Leftist Foundations Under Fire

The news media's treatment of foundation involvement in public policy may have changed forever on March 17. That was the day the New York Post published "Buying 'Reform': Media Missed Millionaires' Scam," an account by one of its columnists, Ryan Sager, of the massive spending by several mainstream foundations to secure passage of the 2002 overhaul of campaign-finance laws and to keep the issue alive.

Mr. Sager told his readers he had discovered "an immense scam perpetrated on the American people by a cadre of left-wing foundations and disguised as a 'mass movement.'" Foundations like Ford, Open Society, Carnegie, Joyce, and MacArthur, he noted, had spent some $123-million from 1994 to 2004 to secure passage of the campaign law.

More than $40-million of that money, Mr. Sager said, had come from the Pew Charitable Trusts, where the program officer in charge had been Sean Treglia. Mr. Sager quoted from a videotape of a lecture Mr. Treglia had given at the University of Southern California in which he explained just how Pew had built support for passage of the campaign law.

Mr. Treglia said the foundation had made grants to "create an impression that a mass movement was afoot -- that everywhere they [members of Congress] looked, in academic institutions, in the business community, in religious groups, in ethnic groups, everywhere, people were talking about reform."

To maintain the illusion of a spontaneous upwelling of support for changes in campaign financing, Mr. Treglia said he "always encouraged the grantees never to mention Pew."

Mr. Sager's exposé ricocheted immediately throughout the burgeoning network of conservative Weblogs, or "blogs." It climbed quickly through right-leaning newspapers, with articles and editorials in The New York Sun, The Washington Times, and The Wall Street Journal, and into the prominent conservative journals National Review and The Weekly Standard. By late March, an audience of millions could catch snippets of the Treglia tape on Fox News. The story even achieved conservative "gatehood" status, often referred to as "Pewgate."

As Rebecca Rimel, president of the Pew Charitable Trusts, told journalists and others, none of Pew's spending was even close to the line of illegal lobbying. Mr. Treglia apologized for giving the impression that Pew or its grantees had engaged in manipulation.

But the substance of this story is less interesting than the fact that it became a story at all. For this episode marks the coming of age of an entirely new communications network, which will bring its own special angle to reporting on philanthropy and public policy.

Traditional journalists tend to take at face value the research on public policies generated by major foundations and nonprofit organizations. Mr. Treglia tried at the University of Southern California meeting to explain to an audience of journalists how this can prepare the ground for political change, but they still saw nothing newsworthy in what he said. Most reporters pass on study results unskeptically, seldom inquiring into possible deeper political agendas.

That is because modern journalism and modern philanthropy are ideological twins. Both are heirs of American progressivism, which championed the displacement of parochial, partisan wrangling in public life by the nonpartisanship, objectivity, and professionalism of public-policy experts.

Ms. Rimel captured this perfectly in her response to "Pewgate" in a letter she wrote to The Wall Street Journal: "In an era of personal attacks and polarization, the Trusts strive to provide objective information and to seek common-ground solutions to many of our country's most vexing problems." Its approach has worked. As Martin Morse Wooster observed in a column in the Journal, "on NPR and in David Broder columns," Pew and its grantees "are treated as benign truth-tellers, so high-minded as to be beyond politics."

But Pewgate signaled a big change. It revealed a new and extensive conservative communications network outside of and harboring deep suspicions about the old, cozy fraternity of press and philanthropy. Conservatives have long regarded the mainstream news media as hopelessly skewed to the left. But their new network is now noticing much the same thing about mainstream foundations.

It seems that no matter what the issue -- the environment, health care, urban renewal, or electoral reform -- the philanthropic prescription is invariably to get the government to do more taxing and spending so it can pay for more trained experts who will assume responsibility for more of our affairs. Foundations may insist such recommendations spring from pure rationality and objectivity. But the new network has another name for them: liberalism.

If this seems harsh, conservative grant makers can only say, "Welcome to our world."

For mainstream journalism's uncritical acceptance of philanthropic research abruptly ceases whenever conservatives finance a study. Suddenly, reporters are acutely sensitive to and eager to unearth devious, sinister ideological agendas. To show how far this goes, a recent Washington Post article alertly included a list of a nonprofit group's conservative backers -- in the obituary for the group's director. That, of course, only reinforces the perception that the mainstream news media has a clear ideological agenda of its own. The new conservative network will simply help establish a more level playing field for journalistic treatment of foundations.

Any foundation interested in public-policy activism can now expect its implicit political inclinations to be vetted far more thoroughly and publicly than before. It will be much more difficult for donors to operate beneath the radar, justifying their low profile by saying that they are simply objective servants of the public interest. After all, the new networks were born of a reaction against precisely that claim by mainstream news media, and so are inclined to suspect hypocrisy whenever it is made. All foundations -- not just those on the right -- that want to shape public policy will now be treated as political actors.

Pew discovered what that means, when its response to the allegations by Mr. Treglia came out this way on Fox News: Pew said "it did nothing wrong and is proud of the $40-million it spent to get other people's money out of politics." Unfair? Of course. That's politics; be sure to wear a helmet.

As for the conservative network, I hope it will pay more attention to philanthropy, studying and reporting on its trends, fancies, procedures, and technologies. I have high hopes in particular for conservative bloggers.

Several of them -- Ryan Sager at Miscellaneous Objections, Winfield Myers at Democracy Project, and Mark Tapscott at Tapscott's Copy Desk -- did solid reporting on Pewgate, in spite of their relative unfamiliarity with the field. None of them, for instance, charged Pew with breaking the law -- though that did not stop Pew from acting as if this were the only charge to which it needed to respond.

Bloggers are scrappy, radically individualistic insurgents. They like nothing better than to take on tottering institutional empires, where arrogant, insulated leaders have escaped accountability for their lethargy and corruption by virtue of the fear they have instilled within the respectable, established commentariat. So it is just a matter of time before serious blogging comes to philanthropy. But we need bloggers who are veterans of the field, and who know how to interpret the opaque, impenetrable jargon and stylized, empty ceremonies of that world. By mercilessly critiquing the foundation world's "official" literature and rituals, actual transparency might be encouraged.

Bloggers should also do shoe-leather reporting and investigating. Hollow, exaggerated claims for a foundation program's success could quickly be deflated by behind-the-scenes reports on what is really happening on the ground.

Blogs will also be available for back-channel contributions from foundation staff members who wish to report squandered resources, dishonest publicity, or overbearing leadership. As the conservative commentator Hugh Hewitt notes in his insightful book Blog: Understanding the Information Reformation That's Changing Your World, real leadership changes came to The New York Times when its staff members' disgust over the Jayson Blair scandal erupted onto the Internet.

Some will quail before this new media world, complaining that now is hardly the moment for heightened criticism of foundations, with Congress poking around. But it is precisely this paranoia about negative reporting -- this priggish reluctance to air differences and difficulties before outsiders -- that prompts Congress and the public to suspect foundations have something to hide. Awareness that they are being scrutinized tends to keep large organizations nimble, alert, and alive. Why should philanthropy be any different?

Foundations that want to become active in public policy should not be discouraged from doing so. But it is important for board and staff members alike to take a long, searching, honest look at the political assumptions the foundation inevitably carries into the public fray. Those assumptions will quickly be brought to light, by others who do not share them. It will no longer be credible to profess innocence of political intent in the name of objectivity. Foundations may find the new world of press and public policy to be messier, louder, and less genteel. But we will all find it to be more honest, more balanced, and ultimately, more informative.

Don't forget that foundations are really a form of artificial person like a corporation that Congress has given tax exempt status to. When it is formed, it has no assets. Donations are tax deductable. The founder starts things off with a big and "generous" donation, and recruits his like-minded pals to be on the Board. If this donation is handled correctly, this donation will be tax-advantaged with respect to estate tax.

The important fact to remember is that as the law presently reads, if a foundation has a sufficient level of assets, in effect it has eternal life. A foundation must give away 5% of its assets each year, but according to several sources, it appears the average foundation portfolio has enjoyed a 7.5% rate of return.

So, the foundation may even grow in assets over the years. As time passes, the Board always drifts away from the founder's intent, and frequently the drift is to the left.

Part of the blame for the influence of foundations can be found in the death and gift tax law- where if you have a lot of assets, particularly (like Bill Gates) in the form of stock that has increased greatly in value, you really must give it away to a tax exempt cause or see the government seize more than half its value. Give it away or give it to Hillary.

As such, this means that the portion of US wealth in the hands of foundations will grow. All they have to do is not spend money faster than they are making it, and as long as they spend enough to retain their tax-advantaged status.

One simple solution would be to increase the 5% to 8%. This would flush more grants and donations out of the foundations into the hands of people they normally donate to, and would boost leftist causes in the short run, but in the long run it would force them into a slow death.

At the turn of the last century, we had a great public debate about the Big Trusts such as the oil companies. Some politicians were elected to 'bust the trusts'. The time has come to bust the foundations, at least bust them from having eternal life down to just having normal mortality, like the rest of us.

Thank you for this ping, JJ.

The following is key, IMHO:

It's the blind eye -- that which continues to let, for example, heinous, foul and racist/sexist comments by lib-dems to be "overlooked" whereas Republicans are given the "dangling lightbulb and single chair" treatment. Smashing through that "veil" is a toughie; but I am glad to see it happening, and in whatever doses it does arrive. The progressive groups have not only become a government unto themselves but a religion, too. This bias FOR those groups progressive is WHAT IS CONTRIBUTING, most-so, IMHO to the "hostile" communications situation that the very progressives seem perpetually complaining about.

They don't see the pink elephant in their own living room. Even worse, is that they don't care too, either.

Alia, I like the phrase you pointed out:

modern journalism and modern philanthropy are ideological twins

I do not buy into the ideological twin concept. I'm starting to believe modern philanthropy is responsible for CREATING and funding it's journalism Army.

The progressive groups have not only become a government unto themselves but a religion, too. This bias FOR those groups progressive is WHAT IS CONTRIBUTING, most-so, IMHO to the "hostile" communications situation that the very progressives seem perpetually complaining about.

I absolutely agree. Brilliantly stated!! :)

JJ -- Along the lines of your post, I learned something tonight. I haven't checked the validity: Steven Spielberg insists that those wishing to do business with him must first complete a Scientology course. I got this from a very usually reliable source of some standing. My source was actually jealous, upon my further questioning. My response was the old "he who has the gold..."

However most schools are not PRIVATE institutes; but public; ergo they are supposed to be divested of "religious/belief" overtones. You have perfectly pointed out that these are not. And that journalists are the modern-day equivalent of "socio-evangelism."

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