Let Down at the Ford Foundation: Reflections on the Shortcomings of Philanthropy

Against the backdrop of Ford Foundation President Darren Walker’s announced efforts to address inequalities on the global stage, HistPhil hosted a conversation this past August on the ability of philanthropy to address societal-wide inequities. At the Ford Foundation offices in NYC earlier this month, Walker discussed further his vision for the organization with Stanford political scientist Rob Reich (The event also was live streamed, which we very much appreciated and watched). Below, fellow attendee Joanne Barkan ponders how exactly the foundation will address inequality.

It was a disappointing event at the Ford Foundation on January 7. The title of the evening’s program – “Building a New Future: The Role of Foundations in Addressing Inequality” – seemed to promise an exploration of Ford’s new strategy. As announced last June, the foundation plans to focus its grant-making on understanding and remedying inequality at its roots and in all forms – economic, political, racial, gender, and cultural. But when the evening ended, the audience was no wiser about how Ford’s current work will change, what the foundation will do that it hasn’t done before, and, more broadly, how major foundations can wield wealth and influence from a position of privilege without reinforcing inequality in power.

Hosted by the foundation, Stanford University’s Center on Philanthropy and Civil Society, and Stanford New York Alumni, the program began with a promo clip for Ford’s new video series #InequalityIs. Elton John, Edward Norton, and a dozen others each defined inequality with painful earnestness. Thankfully, the promo lasted just ninety seconds. Next came the main event – a half-hour Q & A with Stanford Professor of Political Science Rob Reich posing questions and foundation President Darren Walker answering. The program, which ended with questions from the audience, was sandwiched between two rounds of wine and hors-d’oeuvres.

Time was short, and both questions and answers tended to sprawl, but the speakers said enough to give the audience a sense of how they think about foundations, the use of wealth and privilege, and the market system.

Reich began by asking Walker about his background and then moved to an issue that inevitably comes up when long-established foundations like Ford commit themselves to social justice: “The very system that generates the inequality that you seek to put at the center [of your strategy] is untouched, in particular because that was the source of the money in the first place.” Reich was referring to the origin of the foundation’s endowment in the profits of the Ford Motor Company. In 1936 Edsel Ford made an initial gift of $25,000; when he and his father Henry died in the 1940s, 90 percent of the company’s nonvoting shares went to the foundation.

The source of the wealth in exploitative profit-making and its use now to combat inequality is a historical irony but one without practical consequences for the foundation’s current leaders. Walker answered sensibly, “I think each of them [donors like Carnegie, Rockefeller, and Ford] established a mission and a charter that left room for interpretation over the generations.” Indeed, the charters of these foundations set lofty but wide-open goals that were detached from how the money was made. The Rockefeller Foundation was launched in 1913 “to promote the well-being of mankind throughout the world.” According to Ford’s 1936 charter, the foundation’s resources are to be used for “scientific, educational, and charitable purposes, all for the public welfare.” Once the ink on a charter is dry, the sitting trustees get to interpret phrases like “the public welfare” and spend the money accordingly.

Unlike the origin of the wealth, its use to exert influence to change political and economic structures in a democracy is a thorny issue, perhaps the thorniest.

For Walker, ever-increasing inequality is undermining democracy. The problem grows out of the market system – “a marketplace that creates winners and losers and that actually generates things that in some ways are antithetical to what is in those [American founding] documents about equality and opportunity.” Not surprisingly, Walker supports the legal arrangements that give tax exemptions to the rich in exchange for their creating private foundations to do good as they see fit. “[F]or over a hundred years, we have a tradition…of saying people with…wealth can use it for philanthropic purposes. I actually think that’s a good thing.” Walker summed up the task of philanthropists this way: “[H]ow do we leverage our privilege to actually get at these issues because we’re privileged?”

“Leverage” is a buzzword for the current generation of philanthropists who want to maximize the impact of their grants, which they see as investments. Rather than fund, say, a charter school in one district, donors leverage the same money by contributing to a charter management group that has strong political ties statewide and can get a dozen new charters started. “Leveraging privilege” is one way to define plutocracy: when the very wealthy – individuals or foundations – leverage their privilege into influence, they increase their power at the expense of those who don’t have great wealth. This exacerbates the inequality of power in society and seems at odds with Ford’s new strategy.

In addition, Walker applauds super-wealthy individuals who use their money for direct political influence – something that foundations are prohibited from doing. The subject came up when Reich asked about Mark Zuckerberg and Priscilla Chan’s decision to channel the majority of their wealth (estimated at $46 billion in 2015) through a limited liability corporation, rather than a nonprofit foundation. They can fund political work as well as philanthropy through their LLC. “Mark and Pricilla have been very clear,” Walker said, “that in order to effect the kind of change they would like to effect, they need the tool of political influence. Good for them!…I see this as all good because it means that we have a rich, robust, vibrant sector of people who are taking their wealth and deploying it.” Of course, this vibrant sector includes rich people across the political spectrum. Walker didn’t address the fact that for every donor working in the same direction as the Ford Foundation, there’s at least one pushing just as hard in the opposite direction.

Leveraging privilege into influence isn’t a zero-sum game in which one kind of influence cancels out another. Big money, whatever its ideological valence, corrupts democracy by creating immense political inequality. Walker needed to explain why it’s good that Mark and Priscilla have so much more political influence than the people passing around hors-d’oeuvres that evening. Reich objected to Walker’s position by saying, “[Y]ou welcome people with big pockets being nakedly political whatever their partisan views happen to be, whatever their ideas of change happen to be, or whatever their different ideas of justice happen to be….I’ve got some ideas about justice, and with $500 million or $45 billion, I could launch a bunch of Super PACS, too, but that’s not going to happen. So I don’t see that as obviously democracy-supporting. That sounds like plutocrats deciding what’s good for democracy.” At this point, some applause rippled through the audience. I admit, I started it, but I clearly wasn’t the only one who agreed with Reich on this point.

Answering an audience member’s question, Walker noted that “more and more Americans believe the system is rigged, believe that our financial system is rigged, our political system is rigged, and therefore their ability to be optimistic and hopeful, which [is] at our very core of our very being as a nation, is diminished.” But nothing rigs the system more than big money buying influence. Walker didn’t make the connection to mega donors, political and philanthropic: many Americans see the nation’s Marks and Priscillas as rigging the system.

Only once did Walker describe a specific instance of inequality that philanthropists might choose to address: access to prestigious summer internships for college students. “Most of those internships are unpaid,” Walker said about positions at art museums, “and so the people who can actually take those jobs already are privileged. They then get the credential of working for a summer as assistant to a curator at MOMA or the Met…which then gives them a leg up, and so their privilege is compounded and [so is] the inequality that manifests in that area.” The same holds true in every field. Subsidizing high-credential internships for low-income students could expand equality of access to high-ranking jobs; a more diverse leadership at elite institutions would improve those institutions. So an effort like this deserves the support of Ford and other philanthropies. It does nothing, however, to change the underlying economic and political structures that generate systemic inequality outside the world of the elite.

The only other project that Reich and Walker discussed was maximizing the opportunity for all Americans to vote by expanding registration – work that Ford has long supported. Their exchange focused on what category of work this is. Reich emphasized that voter registration is political and controversial because, for many Americans, “what that amounts to in practice is enrolling people who are highly likely to vote for the Democratic Party.” Walker alternated between insisting that “we do not see that as a political activity; that’s a civic activity” and acknowledging that “there are people who say the Ford Foundation shouldn’t be supporting efforts to insure that everyone votes….” Defending voting rights in the United State deserves maximum support, but the conversation never broached how this ongoing project melds with the new strategy or if, perhaps, it exemplifies the new strategy because it tackles political inequality head-on.

In his December 17 New York Times op-ed piece about reimagining philanthropy, Walker quoted a passage from Dr. Martin Luther King, Jr.’s 1963 sermon, “On Being a Good Neighbor”: “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice that make philanthropy necessary.” Toward the end of his Times piece, Walker added, “What can we do to leverage our privilege to disrupt the drivers of inequality?” and “Many [in philanthropy] already are answering King’s call, working intensely toward a world that renders philanthropy unnecessary.” The two sentences suggest the complexity of a strategy that requires privileged individuals and foundations to exercise as much power as necessary to undo the system that keeps them supplied with privilege and power.

Walker’s focus on inequality is an effort to repair democracy. The work is urgently needed, but as Reich observed near the end of their conversation, “[T]he repair job is ultimately one that citizens have to do, not that philanthropists do.” Dr. King’s effort to realize the promise of democracy took the form of a radical national movement of citizen activists for equal rights and opportunity; the agenda was systemic change. Darren Walker works within an elite network where leveraging privilege is the mode of operation. The January 7 event didn’t hint at whether the Ford Foundation would support the activities required to repair democracy today, such as citizens organizing for publicly financed political campaigns, radically progressive tax reform, labor law reform, union organizing, an end to segregated housing, rigorous regulation of banking and finance, fully funded oversight agencies, full and equal per-student funding statewide for public education, and universal access to high-quality and truly affordable health care. Let’s hope that next foundation event succeeds where this one disappointed.