOs, actually receive from Ford. This is because significant funds or program benefits are also channeled through other not-for-profit organizations and even overseas government agencies.
For example, the 2002 annual report of the Washington-based Advocacy Institute lists the Palestinian NGO Network, or PNGO, as a “partner.”
In February 2003, the Advocacy Institute brought a group of PNGO fellows to Washington in a Ford-funded program “to strengthen PNGO’s advocacy capacity.” The program involved “message development, coalition building, media,” as well as “access and persuasion of decision makers,” according to a statement that appeared in mid-August on the institute’s main Web page.
Ford records indicate that the foundation in 2000 granted the Advocacy Institute $180,000 “to strengthen the role of a network of Palestinian NGOs.” The money for PNGO is tallied among the foundation’s U.S. grants, not those of the Cairo office.
Just a year later, in August 2001, PNGO was one of the main groups pushing for anti-Israel resolutions at the U.N. World Conference Against Racism in Durban, South Africa.
To be sure, Ford has also granted several million dollars to American Jewish and Israeli peace groups. For example, Ford in the past has granted $500,000 to the American Reform Judaism movement’s Mideast peace program, known as “Seeking Peace, Pursuing Justice,” which seeks to mobilize North American Jewry for social justice in Israel.
Ford also funds several Israeli-based dissident and human rights groups that campaign for Palestinian justice. The list includes such Israeli Palestinian rights advocates as B’Tselem, Rabbis for Human Rights and Hamoked.
B’Tselem currently receives $250,000 for what Ford databases and reports describe as “monitoring human rights in the West Bank and Gaza Strip, documenting violations, and advocating for policy changes.”
Rabbis for Human Rights has been granted more than $250,000 for what Ford databases and reports describe as “rabbinically-based educational and organizing activities promoting human rights policies by Israel in the West Bank and the Gaza Strip.”
Rabbi Arik Ascherman, the group’s executive director, said the Ford money has been used to develop a Web site, place newspaper advertising and bring other rabbis to Israel to learn about human rights.
Last year, Hamoked was granted $300,000 for what Ford’s databases and reports describe, in one summary, as “advocacy and legal action to promote human rights of Palestinians in the Occupied Territories facing human rights violations by Israeli authorities.”
B’Tselem and Rabbis for Human Rights, while staunchly advocating for Palestinian human rights, have also vocally and publicly condemned the campaign of Palestinian suicide bombings and other terrorism aimed at Israeli civilians.
Ascherman spoke favorably of Ford, commenting, “Our experience with Ford has been very positive.”
He also said that, while “it would be wrong for a funder organization to have a heavy-handed thumb editing,” in general, grant makers should “ensure the funds are spent for the goals they support, and I would like to think the goals of the Ford Foundation do not include anti-Semitism.”
“We at Rabbis for Human Rights obviously abhor anti-Zionist organizations and anti-Semitism,” said Rabbi Brian Walt of the group’s North American branch.
The Ford Foundation also funds the Washington-based New Israel Fund for its activities supporting and promoting social change in Israel. Since 1988, the Ford Foundation has provided more than $5 million to the New Israel Fund, a coalition of Israelis, North Americans and Europeans seeking to promote human rights and justice issues in Israel.
Ford has just announced it would increase its funding to “peace and social justice groups” in Israel through the New Israel Fund with a $20 million five-year grant to be administered by a joint Ford-NIF enterprise.
Aaron Back, Ford’s former program officer for Israel, will oversee the new funding.
The money is designed to “increase our funding in Israel and help build the capacity of civic organizations vital to strengthening its democracy,” according to Ford’s president, Susan Berresford.
The move will shift future grant-making from Ford offices in New York to the New Israel Fund. It is not yet clear which groups will receive money from the donor-advised fund.
The overwhelming majority of Ford’s monies for the Middle East are granted to pro-Palestinian and Islamic rights groups.
The list extends for pages. For example, last year, the Al Mezan Center for Human Rights in Gaza received $100,000 for what Ford databases and reports describe as “community-based advocacy work on economic, social and cultural rights in Gaza.”
The Al Mezan Center works closely with the International Solidarity Movement, which stages civil disobedience actions to obstruct Israeli security forces operating in the territories. The center also operates a Web site, at www.mezan.org, that seeks to document alleged Israeli atrocities and violations of international law, and that also denounces Israel’s war against the Islamic fundamentalist group Hamas.
A recent typical Al Mezan Center news release began, “The Israeli Occupation Forces (IOF) have blatantly escalated their aggression against Palestinian civilians in the OPT during the last week.”
Al Mezan is one of the many Palestinian NGOs that refer to the Israeli Defense Forces as Israeli Occupation Forces. OPT is its abbreviation for “occupied Palestinian territories.”
Augmenting its Ford funding, Al Mezan also receives funding from the Swiss Agency for Development and Cooperation, the International Commission of Jurists in Sweden, the U.N. High Commissioner for Human Rights, and several other U.N. and European Community sources.
A second Palestinian agency, operating under the name Health, Development, Information and Policy Institute, received one $60,000 Ford grant under “Media Arts and Culture,” plus a second award for $75,000 under “Sexuality and Reproductive Health.” The institute operates an incitement Web site, www.palestinemonitor.org, dedicated to mobilizing world action against Israel and Zionism. Its main page offers recommended activism.
For example, a page on the site, as of mid-August, sub-headlined “How can you take action for the Palestinian cause?” offered two Palestinian links, one of which is: “Boycott Israeli Goods.” Clicking on that link leads to another site, www.boycottisrael.org, which includes a list of American companies to be boycotted for doing business in Israel, including Johnson & Johnson, Disney and Starbucks.
In mid-August, Palestine Monitor’s own “Activism” page offered enthusiastic coverage of a September 2002 attempt by pro-Palestinian protesters to enter Caterpillar’s Washington premises for the purpose of serving a so-called citizens-arrest warrant for “war crimes” related to selling bulldozers to Israel.
A third entity, the Jerusalem Media and Communication Centre, recently received three grants totaling $365,000 to create what Ford databases and reports describe as “media services for the foreign press and a weekly electronic magazine,” as well as “enhancement of media activities related to the crisis situation.”
The center publishes “The Palestine Report,” which can be found at www.palestinereport.org. This Web site employs dramatic imagery and testimony to portray Israel as an apartheid state guilty of war crimes, violations of international law and repeated massacres.
As of early October, one of the center’s main Web site features was a clickable section entitled “From Revolution to Revolution,” which “focuses on internal Palestinian politics, political strengths and cracks in the armor of unity.”
A prominent “Resources” list links to the Web sites of six Palestinian factions. Several of them are listed by the State Department as terrorist groups, including the People’s Front for the Liberation of Palestine, Islamic Jihad and Hamas, the Islamic Resistance Movement.
When the Jerusalem Media and Communications Centre was asked whether other organizations could be listed as well, an official explained, “We only link to the biggest and best organizations.”
A State Department spokesman for the Near East Affairs bureau who viewed “The Palestine Report” and its link pages to terrorist sites declared, “I am uncomfortable with the funding of this site and especially these links — very uncomfortable.”
Yehudit Barsky, director of the American Jewish Committee’s division on Middle East and international terrorism, added, “I think this demonstrates that we in the United States have not paid attention — foundations can be used in a way no one can imagine. Here we see a Web site promoting terrorist organizations. The Ford Foundation just did not care.”
During this investigation, Wilde, the Ford Foundation communications vice president, refused to answer any questions regarding PNGO, the Policy Institute, the Jerusalem Media and Communications Centre or any other aspect of the foundation’s involvement with Palestinian NGOs.
Nor would Thea Lurie, the foundation’s deputy media director, or media associate Joe Voeller.
But in a six-page written response to questions that the foundation released only after this investigation was completed, Wilde said: “We are a grant making organization. We support grantees for agreed-upon activities and do not dictate what they should say.”
The statement also said: “Our human rights work reflects a commitment to principles that go beyond partisanship and politics, to basic rights and protections that human beings possess by virtue simply of being born.”
During a visit to Ford’s headquarters in New York, foundation officials brushed off questions about anti-Israel agitation. Quipped one senior Ford official: “Anti-Zionism is in the eye of the beholder.”
from the Jewish Telegraphic Association, 2003-Oct-16, by Edwin Black:
Transparency a concern as millions go to Mideast
WASHINGTON, Oct. 16 (JTA) — With hundreds of millions of dollars being pumped into Palestinian non-governmental organizations by numerous private foundations here and in Europe, government and Jewish communal officials are raising significant questions about transparency.
How is the money being used? And do major Palestinian activist funders such as the Ford Foundation — which granted $35 million to Arab and pro-Palestinian organizations in 2000 and 2001 alone — exercise proper controls?
What’s more, federal agencies concerned with fighting terrorism are increasingly asking: When money goes into one NGO’s pocket, where does it wind up?
Earlier this year, Washington’s fears over the loosely controlled millions streaming into Palestinian organizations from foundations turned into action. The State Department and the U.S. Agency for International Development began applying President Bush’s Executive Order 13224 to American organizations working in Palestinian areas.
Executive Order 13224 recognizes “the pervasiveness and expansiveness of the financial foundation of foreign terrorists” and regulates financial transactions that may end up in the hands of those that either commit or even “advocate” terrorism.
In May and June of this year, USAID informed American tax-exempt charities it funds that if they partnered with any Palestinian NGOs, those NGOs would be required to sign a Certification Regarding Terrorist Financing. The certification pledges that no funds have made or will make their way into organizations to “advocate or support terrorist activities.”
The Palestine NGO Network, or PNGO, an umbrella group of 90 Palestinian organizations that is funded in part by the Ford Foundation, was outraged.
On July 12, PNGO published a statement declaring: “Some donor agencies in the West Bank and Gaza Strip are setting unacceptable conditions for providing financial support to Palestinian NGOs. Such conditions include a pledge titled ‘Certification Regarding Terrorist Financing’… stipulating that Palestinian NGOs pledge not to ‘provide material support or resources to any individual or entity that advocates, plans, sponsors, engages in, or has engaged in terrorist activity…’ based on the U.S. Executive Order 13224.”
PNGO program coordinator Renad Qubaj complained in a telephone interview, “Who defines what is terror? All funds received by the NGOs should be unconditioned — no political conditions.”
Another Palestinian NGO railing against the terrorist certification was the Al Mezan Center for Human Rights, which has received three Ford Foundation grants totaling $350,000, according to foundation records.
In late August, Al Mezan’s director was quoted in the Arabic press as stating: “There is no legal basis for this document. This document should be boycotted, including the local authorities, political parties and universities. These institutions should reject this document completely, as it puts them in great danger. We should publicize a list of any institutions that agree to the conditions in the document.”
A spokesman for the State Department’s Near East Affairs bureau, Greg Sullivan, said he sharply disagreed with the Palestinian groups’ position.
“This should come as no surprise to the NGOs,” he said. “We want to see accountability and results. The money going into the Palestine area is a problem. That is why the Executive Order exists.”
He added: “We know terror acts when we see them, and we call them terrorism consistently.”
PNGO steering committee member Allam Jarrar said that although many of the umbrella group’s members depend upon USAID for funds, PNGO itself gets much of its money from Ford, and “Ford does not make us sign this agreement.”
He added, “For us, Ford is a very credible organization.”
Palestinian sources said they would pressure the American government to waive Executive Order 13224.
But Sullivan of the State Department insists the order is necessary and said, “I can’t see us budging on this requirement.”
Interestingly, at the same time the State Department started tightening control on NGO funding, it began shifting monies directly to the Palestinian Authority. In May, the U.S. government granted $50 million in aid to Palestinian areas, channeling the first $30 million through traditional Palestinian NGOs.
However, on July 12, the State Department suddenly announced the last $20 million of that original sum would be granted directly to the Palestinian Authority.
Asked if there was an “unspoken linkage” in shifting financial transactions away from NGOs to genuine government structures, a State Department spokesman asserted, “Not unspoken at all — but loudly spoken.”
“The bottom line,” the spokesman said, is that “we here in Washington — this department, as well as Treasury and the FBI — are deeply concerned about the fungibility of money to NGOs that can go in one door and out the back door, and then finance terrorist activities.”
“As for the latest $20 million,” the spokesman said, “it is strictly controlled.” He said the State Department is holding the Palestinian Authority and its finance minister “strictly accountable.”
The State Department spokesman added, “We want to be confident that our monies do not finance anti-Semitic Palestinian textbooks and other anti-Semitic materials.”
The spokesman indicated that the accounting firm of Deloitte & Touche had been engaged “to monitor those funds.”
Just as the State Department was tightening up policy on NGOs earlier this year, the IRS began demanding far greater accountability and transparency from American foundations engaged in Palestinian areas.
The Treasury Department recently published voluntary “Anti-Terrorist Financing Guidelines” to tighten the lax funding procedures employed by some foundations.
Among Treasury’s recommendations: Charities should “determine whether the foreign recipient organization is or has been implicated in any questionable activities.”
Adding to the pressure on foundations, the multinational Financial Action Task Force on Money Laundering has spotlighted “non-profit organizations [that] collect hundreds of billions of dollars annually from donors and distribute these monies” to a gamut of beneficiaries.
The Council of Foundations, a representative association of philanthropies, recoiled from the Treasury Department’s suggestion that it obtain Certification Regarding Terrorist Financing. In a June 20, 2003, letter to Treasury, Council President Dorothy Ridings, a former Ford trustee, challenged the guidelines as inappropriate and unnecessary.
A formal statement by Interaction, the largest American alliance of international humanitarian organizations, asked Treasury to withdraw the guidelines altogether. Interaction specified that West Bank grantees would regard certification requests as “unduly intrusive.”
Sources at Treasury indicate they want more than accountability; they want transparency — that is, the ability to review activity reports and monitoring, all of which are currently secret at organizations such as Ford.
“The days of opaque financial transactions are over,” a State Department official said when asked about the millions of foundation dollars pouring into Palestinian NGOs. “Yes, we would like to see transparency, accountability and internationally acceptable standards on all their monies.”
Lack of transparency is indeed the question facing the government and foundations engaged in Palestinian areas. At the Ford Foundation, other than a one-sentence description of a grant published in its annual reports, Web databases and IRS filings, mounds of documents relating to the original grant, activity reports, monitoring and audits are all held secret for 10 years after the grant concludes.
For example, in the case of LAW, the Palestinian Committee for the Protection of Human Rights and the Environment, those files would not become available for public inspection until 2015 — and even then only after a cumbersome academic-style review of any request.
LAW was instrumental in organizing the anti-Israel debacle at the September 2001 U.N. World Conference Against Racism in Durban.
When asked about its policy of keeping documents secret, Ford issued a statement, saying: “We protect grants and documents within the last 10 years to guard the confidentiality of ongoing relationships with grantees.”
Officials of Jewish organizations found that policy troubling.
“It is not only a sad comment on philanthropy running amok, but outrageous and irresponsible,” commented Abraham Foxman, national director of the Anti-Defamation League.
“The Ford Foundation, in its efforts to address evil, has — because of the lack of oversight and monitoring, and establishing serious criteria as to the recipient —wound up aiding and abetting extremists and political movements that border on anti-Semitism and anti-Americanism,” he said.
“It is incumbent on the trustees of the Ford Foundation to provide transparency about their funding, including the audits,” Foxman added.
Malcolm Hoenlein, executive vice chairman of the Conference of Presidents of Major American Jewish Organizations, called for a congressional investigation of Ford Foundation grants to Palestinian NGOs.
“At a time when government and society are demanding transparencies on the part of corporations and charities,” Hoenlein said, “it is hard to justify the apparent exemption of the Ford Foundation, which uses tax-free dollars to fund what is at best questionable organizations and causes — and at worst organizations undermining the interest of the United States and its allies.
“It is now incumbent on Congress and federal agencies to conduct their own examination,” he said.
Yehudit Barsky, director of the American Jewish Committee’s division on Middle East and international terrorism, said, “We need two kinds of accountability from Ford — not just where did the money go, but how was it spent.
“Ford owes the public not only a financial accounting, but also a moral accounting,” she said.
A written statement issued by Ford, in response to questions, asserted, “The Ford Foundation takes the threat of possible misuse of grant funds for terrorism very seriously. We share the concern of the U.S. government to minimize the risk that grant funds might be diverted for terrorist purposes. We comply fully with all legal requirements established by U.S. law and regulation.”
The statement added, “We have no reason to believe that Ford Foundation grant funds have been used to benefit terrorist organizations.”
This investigation has not identified any instances of Ford monies being linked to terrorism. However, despite more than two dozen attempts, in writing and by phone, over a several-week period, Ford officials responsible for external communications refused to answer any questions regarding specific Palestinian NGOs, or past or present investigations regarding the misuse of specific funds.
David Harris, executive director of AJCommittee, said it is “unfortunate” that Ford “is unwilling to go on the record, to explain or clarify its policy” regarding specific grantees.
With no product to sell, no stockholders, no customers, no need for outside fund-raising and no need to answer to the public, the financial independence of the Ford Foundation, estimated to be $10-billion strong, makes the organization impervious to the type of criticism it appears to expect for financing activism and agitation.
In a recent speech, the foundation’s president, Susan Berresford, acknowledged, “Addressing root causes [of injustice] often means making new kinds of arrangements in public policies, community and power relationships …It is different from traditional charity — feeding the hungry, sheltering the homeless.”
“Social justice philanthropy requires risk-taking, experimentation, managerial oversight, patience, long-term commitment and a thick skin. Being a social justice philanthropist or activist isn’t always comfortable or easy,” she said.
The Ford Foundation has spent billions to fight for transparency in government and create a better world.
But Harris of AJCommittee makes this point: “Transparency begins at home.”
from the Jewish Telegraphic Association, 2003-Oct-16, by Edwin Black:
Audit of Palestinian group suggests lax funding controls
WASHINGTON, Oct. 16 (JTA) — To find lax funding controls of Palestinian charities, one only need take a look at one of the Ford Foundation’s beneficiaries, the Palestinian Committee for the Protection of Human Rights and the Environment, also known as LAW.
The group — whose acronym comes from the name of its predecessor activist organization, Land and Water — was a key organizer of the anti-Israel debacle at the September 2001 U.N. World Conference Against Racism in Durban, South Africa.
LAW received $9,628,942 during the five years ending Aug. 31, 2002, from a long list of philanthropic donors. Besides the Ford Foundation’s $1.1 million, LAW received direct grants from more than 30 European and American public entities.
These include $1.5 million from the Dutch charity Cordaid; $853,000 from the Grand Duchy of Luxembourg; more than $93,974 from the Swedish unit of Save the Children; and $33,000 from the Canadian Embassy, according to audits obtained for this investigation.
No Arab sources were listed in LAW’s five-year donor record.
Last fall, donors became concerned when LAW officials were unresponsive to spending inquiries, according to a newly installed senior LAW official. Soon it became clear to the donors that vast monies — more than $2 million — were unaccounted for, misappropriated or being secreted in bank accounts instead of being spent on programs.
A consortium of worried benefactors formed an evolving committee, made up mainly of Ford Foundation officials and Norwegian and Swiss donors, according to a source with the International Commission of Jurists in Sweden, one of the concerned donors.
The consortium wanted a major accounting firm to launch an immediate investigation and asked the Swedish relief agency SIDA to quickly commission an audit. SIDA enjoyed an ongoing contract with Ernst & Young, which accepted the assignment immediately.
Ernst & Young’s offices in Stockholm and the West Bank city of Ramallah then undertook the investigation, according to a SIDA spokeswoman.
Approximately 80 percent of the estimated $100,000 audit cost was to be reimbursed by Ford, in concert with several European charitable groups, she said.
SIDA’s spokeswoman explained her agency was not actually a LAW donor, but merely facilitated the audit as a convenience to Ford and other funders.
Ernst & Young headquarters in London refused to discuss any aspect of its audit or provide a copy of the investigative report, which was submitted to the donor consortium on March 25 of this year.
But a copy of the 60-page investigation, obtained from overseas sources, catalogs a stunning list of financial improprieties.
Nearly 40 percent of the $9.6 million donated was either ineligible, unsupported, misappropriated or never spent on programs, according to the investigative report.
And more than $2.3 million was “retained,” turning LAW into a sort of bank under the nominal control of its then-executive director, Khader Shkirat, and other senior officials, the report asserted.
Indeed, three interest-free loans were made to a moneychanger, Izz Shkirat, related to the executive director at the time, according to the report. Two of the three loans, $30,000 and $40,000, were repaid, the report stated.
But a May 1999 loan for $130,000 has yet to be repaid, according to the report.
More than $160,000 in expenses was paid on behalf of an entity called the Centre for Democratic Advancement, reportedly formed by Khader Shkirat, which then used the money to purchase a destroyed radio station, according to the audit.
Asked about media reports that LAW funds were embezzled, an American employee of Ernst & Young familiar with the audit replied, “It depends what dictionary you use. They were certainly misappropriated.”
Moreover, $490,000 from LAW became part of a series of transactions among other LAW board members and used to acquire a 56 percent ownership in Arab Phone Inc., according to the audit.
In addition, more than $75,000 was spent on first-class or business-class international airline tickets, and lavish hospitality, which added $109,000 to the impermissible expenses, according to the report.
Seven cars and trucks were purchased for personal use of several former board members, and several of the vehicles have remained with those former trustees, according to the report.
Ernst & Young also concluded that the unused money arose from “fictitious financial reporting” to donors as a result of “collusion” among LAW’s board, Khader Shkirat and local accountants.
In June of this year, CBS News interviewed Shkirat as attorney for Fatah leader Marwan Barghouti, who is being tried in Israel for terrorism.
The Ford Foundation recently granted Shkirat a $60,000 grant to conduct human rights research at Harvard and complete English courses at Boston University.
Shkirat could not be located for comment, and Ford officials refused all comment on the case.
While spotlighting LAW’s abuses, Ernst & Young also reported to donors that the foundations’ controls were so sloppy that “it cannot be ruled out that LAW was under the impression that it had the donor’s silent consent to use the funds in any way it saw fit.”
A key American Ernst & Young source familiar with the report denigrated the funding arrangements as “goulash.”
“Everything goes into the pot, everything goes out of the pot. No one knows what is what — not Ford, not any of them,” he explained.
A senior LAW executive added: “What do you expect? I know of one grant for $200,000 made from the European Commission with nothing more than a phone call.”
When reached, LAW’s new director, a Lebanese Canadian named Jihad Sarhan, apologized for LAW’s former management and said LAW would not engage in future agitation or name-calling, simply human rights advocacy.
Sarhan stated that he did not completely agree with the Ernst & Young report and was hoping to retain Price Waterhouse Coopers to conduct a follow-up audit. He added that the group appointed a new board, and in early August changed its name to Law Association for Human Rights.
LAW correspondence and submissions over recent months to Ford and other donors, obtained exclusively for this investigation, thanked international donors for continuing their financing and promised strict financial controls in the future.
As of this writing, Ford was still scheduled to continue its funding of LAW through 2005, according to LAW and Ford sources.
Edwin Black is the author of the newly released “War Against the Weak: Eugenics and America’s Campaign to Create a Master Race” (Four Walls Eight Windows), which investigates corporate philanthropic involvement in American and Nazi eugenics. In May 2003, he won the American Society of Journalists and Authors’ award for best book of the year for his previous book, “IBM and the Holocaust” (Crown Publishing, 2001).
(The following item also appears in Global Socialism chapter.)
from the New York Times, 2000-Feb-14, by David Cay Johnston:
Dozens of Rich Americans Join in Fight to Retain the Estate Tax
SEATTLE, Feb. 13 - Some 120 wealthy Americans, including Warren E. Buffett, George Soros and the father of William H. Gates, are urging Congress not to repeal taxes on estates and gifts.
President Bush has proposed phasing out those taxes by 2009. But a petition drive being organized here by Mr. Gates's father, William H. Gates Sr., argues that "repealing the estate tax would enrich the heirs of America's millionaires and billionaires while hurting families who struggle to make ends meet."
The billions of dollars in government revenue lost "will inevitably be made up either by increasing taxes on those less able to pay or by cutting Social Security, Medicare, environmental protection and many other government programs so important to our nation's continued well-being," the petition says.
In addition to the loss of government revenue, the petition says, repeal would harm charities, to which many of the affluent make contributions as a way of reducing the size of their estates.
"The estate tax," it says, "exerts a powerful and positive effect on charitable giving. Repeal would have a devastating impact on public charities."
Mr. Buffett, the Omaha investor who ranks fourth on the Forbes magazine list of the richest Americans, said in an interview that he had not signed the petition itself because he thought it did not go far enough in defending "the critical role" that he said the estate tax played in promoting economic growth, by helping create a society in which success is based on merit rather than inheritance.
Mr. Buffett said repealing the estate tax "would be a terrible mistake," the equivalent of "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."
"We would regard that as absolute folly in terms of athletic competition," he said.
"We have come closer to a true meritocracy than anywhere else around the world," he said. "You have mobility so people with talents can be put to the best use. Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit."
The petition is to appear in an advertisement on the Op-Ed page of The New York Times this Sunday and later in other newspapers.
Among those signing it are Mr. Soros, the billionaire financier; the philanthropist David Rockefeller Jr., former chairman of Rockefeller & Company; Steven C. Rockefeller, chairman of the Rockefeller Brothers Foundation; Agnes Gund, a philanthropist whose family owns stakes in many companies, and Ben Cohen, a founder of Ben & Jerry's.
Mr. Buffett and the younger Mr. Gates have both said they will give away most of their fortunes in bequests at death. Many of the signers have longtime affiliations with causes that depend heavily on charitable gifts, including bequests, and they are concerned that outright repeal of the estate and gift taxes would lead to a sharp drop in charitable giving.
A number of the signers are Democrats, and some have contributed heavily to the Democratic Party. But the elder Mr. Gates said in an interview that the idea for the drive was his own and that the support he had received was nonpartisan. Mr. Gates, like his son, has consistently declined to align himself with either of the political parties, and he said he had never given a moment's thought to the party affiliations of those being enlisted.
The petition says that "repeal of the estate tax would be bad for our democracy, our economy and our society," although its backers add that adjustments may be needed to help families passing down farms and small businesses. "Let's fix the estate tax," the petition says, "not repeal it."
Estate taxes are assessed on the net worth of an individual at death. There is no tax on the first $675,000, and under current law that exemption is to rise to $1 million by 2006. (Farms and family businesses already enjoy the $1 million exemption.)
But amounts above that threshold are taxed at rates that begin at 37 percent and rise to 55 percent, the rate that applies to anything greater than $3 million. The estates of fewer than 48,000 Americans a year - 2 percent of annual deaths - pay the tax. Nearly half the total is paid by the estates of the 4,000 people who die each year leaving $5 million or more.
President Bush has made repeal of what he calls the death tax a part of his plan to cut taxes by $1.6 trillion over the next decade. His plan would also repeal the gift tax, which applies to gifts of more than $10,000 a year per recipient, and would permanently exempt from taxation all capital gains held at death.
Mr. Bush and Congressional Republicans who support the plan say that estate and gift taxes discourage savings and investment. Repeal, they assert, would increase economic growth by rewarding those who build great fortunes and creating incentives for them to invest more.
Mr. Bush says his plan would save those now subject to gift and estate taxes $236 billion over the next decade. Critics of the plan say this estimate of the cost to the Treasury is very low, because it does not take into account what tax experts have described as the new ways that repeal would give the wealthy to avoid income taxes.
The elder Mr. Gates, who gained affluence as a prominent Seattle lawyer, said he had not asked his son, the chairman of the Microsoft Corporation, to sign the petition.
"My son is sympathetic," he said, "but he wants to stay focused on three things: his family, Microsoft and world health," which is the main interest of the Bill and Melinda Gates Foundation.
The elder Mr. Gates said the money that Mr. Bush wanted to devote to repeal of the estate and gift taxes could be put to better use "to reduce other taxes, which affect the other end of the economic spectrum."
"Ever since I heard that somebody was trying to repeal the estate tax, I have been angry," Mr. Gates said, adding that if it were not for his full-time job, he would organize a group called Millionaires for the Estate Tax. Mr. Gates is president of the Bill and Melinda Gates Foundation, which has an endowment of $20 billion.
Mr. Gates is working on the drive with United for a Fair Economy, a nonpartisan, nonprofit organization in Boston that wants to narrow the gap between rich and poor. The petition on the estate tax is being circulated among Americans with enough money that they are affected by it, and a spokesman for the Boston group, Chuck Collins, said that of more than 120 such people asked to sign, only four had declined. He would not identify them.
from Philanthropy Magazine, 2001-Jan/Feb, by Valerie Richardson, contributing editor:
The Green Movement's Road to Nowhere
A foundation-funded campaign meets with local oppositionFoundations are supposed to help the poor, not create them. That's why Donna Thornton doesn't understand why the Pew Charitable Trusts is trying to put her out of business. Donna and her husband, Dennis, run Thorco, a small family-owned logging company in Kalispell, Montana, that depends in part on federal timber from the Flathead National Forest. Times are tough-for the first time, the Thorntons don't have any work this winter-and a sweeping land-use measure supported by Pew is threatening to make them even tougher.
``What this means to our community is poverty,'' says Thornton, who has lived all her 38 years in Kalispell. ``Montana already leads the nation in many poverty categories and that didn't used to be the case. And this is going to make it worse.''
Two years ago, Pew launched the Heritage Forests Campaign, an ambitious ``national-outreach effort'' aimed specifically at winning administration approval for a ban on new road-building on as many as 60 million acres of national forest. During that time, the so-called ``roadless'' initiative has gone from a pipe dream with no chance of congressional passage to an administrative fait accompli, thanks to the clout of the environmental movement, a compliant administration, and an infusion of cash from green-friendly foundations.
``This is an absolutely monumental public-lands protection piece and we're very close to making it happen,'' says Ken Rait of the Oregon Public Lands Council, who was hired by Pew to run the campaign.
The initiative landed on Agriculture Secretary Dan Glickman's desk this past December, giving him just enough time to issue a Record of Decision before President George W. Bush was sworn in. But the initiative's success came at a cost.
By forcing such a sweeping measure through the executive branch without approval from Congress or support from local communities, the Philadelphia-based philanthropic giant has come under fire for crossing the line between philanthropy and politics. The campaign was the subject of hearings last year before Congress, which have been followed by calls for more oversight and tougher restrictions on foundation giving.
The episode has also alerted rural denizens to the threat posed by the funders of the environmental movement. Some small-towners who used to have a high regard for the work done by foundations-or who had never heard of them at all-are starting to view them as the bad guys.
``We tend to think that these foundations are doing noble deeds, but here you have these East Coast bullies trying to tell us how to do things in the West,'' says Brad Little, an Emmett, Idaho, rancher who has sued to stop the roadless initiative. ``It's going to hurt the status of philanthropic foundations. They don't pay taxes now, and people are going to say, `Let's make 'em pay taxes if they're going to do this environmental activism.'''
Keep Those Cards And Letters Coming
The idea of cordoning off roadless areas is hardly new-environmentalists trace a similar proposal back to the last days of the Nixon administration. The issue caught the attention of Pew officials a few years ago when the Forest Service undertook a study on the repair and management of existing forest roads.
``We thought they were missing the bigger picture, which is what we should do about the 60 million acres of remaining roadless areas,'' says Steve Kallick, Pew's assistant director of environment programs.
From the start, Pew officials and environmentalists agreed that the campaign should be directed at the Clinton administration, not the Congress, where the chances of passage in the Republican-controlled body were virtually nil.
``There was never any thought to trying to put this through Congress,'' says Kallick. ``It was done under the Forest Service's authority to manage the national forests.''
To organize the campaign, Pew turned to the National Audobon Society, awarding over $3.4 million in grants over two years. Other foundations chipped in, including Brainerd, Turner, Nathan Cummings, and W. Alton Jones, but the bottom line is in dispute: The House Resources Committee reported that it had identified $12 to $15 million in foundational funding for the project, while Pew insists the figure is closer to $4 million.
Audobon built a coalition of environmental support in part by funneling funding to another dozen green groups, including the National Resources Defense Council, Wilderness Society, and the Earthjustice Legal Defense Fund. In March 1999, the campaign had its first success when the Forest Service agreed to impose an 18-month moratorium on new road construction in some public forest lands.
To build support for a permanent ban, the campaign hired a gaggle of pollsters to gauge opinion on the issue, including the Mellman Group, which did polling for President Clinton. Released July 27, 1999, the Mellman poll showed overwhelming support for protecting roadless areas in national forests, with 63 percent saying they agreed that ``there is not enough wilderness protected on national forests,'' according to Audobon's press release.
Organizers left little doubt as to whom the poll was directed. ``President Clinton can leave a legacy of historic proportions by protecting the last untouched national forest roadless areas,'' said Mr. Rait in the same release.
The polling was followed by a massive write-in effort that ultimately generated a staggering 500,000 emails, postcards, and letters to the White House in support of the roadless initiative. That was enough to persuade the administration that the issue was a winner: On October 13, 1999, President Clinton announced that he would direct the Forest Service to prepare a study that would ban road-building on sections of the national forests that were roadless but that had not been designated as permanent wilderness.
Kallick says the write-in campaign and polling were critical in winning the administration's endorsement. ``I'm convinced that made the difference,'' he says. ``Most politicians don't think much about natural-resource issues and you really have to get their attention.''
Bypassing Congress
The decision certainly got the attention of the West. While environmentalists applauded, lawmakers blasted the decision as a ``power grab'' that would rope off millions of acres as ``de facto wilderness,'' with devastating consequences for forest health and the already-struggling timber industry.
``You are effectively shutting down national forests,`` said Senator Frank Murkowski, Alaska Republican, at a Senate subcommittee hearing in November 1999 with Forest Service Chief Mike Dombeck. ``This is a de facto designation.''
Some lawmakers zeroed in on Pew, accusing the foundation of trying to circumvent the democratic process by making an end-run around Congress. They argued that the policy should have been broached through the forest-planning process, a typically slow, detailed and compromise-laden endeavor involving federal and state agencies, Congress, local communities, and interest groups.
``If the roadless initiative is universally popular, why can't the Heritage Forests Campaign get it enacted by Congress through the normal legislative process?'' asked Rep. Helen Chenoweth-Hage, Idaho Republican.
Pew makes no apologies for bypassing Congress. According to Kallick, the campaign's decision to take public-opinion polls and then move through the administration was actually more democratic than taking the proposal to the public's elected representatives.
He cites the influence of Western Republicans in keeping the roadless initiative off the congressional agenda. ``A small minority of people in power for many years has blocked this kind of action, and we felt that if most of the public was given the choice, they would support it,'' says Kallick.
The overwhelming response from the write-in campaign proves his point, he says. ``This one was unique in our experience in that it really created a snowball of public opinion. The response here was unprecedented,'' says Kallick. ``It just shows we were right.''
What it shows, say critics, is that Pew knows how to conduct polls. ``Pew's not interested in both sides of the story-they only want one side of the story,'' says Little, who sits on the boards of several Western nonprofits, including the University of Idaho, High Country News, and Idaho Community foundations.
``Those guys are masters at getting the answers they want. The [polls] on the roadless initiative were so biased,'' he says.
For example, the key question asked by pollsters was whether those surveyed ``would support a policy to protect the remaining roadless areas from logging, mining and other habitat-altering development,'' says Kallick. The survey results showed at least 65 percent support for that statement across a spectrum of demographic groups.
Clearly many Americans want to protect wilderness. But, critics ask, do they realize that the roadless area policy was aimed specifically at national forests? If so, do they understand the distinction between wilderness areas, national parks, and national forests? There are already 105 million acres designated as wilderness in the United States where no logging, mining or other industry is allowed, but the national forests have traditionally served as key sources of timber, minerals, and other resources.
Pew officials counter that the polls were conducted by Democratic and Republican pollsters alike, and that slanted surveys would have been worthless. ``It was a well thought-out effort to work with both sides,'' says Kallick. ``A poll that isn't straightforward doesn't do you much good.''
Stealing A March
Either way the initiative caught many Westerners by surprise. ``The average citizen in Idaho felt that it was done quietly behind closed doors,'' recalls Dan Goicoechea [CK] of the Idaho Farm Bureau. ``Our congressional delegation screamed and howled about it. No one could figure out where it was coming from.''
It didn't take long for them to find out. On February 15, 2000, the House subcommittee on Forests and Forest Health held an oversight hearing on ``The Funding of Environmental Initiatives and Their Impact on Local Committees,'' which examined ``the relationship among large foundations, environmental groups and the federal government in the development and implementation of environmental policy.'' The primary case study used during the hearing was the roadless initiative.
Not surprisingly, lawmakers and witnesses used the hearing to denounce the Heritage Forests Campaign. Subcommittee chairman Chenoweth-Hage accused Pew of abusing its tax-exempt status by sidestepping Congress with ``back-room deals [that] deny the average citizen a voice.''
``To whom is the Heritage Forests Campaign accountable?'' she asked. ``This campaign is put together by foundations-not participants. The grantees are accountable to the foundations that fund them-not their own members.''
She also announced that documents obtained from Council on Environmental Quality showed that a number of groups involved with the Heritage Forests Campaign-``a who's-who in the environmental community,'' as she put it-were in attendance during the drafting of the initiative. Nobody representing the timber industry, recreation, local communities, or school boards was present, she said.
That's enough for Ron Arnold, a leading wise-use advocate whose book, Undue Influence, tracks the links between foundations and the environmental movement, to accuse the players in the Heritage Forests Campaign of law-breaking.
``It's a violation of the Administration Procedures Act,'' he says. ``It's a conflict of interest where you have that kind of one-sided access. They were invited into the administration offices to plan the actual rulemaking.... I had a right to be there, too, and I was not invited. And that's illegal.''
Pew's Kallick scoffs at such charges. ``That [charge] was completely overblown-there was nothing illegal about it,'' he says. ``The argument was that it was never appropriate to go to the government and ask for anything unless you had every other [opposing] group with you. Interest groups talk to the government all the time-that's democracy.''
Three months later, at a full committee hearing on the same issue, witnesses noted that the Heritage Forests Campaign had gathered 170 signatures of support for the roadless initiative from members of Congress. While not illegal, such lobbying drew criticism from watchdog groups like the Capital Research Center.
``[W]hen a foundation organizes a lobbying campaign on a highly divisive political issue, when it uses its largess to task one nonprofit organization-the National Audobon Society-to coordinate the lobbying of other nonprofits, then Congress should ask whether the spirit of the law is being upheld,'' said Robert Huberty, the group's executive vice president.
During the hearing, Chenoweth-Hage noted that Pew had been asked to send a representative, but declined. ``She made a point of saying that these people from Alaska and Idaho had been able to make it, but somehow people from Philadelphia couldn't,'' says Huberty.
Pew officials deliberately avoided the hearing, says Kallick, because they knew the questioning would be unfriendly, and because the rest of the witnesses were critics of the roadless initiative. ``It was clear there was an inappropriate amount of attention being paid to us and not to the assessment of the roadless policy,'' he says. ``Under the circumstances, we didn't think it would benefit us.''
Kallick also dismisses the complaints as sour grapes. ``What people really complained about is that we were effective,'' he says. ``The difference here is that something historic happened and that's what rankled them.''
Lawsuits And Coffins
For all the uproar on the Republican side of the aisle, the roadless initiative never strayed from its course. After publishing the proposed rule in the Federal Register, the Forest Service held hearings last summer that drew a hefty 1.6 million comments. Environmental groups called on the agency to broaden the rule to include the Tongass National Forest in Alaska, which was excluded from the administration's version, while critics begged for it to be scrapped.
In Montana, opponents organized a convoy to the June hearing in Missoula, where more than 2,000 protestors staged a rally and brought in a coffin filled with letters objecting to the initiative. Even then, however, many of the initiative's foes said they felt like they were going through the motions with an agency that had already made up its mind.
``What really bothers people here the most is when things that directly affect our lives don't include our people in a meaningful way,'' says Stefany Bales, spokeswoman for the Intermountain Forest Association in Coeur d'Alene, Idaho. ``I don't think anyone here really thought that our testimony would have any impact.''
Opponents have also gone to court, first to stop the 18-month moratorium and then to derail the final rule. So far three lawsuits have been rejected, the latest one (filed by Boise Cascade, the Intermountain Forest Association, and the Idaho State Snowmobile Association) because the judge ruled the challenge premature.
On November 13, 2000, the Clinton administration announced the release of the roadless initiative's final environmental impact statement, the last step before the final decision. The statement contained good news for environmental groups: The initiative now includes a ban on commodity logging in roadless areas and also paves the way for the inclusion of the Tongass in 2004.
At the announcement, Secretary Glickman lauded both the initiative and the process through which it was approved. ``Never before have the American people so actively participated in helping to decide how their public lands should be managed,'' he said.
The American people may have participated in the process, counters Arnold, but there was nothing democratic about it. ``It was a done deal. It was the biggest put-up job in the history of the environmental movement,'' he says. ``The foundations paid for it all and the environmental groups took the money and they did what they were told.''
The success of the Heritage Forest Campaign could well inspire similar efforts, although Pew has no plans for a follow-up, says Kallick.
``It's hard to imagine another campaign of its kind. But where there's broad public support for change in land policy, we would investigate it,'' he says. ``We're certainly not closed to future actions, but we have no plans right now.''
In the meantime, the initiative leaves the rural West worried about the future-and wary of wealthy out-of-town do-gooders bearing polls.
``The roadless area is the final nail in the coffin,'' says Little. ``It's going to change the whole character of the communities I live in from places where we work the land and produce a product to a total tourism deal. And people here don't want that. But that's one poll Pew won't do.''
from TPDL 2000-Aug-2, from Insight Magazine 2000-Aug-21, by J. Michael Waller:
Funding Subversion of National Security
How huge foundations now are lavishing money to gut U.S. national interests from leading defense and security bodies, outspending sounder national-security programs 10-to-1.
Traditional national-security groups in academia, government and public policy are disappearing. And that, observers say, presents an alarming trend for the 21st century. ``Most national-security-minded groups simply aren't there anymore,'' says John Lenczowski, director of the Institute of World Politics, perhaps the only graduate school in the United States devoted to teaching traditional statecraft. ``The veterans groups don't serve their old purpose at all anymore; they're in it for government benefits. And when it comes to academic institutions, you've got mostly a kind of internationalist crowd. Most of the schools of international affairs focus on internationalism, rather than the American national interest.''
Meanwhile, thanks to the globalist-collectivist bias of the leading universities, relatively few younger people are equipped to replace the Reagan-era thinkers and doers who won the Cold War. The dominant force of the next generation is intellectually rooted in a fundamental distrust of the United States and of U.S. might and mission during the Cold War and sees the United States as even less to be trusted as the world's sole superpower. This worldview deliberately tends to diminish U.S. influence by promoting more numerous and more powerful international organizations and courts, nongovernmental organizations, or NGOs, and treaties that would constrain the United States while doing little, in practical terms, to restrain regimes hostile to America and to freedom. This view also treats U.S. economic, diplomatic and even military resources as tools with which to advance political, social and cultural agendas ranging from gun-control and the environment to gender- and sex-related causes.
It means that this century's new diplomats, intelligence analysts, military planners, congressional staffers and strategic thinkers will come mostly with a worldview that minimizes U.S. national interests. Their work will be reinforced - or even initiated and shaped - by think tanks, journalists and NGOs financed by the same multibillion-dollar pool.
With the exception of a hardy handful of small foundations, the end of the Cold War saw funding all but evaporate for traditional organizations and programs focused on national-security policy. But the big foundations that bankrolled academics and activists professionally opposed to U.S. Cold War leadership re-grouped, even going on retreats and conducting studies to ``examine'' their new purpose and to redefine the ideas of defense and security. In most cases, according to a Center for Security Policy study of the 70 largest foundations in the defense and security field, the grantors changed their program names. They stripped out ``national'' from security and replaced it with global, environmental or collectivist themes.
Less than a decade after the collapse of the Soviet empire, the new globalist strain is outspending traditional national-security programming by more than 10-to-1, according to the study. The combined endowments of foundations funding global-collectivist security programs exceed $42 billion, while foundations devoted to more traditional national-security and defense policies hold a comparatively tiny $4 billion in assets - one year's worth of interest income of their collectivist counterparts.
Spending from those endowments on defense and security education, training and public policy totals about $200 million annually - not including peripheral issues such as democratic transitions and postconflict aid, or the $100 million that CNN mogul Ted Turner gives annually to U.N. programs. Traditional national-security education and policy receives only about $23 million a year. ``This is a 10-to-1 endowment advantage and a 7-to-1 funding advantage for the left,'' according to the study.
That $23 million total for traditional national security is less than the $27.5 million the John D. and Catherine T. MacArthur Foundation dished out in 1997 for its Program on Global Security alone. Such huge levels of funding afford the foundations and recipients another key advantage: They are more willing and able to coordinate and plan ahead for program priorities and can expect implicit cooperation among recipients that is much harder to expect when funding is scarcer and therefore more competitive.
``The left understands the power of ideas and the importance of cadre-building in world affairs far better than the right does,'' the Center for Security Policy's Thor Ronay tells Insight. ``They build cadres early. That's why they fund so many university degree programs, academic chairs and graduate students - to credentialize people. They create an idea - `international legalism,' let's say - and then credentialize the idea, promote it in the media and policy circles and provide the cadres to lead the way. It's much like the model of founding a new religious sect.''
One example is the arms-control area. ``They identify their best and brightest cadres interning in the arms-control and disarmament movement, give them Herbert Scoville Fellowships from the Council for a Livable World, subsidize their Ph.D.s and place them with like-minded mentors in senior government posts,'' says Ronay, who authored the center's study. ``There are a number of them in the Clinton administration today with top-secret clearances, hired to run U.S. national security. It's like a presidential management internship program for the left. Their side takes this very seriously and invests in it and acts on it. They understand that power lies not only in ideas but in people and programs. If you put enough into people and programs, especially media and pedagogy, you can sell bad ideas for long enough to bring dangerous results.''
The taxpayer-funded U.S. Institute of Peace targets high-school students with an annual essay contest on ``peace'' issues and has a fellowship program for graduate students to pursue ``peace studies.'' The Council for a Livable World says that since 1987 it has mentored 71 graduate students into key activist, academic and government posts, including prominent defense contractors, the State Department, the Defense Intelligence Agency and the CIA. The MacArthur Foundation's Next Generation Program has spent a staggering $100 million during the last 15 years to train more than 5,000 graduate students in the international-relations and security arena. That's nearly an entire generational cohort: from academics, journalists and foreign-service officers to NGO executives.
In contrast, Ronay says, ``Conservative groups have to go begging for donors and justify every expense in terms of what it has done today. Only a few seem to have the vision or sense of strategy it takes to look a generation or even a decade ahead.''
Most of the defense and security grantmaking from the large foundations manifests itself in four basic programs, according to the Center for Security Policy study: media, academia and cadre-building, international legalism and arms control/disarmament, and institution-building.
From her glass tower at 777 United Nations Plaza in New York City, Samuel Rubin Foundation President Cora Weiss sees things with a clear sense of purpose in protracted terms. Her father, Samuel Rubin, built his Fabergé empire in the 1930s with clandestine help from Soviet-backed Communist groups, according to veteran journalist James L. Tyson. Such an ideologue was Rubin that he named his son Reed after U.S. Communist John Reed, whom the Soviets buried in the wall of the Kremlin. The elder Rubin founded and endowed the foundation where Weiss has been a fixture since at least the 1960s.
During the Vietnam War, Weiss funded not only agitprop against U.S. military involvement in Southeast Asia but groups supporting Hanoi and the Viet Cong against U.S. troops. For decades she funded a range of hard-left groups from the Center for Constitutional Rights - which has litigated for the likes of CIA defector Philip Agee and Puerto Rican terrorists (Agee and one of the terrorists are living in Cuba) - to the Institute for Policy Studies. During the Cold War, though, most of the Samuel Rubin Foundation's grantees were considered even by liberals to be on the far left. Today, however, Weiss and her beneficiaries are more in the mainstream.
Not that they have shed their radicalism. They and others have changed the terms of debate. Unlike many Vietnik activists and Soviet apologists, Weiss never has broken with the hard left and, unlike even Jane Fonda, never has apologized for supporting the Communists. Today Weiss is a leader in a new effort among large defense- and security-related foundations to coordinate their giving more effectively.
That effort began early last year. Amid concern that a handful of conservative senators were threatening to derail decades-old arms-control processes, the largest or most active foundations convened a Peace and Security Funders Group, or PSFG, in Cambridge, Mass. The initial steering committee consisted of Weiss and her family foundation along with the Ploughshares Foundation, the John D. and Catherine T. MacArthur Foundation, the W. Alton Jones Foundation, the John Merck Fund, the Hewlett Foundation and the Ford Foundation. The PSFG welcomed smaller traditional defense and security funders to join but has a bylaw permitting any member to be expelled without cause.
PSFG coordinator Wayne T. Jaquith has more than 30 years of movement activism under his belt. He and many grant-giving officials in foundations have worked together informally for decades. While the target then was ``U.S. imperialism,'' many of the big funders are promoting an imperialism of their own. At one PSFG meeting a MacArthur Foundation foreign-policy official said, ``On some things I am an unabashed imperialist - feminism is one of them.'' Weiss, in an October 1999 funders meeting, said she wanted to create more ``sensitive'' armed forces, saying she detested ``men in uniform with guns'' and outlining a campaign for global gun control and a plan to make every U.N. peacekeeping soldier attend gender and cultural sensitivity training.
Once one sees that the big funders of defense and security policy are coordinated at the top, a lot of grants make more sense. ``It's rather like the FBI discovering that the mob had a council,'' says a source inside the grants community.
The big funders felt invincible. Last year's Senate defeat of the Comprehensive Test Ban Treaty, or CTBT, shocked the new funders group into overdrive. ``I'm sitting here stunned at the defeat of the Comprehensive Test Ban Treaty - something many of us have worked on for 35 years,'' Jaquith wrote to funders-group members in advance of their October 1999 meeting in San Francisco.
Discussing the CTBT's defeat at the San Francisco gathering, Weiss told members, ``We have to organize. This is how all the anti-Vietnam demonstrations got funded - at a table like this.''
But to organize effectively, the funders have to move further from their radical intellectual roots and into the mainstream. They are eyeing moderate Republicans in the U.S. Senate as future allies. In San Francisco they invited national-security advisers of Republican presidential candidates to participate in a ``consensus-directed discussion'' on defense and security. One funder proposed new initiatives in ``educating'' journalism students and professional journalists about the perils of missile defense and called for a major drive to influence the GOP. ``There are a number of moderates among the Republicans, in the Senate especially,'' the foundation official said. ``No one knows what sources of input are respected by this group, but we do know most senior Republicans refused to meet with our outside scientists and people before the CTBT vote.'' He proposed assessing how best to approach Senate Republican moderates.
As long as the PSFG continues to expand its influence on grantmaking for defense and national-security issues, the U.S. policy debate promises to become increasingly lopsided and intemperate. With the realist and morally centered school of national-security experts that reached seniority during the Reagan decade now moving toward retirement, little is being done to inculcate their tried-and-true combination of worldview and leadership experience to the next generation. The thousands and thousands of cadres produced by the globalist foundations rapidly are filling the vacuum.
The worldview of the PSFG ``is evident even in its name; what is conspicuously absent is the conception of `national security,''' according to the Center for Security Policy study. ``The highest-ranking totem for this view is perhaps Deputy Secretary of State Strobe Talbott who in 1992 told Time magazine that in the coming century, `nationhood as we know it will become obsolete; all nations will recognize a single, global authority.''' [Actually, he was the editor of Time when he wrote those words. The editorial they appear in is in the Erosion of Sovereignty chapter in unabridged form. -AMPP Ed.]
In Ronay's view, ``Essentially, you have a generation that failed to learn the lessons of the Cold War - and who in most cases rebelled against the very instruments and policies which ultimately prevailed in that costliest struggle of the world's bloodiest century - now clamoring to lead us into a brave new world of their own imagining. The only thing that is more amazing is how few people seem to notice or care. History will note this the way it always does: as an `interwar interlude.'''
Politicized revisionist history and the decline in the study of history in general, political correctness both in academia and government, group identity and general disdain for the United States as a force for good have contributed to the rethinking of the mission of the United States in the world. ``I don't believe that you can defend a country and a civilization which you neither understand nor appreciate,'' says Lenczowski, who served on the National Security Council in the first Reagan administration. ``Or, one can further say, I don't believe that you can defend a country that you don't love.''
from AIM, April 17, 1998, http://www.mrc.org:
Conspiracy to Commit Journalism: The Media's Attacks on the Scaife Foundations
When Hillary Rodham Clinton urged the media to investigate the "vast right-wing conspiracy" against her husband, the donations of Richard M. Scaife became the subject of unusual media scrutiny. Scaife drew controversy not by funding conservative policy analysis, but by funding investigative journalism which reflected badly on the President. Investigative journalism on the the President was considered an essential civic duty in the Reagan years. Current reporting suggests it's just the opposite. Is there a double standard? A Media Research Center analysis by Director of Media Analysis Tim Graham reviewed TV news coverage of the Scaife controversy and then focused on what reporters didn't ask:
- How can this be a conspiracy? The Scaife foundations' donations are hardly secret, with their IRS forms posted on the Internet. In the many stories connecting Scaife to The American Spectator magazine, few noticed Scaife is no longer funding the magazine over policy differences.
- Who are the real powerhouses in public policy giving? Several large liberal foundations give hundreds of millions of dollars more to public policy groups than the Scaife foundations do, yet only Scaife's comparatively smaller donations seem newsworthy.
- Where was the vast left-wing media conspiracy in the Reagan years? While the networks focused on journalistic conspiracies against Clinton, liberal groups who drove media coverage of terrible-sounding Reagan-Bush conspiracies were not lumped into a "vast left-wing conspiracy" by national media outlets.
- If foundation money and journalism are a toxic mix, how do media outlets explain their own foundation receipts? Millions of liberal foundation dollars are currently being spent in the news rooms of "objective" national media outlets for projects including support for Clinton policy initiatives and attacks against press coverage of Clinton. Where is the media coverage of these practices?
By Tim Graham
I. INTRODUCTION
The major media might think they cover every trench of America's political battles in exhaustive detail. But one important factor in the making of policy and the making of news - America's grant-making foundations - rarely make it into the media's portrait of the political system. One notable exception came in February. In the wake of First Lady Hillary Clinton's charge that her husband is the victim of a "vast right-wing conspiracy," the public-policy donations of Richard M. Scaife became the subject of unusual media scrutiny. The national media suggested that Scaife, through the Carthage and Sarah Scaife Foundations, has been orchestrating a campaign to bring down President Clinton, a conspiracy which is so broad-based that it included even independent counsel Kenneth Starr.
These critiques do not mention the millions of dollars the Scaife foundations have given to develop the programs of conservative think tanks like the Heritage Foundation, the Free Congress Foundation, or the American Enterprise Institute. They primarily focus on conservative journalism. Why the focus on investigative journalism over policy research? White House actions suggest that policy research doesn't scare them as much as investigative journalism does. In the Reagan and Bush years, investigative journalism into the policies and ethics of the President was seen as the very essence of civic duty. Now journalists themselves insist it's the opposite.
Much of the reporting on Scaife's donations sounds as if it came from the 330-page document "Communication Stream of Conspiracy Commerce," a packet of Xeroxed Nexis clips collected and bundled together at taxpayer expense by White House lawyer Chris Lehane, and passed on to many White House reporters starting in 1995. Scaife figured prominently in the elaborate conspiracy theory Lehane constructed, the tale of a food chain stretching anti-Clinton stories from dastardly right-wing operatives and journalists to the mainstream press.
The focus on the "vast right-wing conspiracy" underlined the degree to which the national media is guilty of a double standard. If in the 1980s, Nancy Reagan had blamed a "vast left-wing conspiracy" for the Iran-Contra scandal, the media surely would have made fun of her - not spent its time detailing Reagan White House information packets on the liberal views and connections among Reagan detractors. The Clinton press strategy, forged in the crucible of the 1992 campaign, suggests it doesn't matter whether a story is true or false, only who's telling it. The same reporters who've ignored the donors behind left-wing conspiracy journalism and liberal foundation funding of "objective" news outlets have singled out Scaife as if only the conservative movement has ever united to question a national politician's integrity.
II. THE CHARGES
All the network stories carried the echo of the White House conspiracy-packet line, emphasizing a) the scandalous thought that someone would pay for investigative reporting that dared to challenge the President, and b) the tenuous connection between Scaife's funding of Pepperdine University's School of Public Policy and Starr's temporary decision to quit and work there. None of these outlets felt the need to expand beyond Clintonite handouts to substantiate whether there was any conscious collusion or communication between Scaife and Starr. They just practiced guilt by association. Mr. Scaife stated for the record that neither he nor anyone involved with his foundations has ever met with or talked to Mr. Starr, and neither he nor his staff had any role in Mr. Starr's Pepperdine appointment. Mr. Scaife also noted that he is only one of several donors to give $1 million to the endowment for Pepperdine's School of Public Policy. Beware: all these stories sound like they came from the same script, with minimal variations.
In a February 1 CNN Impact story, Kathy Slobogin said: "Finally, there is the Clintons' arch-nemesis Ken Starr. His links to Clinton detractors? He agreed to write a brief in the Paula Jones case. Once appointed independent counsel, his law firm dropped the case. A year ago he almost took an academic job funded by millionaire Richard Mellon Scaife, a relentless Clinton opponent." Four days later on Investigating the Investigator, the CNN special probing Kenneth Starr, Slobogin repeated herself about "a job offer that made his critics cringe."
On ABC's Nightline February 4, reporter Chris Bury announced: "[Journalist Christopher] Ruddy's boss is Richard Mellon Scaife, heir to the Mellon banking fortune. Scaife has been a big donor to anti-Clinton causes, including a legal foundation that supported Paula Jones....The Paula Jones allegations were first reported in the conservative American Spectator magazine. It, too, has received money from Richard Mellon Scaife."
CBS correspondent Rita Braver saw sinister connections in a February 8 CBS Evening News report. "Christopher Ruddy, a reporter at Scaife's newspaper, the Pittsburgh Tribune-Review, wrote a spate of articles claiming former White House aide Vincent Foster was murdered rather than committing suicide," reported Braver. In addition, "Scaife foundations have given hundreds of thousands of dollars to The American Spectator, which broke the story that led to the Paula Jones sexual harassment suit against Mr. Clinton. Scaife also funded a special Clinton investigative unit at the magazine. Scaife also helped underwrite the School of Public Policy at Pepperdine University where, the school says, purely by coincidence, independent counsel Ken Starr is slated to work."
In "a look at the motley characters behind Hillary Clinton's `vast right-wing conspiracy'" in the February 9 Time, Walter Kirn noted: "Last year, in a decision he later reversed under pressure from Republican lawmakers, Starr announced that he was leaving his job to become dean of the law and public policy schools at Pepperdine University. The chair Starr had set his sights on, as it happened, was endowed by a certain Richard Mellon Scaife, an archconservative Pennsylvania billionaire who also happens to publish the Pittsburgh (Pa.) Tribune-Review, a newspaper whose star reporter, Christopher Ruddy (hang in there; this pays off) is notorious for his own conspiracy theories concerning the death of Clinton officials Vincent Foster and Ron Brown. Interestingly, Scaife's billions have also bankrolled The American Spectator, the magazine that broke the Troopergate story." Kirn asked: "Could Scaife be Mr. Big? It seems that among most conservatives there are only two degrees of separation from the ubiquitous philanthropist." The newest Time article on Scaife referred to him in a headline as "king of the Clinton-haters."
The February 9 Newsweek also included Scaife in its diagram of the right-wing conspiracy, noting "liberals howled last year when he [Starr] considered a Pepperdine University deanship partially funded by conservative Richard Scaife."
Daily newspapers also suggested Starr was tainted because of the heralded Pepperdine-Scaife connection. In the month after the Clinton sex scandal broke, references to Starr would often include references to Scaife. Nine articles in The New York Times, the Los Angeles Times, The Washington Post, and USA Today between January 20 and February 20 mentioned that Starr had planned to leave the independent counsel's office to take the job at Pepperdine funded by Scaife, implying a conflict of interest for Starr.
On the March 5 NBC Nightly News, correspondent Lisa Myers reported: "To the Clinton White House, Scaife is the Darth Vader of the alleged right-wing conspiracy against the President, having helped bankroll a Pittsburgh newspaper that specializes in anti-Clinton conspiracy theories; The American Spectator, which broke the story about Arkansas troopers soliciting women for Clinton; lawyers once involved in Paula Jones' suit against the President; and a group that ran ads in search of other women. But what do Scaife and his views have to do with Starr?" Myers asked. "Well, a Scaife foundation helps fund the deanship at Pepperdine University, a job Starr accepted last year, then had to reject after a firestorm of criticism."
Most recently, on March 26, MSNBC's nightly show White House in Crisis devoted a half-hour to Scaife. Host Keith Olbermann implied Scaife was almost the only donor to the anti-Clinton cause: "If you've got a conspiracy, you've gotta have a bankroll. If the now-famous (if not exactly new) charge by the First Lady that the President is the target of a vast right-wing conspiracy is accurate, then nearly all the banking records point to one individual - Richard Scaife."
Reporter David Gregory added: "Called the Goldfinger of conservative causes, he's donated an estimated 200 million dollars over the past few decades." Gregory repeated all of Myers' list of connections - the Pittsburgh newspaper, The American Spectator, the lawyers for Paula Jones, the ad in search of Clinton victims. (Reporters never noted Scaife has funded The American Spectator for 30 years.) Predictably, Gregory added: "Another reason for the White House's suspicions of Scaife: his alleged ties to independent counsel Ken Starr. A Scaife foundation helps fund one of the schools at Pepperdine University, where last year Starr accepted a job as dean. He later rejected the job after a firestorm of criticism."
In an interview with neoliberal New Republic writer Nurith Aizenman, Olbermann asked: "I heard a theory expressed by some folks on the right that in fact there may or may not be a vast right-wing conspiracy, but that Richard Scaife is in fact too far right even for a vast right-wing conspiracy, if such a thing exists. Is there validity to that point? Is he at the center of something on the right or is he righter than right?" He also suggested after returning from a commercial that Scaife might be funding a "coup."
III. THE REBUTTAL
All these networks mostly forwarded White House perceptions of a Pittsburgh-based "Darth Vader" without taking the time to make their reports a broader investigation of the crossroads between philanthropy and politics, or between philanthropy and journalism. No one asked questions offering a challenging rebuttal to the Clintonites' anti-Scaife charges:
1. How can this be a conspiracy? The Scaife foundations' donations are hardly secret, with their IRS forms posted on the Internet (at www.scaife.com). The organizations the Scaife foundations have supported are hardly in agreement about wrongdoing by President Clinton. Few of the dot-to-dot conspiracy stories connecting Scaife to The American Spectator magazine noticed Scaife is no longer funding the magazine after it published an article criticizing journalist Christopher Ruddy's reporting on Vincent Foster's death. Few note that alleged Scaife pawn Starr ruled the Foster death a suicide. What about the unsubstantiated Scaife-Starr conspiracy? As a February 11 Investor's Business Daily editorial pointed out, if "this was a conspiracy, it sure was an odd one. Here was Scaife helping fund a new position that tempted Starr - allegedly `his' man- away from the work of probing the president."
2. Who are the real powerhouses in public policy giving? Several large liberal foundations give hundreds of millions of dollars more to public policy nonprofits than do the Scaife foundations, yet only Scaife's comparatively smaller donations are newsworthy. Reporters also ignore that many of the richest foundations in the United States are distinctly liberal, with the Ford Foundation authorizing grants of $300 million a year, the MacArthur Foundation donating over $100 million, and the Carnegie Foundation over $50 million. The largest conservative foundations, such as Bradley, Scaife, and Olin, each give less than $50 million. Between them, the Carthage and Sarah Scaife foundations give less than $25 million each year. Reporters don't think it's news when, for instance, the Ford Foundation supports such leftist groups as the American Civil Liberties Union, the Center for Budget and Policy Priorities, and the Children's Defense Fund. In the 1980s, the Ford Foundation was so far to the left it even funded institutions in the Marxist regimes of Nicaragua, Ethiopia, and Zimbabwe, and that never provoked media inquiries or even a mildly liberal ideological description from reporters..
3. Where was the vast left-wing media conspiracy in the Reagan years? With all the focus on Scaife's now-defunct funding of The American Spectator, one might think that left-wing nonprofit groups had never played a part in the nation's media system. But in fact, in previous administrations, investigative journalism (much of it wildly incorrect) charging some highly implausible and terrible conspiracies committed by Republican Presidents was funded by liberal foundations without those elements ever being lumped into a "vast left-wing conspiracy" by national media outlets. For example:
The Center for Investigative Reporting was founded in 1977 by a group of San Francisco radicals whose investigative credo was declared by CIR co-founder David Weir in a 1982 Newsweek interview: "We don't consider investigative reporting to be something that includes investigating welfare mothers." Throughout the 1990s, CIR's financial lifeline has been the PBS series Frontline. Their documentaries included "The Great American Bailout," an investigation into the savings-and-loan scandal, which included a reasonable summary by then-CBS reporter Robert Krulwich, but also insinuated a conspiracy: that the Reagan administration delayed the S&L bailout until after George Bush won the 1988 election. CIR scored investigative deals with the commercial TV networks from the late `70s to the late `80s. But when network news budgets shrunk as the '90s approached, CIR was left high and dry. Liberal foundations and PBS rode to their rescue.
In a 1991 article in the American Journalism Review, Michael Hudson explained: "CIR recently received $75,000 - its largest grant ever - from the Florence and John Schumann Foundation in Montclair, New Jersey...In the spring of 1989, [Bill] Moyers had helped raise money for the toxic waste documentary and volunteered to serve as executive editor. This year, Moyers became president of the Schumann Foundation and helped CIR win the large grant." Moyers also serves on a board of advisers to CIR (in addition to ex-ABC reporter Sylvia Chase, former Newsweek editor Osborn Elliott, CNN's Judy Woodruff, NPR's Susan Stamberg and CBS's Mike Wallace.)
The Christic Institute wasn't a media organization, but its wild allegations were popular with PBS's Frontline and the CBS program West 57th, among others. The Institute charged in a lawsuit against government officials that a "secret team" ran much of American foreign policy, including drug-running for the Nicaraguan freedom fighters. Their conspiracy theories were the inspiration for two PBS Frontline documentaries in April and May of 1988. In June 1988, Judge James King threw the suit out for "abuse of the judicial process" and awarded 12 defendants $1 million in attorney fees. (PBS never apologized for or retracted their films.) Christic Institute funders included the Arca Foundation, the C.S. Fund, the J. Roderick MacArthur Foundation, and the Tides Foundation, as well as millions from rock stars and movie stars such as Jackson Browne, Don Henley, Bonnie Raitt, and Kris Kristofferson.
(Three years later, Frontline, which has no private underwriters, profit or nonprofit, ran two hour-long documentaries on the conspiracy theory that the 1980 Reagan campaign delayed the release of American hostages in Iran for political gain. The "October Surprise" theory was investigated by Democratic-led House and Senate committees, which found the accusations groundless. So sometimes the funders of conspiracy-theory journalism against a President aren't millionaires with an agenda: they're taxpayers, many of whom involuntarily funded PBS documentaries they found offensive and inaccurate.)
The National Security Archive was another popular liberal media resource. Founded by former Washington Post reporter Scott Armstrong and other liberal activists in 1985, the Archive has been dedicated to using the Freedom of Information Act to secure U.S. government documents on foreign policy adventures, beginning with a heavy emphasis on the Iran-Contra affair. Among their books is White House E-Mail: The Top Secret Computer Messages the Reagan-Bush White House Tried to Destroy. The Archive, now based in the nation's capital at George Washington University, explains on its Web site that "The Archive's $1.5 million per year budget comes from publication revenues and from private philanthropists such as the Carnegie Corporation, the John D. and Catherine T. MacArthur Foundation, and the Ford Foundation." Another donor is the radical-left Arca Foundation, whose Web site explains they gave "to support the Archive's research into the connections between the CIA, covert operations and drug-trafficking in the 1980s." Isn't this an exercise in "Reagan-hater" philanthropy?
4. If foundation money and journalism are a toxic mix, how do media outlets explain their own foundation receipts? Millions of liberal foundation dollars are currently being spent in the news rooms of "objective" national media outlets for projects that have included supporting Clinton policy initiatives and attacks against press coverage of Clinton. Why hasn't that attracted all the outlets who've spread the accusations against Scaife? If media outlets suggest that little-known millionaire "Goldfingers" are altering the political scene through unexamined contributions, then how do today's for-profit national media outlets explain their own financial infusions from charitable foundations, and what agenda do those dollars fund? For example:
The Robert Wood Johnson Foundation placed five fellows on Hillary Clinton's secret health care task force, and when that secrecy became an issue, the foundation doled out a half million to put on four town meetings with the First Lady to create the appearance of a public dialogue. The foundation also funded polls for the White House and studies for pro-Clinton groups like Families USA, including one that doubled the estimates of uninsured Americans. But media outlets raised little fanfare when the Johnson Foundation paid NBC News $3.5 million in 1994 for a two-hour, commercial-free special on health care titled "To Your Health."
The main attraction of the foundation-funded NBC special was Hillary Clinton, who referred repeatedly to NBC's taped horror stories of uninsured sick people as proof of the need for the Clinton plan. The program opened and closed with tributes to Mrs. Clinton for bringing this important issue to public attention. The other speakers also suggested a pro-Clinton tilt: on-stage panelists leaned two-to-one in favor of the Clinton plan or a single-payer plan. Speakers from the audience also leaned to the liberal side by two to one. The audience clapped loudly at declarations in favor of socialized medicine. The media did not warn the public of conspiracies of collusion between "Clinton-lover" foundations and journalists.
The Henry J. Kaiser Family Foundation was also active in the fight for the Clinton health plan, at one point sponsoring a television ad generically promoting "managed competition" with the League of Women Voters. The foundation had fellows on Hillary Clinton's secret health care task force, and foundation head Drew Altman was a familiar pro-"reform" talking head on television before the Clinton plan failed. The foundation also operates a media fellows program on health care policy advised by, among others, former U.S. News & World Report economics writer Susan Dentzer and ABC medical correspondent Dr. Tim Johnson. In their publicity materials, the foundation underlines the political impact of the fellowships: "The impact t the media has on the decisions our country makes in health is evident. The media plays an important role in shaping the debate and helping to determine the choices policymakers and the public make when it comes to health care." Media fellows have included reporters from National Public Radio, PBS's MacNeil-Lehrer NewsHour, U.S. News & World Report, The New York Times, the Los Angeles Times, and The Washington Post.
The Kaiser Family Foundation also funds special partnerships with media companies. In February, it announced a teen pregnancy prevention project in cooperation with NBC. (It has a partnership with the Alan Guttmacher Institute and the National Press Foundation to investigate reproductive health "problems" such as Catholic hospitals' failure to perform abortions.) It has also announced a new partnership with U.S. News & World Report "to monitor Americans' experiences with the changing health care system." It has a three-way partnership with Harvard University and The Washington Post to "design and analyze surveys examining public knowledge, perceptions, and misperceptions on major issues. The Post then reports the results as well as the facts to dispel myths and correct misperceptions." The Post's most recent project was a four-part series on the changing roles of women. No one in the media has questioned whether this foundation's support for health "reform" or abortion rights presents an agenda to the journalists they fund.
The Pew Charitable Trusts are credited on the Internet as the funder of the Committee for Concerned Journalists, the organization of current and former "objective" media personalities that recently presented a study attacking the use of anonymous sources in the first days of the Monica Lewinsky story. In an analysis for the Capital Research Center, journalist Alicia Shepard found: "Since fall 1993, the foundation has pledged at least $19.7 million to various media enterprises, $10.7 million of it to support civic journalism The overarching goal of these activities is to use the `extraordinary power' of the media to stimulate the public `to participate in community life.'"
Pew is supporting National Public Radio's reporting on culture, the environment, and religion. Since federal law makes it difficult for foundations to donate money to for-profit organizations, such as newspapers, the Pew trusts make donations to the liberal Tides Foundation, which in turn funds the Pew Center for Civic Journalism, which pays the newspapers. Pew has given millions of dollars to media outlets and groups like the Citizens Election Project (run by liberal former Time Washington Bureau Chief Stanley Cloud) to cover the 1994 and 1996 campaigns. If Scaife's contributions are so questionable, have any networks asked any questions about the ethics or agenda of these donations?
IV. CONCLUSION
The public would benefit from greater media exploration of the connection between charitable foundations and the worlds of politics and journalism. But until now, the media's inattention has suggested that foundation giving to public-policy groups doesn't deserve much media coverage. The financial support given to politicians and think tanks by for-profit corporations is an recurrent media concern, but journalists' worries over the influence of money over politics have rarely spilled over into the millions spent on political affairs by nonprofit institutions. Perhaps reporters and editors have felt that an organization's or person's ideas should be judged on their merits, not based on who financially supports them. But if that's the case for liberals, it ought to be the case for conservatives, too.
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Graham is the author of the book Pattern of Deception: The Media's Role in the Clinton Presidency (Media Research Center, 1996).
from the Associated Press, 1999-Feb-21:
Gates Foundation Now Sixth Largest
WASHINGTON (AP) -- Boosted by a new donation this month of more than $3 billion, a philanthropic foundation created by Microsoft Corp. founder Bill Gates is now the sixth largest in the country, the latest edition of The Chronicle of Philanthropy said.
The William H. Gates Foundation, named after Gates' father, is now worth $5.2 billion, the biweekly said in its edition dated Feb. 25.
The Lilly Endowment, in Indianapolis, is the largest foundation, with assets of more than $15 billion, followed by the Ford Foundation, $10.7 billion; the David and Lucile Packard Foundation, $9.6 billion; the Robert Wood Johnson Foundation, $7.8 billion; and the W.K. Kellogg Foundation, $6 billion.
After the Gates foundation, others in the top 10 are the Pew Charitable Trusts at $4.7 billion, the John D. and Catherine T. MacArthur Foundation at $4.1 billion, the Robert W. Woodruff Foundation at $3.7 billion and the Andrew W. Mellon Foundation at $3.3 billion.
The Chronicle said the nation's largest foundations increased their giving by 28 percent last year with grants from 122 surveyed foundations rising to $6.24 billion. It said 138 foundations that reported endowment sizes held combined assets at the end of the year of $154.4 billion.
The William H. Gates Foundation provides grants for health, population and education projects worldwide. In addition, Gates established the Gates Learning Foundation, which works to spread Internet access and computer training and is worth $1.4 billion.