PHILANTHROPY AND FOUNDATIONS. The Role of Foundations in Democracies. Participants

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1 PHILANTHROPY AND FOUNDATIONS Session Title The Role of Foundations in Democracies Historians and political theorists on this panel will analyze the role of foundations in a democracy. Drawing on the history of the Rockefeller Foundation in the United States, for example, political theorist Rob Reich examines the peculiar institutional form that is the modern American philanthropic foundation and explores its fit with democracy. He concludes that despite many anti-democratic features the modern foundation is not incompatible with democracy. Political theorist Emma Saunders-Hastings studies the implications of considering foundations as one kind of (potentially) undemocratic influence among many. In her paper, she asks how the normative and regulatory questions raised by foundation influence compare to those posed by wealthy donors to political campaigns; by corporate political spending and corporate advertising; and by well-organized interest groups. Historian Maribel Morey presents some of her current research on the history of the Carnegie Corporation s funding for black Americans in the United States during the first half of the twentieth century. She concludes by analyzing how, leaning on this research, today s foundations can become vehicles for strengthening (rather than undermining) minority groups empowerment in democratic societies. From his end, historian Lars Trägårdh continues the panel's discussion of foundations and democracy, while expanding the group's scope beyond the United States and to the Swedish context. He explores from a comparative and theoretical perspective the historical trajectory of foundations and philanthropies in Sweden. Participants Maribel Morey, moreym@clemson.edu; Clemson University (Session Organizer) "Repugnant to the Whole Idea of Democracy : On the Role of Private Foundations in Democratic Societies "Repugnant to the Whole Idea of Democracy : On the Role of Private Foundations in Democratic Societies Rob Reich, reich@stanford.edu; Stanford University, Dept of Political Science (Presenter)

2 I examine the peculiar institutional form that is the modern American philanthropic foundation, and I explore its fit with democracy. I begin with an account of the controversy surrounding the creation of the Rockefeller Foundation, a largely forgotten historical episode that reveals attitudes and reservations about philanthropy virtually never heard in our contemporary era. I then turn to an examination of the legal design of the contemporary private foundation low accountability, transparency, donor intent protected in perpetuity, and tax advantaged treatment that renders it an institutional oddity in democracy. Private foundations are, more or less by definition, the legal sanctioning, or more precisely, the legal promotion of plutocratic voices in democratic societies. For this reason, the existence and growing power of private foundations to influence public policy sits in tension with ordinary democratic expectations of the political equality of citizens. I conclude that despite many anti-democratic features the modern foundation is not incompatible with democracy. In fact, when foundations function in support of what I will call Pluralism and Discovery, they can be important contributors to democratic societies. Are Foundations a Countervailing Force? Are Foundations a Countervailing Force? Emma Saunders-Hastings, saundershastings@uchicago.edu; University of Chicago (Presenter) How might we justify the kind of influence that large philanthropic foundations exercise in democratic societies? Despite the public benefits that foundation grants can confer, many observers worry that foundations represent an exercise of unaccountable elite influence. In responding to this charge, defenders of foundations sometimes claim that foundations act as a counterweight to other kinds of non-democratic influence. In this paper, I examine the implications of considering foundations as one kind of (potentially) undemocratic influence among many. I ask how the normative and regulatory questions raised by foundation influence compare to those posed by wealthy donors to political campaigns; by corporate political spending and corporate advertising; and by well-organized interest groups. I distinguish between two ways of interpreting foundation activity as a countervailing force, and I identify the different kinds of evidence that each would require to be convincing as an all-thingsconsidered defense of the role of philanthropic foundations in democratic societies. First, we might think that foundations act as a counterweight by producing different effects on public life than

3 do other influential agents. For example, foundations grants have helped to fund anti-smoking advertising campaigns. They have done so not in a vacuum but rather in competition with other private money: the money spent by cigarette companies on advertising and lobbying. For any given issue area, foundation money is rarely the only non-democratic form of influence at work, and so it can be misleading to evaluate the normative case for foundations without considering this broader ecology of influential money. However, there are difficulties with the countervailing effects justification for foundation influence. These lie not only in determining whether it is generally true that foundation and corporate interests operate at cross-purposes rather than reinforcing each other (consider, for example, the pro-privatization position of many foundations involved in school reform). The deeper problem is that this is not a democratic defense of foundations but rather a consequentialist one. By the standard of producing good countervailing effects, foundation efforts to co-opt legislators (as a counterweight to the legislators influenced by wealthy or corporate spending) would fare just as well. A stronger defense of foundations as a countervailing force in contemporary democracies would be possible if we could show that foundations represent different interests or constituencies from those represented by corporate, elite, or interest-group influence. This would require showing not just that foundations happen to promote different agendas but that they do so in ways reliably connected to the interests and preferences of otherwise-underrepresented populations. I argue that, while this is a stronger democratic defense for a positive democratic role for foundations, it is not a defense that can justify the status quo. In existing democracies, philanthropic regulation and public attitudes around philanthropy overwhelmingly defer to the preferences of donors. Under these conditions, foundation philanthropy expands and diversifies but does not offset elite influence. Civil War in Civil Society: Philanthropy and Foundations in the Shadow of Democratic Social Movements in Sweden Civil War in Civil Society: Philanthropy and Foundations in the Shadow of Democratic Social Movements in Sweden Lars Tragardh, lars.tragardh@esh.se; Ersta Skondal University College (Presenter) This paper will explore from a comparative and theoretical perspective the historical trajectory of foundations and philanthropies in Sweden. Historically, foundations and philanthropies have in Sweden played second fiddle to the dominant Social Movement tradition. In the socio-political imaginary of Sweden, modern political culture is tightly linked to the popular movements the Free Church, Temperance, Peasants, Cooperative and Workers movements that emerged in the 19th century. Ideal-typically, these movements represented a particular type of civil society organization, based on a membership model and informed by democratic governance rules. They became known as schools for democracy and perceived as key partners in the modern

4 corporatist set-up also characterized as popular movement democracy. Even though they were largely hidden from view and ignored by most historians, foundations and philanthropies were nonetheless also important actors, not least during the late 19th and early 20th centuries. During the hey-day of the welfare state, however, charity and philanthropy came to acquire a bad name, criticized for entrenching existing class structures and for being un-democratic. A civil war broke out in civil society, pitting charities and philanthropies against social movements tied to the dominant Social Democratic party that sought to replace philanthropy with taxes and charity with social rights. Nonetheless many foundations, philanthropies and charities survived and continued to operate, especially in areas like health, science, foreign aid, and assistance to the marginalized (drug addicts, homeless, etc.). Today we find ourselves in yet another phase that has been described as the return of charity and philanthropy, involving changes in both law & policy and in the social values that underpin or undermine acceptance of charity. How can we understand this development in comparative and theoretical terms? Learning from the Carnegie Corporation: The Role of Foundations in the Lives of Minority Groups in a Democracy Learning from the Carnegie Corporation: The Role of Foundations in the Lives of Minority Groups in a Democracy Maribel Morey, moreym@clemson.edu; Clemson University (Presenter) For over a century, big foundations in the United States have made minority groups targets of their philanthropic spending. In the early years of the twentieth century, for example, the Rockefellers General Education Board and Andrew Carnegie's Carnegie Corporation funded programs particularly marked for black Americans. These foundations first advocated the Tuskegee model of segregated education for black Americans as the panacea to white-black relations in the United States. This model of black education was promoted by Booker T. Washington, principal and founder of Tuskegee Normal and Industrial Institute in Alabama, and outlined in his famous Atlanta Compromise address of It was a form of education that trained black Americans to assume jobs in the lower rungs of the Southern economy; jobs that presumably would facilitate former slaves paths toward economic independence without disrupting white Southerners call for racial superiority in the region. It was an educational model that presupposed the need and attractiveness of maintaining a segregated society with whites as dominant and blacks as subordinate. Then, in the later half of the twentieth century, big philanthropy became known as advocates of racial equality in the United States. By the 1960s, for example, the Carnegie Corporation had initiated a social justice agenda. The Rockefeller Foundation launched an equal opportunity division; and from its end, the Ford Foundation funded black freedom movement efforts.

5 As I explain in greater detail in my current book manuscript, this shift began when the Carnegie Corporation commissioned and funded the Swedish economist Gunnar Myrdal s An American Dilemma (1944); a central text of the civil rights movement. In making this decision, the organization s leadership was driven not by concerns for grassroots activism, World War II ideology or Cold War foreign policy imperatives, but rather both by a patronizing altruism toward black Americans and a self-interest in maintaining racial and economic stability in the United States. Even more, these were the same motivations that had led these white men to fund the Tuskegee model throughout the first decades of the century. If anything, what changed for them was their increased faith in the applied social sciences. Reading this historical narrative of how and why the Carnegie Corporation came to commission and fund An American Dilemma, contemporary philanthropic organizations might feel tempted to want to mimic the steps that the Corporation took in funding Myrdal s project. After all, many of today s leaders herald this central text of the American civil rights movement as one of the most important results of grant-making by the foundation. However, it is worth noting that the Corporation s staff and trustees who funded Myrdal s project maintained the same motivations that had driven them to support the Tuskegee model of education; a funding practice that today s philanthropic leaders are less proud. This paper concludes with an analysis of what contemporary philanthropic leaders might learn from this historical case study; and in the process, how they can become vehicles for strengthening (rather than undermining) minority groups empowerment in democratic societies. For example, I will propose several ways that the historical actors in this paper could have avoided being patronizing in their altruism toward black Americans; what these white men could have kept in mind as they promoted education and then the applied social sciences as the key to race relations in the United States; and lastly, how their goals in achieving racial and economic stability necessarily made them less-than zealous advocates for black Americans equal status in society.