Revenge of the Usual Suspects: Why Liberal Foundations Are On a Winning Streak

Much has been written about the new donors who've been shaking up philanthropy for the past 15 years or so, often bringing a business mindset and centrist politics to their giving. I'm talking about funders like Gates, Broad, the Waltons, the Arnolds, and many other big givers, often from tech and finance.

If you read Inside Philanthropy, you know that we track these funders obsessively. Many of them have barely scratched the surface of their giving capacity, and their wealth is set to loom even larger in philanthropy in coming years than it has so far. As well, these living donors are often notable for the fresh mindset they’re bringing to philanthropy and their preference, in many cases, for lean foundations that intend to spend down.

But while this onslaught of newcomers is, indeed, fascinating (or alarming, depending upon your worldview), here's a fact that hasn't received much attention: It's actually the major liberal foundations that have been scoring the biggest wins lately.

If this were a movie, it’d be called Revenge of the Usual Suspects.

Just think about it. While the signature project of the new philanthropists—education reform—has stalled out amid few dramatic results (according to none other than Bill Gates), and while various new-fangled models have yet to scale appreciably, a host of plodding, old-school efforts by traditional foundations with a liberal bent have been coming to fruition lately. Let’s take a look.

Health Care

Universal health care, a longstanding dream of the American left, is now largely a reality—thanks, in part, to several top foundations that played key roles in orchestrating the biggest expansion of government in generations. There’s been nothing very fancy about this fight, just dogged persistence and tons of cash for wonks, advocates, community organizations, message gurus and the like. Robert Wood Johnson, Atlantic Philanthropies, and the California Endowment poured tens of millions into the fight, including huge spending to sign people up on the new health care exchanges after Obamacare was passed. This fight isn’t over, with many states still resisting the expansion of Medicaid. And who knows what will happen if a Republican takes the White House. Otherwise, though, the Holy Grail of universal coverage is pretty much in hand.

Inequality, Poverty, and Race

The United States is now having the biggest debate over income inequality since the 1930s, and the biggest debate over race since the 1960s. These conversations didn’t happen by accident. For years, a range of liberal foundations have been pumping loads of money into policy and advocacy groups focused on equity issues—and are now seeing a payoff. Just yesterday, we wrote about how the Kellogg Foundation has gained new traction on its signature issue, equity for children. We’ve also recently covered the Ford Foundation’s huge investment in an increasingly successful push to improve the lot of American workers. And earlier this year, I wrote about the Russell Sage Foundation’s “epic dig” into inequality, putting millions into groundbreaking research that helped elevate the sense of urgency around this issue. Of course, we've also covered the big investments by a who's who of liberal foundations over recent years to advance racial equity—work that helped pave the way for the robust debate on race that's taken place since Ferguson. 

Climate Change

At this point, there's no question that the climate change debate has turned a corner, with new political momentum gathering for action and coal-fired power plants shutting down left and right. To be sure, newer philanthropists have played a crucial role here, starting with Michael Bloomberg and a range of Wall Street donors who’ve super-sized the top environmental groups. But the biggest share of credit for moving the climate issue among funders goes to the Hewlett and Packard foundations, which came in early and have given the most money by far, sticking with the climate issue in a big way year after year. Both of those foundations are pretty traditional outfits named after benefactors who long ago passed from the scene.

Criminal Justice Reform

The John and Laura Arnold Foundation, as well as the Pershing Square Foundation, are among the new funders behind a growing push to soften Draconian criminal justice policies. But places like Ford were working this cause before those foundations even existed. And now such patient efforts are paying off, as veteran advocates long supported by foundations finally get a hearing in the political mainstream. Of particular note: Work on juvenile justice by Annie E. Casey and MacArthur, which has been going since the mid-1990s, is now driving reform efforts, while OSF’s once fringe ideas on drug reform have entered the mainstream. Oh, and Ford’s quest to restore access to Pell Grants for prison inmates recently yielded some nice results, too.

LGBT Rights

We’ve written a lot about how a handful of top individual donors played a decisive role in pushing forward LGBT rights and marriage equality. But credit for recent victories in this area also goes to Ford and OSF, which have spent heavily in this area over the past decade—and, of course, the Haas Fund, which was founded in 1953. More broadly, philanthropy’s wins on LGBT rights underscores the way that old-style investments in advocacy and policy can still reshape the course of society and improve the lives of millions. As well, the triumphant LGBT push is best understood as just the latest chapter in philanthropy’s half-century fight to extend civil rights to all Americans.

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So what can we learn from this string of recent victories for liberal foundations? A few things.

First, maybe some of the new funders coming onto the scene should stop being so fixated on innovation and finding new models of social change. Clearly, the old models are still able to deliver plenty of impact, and in variety of areas. I reflected on this point the other day, comparing investments in social entrepreneurs (which are red hot nowadays) to grantmaking for social movements, which is decidedly less popular, despite the better track record that such movements have at achieving change in recent years.

I get that many of the new donors made their fortunes through some kind of innovation, and are keen to apply the lessons they’ve learned to social change. That’s a good thing, too, and philanthropy is much stronger as a result. But the smartest of these funders are looking at all the strategies out there, including the familiar approaches that have delivered big-time for liberal funders in recent times. Pershing Square is a good example of a foundation that mixes new and old strategies, as I wrote recently.  

Second, don’t confuse the success of the strategies of top legacy foundations with the merits of their operating models. Yes, recent events show that putting big money into tried and true levers of change—like research, advocacy, public education, and litigation—can still move the needle, but that doesn’t mean it makes sense to give out a blizzard of program grants to myriad nonprofits, which entails huge operating costs. Places like Ford, I’d argue, have succeeded lately despite their model, not because of it—and that foundation in particular will be even more successful now that it has a leader who sees the light, promising to focus more general support on fewer grantees.

So far, the biggest contribution of the emerging funders lies less in their success at innovation—with the jury still out on many things—than by popularizing a leaner model of philanthropy that centers on bigger investments in fewer nonprofits. It’s harder for top legacy foundations to keep burning a fifth of their budgets on overhead and nickel-and-diming grantees with program support when alternative models of large-scale grantmaking are becoming more visible.

A final point to consider is how recent events underscore the cyclical nature of American public life—and philanthropy’s efforts to shape policy. Following the 2004 election, don’t forget, conservative ideology was at an apex, with funders on the right basking in the success of two decades of strategic investments—while the left had a collective freakout.

The pendulum has now swung back the other way, helped along by years of urgent progressive philanthropy. But make no mistake: It may well swing again, as deep-pocketed conservative philanthropists mobilize to reverse recent gains by progressives.

Much has been made of how the Koch brothers’ political network is slated to spend nearly a billion dollars in this election cycle. The thing to watch for next, especially if that effort is a bust, is for that same energy and money to be channeled toward a big new push to strengthen conservative advocacy and policy groups.

Conservative philanthropists have been hugely successful in the past, scoring a knockout blow against the federal welfare entitlement, among other victories.

They’ll be back, with new energy and ideas, as well as bigger war chests. It’s just a matter of time.