Philanthropy, Weaponized

In a recent series of articles, The New York Times detailed how nonprofit think tanks are rife with conflicts of interest.

The Times reported how corporations made charitable donations to certain think tanks, which then happened to undertake studies that benefited those corporations. The Times also reported how associates of think tanks worked simultaneously for corporations affected by their studies. One scholar at the American Enterprise Institute, for example, wrote articles and testified in front of Congress urging the rejection of increased regulation of the internet – without revealing that he was also a paid consultant for Verizon and its trade organization. Another scholar at the American Enterprise Institute testified before Congressional committees in favor of increased military spending – while simultaneously serving as a paid lobbyist for Pentagon suppliers. The list goes on, and on.

But The Times missed the bigger story: the fundamental problem with the think tank industry itself. Many of the best-known think tanks are charities in name only. They have no mission beyond helping persuade the public and bully the government into accepting policies promoted by the think tanks’ founders and boards.

I’ll go so far as to say that think tanks and self-interest are genetically linked: some of the most prominent think tanks were created specifically to promote policies that economically and politically benefitted their founders. As described in brilliant and depressing detail by Jane Mayer in Dark Money: The History of the Billionaires Behind the Rise of the Radical Right, the core purpose of many think tanks is to provide a veneer of intellectual sophistication, objectivity, and positive public relations for what are often blatantly partisan and self-interested causes.

When most people hear a scholar from think tanks like the Heritage Foundation, the Cato Institute, or the American Enterprise Institute weighing in on a public policy issue, they assume that this person brings both expertise and objectivity to the subject. But these organizations have never been objective, nor was objectivity ever a founding principle. For example, the Heritage Foundation was funded from its creation in 1975 by billionaire Richard Scaife and his foundation to promote Scaife’s lifelong obsession with reducing the size of the federal government, minimizing taxes for the wealthy, and eliminating governmental regulation. He and other funders created the Heritage Foundation specifically to advocate for causes that resonated with their philosophical and economic interests. Similarly, the Cato Institute was founded and funded by the Koch brothers to promote libertarian economics. The Kochs’ policy interests, and those of the Cato Institute, very much connect to the Kochs’ personal bottom lines. As extraordinarily rich men, Charles and David Koch want to pay lower taxes. As executives of a petrochemical conglomerate, they want less environmental and labor regulation, and they reject the very notion of climate change. Any guesses about the Cato Institute’s views on these issues?

Indeed, the researchers at these and other think tanks know on which side their bread is buttered. They write research papers, make television appearances, and testify in Washington, but the range of their possible opinions is severely limited by the ideological preferences of their institutions. (And yes, there are liberal think tanks as well, which operate by a similar set of rules, though conservatives have a vastly larger and better-organized and funded network.)

Meanwhile, the same people who founded Cato, Heritage, and other conservative think tanks have also made significant donations to fund programs at some 300 universities around the country to advance their causes. A favorite purpose is the creation of “Law and Economics” programs at law schools, where, critics contend, legal and libertarian economic theories merge to the point of indoctrination. When donors dangle major gifts for these programs, the universities’ response has been invariably to say yes – even where the donor has reserved the right to review and confirm academic appointments, a condition that would strike most people as a significant breach of academic independence and integrity. Some universities, like George Mason, are particularly accommodating of their conservative donors. (It’s not coincidental that George Mason named its law school after conservative icon Justice Antonin Scalia this year within weeks of his death. Thirty million dollars, including $10 million from Charles Koch, was very persuasive.) But even some of the wealthiest and most liberal institutions (such as Brown and NYU) have taken money for new conservative programs. The donors refer to these as ideological “beachheads” in what they perceive as otherwise liberal universities. And these beachheads then serve as training grounds for future conservative judges, professors, and, yes, think tank scholars.

All of which raises the subject of what is particularly charitable about these initiatives. According to Mayer, Charles Koch himself refers this these efforts as “weaponized philanthropy,” a phrase that implies that these “philanthropic” activities are very much about advancing a partisan political agenda and winning ideological battles, with no relation to what most of us think of as intellectual integrity, let alone charity.

It’s fair to ask how it came to pass that these sorts of activities are actually subsidized by the taxpayers through charitable deductions. The answer, as Princeton Professor Stanley Katz has pointed out, is that in the United States charity has not been defined what it is, but what it isn’t. A charity is an entity that does not benefit individual owners – that is, a charity has no shareholders. A charity cannot (explicitly) benefit a board member. And a charity can’t undertake criminal activities. Virtually anything else can be seen as having a charitable mission and a community benefit, including think tanks with obvious partisan interests. And because charitable regulators in most states are grossly underfunded, and because the IRS Tax Exempt Organizations Division is overwhelmed and essentially powerless, brazen operators push the definition of a charitable mission ever further.

How to rein this in? I wish I knew. But a first step for all of us who care about real nonprofits – that is, those that feed the hungry, house the homeless, educate the young, promote the arts and culture, help those with disabilities, and heal the sick – is to speak up. And we have to recognize that when a “nonprofit” is established to further the political and economic welfare of its founders, we shouldn’t be surprised if a few staff members end up feathering their nests along the way.

Copyright Alan Cantor 2016. All rights reserved.

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5 thoughts on “Philanthropy, Weaponized”

  1. Alan–This is great. Why wouldn’t you include Brookings and the big universities (and others) who are also part of this game? Clara

    1. Your points are well taken, Clara, and I always love to hear from you.

      The Times articles I link to have a lot about Brookings and the games they are playing there. Not to overlook the issues at Brookings, but in this piece I drew largely from the Jane Mayer book, which I consider one of the most important books of the last year (at least among those I’ve read!), and her focus is on the conservative network. I do reference the universities and the money they take in — a widespread and disturbing phenomenon. So I agree with you, fully — but I limited myself to 1,000 words, so I couldn’t get it all in!

  2. Al, you make some great points, as usual. Let me push back a bit, however. First, on the nest feathering. Most of the worst abuses, in my experience, are from scam artists claiming to run “traditional” charities. It’s much easier to suck up dollars for personal gain when you’re claiming to help veterans, or poor orphans, or whatever. So linking abuse of philanthropy for personal gain to the political motives of think tanks doesn’t really hold water. Second, “real” nonprofits that feed the hungry, house the homeless and help those with disabilities also know that advocacy is a hugely important part of how they can achieve their missions. What better way to combat homelessness than to influence government housing policy? I don’t think you’re proposing a nonprofit sector that is muzzled and can’t advocate on the issues that affect their causes or communities, are you?

    1. As you may guess, Aaron, I agree with you. But in a short blog post, it’s hard to be comprehensive.

      A while ago I wrote about charity scams, and I in fact talked about scam artists using the word “veterans” (and “children,” “cancer,” and “firefighters”) to snooker people into giving gifts. I agree that this is a huge problem, and the state regulators and the IRS are failing to keep up in the vast majority of cases. (I will say that my home state of New Hampshire has an excellent department overseeing charitable organizations, and they do a terrific job. But that’s not the case in most states, and the IRS Tax Exempt Division is underfunded and ineffective.) To point out the issues with think tanks is not to imply that the charitable community writ large is all honorable and pure. Alas, it isn’t, and that’s a huge issue that casts a shadow on the sector. There are a lot of bad actors out there. You’re right.

      And, no, I certainly don’t think that the nonprofit community should be muzzled on advocacy issues. I in fact often urge nonprofits to remember that they can and should undertake advocacy to further their missions. Perhaps I’m revealing my personal political biases (we all have them, so I might as well admit mine), but I feel very differently about a group that helps the homeless advocate for its clients than I do for billionaires creating seemingly objective think tanks that in fact are focused on furthering the economic and political interests of their founders.

      Thank you for writing, Aaron, and for all you do!

  3. This is alarming, but in no way surprising. The wheels of democracy are, sadly, greased by money. If it were only otherwise. But to make it worse, the people who could change the system (our lawmakers) are also its primary beneficiaries. In the final analysis, you are either in the game or you are out of the game. You might as well try to hold back the tides.

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