UNDUE INFLUENCE

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Foundations

Undue Influence by Ron Arnold

The Golden Rule: Who has the gold rules.

Private foundations have taken substantial control of the environmental movement in America. They bring with them what psychiatrist Roy Menninger called "the narcissism of the righteous," a.k.a. the "I'm a better angel than you" syndrome. Having money and the power to decide who gets it is intoxicating and toxic both to those who give and those who get. They live in a world that knows nothing of creating wealth, but only of spending it.

But don't call it plutocracy (the rule of wealth) because that will end your credibility among the plutocrats. And don't call those who rule by wealth an oligarchy (rule by the elite few) because that will end your credibility with the elite few.

So we're reduced to calling them rich guys who give the money and the marching orders. And we call them the ecoligarchy. Smile, it's a joke. You know, a story with a humorous ending? Or a an unexpected juxtaposition of two disparate planes of thought that produces a sudden insight?

Only the products of the plutocracy and their ecoligarchy are not funny to the people whose lives they ruin.

Many liberal foundations have become prescriptive, that is, they design their own programs for leftward social change and then pressure a highly orchestrated network of environmental groups to perform their projects.

Some foundations no longer accept applications, but only fund pre-selected groups.

Case in point: The former W. Alton Jones Foundation's policy statement once advised applicants:

  • The foundation works principally through foundation-defined initiatives addressing its priority issues. These initiatives usually take the form of coordinated grants to multiple institutions, each of which focuses on one or more components of an overall campaign defined by the foundation’s mission. Proposals for participation in these initiatives are invited by the foundation.

Numerous foundations have some version of this exclusionary policy.

"Prescriptive" also means pressuring applicants from the open application process into programs they would not have originated themselves.

The Environmental Grantmakers Association (EGA) is an unincorporated group of more than 200 foundations with important environmental programs. The EGA foundations meet in closed sessions to plan strategy in shutting down every economic action that affects the environment.

Foundation Facts

  • Foundations and "public interest" non-profits are a big, influential and expanding industry

  • During the last 15 years, the number of foundations has nearly doubled from 22,000 to 39,000

  • Foundation assets now exceed $200 billion, half of it controlled by fewer than 200 foundations

  • Big foundations, which have a distinctly liberal cast, use their tax-exempt dollars to fund everything from the environmental movement to studies supporting the welfare state to population control.

  • When used to finance "public interest" group advocacy, foundation wealth can have an enormous influence on which public policy is adopted

  • Most significant policy initiatives undertaken today by the Federal government have some foundation support, and many are implemented as a result of foundation-funded advocacy

  • Those who run big foundations represent a small, elite, insulated group, most of whom live in the eastern United States, hundreds or even thousands of miles from the areas affected by the environmental policies they support

  • Foundations have no voters, no customers, no investors

  • They have no wish to receive feedback from those affected by their decisions, nor are they accountable to anyone for funding policies which adversely affect the well-being of people or local economies

  • Tax exempt foundation funding of environmental advocacy groups unfairly tilts the playing field against the views and input of those most affected by the policies advocated

  • The average citizen’s voice and input in the government decision-making process is often drowned out by those advocacy groups largely funded by foundations, making our government seem even more remote and less responsive to the needs of the average person

  • At least 18 foundations give grants to environmental organizations to spy on critics, with the total of these grants from 1992 to 1996 exceeding $1 million

BASICS OF FOUNDATIONS

A foundation is a modern innovation to provide for the endowment of non-profit enterprises and the establishment of an association or corporation to carry out its founder’s plans.

Once the founder is dead, the foundation administrators often change the founder's plans and operate programs that the founder would have opposed. This is the case with most foundations that fund environmentalist groups.

Most foundations are set up as charitable trusts. The grantor conveys money, stocks or other property by a deed of trust to a named trustee or trustees, to be disbursed as the instrument directs.

The endowment of a charitable trust is usually invested in a securities portfolio managed for the foundation by professional investment firms. The money foundations give away each year comes from the annual profit on these investments.

The charitable trust may or may not be incorporated. Most modern foundations are corporations. Technically, the foundation is the document of endowment or incorporation, but the term usually means the organization that administers the fund.

Both public charities and private foundations form part of the nonprofit structure of the environmental movement. Most private foundations are grant donors while most public charities are grant recipients.

Public charities are charitable organizations supported by members of the general public. They are allowed to operate programs to accomplish their tax-exempt purpose. Most environmental groups are classified by the IRS as public charities.

A private foundation is a charitable organization that is funded by one or a few persons rather than the general public. Although subject to stricter rules than a public charity, a private foundation is tax-exempt just like a public charity and may carry on the same activities. Private foundations may run their own programs. Often, a private foundation simply makes grants to public charities instead of operating its own programs.

Public charities file an annual report, Form 990, to the Internal Revenue Service even though they are tax exempt.

Private foundations file Form 990PF.

The Form 990PF reveals the foundation's entire list of grants given during each year, and the endowment's investment portfolio in complete detail, including prices of stocks when purchased, when sold, current book value, and dividend earnings.

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