Philanthropy in the End Times

The state of giving at the impossible intersection of capitalism, morality, and the natural world.

By Curtis White

Theodore Roosevelt and John Muir at Glacier Point in Yosemite, 1903.

In the United States, everyone can enjoy freedom of speech so long as it doesn’t matter. For those who would like what they say to matter, freedom of speech is expensive. It is for this reason that organizations with a strong sense of public mission but not much money are dependent on the blond child of capitalism, private philanthropy. Working with this child has its challenges, not the least of which is the risk that the philanthropist will end up dominating the mission and programs of the organizations it funds. According to one source with decades of experience in philanthropy, foundation grants are too often a drama between “gods” and the “little people” who fulfill the destiny of the gods.

Like the system of patronage that served the arts and charity from the Renaissance through the eighteenth century, private foundations have the rarest privilege of all: they do not have to explain themselves. They do not have to justify the origins of their wealth, or how they use that wealth, or what the real benefit of their largesse is. In short, foundations are America’s last aristocracy. To quote an unlikely source, Steve Forbes has written that “there is one, largely unaccountable aristocracy in American life today: foundations...They do not answer to the marketplace or an electorate.”

They say that gifts persuade even the gods. 

—Euripides, 431 BC

Generally speaking, private philanthropy gets a pass in the press. I presume that the press thinks it has better things to do than criticize rich people for giving their money away, especially when they are funding good causes. But even if it has been mostly voiced off the public stage, criticism of the culture of philanthropy in America cuts deep. Foundations have been described by both wings of American politics as arrogant, elitist, plutocratic, insular, opaque, capricious, inbred, intellectually deficient, bureaucratic, and bewildered. These are surprising but not necessarily hurtful words for private philanthropy because the people most connected to private foundations already know they are aristocratic and unaccountable and are actually pleased with the fact. These people serve on one another’s boards, share in prestige’s warm mutuality, and make certain that foundations are compliant with the values of the donor class. Moreover, this arrangement is careful to perpetuate itself. According to Stephen Viederman, former director of the Jesse Smith Noyes Foundation (a foundation that focuses on environmental and economic justice), replacements for departing foundation board members are almost always from the “world of top people” and are of the “same race, class, or occupational group as those who had served before.”

Girl in an underground shelter waiting to receive food from a local NGO. Debaltseve, East Ukraine. February 4, 2015. © Amnon Gutman, courtesy the artist

In the end, the philanthropist’s philosophy is this: We are virtuous because we have money. We are virtuous for giving away some of it each year. We give money only to the best causes that fall within our mission. We will tell you what the best causes are. We are under no obligation to tell you why the best causes are the best.

This may sound extreme, but isn’t a new criticism. Various parts of this critique have been in circulation since the first corporate philanthropic foundations were formed in the early twentieth century. Upon the establishment of the Carnegie and Rockefeller foundations, there was fierce debate about their legality and lack of accountability. Observers worried that nontaxpaying entities with massive resources would be just another way for the wealthy to turn money into power.

 

The response to this crisis in the United States has been the growth of the mainstream environmental movement, especially the Environmental Protection Agency and what is now called Big Green (the Sierra Club, Greenpeace, Nature Conservancy, Natural Resources Defense Council, etc.). But Big Green was not the pure consequence of an upswell of popular passion; it was also the creation of philanthropic, federal, and corporate gift-giving.

The Natural Resources Defense Council was created by the Ford Foundation. The Pew Charitable Trusts created an organization called National Environmental Trust. (Pew itself was first endowed with money from the Sun Oil Company.) These large environmental organizations are deeply dependent on federal and foundation support, and accordingly tend to take a soft line on economic and industrial reform—a major problem in that big business has the most direct control over carbon emissions in America. As Mark Dowie reports in his one-of-a-kind book American Foundations, Big Green organizations “are safe havens for foundation philanthropy, for their directors are sensitive to the economic orthodoxies that lead to the formation of foundations and careful not to do anything that might diminish the benefactor’s endowment.”

The most dramatic problem facing capitalism for the last half century has been its tendency to destroy the very world in which it acts: the environmental crisis in all its manifestations. The environmental crisis, particularly global warming, provides an urgent challenge for philanthropy, one that highlights long-simmering concerns about foundation giving. Philanthropic giving to environmental organizations has increased slightly in recent years to just shy of $10 billion, but these resources have so far proved insufficient to halt global warming or spark government action.

Citizens of Paris Offering Their Jewels to the National Convention, by Jean-Baptiste Lesueur, c. 1790. © Musee de la Ville de Paris, Musee Carnavalet, Paris, France/Archives Charmet/Bridgeman Images

As with the Environmental Protection Agency, Big Green is not so much an enemy of industry as it is a self-regulator within it. In other words, the Sierra Club is not run by visionary rebels, it is upper management. Big Green does have effects that are beneficial to the environment—many!—but in no way is it hostile to the economic system that is the ultimate source of environmental destruction. As a consequence, a given industry may attack environmentalism when it interferes with its business, but big business as such is dependent on Big Green and will regularly replenish its coffers so that it may stay in existence—never mind the occasional annoyance for an oil company that wants to spread its rigs and pipelines across delicate tundra.

The dependence of Big Green on philanthropic funds can also be nakedly political. Mark Dowie reports in his Losing Ground that in the early 1990s the Pew Charitable Trusts entered the fray over public land forestry. Josh Reichert, Pew’s environmental program officer, created a foundation coalition, the National Environmental Trust, to address forestry. Once the money was held out, large organizations like the Sierra Club fell in line, talked the talk, and took the money. The problem was that this program was not allowed to consider a “zero cut” forestry position. The NET would concern itself only with moderating policy on behalf of corporate interests. Smaller, more principled organizations like the Native Forest Council were “left out in the cold.” But Reichert was unapologetic. According to Dowie, “Reichert stipulated that no one advocating zero cut, criticizing corporations by name, or producing ads that did so would be eligible for membership in the forest coalition—or for funding.”

Too many people have decided to do without generosity in order to practice charity.

—Albert Camus, 1956

Such punishment is not rare. While there are over eighty thousand foundations in the United States, there are only a few hundred funders in the Environmental Grantmaker’s Association. Environmental philanthropy is a small world. As one of my sources in the philanthropic world explained, blacklisting can take place quietly over wine: “I won’t say anything bad about so-and-so, but I’ll never fund him again.” What’s unspoken is “and you shouldn’t fund him, either.”

This scenario is easy enough to imagine. The EGA was established in 1987 and bankrolled by the Rockefeller Family Fund. Its one notable production is its annual fall retreat. In 2009, for example, the EGA membership gathered along the Cook Inlet near Anchorage. (They’ll be at a $1,000-a-night retreat in upstate New York in 2015.) Among the enticements to participants was “a set of delicious pre- and post-retreat field trips.” There are no agendas, minutes, or summaries of these meetings available to the public. Even the reports that the group creates (“Tracking the Field”) are available in full only to members.

There is no reason for surprise if organizations like the EGA facilitate small but lethal talk over wine. This is how private philanthropy polices certain limits on what can be said, all in order to ensure that their own generosity doesn’t become a weapon against them. As representatives of corporate wealth, it is incumbent upon them to see that their work doesn’t threaten the source of their wealth. When private philanthropy is asked to be more inclusive, to empower local environmental groups, to spend out endowments, it sounds as if it is being asked to become, in Nietzsche’s words, “the will that wills its own destruction.” As you would expect, foundations are bewildered by the suggestion and unwilling to do so.

 

The great paradox of environmental philanthropy is this: How do philanthropic institutions founded on wealth and privilege seek to address the root source of environmental destruction if that source is essentially the unbridled use of wealth and privilege? Ken Burns’ 2009 film The National Parks: America’s Best Idea provides an illuminating example of the paradox of self-interested altruism. If private philanthropy is to play a constructive role in addressing environmental destruction, it must come to terms with this internal contradiction. Unfortunately, more often than not philanthropy’s strategy is to pretend not to see the problem.

The most grotesque instance of this in The National Parks is Burns’ introduction of John D. Rockefeller, Jr., as one of the great philanthropic heroes in the establishment of our national parks. In 1928 Rockefeller stepped forward with $5 million to save the Smoky Mountains. What isn’t said is that Rockefeller’s fortune came from his father’s founding of the Standard Oil Trust, notorious for its use of Pinkerton goons to enforce exploitive wages and murderous working conditions for its miners. Rockefeller’s mining operations in Butte, Montana, turned the town into what it is to this day: one of the most toxic spots on earth. Standard created great hills of toxic slag, polluted over a hundred miles of the Silver Bow Creek (known to locals as “Shit Creek” for its sulfurous stench), and dug an open pit now filled with billions of gallons of acidic water. John D. Rockefeller, Jr., continued his father’s methods for profit extraction including the pitiless oppression of miners, culminating in the Ludlow Mining Massacre of 1914, only a few years before Rockefeller donated millions of dollars for the creation of Acadia National Park in Maine.

Thank You Paintings Exchange #9, by Alina and Jeff Bliumis with Nazlie and Michael Latefi. © Nazlie and Michael Latefi, courtesy of the artists.

The failures of Burns’ National Parks are not solely failures of omission. There are also enormous failures of interpretation, or a refusal to interpret. Burns argues a continuity between the work of the radical naturalist John Muir and the work of Stephen Mather, the California-born philanthropist who was most responsible for promoting the parks to the public and recruiting the financial support of people like Rockefeller for the creation of national parks. What Burns doesn’t acknowledge is that Mather’s work is at best a transformation of Muir’s vision. Perhaps it can be said that every visionary needs a pragmatist to realize the vision, but Burns’ film reveals a different sort of pattern, one we see repeated in the work of environmental philanthropy today. The pattern is this: first the visionary (Muir), then the millionaire philanthropist (Mather), and, finally, the whole thing is handed off to bureaucrats, who, for all their good works, can rarely be mistaken for nature mystics like Muir. Most significantly, the role of heroic millionaires has evolved and been institutionalized in philanthropic foundations. The pattern now is: first the passionate work of grass-roots activists; then the foundations come in; and finally the reign of data and the wisdom of bureaucracies through which nature becomes little more than a technical balancing act, an engineering problem on a global scale.

Perhaps The National Parks provides images of the beauty and even the spirituality of our national parks. Nowhere, however, does the film dare the difficult and risky path of suggesting that the national park system is also a deeply problematic idea because it puts a boundary on nature beyond which we are free to be as destructive as we like. Drive across a park boundary and suddenly you’re back in Petroleum World (“our national automobile slum,” as James Howard Kunstler puts it). But this is not, obviously, the sort of argument that the corporate underwriters of The National Parks (which include General Motors and the Pew Charitable Trusts) would be willing to pay for.

 

In the end, what environmental philanthropy can be trusted to understand at present is not forest health, or climate change, or the imperatives of recycling. What it can be trusted to understand is the thing that gives it its privileges: its money. The foundation can be trusted above all to be duly diligent in the maintenance of its endowment. Unfortunately, managing how the endowment is invested often leads to conflicts with the stated social purpose of the foundation.

For example, one of the emerging controversies in the world of environmental philanthropy is the 95/5 question. Foundations are required to give away just 5 percent of their endowment each year. The other 95 percent is invested. But invested where? Environmentalists are particularly sensitive to this question because if the money is invested in companies that continue to pollute and destroy the environment, you have a disturbing reality. The 5 percent does theoretical good while 95 percent does demonstrable bad: chasing profits in environmentally destructive ways.

This issue came to a head in 2007 when the Los Angeles Times concluded an investigation into the investment practices of foundations by revealing that the Bill and Melinda Gates Foundation funded a polio vaccination clinic in Ebocha, Nigeria, in the shadow of a giant petroleum-processing plant in which the Gates Foundation was invested. The Los Angeles Times report states:

But polio is not the only threat Justice [a Nigerian child] faces. Almost since birth, he has had respiratory trouble. His neighbors call it “the cough.” People blame fumes and soot spewing from flames that tower 300 feet into the air over a nearby oil plant. It is owned by the Italian petroleum giant Eni, whose investors include the Bill and Melinda Gates Foundation.

Despite the intense criticism at the time, the Gates Foundation did not change its course. An investigation of the Gates Foundation’s tax return for 2013 performed by The Guardian revealed that the foundation held $1.4 billion of investment in fossil-fuel companies including BP and Anadarko (the latter of which was recently forced to pay $5 billion in environmental cleanup charges). And this is all in spite of the fact that last year’s Gates Foundation annual letter stated that “the long-term threat [of climate change] is so serious that the world needs to move much more aggressively—right now—to develop energy sources that are cheaper, can deliver on demand, and emit zero carbon dioxide.”

This is a conflict to which environmentalism is especially sensitive, and foundations ought to be. And yet, incredibly, the Gates Foundation chose to deny that the conflict is a conflict. As then chief executive Patty Stonesifer wrote in 2007: “It is naive to suggest that an individual stockholder can stop that suffering. Changes in our investment practices would have little or no impact on these issues...We believe a much more direct way to help people is by making grants and working with other donors to improve health, reduce poverty, and strengthen education.”

This is tantamount to saying that if the Gates Foundation didn’t invest in this profitable venture someone else would. We’ve seen this sort of argument before, though it usually comes from private companies. For example, British Petroleum defended its role in the exploitation of Alberta tar sands by saying: “These are resources that would have been developed anyway.” BP may feel that it is protecting profits for its shareholders, but what shareholder is the Gates Foundation protecting? If it must remain a shareholder in Eni, why doesn’t the Gates Foundation file a stockholder resolution protesting Eni’s methods? The dark irony is that the Gates Foundation saves Nigerians from polio now, but it is morally indifferent to the lung diseases that will kill them later.

Most foundation boards don’t actually know if their investments and their missions align. When pushed on the matter,most foundations respond as Gates did: investments are the foundation’s private concern and no business of ours. But the problem remains: when environmental organizations receive funding, what confidence can they have that this happy money is not itself the expression of a distant devastation?

Of course, from an environmentalist’s perspective the preservation of a foundation’s endowment is much less pressing than the facts on the ground, especially if that fact is climate change. Left to itself, industry is not going to do anything about a warming earth.

In fact, it is most likely to make matters even worse. As Mark Bittman wrote in a penetrating essay for the New York Times, in the middle of a historic drought that threatens the future of California, too much of the agriculture industry is “mining water as they would copper: When it runs out, they’ll find new ways to make money.”

Mine Rescue, by Fletcher Martin, 1939. Smithsonian American Art Museum, Washington, DC.

Ideally, private philanthropy would play an aggressive role in countering the logic of exploitation for short-term profit, even if it means digging deeper into endowments. But that doesn’t seem to be what’s happening. Most foundations still give away only 5 percent of their endowment each year, the legal minimum. But if climate change must be successfully addressed within the next two decades—if it’s really the critical moral issue of our time, or any time—why spend only 5 percent? For a simple reason: spending 5 percent annually will allow the foundation to do its work into eternity. Sadly, a world without a livable climate is easier for the philanthropist to imagine than a world without the family foundation. Sadder still, philanthropy’s unwillingness to spend and act more aggressively makes it too much like the water gluttons of California for whom self-interest trumps all other concerns.

The good news is that there are groups that understand this problem and are beginning to push for change in the priorities of corporate foundations. Last year, 160 leading environmentalists from 46 countries called on foundations and philanthropists to use their endowments to turn the tide on global warming: “We, 160 winners of the world’s environmental prizes, call on foundations and philanthropists everywhere to deploy their endowments immediately in the effort to save civilization. The world’s philanthropic foundations, given the scale of their endowments, hold the power to trigger a survival reflex in society.”

And in an article in Inside Philanthropy, David Callahan provides an overview of major gift-giving coming out of finance. The list of nine includes Henry Paulson and Julian Robertson, “the Wizard of Wall Street.” While Callahan does not discuss the 5 percent dispute, he does observe that Wall Street’s winners are well advised to be attentive to climate change because their place of business, Wall Street, is likely to be underwater soon if they are not attentive.

 

Business is not opposed in principle to morality, but morality is always, as Robert Heilbroner put it, an “anti-economic impulse.” The problem for capitalism is how to manage morality so that its anti-economic effects are minimal. Properly handled, morality can even become a market player (cap-and-trade schemes, for example). Thanks to foundations like Gates, environmentalism’s moral impulse is now indistinguishable from the delicate balancing act that is the national economy: both are subject to the calculus of “cost benefit.” 

If you pick up a starving dog and make him prosperous, he will not bite you. This is the principal difference between a dog and a man.

—Mark Twain, 1894

The greatest moral problem for environmental philanthropy is that it doesn’t have what the theologian Paul Tillich called an “ultimate concern.” It has finite concerns, like mercury levels in fish or parts per million of greenhouse gases. But it has no ultimate concerns. To have an ultimate concern would mean that environmentalism would have to finally become a thing that could commit itself to an ideal and know exactly what it meant by that commitment. Environmental philanthropy makes no existential wagers of this sort. 

If environmental philanthropy were to discover its own sense of moral purpose, it would find itself in a frightening new context. Tocuta deal in keeping with the “best practices” of a bureaucracy is one thing, but to cut a deal that violates your own ultimate concerns is quite another. For Tillich, sin is whatever separates us from our ultimate concerns. But “no worries,” as we say these days, American philanthropy is there to make sure all our decisions are pragmatic in the most vulgar sense: they put off the final day when all of our moral shuffling comes to a conclusion.

And yet under present circumstances philanthropy has a necessary role to play if it has the will to take it up. It can and should provide leadership but not only from above. If it continues to act from the heights, it will fail, we will fail, because it will always be in the position of feeling it has to protect those heights. What it must do is to become part of a larger community. This is necessary at the practical level, but it is also true that philanthropy must through some form of self-overcoming find its place in a larger community of values. That is true for all of us, of course, and not just “our last aristocrats.” The challenge for all of us is to find our ultimate concerns and live through them. 

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