7 Foundations and Collaboration

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DOI: 10.1163/156916307X188997
2007 33: 479 Crit Sociol
Joan Roelofs
Foundations and Collaboration
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Critical Sociology 33 (2007) 479504 www.brill.nl/cs
Foundations and Collaboration
Joan Roelofs
69 Beaver Street, Keene, NH 03431, USA
joan.roelofs@verizon.net
Abstract
Foundations are prime constructors of hegemony, by promoting consent and dis-
couraging dissent against capitalist democracy. Tere is considerable collaboration
among foundations and their networks of nonprots; between philanthropic
foundations and protmaking corporations; and between the foundation world
and government entities, local, state, national and international. We do not have
to posit any secret conspiracies (although they may well exist). Te proponents of
civil society celebrate the erosion of boundaries, especially those between the
public and private sectors, while networks consisting of funders and grassroots
organizations enable the powerful to appear as just another participant. Tese
developments, as Zbigniew Brzezinski has observed, obscure asymmetries in
power and inuence. Democratic institutions are quietly being supplanted by a
new feudalism.
Keywords
foundations, networks, hegemony, civil society
Antonio Gramscis concept of hegemony suggests a conceptual framework
useful for understanding foundations. Gramsci (1971), an Italian socialist
imprisoned by the Fascists, argued that any political system, such as demo-
cratic capitalism, is maintained in two ways. Te more obvious is the polit-
ical realm, or the state, which controls through force and laws. It is
complemented by subtle but essential system-maintenance performed by
civil society, or the private realm, which produces consent without the
threat of force.
Koninklijke Brill NV, Leiden, 2007 DOI: 10.1163/156916307X188997
CS 33,3_f7_478-504.indd 479 5/7/07 4:26:28 PM
by Pepe Portillo on July 29, 2014 crs.sagepub.com Downloaded from
480 J. Roelofs / Critical Sociology 33 (2007) 479504
Foundations are prime constructors of hegemony, by promoting con-
sent and discouraging dissent against capitalist democracy. Tey are not
all-powerful, but their overarching presence deserves far more scrutiny
than they receive from activists, social scientists, or journalists. Teir
inuence is exerted in many ways, among them: creating ideology and the
common wisdom; providing positions and status for intellectuals; control-
ling access to resources for universities, social services, and arts organiza-
tions; compensating for market failures; steering protest movements into
safe channels; and supporting those institutions by which policies are initi-
ated and implemented.
1
Robert Arnove (1980:1) has summarized it as
follows:
. . [F]oundations like Carnegie, Rockefeller, and Ford have a corrosive
inuence on a democratic society; they represent relatively unregulated and
unaccountable concentrations of power and wealth which buy talent, pro-
mote causes, and, in eect, establish an agenda of what merits societys atten-
tion. Tey serve as cooling out agencies, delaying and preventing more
radical, structural change.
A pluralist might argue that foundations couldnt have any signicant
power, as there are a thousand points of light and diverse projects funded
by philanthropy. However, among these lights are some very broad beams.
Tere is considerable collaboration among foundations and their networks
of nonprots; between philanthropic foundations and protmaking cor-
porations; and between the foundation world and government entities,
local, state, national and international. We do not have to posit any secret
conspiracies (although they may well exist). Tere is enough in the public
record to document much cooperative action and foundation intentions to
blur boundaries, especially those between the public and private sectors.
Such boundary erosion adds feudal elements to our purported democ-
racy, yet it has not been resisted, protested, or even noted much by political
elites or social scientists. One explanation for this is that although our
1
Intellectuals in Gramscis sense of the term, which included artists and scholars, clergy,
teachers, journalists, political party and other activists, engineers, public administrators, doctors,
lawyers, social workers, and professional reformers. For a comprehensive treatment of founda-
tion activities see Roelofs (2003).
CS 33,3_f7_478-504.indd 480 5/7/07 4:26:29 PM
J. Roelofs / Critical Sociology 33 (2007) 479504 481
Constitution was a radical creative departure in the 18th century, it did not
provide adequate processes or institutions for coping with the problems of
the 20th century. Historians Barry Karl and Stanley Katz (1981: 243)
acknowledge and document the vast power of foundations in providing
essential services to the polity such as planning, and in training elites for
ecient and enlightened leadership:
Te creation of the modern foundation and its legitimation as a national
system of social reform a privately supported system operating in lieu of a
governmental system carried the United States through a crucial period of
its development: the rst third of the twentieth century.
Foreign policy expert Zbigniew Brzezinski (1997: 25) argues that bound ary
blurring serves United States world dominance, the only alternative to
anarchy:
As the imitation of American ways gradually pervades the world, it creates a
more congenial setting for the exercise of the indirect and seemingly consen-
sual American hegemony. And as in the case of the domestic American sys-
tem, that hegemony involves a complex structure of interlocking institutions
and procedures, designed to generate consensus and obscure asymmetries in
power and inuence.
Te major foundations were created in the early twentieth century by the
new millionaires, seeking to dole out their benevolence in a systematic
manner. Tey also hoped to exert inuence over social progress and public
opinion, which was intensely anti-capitalist at the time. Te Rockefeller
Foundation was chartered by New York State in 1913, after John D. Rock-
efeller decided:
[ T]o establish one great foundation. Tis foundation would be a single cen-
tral holding company which would nance any and all of the other benevo-
lent organizations, and thus necessarily subject them to its general supervision.
(Howe 1980: 29)
Tere were earlier models. Te General Education Board was formed in
1902 by John D. Rockefeller to develop Black education that would be
economically useful and politically harmless. It served as a clearinghouse
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for corporate donors and gave grants to schools and state education
departments, while coordinating the eorts of many philanthropies, such
as Peabody and Slater Funds, Jeanes Foundation, Phelps-Stokes, Julius
Rosenwald Foundation, Carnegie Corporation, and Laura Spel man Rock-
efeller Memorial Fund. Similar partnerships resulted in the 1909 founding
of the National Association for the Advancement of Colored People, which
represented a conservative, elite-led approach to racial integration. During
the 1920s, the NAACP was regarded as a counterweight to the Commu-
nist Party, which was wooing Blacks (Horne 1986: 19). It was aided during
its formative years by the Rosenwald and Peabody Funds, later joined by
J. D. Rockefeller, Jr., Edsel Ford, and the Garland Fund, among others.
By 1928, on the eve of the Depression, the NAACP had amassed a
sucient surplus of funds to invest part of its income in an impressive
array of stocks and bonds . . . (Ross 1972: 106).
From their beginnings, the Rockefeller Foundation and Carnegie Cor-
poration (founded in 1911) were partners. Tey created the American
Council of Learned Societies in 1919 and Social Science Research Council
in 1924 as academic holding companies to distribute research funds. Tese
buer organizations could pass as neutral to activists and academics,
who in those days were still suspicious of the robber barons and all their
activities.
Te governmental National Endowment for the Humanities, Natio nal
Science Foundation, and Fulbright fellowships were modeled on these ear-
lier foundation-created institutions. Now the SSRC is funded by these
government foundations and the United States Information Agency;
the governments of Sweden, Britain, Germany, and the Netherlands; the
United Nations; the Ford, Rockefeller, Carnegie, Mellon, and MacArthur
Foundations; and others.
To formulate foreign policy and its domestic requirements, the Council
on Foreign Relations was created 1921. Originally funded by the Carnegie
and Rockefeller Foundations, it is now also supported by Ford, Soros, and
others, including the government agency, United States Institute of Peace.
2

Today it continues to represent the international side of progressivism,
2
Te Carnegie institutions are not called foundations, but they will be designated as such
for simplication.
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aiming to project United States power throughout the world, and to per-
suade US citizens that this is the only acceptable concept of national inter-
est (Shoup and Minter 1980). Membership links hegemonic elites and
those aspiring to join them; serious presidential candidates and cabinet
members dealing with foreign aairs are usually members. Leading jour-
nalists (including those of the left-liberal press), academics, bankers, law-
yers, CEOs of multinationals, and the foundation people belong, and meet
in its study groups and events. Te CFR belongs to a network of related
organizations, some in other nations, such as the Royal Institute of Inter-
national Aairs in the United Kingdom, and others that are international,
such as the Trilateral Commission, Bilderberg, and the World Economic
Forum. All aim to integrate governmental and non-governmental elites. In
1997 a similar think-tank emerged, the Project for the New American
Century (PNAC) funded by conservative foundations (e.g., Olin, Scaife,
and Bradley). It replaces the white gloves of the CFR with brass knuckles.
From the outset there was congressional scrutiny of foundations, begin-
ning with the Walsh Commissions (US Congress 1915) warning that the
power of wealth could overwhelm democratic culture and politics. Later
investigations (US Congress 1954, 1969a, 1969b, 1973) heralded the
beginning of regulation and prodded the non-prot sector into more for-
mal collaboration. A Commission on Private Philanthropy and Public
Needs was created in 1973, chaired by John H. Filer, CEO of the Aetna
Insurance Company, funded by foundations and corporations, and
endorsed by both the US Treasury Department and Chairman Wilbur
Mills of the US House Ways and Means Committee. It produced a ve-
volume report (Filer Commission 1977) and stimulated the formation of
Independent Sector, a trade association that collects statistics and under-
takes public and governmental relations for nonprots in general. Aca-
demic centers for philanthropy studies were also initiated, the rst being
the Program on Non-Prot Organizations at Yale. Peter Dobkin Hall
(1992: 38) maintains that because of the Filer Commission:
For the rst time all charitable tax-exempt agencies, from giant grant makers
through grassroots activist organizations, were treated as part of a unied
nonprot sector. More than merely reporting on the current state of Ameri-
can philanthropy and voluntarism, the Filer Commission succeeded in creat-
ing a new language and a new conceptual framework, which would profoundly
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shape all subsequent research on voluntary, philanthropic, and charitable
activity.
By the 1970s, corporate foundations had joined the traditional private
foundations in public policy activities. As the civil rights movement became
more militant, the Ford and Rockefeller Foundations responded by creat-
ing the National Urban Coalition to transform Black power into Black
capitalism, the latter usually denoting minority franchise ownerships.
Te NUC was a signicant departure in philanthropy, enlisting corporate
foundations in funding grassroots and civil rights organizations, in addi-
tion to their previous community benevolence or university and think
tank support.
Formal organizations have multiplied. Te Council on Foundations
sponsors the Foundation Center, providing statistics and numerous publi-
cations that may be accessed on their web site or at branch libraries in
every state. Arts funders have their own peak organization within the
Council on Foundations, Grantmakers in the Arts, and a think-tank in
Washington, DC, Center for Arts and Culture. In addition, government
foundations have been created at the urging of the private ones, which
are modeled on them and work collaboratively with them: the National
Endowment for the Arts, the National Endowment for the Humanities,
the Institute for Museum and Library Services, the Corporation for Public
Broadcasting, and the National Trust for Historic Preservation. General
planning for the arts has become feasible.
Cultural funders, both public and private, seem to be reconsidering the axiom
of art for arts sake as a guiding principle and are showing increased interest
in the social and/or civic uses of the arts as well as in the public purposes of
the arts. (Wyszomirski 1999: 475)
Te National Committee for Responsive Philanthropy originated among
Filer report dissenters, and champions minority and low-income grantees,
as does the National Network of Grantmakers. Regional social change
foundations, such as Haymarket Peoples Fund and North Star Fund, have
united in the Funding Exchange. Right-wing foundations co-operate at
the Philanthropy Roundtable and the National Commission on Philan-
thropy and Civic Renewal. Tere are specialized organizations such as
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Midwest Center for Nonprot Leadership, Hispanics in Philanthropy,
the National Society for Fund-Raising Executives, the National Center
for Nonprot Boards, and ARNOVA: the Association for Research on
Nonprot Organizations and Voluntary Action. Te Environmental Grant-
makers Association has among its members the major liberal foundations
(e.g., Ford, Rockefeller, MacArthur, and Mott), conservative funders (e.g.,
Pew, Smith Richardson, Packard, and Hewlett), and corporate foundations:
Ben and Jerrys and Patagonia, as well as BankAmerica, Heinz, Merck, and
Philip Morris.
Many foundations support the Aspen Institute, which sponsors a
Nonprot Sector Research Fund, and presents programs creating links
between grassroots anti-poverty organizations and the national security
elite. Tere are two major research journals in the eld, Nonprot and Vol-
untary Action Quarterly and Voluntas (with an international focus), and
diverse periodicals, such as the Chronicle of Philanthropy, Foundation News,
and Black Philanthropy. Te large foundations and most associations have
newsletters and web sites; particularly useful is Guidestar, a large nonprots
database, including posted tax forms.
Foundations, Protest Movements, and Citizen Organizations
Philanthropy suggests yet another explanation for the decline of the 1960s
and 1970s protest movements. Radical activism was often transformed
by foundation grants and technical assistance into fragmented and local
organizations subject to elite control. Groups may have begun with self-
funding, but those that wished to survive usually sought grants. Subse-
quently, energies were channeled into safe, legalistic, bureaucratic, and
occasionally, prot making activities.
A foundation providing only 10% of a groups budget may never theless
exert decisive control (as a minority shareholder of a corpo ra tion might),
especially if the funds are for new initiatives. Grassroots organizations
often have a considerable portion of their budget supplied by foundations,
sometimes by a single one. Beginning in the late 1960s, both the American
Civil Liberties Union and the National Association for the Advancement
of Colored People/Legal Defense and Educational Fund received crucial
support from foundations. Te Lockheed Martin Corporation Foundation
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supports the NAACP, the Urban League, and the Childrens Defense Fund.
Foundations considered very conservative are nevertheless happy to buy a
piece of the action in activist organizations; thus the Bradley Foundation
gives grants to the Aububon Society, Environmental Defense (formerly
Environmental Defense Fund), and the E. F. Schumacher Society (propo-
nent of Small is Beautiful ).
Grants are not the only way organizations are controlled; award-
winning strategies are conveyed by conferences, consultants, and publica-
tions. Specialized institutions such as the Youth Project and the Center for
Community Change, supported by a consortium of foundations, provide
integrative services and technical assistance to grassroots groups. Unfunded
groups may also be inuenced, as they design their projects and structure
their organizations to qualify for grants. Of course, organizations that do
not seek grants may retain their independence if they can remain self-
funding.
Sponsors may inuence organizations choice of leaders. Te boards of
citizen groups sometimes include foundation personnel, and in any case,
must be attentive to sponsors interests:
Te Rockefeller Family Fund, for example, made its rst grant, $20,000, to a
edgling organization called Physicians for Social Responsibility in 1979. Te
money went to hire PSRs rst executive director and to open its rst oce.
In 1980 the Fund followed with $33,000 for the executive directors salary
and the rst test direct mail appeal. It was a classic example of seed money at
work. PSR took root and owered. Last year it reported 100 local chapters,
16,000 members, 30,000 supporters and an annual budget of $500,000.
Moreover, its establishment credentials undoubtedly created a credibility
that sped the growth of concern over the issue. (Wright et al. 1985)
To ensure that there would be an adequate number of attractive, well-
funded moderate organizations enlisted in the appropriate causes, founda-
tions also created organizations that appeared to be of grassroots origin.
For example, the Ford Foundation started the Puerto Rican Legal Defense
and Education Fund, Womens Law Fund, Environmental Defense Fund,
Natural Resources Defense Council and many others. Sometimes these
paralleled radical groups, such as Central American solidarity or nuclear
disarmament organizations. Energetic and talented leaders of protest move-
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ments would gravitate to those organizations with salaries, oces, travel
budgets, and conference invitations. Karl Marxs (1956: 190) observation
is applicable here:
[T]he circumstance that the Catholic Church in the Middle Ages formed its
hierarchy with the best brains from among the people, without regard to
estate, birth or wealth, was one of the principal means of consolidating priestly
rule and the subordination of the laity. Te more a ruling class is able to
assimilate the most prominent men [sic] of the dominated classes the more
stable and dangerous is its rule.
Te protests of the 1960s evoked a whole range of new organizations, cre-
ated by the foundations and modeled on the NAACP/LDEF and ACLU.
Te new eld of public interest law relied on litigation to redress griev-
ances; it mobilized elites and check-writers rather than masses and street
ghters. Te Ford Foundation took the lead and other foundations sup-
ported the following:
Center for National Policy Review; Lawyers Committee for Civil Rights Under
Law; Legal Action Center; Mexican-American Legal Defense and Education
Fund; NAACP/LDEF; National Committee Against Discrimination in Hous-
ing; Native American Rights Fund; Puerto Rican LDEF; Womens Law Fund;
Womens Rights Project; Natural Resources Defense Council; Center for Law
and Social Policy; Center for Law in the Public Interest; Citizens Communica-
tions Center; Education Law Center; Environmental Defense Fund; Institute
for Public Interest Representation; International Project; League of Women
Voters Education Fund; Legal Action Center; Public Advocates; Sierra Club
Legal Defense Fund; (Bogota, Colombia) Research Center for the Defense of
Public Interests
Foundations coordinated their eorts in this eld through the Council for
Public Interest Law, and to insure an adequate supply of practitioners initi-
ated a Council on Legal Education for Professional Respon sibility.
By the 19701971 school year, 100 law schools were administering 204
clinical programs in fourteen dierent elds of law. In the next ve years
the clinical movement swelled so that by 19751976, CLEPR could con-
servatively estimate that slightly more than 90% of the American Bar
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Association-approved law schools provided some form of credit-granting
clinical education. (Seligman 1978: 162)
Many of the landmark Supreme Court cases (including the early ones
employing Brandeis briefs) were supported by foundations, often acting
in concert. Nevertheless, constitutional law literature usually attributes
this litigation solely to a discrete interest group. Ralph Nader and his
public interest groups have collaborated and coordinated eorts with
foundation-supported public interest law organizations, and foundations
have increasingly supported Naders work. Te challenges to malappor-
tioned state legislatures and congressional districts were deve loped by the
National Municipal League (Ford and Rockefeller-funded) and the Twen-
tieth Century Fund; the Carnegie Corporation and the Ford Foundation
have spent many millions to litigate equal funding for school districts, and
there was substantial foundation sponsorship of the abortion rights litiga-
tion. Such support for progressive activism has certainly brought benets
and liberation to many people. However, it also serves to maintain elite
hegemony, as nearly all social change movements and organizations become
dependent on foundation funding. Radicals either change their tunes, or
they are ejected from organizations seeking comfortable budgets.
Right-wing foundations have adopted the strategies of the liberals. Te
Pacic Legal Foundation, created by the California Chamber of Com-
merce in 1973, inspired Coors, oil companies, and others to found pub-
lic interest law rms such as the Washington Legal Foundation, the
National Legal Center for the Public Interest, and the Mountain States
Legal Foundation. Tese were closely allied with the Heritage Foundation,
and propelled James Watt, Ann Burford, and their ilk into public oce.
Conservative foundations, including Mellon, Bradley, Olin, and Smith
Richardson, also directly nance law school programs embodying the
Law and Economics philosophy, which aims to make the free market
the basis for all law and legal interpretation. Tese initiatives have been
adequately reported and bemoaned in the left-liberal press, which rarely
looks at the funding that is driving the left into the center.
Foundations and Government
Foundations work with governments as any pressure group might, supply-
ing policy ideas and hoping for their enactment, and their eorts in this
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arena are signicant, as foundations oer public policies created in-house
and fund nearly all think tanks where new policies are formulated. Tis
includes those considered left-wing or progressive, such as the Interhemi-
spheric Resource Center, Institute for Policy Studies, Institute for Agricul-
ture and Trade Policy, Worldwatch Institute, Redening Progress, Center
for Responsive Politics, Cultural Survival, North American Congress
on Latin America, National Priorities Project, and the National Security
Archives. Some, like the Economic Policy Institute, Natural Resources
Defense Council, and Human Rights Watch, were initiated with major
foundation involvement.
In addition, power is derived from informal contacts, quasi-ocial status,
joint projects with governments, grants and awards to public agencies, and
policy-implementation roles for foundations or their grantees. Te conse-
quent erosion of the public-private divide, while echoing the old New Eng-
land church-state cohesion, was a goal of the Progressive-era municipal
reform movement. Today, even professors of public administration get into
disputes about which institutions are public and which private; many citi-
zens dont believe that the distinction matters.
Organizations such as the National Municipal League (founded in
1894) were increasingly supported and guided by foundations. Carnegie
and Rockefeller nanced the Bureau of Municipal Research of New York
City, initiated in 1907. Te academic eld of public administration was
largely created during the 1920s and 1930s by the Rockefeller Foundation
and its aliates (the Laura Spelman Rockefeller Memorial, 191828, and
the Spelman Fund, 192849). Foundations funded research institutes
such as Brookings and the National Bureau of Economic Research, and
peak organizations (which combined the functions of pressure groups
and research) such as the American Municipal Association, the American
Public Welfare Association, the National Association of Housing Ocials,
the Council of State Governments, the Municipal Finance Ocers Asso-
ciation, etc. Te Rockefeller Foundation created departments of public
administration to train government personnel at the Universities of Cali-
fornia, Chicago, Cincinnati, Harvard, Minnesota, Virginia and the Amer-
ican University.
To consolidate this new eld, the Spelman Fund developed and nanced
the Public Administration Clearing House, closely associated with the
University of Chicago. Its director, Louis Brownlow, was also Chairman of
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the Social Science Research Councils Committee on Public Administra-
tion. Te Fund also subsidized the stang, publications, and conferences
of the American Society for Public Administration, founded in 1939. By
the late 1930s, an aliate of the Clearing House, the Public Administra-
tion Service, began installing model practices and methods in state and
local government (Roberts 1994: 225).
Te City Manager idea, which claims that cities should be operated
like businesses, was endorsed in 1915 by the National Municipal League
in its Model City Charter. Today the manager form is promoted by the
International City Management Association, which receives major fund-
ing from the Rockefeller Foundation. Another early eort, directed
specically at the legal system, was support (by the Rockefeller Foundation
and Carnegie Corporation) of the American Law Institute for its project to
promote uniformity of all states laws, aiding in the rationalization and
centralization of our political system.
Foundations also inuence local government policy through good gov-
ernment awards and direct grants. Te latter may be small in comparison
to total budgets, but their very existence as a source of public nance might
raise some eyebrows. Furthermore, these grants are almost always for inno-
vation, so their eect cannot be measured in strictly quantitative terms.
Criticism of this funding is usually limited to those who dislike a programs
substance. Tus, parents in Kentucky protested against a public school
requirement for genital examinations:
Who authorized the intrusive program? Not the state legislature. Te pro-
gram, imposed by state bureaucrats, was bankrolled by a private foundation,
the Annie E. Casey Foundation. . . .
US charitable foundations dole out about $100 million each year to state and
local governments. Today virtually every state accepts social agenda grants
from private foundations.
Tey bribe government to take on projects they would not otherwise do,
says Kim Dennis, until recently executive director of the Philanthropy Round-
table, an Indianapolis-based trade association for grantmakers.
Bribe may not be too strong a word. Te governments for sale, says attorney
Kent Masterson Brown, who is suing on behalf of Kentucky citizens to void
the states $299,500 contract with the Robert Wood Johnson Foundation.
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Te 1994 contract provided that the foundation would fund the design of a
comprehensive health care program for the state. (McMenamin 1996)
On rare occasions, liberal critics question the process by which founda-
tions have become gatekeepers to almost all local innovation. Rob Gurwitt
(1998) reports:
In the late fall of 1996, a select subcommittee of the Pennsylvania House of
Representatives made a startling accusation: Private foundations had been
using their grant money to buy public policy. In particular, the legislators
declared, the Robert Wood Johnson Foundation, the inuential New Jersey
health care giant, had been spreading dollars around in an eort to reshape
the states health care system, pursuing its own agenda without regard for
legislative niceties.
Te subcommittees report was blunt. It appears that the Robert Wood John-
son Foundation, the Pew Charitable Trusts, and other foundations are pro-
viding grants as seed money to state, county, and local governmental bodies
to develop new or to expand existing government programs, all without the
informed consent of the General Assembly, it said. Calling these foundations
purchasers of public policy, it went on in outraged tones: It is one thing to
seek change, it is quite another when changes in public policy are inuenced
by the oering of private money to state governmental institutions.
Gurwitt adds that foundations fund every state government, and that in
addition to the original supporters, such as Ford and Carnegie, many new
ones are now involved, such as Enterprise, Edna McConnell Clark, Annie
E. Casey, Kellogg, McKnight, and Annenberg Foundations.
Nearly all reforms in public (as well as private) education originated
with foundations. Te course credit system and centrally-administered
college entrance examinations came about as a requirement for the college
teachers pension program (now TIAA-CREF) started by the Carnegie
Corporation for the Advancement of Teaching. Tese had a major eect
on standardizing high school education throughout the United States, as
college admission increasingly dictated curricula. Carnegie later initiated
new math, Sesame Street, and service lear ning. Ford, along with
Carnegie, were the major promoters of edu cational television and develop-
ers of the Corporation for Public Broadcasting, Headstart, Upward Bound,
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and alternative schools. In 1967, McGeorge Bundy, President of the Ford
Foundation, was appointed by New York Citys mayor as chair of a task
force to plan for NYC school system decentralization.
Public-private boundaries are fading in education. Some school systems
are hiring private corporations to run their schools, school boards nance
independent charter schools, and voucher systems give a public sub-
sidy for students attending private schools, including in some districts,
parochial schools. Many schools use commercial advertising and junk food
vending machines as fundraisers; even textbooks and curricula are linked
to corporate marketing strategies. Corporate foundations are particularly
interested in goals such as increasing the number of students in the math,
science and information technology pipeline. Buzz Bartlett, Director of
Corporate Aairs for Lockheed Martin, testied before the US House
Committee on Science, stating that Lockheed gives $800,000 a year for
k-12 education. Tis is not simply a grant program; Bartlett and others
participate actively in the education reform network, which includes
the Business Roundtables Education Working Group. In addition to the
Lockheed national HQs eorts, [m]ost if not all of our over fty operat-
ing companies are involved in programs in their [sic] schools (US Con-
gress 1999).
Tere has long been close interaction between foundations and national
government. As Karl and Katz have indicated, foundations served as the
planning institutions that our political system lacked. Elites, far from
espousing laissez-faire, increasingly sought trust among competing
corporations, and government intervention to aid in capitalisms survival.
Te Institute for Government Research (now the Brookings Institution)
was created in 1916, led by a businessman and trustee of the Carnegie
Endowment for International Peace, Robert Brookings, and funded by the
Rockefeller Foundation. Te Budget and Accounting Act was an IGR pro-
posal, adopted by Congress in 1921, which turned budget initiation over
to the President and a newly created Bureau of the Budget. Te executive
budget, also adopted by state and local governments, was a move towards
managerialism, and accords with Progressive ideology.
A major social analysis and program for reform, Recent Social Trends in
the United States, was published in 1933 (Presidents Research Commit-
tee), initiated by President Hoover, organized by the SSRC, and funded by
the Rockefeller Foundation. It advocated metropolitan government and
CS 33,3_f7_478-504.indd 492 5/7/07 4:26:33 PM
regional planning to replace obsolete local government structures, and new
governance institutions, such as quasi-governmental and mixed public-
private corporations. Economic and social planning was proposed to cure
the Depression, and the Social Science Research Council was deemed the
appropriate planning institution. Te New Deal was largely created with
such help, although . . . Roosevelt preferred to conceal the fact that so
many of his major advisers on policy and some of his major programmes
[sic] in social reform were the result of support by one or more of the pri-
vate foundations . . . (Karl and Katz 1981: 268). Te social security pro-
gram was designed by the American Association for Labor Legislation, a
group funded by industrialists and Carnegie, Milbank, and Sage Founda-
tions (Domho 1990: 47).
Te main work on the program was done by experts from a private organi-
zation called Industrial Relations Counselors, Inc., which had been founded
in 1921 by John D. Rockefeller, Jr., to search for ways to deal with labor
unrest and avoid unionization. Te organization was closely linked to both
the familys main oil companies . . . and charitable foundations. Tese Rock-
efeller experts worked with other experts and some business leaders through
committees of the Social Science Research Council. . . .
Many of these committee members, including three employees from Indus-
trial Relations Counselors, Inc. were appointed to President Roosevelts Social
Security task force. (Domho 1998: 271)
After social security was enacted there was still the problem of administer-
ing this bold new program. Te Social Science Research Councils Com-
mittee on Social Security (supported also by the Twentieth Century Fund)
was awarded $430,000 (between 19351940) by the Rockefeller Founda-
tion and:
[I]t was the RFs intent that the CSS should coordinate the whole eld of
social security on behalf of Rockefeller philanthropy. Te CSS was created as
an adjunct to the federal social security legislation and fullled the role of
research planner and organizer for the S[ocial S[ecurity] B[ureau]. (Fisher
1993: 150)
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Te SSB was grateful for the extensive assistance of the CSS, which helped
to select personnel and gave technical advice to federal and state ocials.
During the post-World War II period, foundations worked to increase
federal control over a wide range of local functions. President Kennedys
Committee on Juvenile Delinquency became an outpost of the Ford Foun-
dation, and funded the large scale replication of Fords experiments, which
was the beginning of the Foundations dominant inuence in the War
on Poverty. Fords cure for juvenile delinquency, com munity renewal,
required a major reorganization of local government, similar to the arrange-
ments in its Gray Areas projects, so called because they were the areas
between central business districts and suburbs where poor Black, white,
and Hispanic migrants were settling. Public opinion was becoming recep-
tive to the idea that community action was a legitimate federal govern-
ment involvement, in accordance with Fords policy people, who argued
that most local governments were excessively compartmentalized, too nar-
row geographically, and structurally obsolete.
Te Foundations pilot programs, soon to be adopted by Congress, chal-
lenged usual local government structures and processes. Tey were never-
theless politically acceptable in Democratic-controlled cities that hoped for
some federal largess from a Democratic administration. Fords Gray Areas
experiments became a working model of the Federal Governments Great
Society program (Magat 1979: 121). From these initiatives came federal
legislation providing for community development corporations (nanced
by government, corporations, and foundations), which were to establish
small businesses and industries in depressed areas. Te CDCs, often com-
bining education, job training, legal services, housing, health services, and
community organizing, were said by a Ford ocial to be a proxy for local
government (Magat 1979: 122). Tese new entities erased the boundaries
between traditional local government departments; between the public
and private sectors; and among local, state, and national governments.
Local tax money was still part of the mix; other funding included federal
government and foundation grants, business donations and investments,
and any returns on the investment. Boards are rarely elected; they are usu-
ally composed of appointed stakeholders, with elites playing a major role.
Consequently, democratic control is nearly impossible to maintain; today
this format is used not only in impoverished communities but also by
economic development corporations throughout the United States.
CS 33,3_f7_478-504.indd 494 5/7/07 4:26:33 PM
Foundations have strong anities with the Progressive movement, shar-
ing its disdain for electoral politics, which, however messy, at one time
empowered working class constituencies (Hays 1957). Municipal reform
marginalized the poor, and the newer institutions continue this trend.
A contributing factor is the foundation-supported tax law, which allows
grants to 501(c)3 organizations, e.g., including those of poor people, yet
prohibits foundation aid to political parties. For business-oriented candi-
dates, money is always available, but for others, it is hard to scrape up the
big bucks needed to attract attention. In other capitalist democracies, tax
money often supports political parties not merely campaigns and candi-
dates, but also the oces and sta necessary for eective power.
In addition to task forces, advisory committees, and subsidies to govern-
ment operations, there is considerable informal interaction between foun-
dations and government. A 1969 Senate investigation questioned the
honoraria and travel payments to judges, federal and local ocials, and
Congresspeople who participated in foundation conferences, boards, com-
mittees, and the like. It was also concerned about the revolving door,
whereby ocials would go back and forth between government and foun-
dation employment.
Te foundation witnesses claimed that they were being singled out
unfairly, as businesses and trade associations were lavish with honoraria
and travel expenses. When the inquisitors said foundations were dierent
because they were tax exempt, the rebuttal was that commencement speak-
ers were often government ocials and they receive honoraria. Many
examples oered by the foundations in their defense revealed the great
importance of foundation-supported think tanks and policy networks,
e.g., Council of State Governments, to the education and socialization of
government ocials.
McGeorge Bundy, then President of the Ford Foundation, stated that it
had only one federal judge on the Board of Directors, and that:
I have been out of the Government 3 years now but I did come straight from
government to a foundation. Our vice president for international aairs . . .
came to us straight from . . . Director of the AID.
Dean Rusk . . . went straight from Assistant Secretary of State to the presi-
dency of the Rockefeller Foundation and when he left the oce as Secre-
tary of State he received a senior appointment again at the Rockefeller
CS 33,3_f7_478-504.indd 495 5/7/07 4:26:33 PM
Foundation. . . . Cabinet ocers seek out some of our program ocers or vice
presidents and ask them if they are available for service. . . . We had a represen-
tative in one part of Latin America who accepted an appointment as an Ambas-
sador under the Johnson administration. (US Congress 1969b)
New regulations were enacted, but they did not greatly interfere with these
arrangements; in recent years, the Pew Charitable Trusts has been sponsor-
ing civility retreats for the entire US House of Representatives at the
Greenbrier Resort (Shenon 2001). Although foundations were forbidden
by law to . . .persuade members of legislative bodies or government
employees to take particular positions on specic legislative issues, except
in the course of technical advice or assistance rendered in response to a
written request, they could fund occasions or institutions of general
inuence without penalty (US Congress 1970).
As is evident from the testimony above, the foundations have intimate
connections with the United States foreign policy apparatus; they had
extensive political and cultural dealings with nations on every continent at
a time when the US government maintained only formal diplomatic rela-
tions. Te United Nations and its component agencies have also been
greatly aided by foundations and receive grants for special projects. John
D. Rockefeller, Jr., gave an $8.5 million gift enabling the UN to buy the
land for its East Side New York headquarters.
Te leading capitalist front organization, the (Rockefeller and Carnegie-
initiated) Council on Foreign Relations, which unites business, labor lead-
ers, government ocials, journalists, and foreign policy academics,
supported the Central Intelligence Agencys creation and close links remain
(Marchetti and Marks 1980: 237). Te Cold War initiated concerted
action on the cultural front by foundations and the CIA; a major objective
was to persuade European intellectuals that the United States was not only
a free society, but also a culturally rich one that did not repress its artists
as did the proponents of socialist realism. Foundations were used as pass-
throughs for government money; they also funded government-approved
operations themselves (Congressional Quarterly 1967; Saunders 1999). Te
best known of these projects was the Congress of Cultural Freedom and its
journal, Encounter; there was a whole slew of such undertakings, including
world tours of abstract expressionist paintings and the Boston Symphony
Orchestra.
CS 33,3_f7_478-504.indd 496 5/7/07 4:26:34 PM
CIA and foundations together created and supported area studies
institutes aliated with universities to enlist scholars in the Cold War. Te
Russian Research Center at Harvard, the European Institute at Columbia,
and the Center for International Studies at MIT, among others, departed
from normal academic procedures by their location outside of the univer-
sity departments, their broad interdisciplinary approaches, and their fre-
quent waiver of academic credentials. Students, professors, and sta were
foundation-funded, and former government ocials or migrs without
degrees often became senior fellows. A further shift in academic conven-
tions was their close association with government agencies and their con-
siderable participation in classied research. Development studies were
similarly endowed, and often overlapped with area studies programs. Teir
ideology reected the nancial interests of foundation trustees and portfo-
lios, and they worked to create a well-educated Tird World elite dedicated
to capitalism and economic growth (Berman 1983: 113).
In the case of South Africa, the challenge for Western elites was to dis-
connect the socialist and anti-apartheid goals of the African National Con-
gress. Foundations aided in this process, by framing the debate in the
United States and by creating civil-rights type NGOs in South Africa. In
1978 the Rockefeller Foundation convened an 11-person Study Commis-
sion on US Policy Toward Southern Africa, chaired by Franklin Tomas,
President of the Ford Foundation; it also included Alan Pifer, President of
the Carnegie Corporation of New York.
In Eastern Europe, the 1975 East-West European Security agreement,
known as the Helsinki Accords prompted the foundations to create
Helsinki Watch (now Human Rights Watch), an international NGO for
monitoring the agreements; Rockefeller, Ford, and Soros Foundations are
prominent supporters. Te Ford Foundation also funded the London-
based East European Cultural Foundation, one of several new foundations
begun in the 1980s promoting Western-style pluralism in Eastern Europe.
Te EECF (n.d.) states that it was:
[C]reated in response to requests from Central and Eastern Europe for
eective assistance in maintaining cultural, intellectual and civic life in these
countries and to prevent their isolation from each other and from the West.
Te EECF encourages and helps to facilitate various forms of creative
work by Czechs, Slovaks, Hungarians and Poles, and dialogue between Polish
CS 33,3_f7_478-504.indd 497 5/7/07 4:26:34 PM
Solidarity, Czechoslovakias Charter 77, the Hungarian democratic opposi-
tion and unocial peace and human rights activists in East Germany, and
between these groups and the West.
When the Central Intelligence Agencys covert use of foundations and
organizations (such as National Education Association and National Stu-
dent Association) became public in 1967, there was a brief period of indig-
nancy. Congress eventually created a new institution in 1983 to put a
dierent face on this type of intervention: the National Endowment for
Democracy. NED initiates some projects, distributes grants, and directly
funds nonprot organizations or for-prot subcontractors. Te subsidiar-
ies or core grantees of NED are the Center for International Private
Enterprise (an aliate of the US Chamber of Commerce), the American
Center for International Labor Solidarity (aliated with the AFL-CIO),
and, representing the two major political parties, the National Democratic
Institute for International Aairs and the International Republican Insti-
tute. Private foundations, for example, Smith Richardson and Mellon-
Scaife, also chip in. Te Mott Foundation (1998) gave the NDI $150,000
in 1998 to increase public condence in democratization and the transi-
tion to a market economy in Ukraine; it also donated $50,000 for elec-
tion monitoring. Foundations and the NED funded overthrow groups
such as the Civic Forum in Czechoslovakia, Solidarity in Poland, Union of
Democratic Forces in Bulgaria, and Otpor in Serbia (Cohen 2000: 42).
Te US Agency for International Development and a special fund for
Eastern Europe, Support for East European Democracy (SEED), have
projects similar to those of the NED. Tis includes funding foreign politi-
cal parties a clear violation of the UN Charter; a reciprocal arrangement
would, in addition, violate US law.
Other NATO democracies now have government foundations cognate
to NED and work cooperatively, e.g., the Canadian Rights and Democracy
and the British Westminster Foundation for Democracy. France, Nether-
lands, Greece, Italy, Sweden, and Germany fund political party founda-
tions that are especially active in Latin America and Africa. For example:
[T]he Konrad Adenauer Foundation [of the German Christian Democratic
Party] has been widely known for its manipulation of the political processes
of Latin American countries such as Chile in the 1960s and Guatemala and
CS 33,3_f7_478-504.indd 498 5/7/07 4:26:34 PM
El Salvador in the 1980s. Furthermore, from the 1960s onward, it has been
legendary in Latin America for its role as a laundry for CIA funds. A recent
example of this role was in the 1984 presidential campaign of Christian Dem-
ocrat Jose Napoleon Duarte in El Salvador, when the Adenauer Foundation
acted as a conduit for $350,000 in CIA funds designated for Duartes cam-
paign. (Council on Hemispheric Aairs 1990: 12)
Te 1990 election of Violetta Chamorro in Nicaragua was a similar group
eort. Te European members of the Socialist International (an associa-
tion of socialist and social democratic parties worldwide) have their own
foundation, the European Forum for Democracy and Solidarity, which
distributes democratization aid.
Current arrangements embody the international side of Progres sivism
public-private partnerships on a world scale. Tey entwine foundations,
government programs, quangos (quasi-non-governmental organizations),
nongovernmental organizations, and international governmental entities.
Te frequent objective of these projects, often called democracy promo-
tion is to foster neoliberalism, which entails pri vatization of most govern-
ment functions, business deregulation, abolition of subsidies and welfare,
and availability of all assets (land, TV stations, national newspapers, etc.)
for purchase by any corporation, regardless of nationality. Freedom also
means that foreigners can start any business anywhere, including a new
university or a radio station. Democratization is sometimes even associated
with the right of foreigners to be candidates for national oce, but it does
not abolish immigration restrictions for the unmonied. Huge grants have
been used to persuade Eastern Europeans that NATO membership is a
prerequisite for democracy, and to prepare nations for their absorption
into it.
Te European Union also has worldwide grant programs for sustainable
development and democratization, as do UN agencies such as UNICEF,
WHO, UNESCO, or FAO. Te UNs Department of Peacekeeping Oper-
ations has an Electoral Assistance Unit, which helped organize the Nicara-
guan 1990 election that led to the defeat of the Sandinista government
(Pinto-Duschinsky 1997: 304). Another UN entity, the World Bank, has
a grantmaking foundation unit that sponsors, guides, and coordinates
grassroots poor peoples organizations. Mongolia, as many former com-
munist countries, has lost its welfare and health care systems, and the
CS 33,3_f7_478-504.indd 499 5/7/07 4:26:34 PM
free market has not had enough time to provide auence on the US and
European models. To compensate, PACT (Private Agencies Collaborating
Together), a US-based NGO, is working to foster economic and civic
development of the Gobi region, in coordination with Mercy Corps Inter-
national and Associates in Rural Development. In order to ensure a strong
market economy, the group is developing and promoting information
technology use throughout the region (Civnet 1998). Mongolias Soros
foundation (see the article in this issue by Nicolas Guilhot), as those else-
where, attempts to organize the desocialized economy and society. Media
enterprises associated with Soros, such as Transitions on Line are also
becoming the major sources for information about these countries. Foun-
dations usually have a hand in alternative media, from public broad-
casting in the US to OneWorld.net, supported by Ford Foundation,
Netherlands Ministry of Foreign Aairs, Rockefeller Brothers Fund, and
others (see the article in this issue by Bob Feldman).
Other examples of Byzantine foreign policy operations include Partners
for Democratic Change, formed to build civil society in Eastern Europe,
the former USSR, and Argentina (all emerging democracies). Te orga-
nization has directors from the Kettering and Eisenhower Foundations,
United States Information Agency, European Commission, and Council on
Foreign Relations, among others. Te Civic Education Project, to assist
universities in East European and former USSR, includes directors from the
Soros-created Central European University, Boeing Corporation, Harvard,
Yale, Princeton, and the German Marshall Fund. Its contributors include
Mobil Oil, the European Commission, Ford Foundation, MacArthur
Foundation, the North Atlantic Treaty Organization, IBM, and several
Soros foundations. CIVICUS, a world alliance of citizen action organiza-
tions, contrasts its structure with that of churches and socialist internation-
als: In both cases, the global drive was promoted by a centrally organized
institution, be it a church or a political organization, spreading its compass
to the periphery (Tandon and de Oliveira 1994). CIVICUS constituents,
on the contrary, are said to be spontaneous actors, motivated by values,
who create associations from the bottom up. Todays movement is not
being promoted by one all-encompassing structure. Nevertheless, CIVI-
CUS is an elite network in which collaborating funders hold asymmetri-
cal power.
CS 33,3_f7_478-504.indd 500 5/7/07 4:26:34 PM
Te expensive conferencing of these networks tends to incorporate all
protest, dissent, and reform energies into a fragmented, pragmatic, NGO
model dependent on foundation funding, and attractive enough to draw
away partisans or potential recruits of structural change movements. A lead-
ing promoter of NGOs, Tomas Carothers, Vice President for Global Pol-
icy at the Carnegie Endowment for International Peace, had this to say:
[M]ost of the new transnational civil society actors are Western groups pro-
jecting themselves into developing and transitional societies. Tey may some-
times work in partnership with groups from those countries, but the agendas
and values they pursue are usually their own. Transnational civil society is
thus global but very much part of the same projection of Western political
and economic power that civil society activists decry in other venues. (1999
2000)
Foundations have organized grassroots networks such as the Slum Dwell-
ers International, the Shackdwellers International, and GROOTS (Grass-
roots Organizations Operating Together in Sisterhood), which boast of
their distinction from archaic social movements of the past, such as earlier
rural and urban movements of the poor, including trade unions and left-
wing political parties (SDI 2004). Tese groups are prominent at alterna-
tive summits like the World Social Forum also aided by foundations.
Even where, as in Bombay 2004, organizers refused general support from
the Ford Foundation, the participating NGOs (and poor peoples travel)
we are aided by foundations (see article in this issue by RUPE-India). One
critic, David Rie (1999), suggested that the civil society system promoted
and sustained by foundations is a new feudalism. Donors (mostly foreign),
NGO leaders, and members are lined up in patron and client relation-
ships; in comparison, national and local political institutions have little
power, prestige, or funding.
In accordance with the feudal spirit, globalization advocates champion
networks. Celebrated as nonhierarchical, networks enable the powerful
to appear as just another participant, as in the roundtables of local poli-
tics. As Brzezinski observed, they obscure asymmetries in power and
inuence. Tus are democratic institutions quietly being supplanted
by public-private partnerships, advocated by the Recent Social Trends
authors.
CS 33,3_f7_478-504.indd 501 5/7/07 4:26:35 PM
Tis study has shown that the pluralist model of civil society obscures
the extensive collaboration among the resource-providing elites and the
dependent state of most grassroots organizations. While the latter may
negotiate with foundations over details, and even win some concessions,
capitalist hegemony (including its imperial perquisites) cannot be ques-
tioned without severe organizational penalties. By and large, it is the
funders who are calling the tune. Tis would be more obvious if there were
sucient publicized investigations of this vast and important domain.
Tat the subject is o-limits for both academics and journalists is com-
pelling evidence of enormous power.
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