Features » June 26, 2006
The New Funding Heresies
What everyone knows (but no one will say) about funding the left
Their names, for the most part, are unknown. But we know a bit about what they’ve been up to. In early May about 100 well-heeled progressive donors from around the country assembled in a luxury resort on the outskirts of Austin, Texas, for a 21st century version of the smoke-filled room (i.e., the smoke-free room). The occasion was the second meeting of the Democracy Alliance, a group of millionaires–including George Soros and insurance magnate Peter Lewis–who’ve pledged to give a minimum of $200,000 a year for the next five years to progressive organizations. Also in attendance were representatives from 25 organizations seeking Alliance funding.
The three-day meeting was partly a conference on the future of the progressive movement–featuring panels on America’s Role in the World, 21st Century Economics and a surprise talk by Bill Clinton, who caused a stir with his testy response to a question about his wife’s continued support of the Iraq occupation–and partly a meeting to decide who would be the beneficiaries of the Alliance’s largesse. On the last afternoon, all of the partners met behind closed doors to make their final decisions.
Oh, to be a fly on that wall.
Since word of the Alliance first spread through progressive circles last year, it has loomed large in the imagination of many in the movement. Its tight-lipped approach to publicity has given rise to rumors, speculation and grumbling about a lack of transparency. But the Alliance’s approach to long-term funding also suggests the promise of a significant change in the way the left is funded, one that many say is long overdue.
In the wake of the 2004 presidential election, more and more progressive funders are coalescing around what might be called the Infrastructure First theory of progressive revival. Originally pioneered by former Clinton Treasury official and Democracy Alliance founder Rob Stein, and now advocated by everyone from DNC chair Howard Dean to SEIU President Andy Stern, the theory goes something like this: The single most important factor in the right’s political dominance over the last several decades is its superior infrastructure–a network of well-funded, tightly coordinated advocacy organizations, grassroots groups, think tanks and media platforms that are capable of mobilizing the base, drawing in new converts, moving the national political debate and exerting astounding influence on elected politicians. In a somewhat legendary PowerPoint presentation, Stein documents the way this conservative infrastructure was built, who funded it and how it works. The Democracy Alliance’s mission is to help build a countervailing force on the left, what is cheekily referred to as the Vast Left Wing Conspiracy.
Indeed, there’s been a shroud of mystery surrounding the group from its very beginning. “Now that we are fully operational, we recognize our responsibility for greater transparency and accessability to the center-left community, including the press,” Stein, who was at the meeting, told me recently. “But last year when the Alliance was literally in formation, we consciously chose not to ballyhoo or promote ourselves.”
Secrecy isn’t limited to the Alliance. In progressive circles, it seems the first rule of fundraising is: Don’t talk about fundraising. Call up someone at a major foundation or a development director and their first response is to go off the record. “There’s a deafening silence within the movement around the role of money in movement building,” says Daniel Faber, who teaches sociology at Boston’s Northeastern University and edited Foundations for Social Change: Critical Perspectives on Philanthropy and Popular Movements. “It’s very difficult to penetrate that veil of secrecy.”
It makes sense. Progressive activists, organizers and leaders are rarely in a position to openly criticize their funders. (That includes In These Times–here’s hoping that the foundation that pays my salary admires our bracing honesty.) And funders find themselves so besieged by requests for money (not to mention right-wing invective, as Soros can tell you), there’s a tendency to fly beneath the radar. But if the progressive movement is going to build an infrastructure to rival the right, it has to examine and undo the numerous dysfunctions that stem from the way it is currently funded. In order to do that, it must initiate a public debate, no matter how awkward such a discussion might be. It might seem churlish to criticize foundations and donors that are giving away hundreds of millions of dollars, but it’s the people writing the checks that tend to make the rules and nearly everyone now agrees those rules need to change.
In more than three dozen interviews, I tried to suss out what the major criticisms of the existing funding mechanisms were and what new models were being set up to address the problems that funders, organizers, academics and observers had identified. I found, much to my surprise, a shocking degree of consensus about what’s broken and how to fix it.
So here, then, are the five heresies held by the new funding consensus.
1) Big foundations aren’t the answer
When you ask Daniel Faber who funds the left, he bluntly says that the dirty little secret is that most of the money comes from large foundations. Faber estimates that “foundation dollars provide 70 to 90 percent of funding support for most social movements.”
The majority of this money comes from just a few large foundations In a recent study of social justice philanthropy, the Foundation Center noted that two foundations, Ford and Robert Wood Johnson, provide 25 percent of foundation grants for social justice work. “That’s a tremendous concentration of influence,” Faber says. “And the problem with the mainline foundations is that they don’t attack social problems in political terms. They look at them in terms of providing services–so they look at them in isolation.”
A program director at one major foundation that funds a wide variety of progressive groups agreed with Faber. “I can’t think of any topic we work on domestically where we feel like we want to build a movement,” she said.
This attitude comes from the reformist culture of philanthropy, which grew out of a distinctly apolitical belief in noblesse oblige and neutered “charity.” But it also results from a concerted effort by conservatives to bully and intimidate foundations away from funding groups that seek to build political power. Foundations like Ford, which funds hundreds of very progressive groups, live in fear of being hauled before Congress, nailed by the IRS or mau-maued by right-wing critics for any perceived political project. (A recent cover story in The Nation recounted the latest dust-up over Ford’s funding of a U.N. conference on racism that exploded into a controversy over anti-Semitism and -Zionism.)
Things are quite different on the right. Partly because conservatives felt shut out of major foundation funding, a network of conservative family foundations grew up in the ’60s to fund the nascent movement. And unlike their mainstream counterparts, the Olin, Scaife, Coors and Heritage foundations all proudly view themselves as funders of the conservative movement.
But for the progressive movement, the single largest source of funding comes from institutions that don’t consider themselves part of the movement itself. This means that organizations are caught between pursuing their political objectives and pleasing their apolitical funders. Kim Klein, a development consultant who has spent three decades helping progressive organizations raise money, says that an over-reliance on foundation money is the “number one dysfunction” of the movement. “It reflects a lack of political analysis about the nature of money,” she says. “If you’re really serious abut social change and social justice, then you want the people engaged in membership to feel ownership. Imagine there are two lines on your phone. One is someone from the so-and-so foundation and the other is a person who lives down the street. I’ll tell you which call most executive directors take.”
2) Fund institutions and organizations, not programs
It’s tempting to view money as money: Why should it matter who a check comes from as long as it clears? But most money comes with strings attached and foundation money tends to have the most strings. Often those strings come in the form of grants for specific programs as opposed to general operating support. By granting money for specific programs, foundations can exert a tremendous amount of control over the organizations they fund. Faber says that the Ford Foundation once had a reputation for being so overbearing that grantees used to ask each other: “Have you been driven by Ford lately?”
Again, this differs from the conservative movement. A 2004 report by the National Committee For Responsive Philanthropy (NCRP) found that between 1999 and 2001 the top 79 conservative foundations gave $94.3 million in general operating support to policy and advocacy organizations against $77.5 million in program funds. In 2005, NCRP released another report which showed that the 10 best-funded conservative advocacy organizations receive 90 percent of their foundation funding in the form of general operating support. By contrast, their counterparts on the left receive just 16 percent of their foundation funding in the form of general operating support.
“There’s a place for project funding,” Stein says, “but if we’re going to build a movement, there has got to be sustainable financial security for our organizations.” This is why Democracy Alliance has committed to primarily providing general operating support. “It is almost impossible to be an aggressive, bold, problem-solving oriented institution without financial security,” Stein says. “By way of example, the Heritage Foundation has a budget of $40 million dollars but they have cash and investments of $100 million. That’s two and half years’ worth of money to be creative.”
3) Think and fund for the long term
Stein says his chief goal is to cultivate a culture of “strategic long-term investment.” Emphasis on programs, he and others say, leads to a flavor-of-the-month effect, where funders support fashionable programs for a few years and then move on to the next new thing. Alison Fine, who has served as CEO of the E-Volve Foundation and consulted with grant-seekers, says, “It’s very hard to get people to put money into long-term infrastructure because it’s not sexy. Funders want to fund things they can count, something they can bring back to their trustees or their country club and say ‘Look at what I funded,’ and what we desperately need is someone who is going to fund the process of progressive change.”
Christopher Hayes is the Washington Editor of the Nation and a former senior editor of In These Times. Read more of his work at www.chrishayes.org.
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