Foundations That Care About Equity Have Been MIA on Global Trade Issues. Why?

Now that the biggest trade deal in years is finally wrapping up—I’m talking about the Trans-Pacific Partnership (TPP)—we can expect a robust and balanced debate on its merits, with experts on both sides weighing in. Right?

Wrong.

Actually, there aren’t that many experts on both sides of the debate. Rather, most of the wonks and scholars who work on trade issues favor agreements like the TPP and work at organizations supported by business donors.

Regardless of your views on the TPP, this is a problem. Polls show that a great many Americans have deep reservations about more free trade agreements, seeing globalization as a one-way street that helps countries like China while hurting U.S. workers. Yet, within the nonprofit policy world, those skeptical experts are vastly outgunned by free-trade boosters on the other side.

One reason for this imbalance is that the foundations that usually amplify the voices of lower-income Americans in policy deliberations have largely neglected issues of trade and globalization. In fact, it’s hard to think of many foundations at all that focus grantmaking in this area. Economists may agree that globalization has been a key driver of inequality, undermining the bargaining power of low-skilled workers, but even those foundations worried about inequality have never moved this issue to the front burner.

Why is that?

Well, first, let me say that there are some think tanks and advocacy groups that do channel the concerns of ordinary workers. One is the Economic Policy Institute. Another is the Center for Economic and Policy Research. A third is Public Citizen, which has long contested free trade agreements through its Global Trade Watch project, led by Lori Wallach.  

These groups get various levels of foundation support, but little of that is expressly for work on trade. Global Trade Watch has pulled down the most such dedicated support in recent years, from funders that include the Ford Foundation, Rockefeller Brothers Fund, and the Wallace Global Fund.  

Still, such funding for free trade skeptics has been modest, and most of the leading progressive think tanks do little or no work on trade, including the Center for American Progress and the Center for Budget and Policy Priorities. The lion's share of grant money flowing for trade has come from corporate or conservative foundations and has gone to the cheerleaders of liberalizationmost notably the Peterson Institute for International Economics. In turn, this money is supplemented by other streams of revenue from big individual donors.

The Peterson Institute is so named thanks to a $50 million gift from billionaire Pete Peterson, who made his fortune in private equity and is the institute’s board chairoverseeing a group of directors that includes a number of leaders from business and finance, many with direct stakes in the outcomes of global economic debates. Most of Peterson’s revenue comes from donors with links to business, and I’ve wondered before about how impartial this organization can be given where it gets its money. We’ve recently raised similar questions about the Brookings Institution, another think tank that has become increasingly reliant on corporate donors. (Like Peterson, it’s a booster of the TPP.)

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It’s not hard to see why financial elites and business funders would bankroll work to further liberalize global trade. These folks have been big winners from globalization, a trend which has benefitted better educated and more skilled Americans, as well as the owners of capital.  

But, again: Where are the foundations that care about the lower-income Americans that have been the losers of globalization, who are stranded in places like Detroit?

Well, we all know that many top foundations do care about Detroit, but I don’t know why they’ve been MIA on a primary force that has brought down that cityalong with so many others.

Still, here are a few guesses. First, global economic issues are very complex and can be intimidating to a lot of people. Many funders may not be drawn to this work, despite the huge stakes involved, and the same might be true of policy wonks and advocates. Which is to say, there is both a lack of supply, in terms of funding, and a lack of demand, in terms of nonprofits looking for such support. This is a niche issue area, and a tough one to master.

Second, funders who care about economic opportunity have had plenty else on their plates lately, including workforce development and asset building. They can’t do everything, so you can see how the most boring and difficult challenge might be left out.

And then there is a third possible explanation for why foundations have taken a pass on global economic policy: These institutions are run by elites, especially at the board level, and there’s been a longstanding consensus on free trade among nearly all elites—even progressive ones who otherwise fret about inequality. Don’t forget, it’s President Obama who's leading the charge for the TPP, and the only reason that Hillary Clinton recently came out against the deal is because she’s running scared of populists on her left flank.

Regardless, the mismatch of financial resources when it comes to trade battles is food for thought in the ongoing discussion over philanthropy and inequality. While the foundation sector does a good job of leveling the playing field in some debates over economic issues and ensuring a voice for poorer Americans, that hasn’t been the case on trade. I’d add that it also hasn’t been the case in some other crucial policy areas like financial regulation, taxes, and monetary policy.

It’s nice to see more funders stepping up to tackle inequality. But when will they pay more attention to some of the most powerful forces that structure economic opportunity in America?