Today is Giving Tuesday, which the United Nations Foundation and the 92nd Street Y launched seven years ago to encourage global giving throughout the winter holiday season.
Giving Tuesday arose alongside a new generation of philanthropies and philanthropists. Begun in 2000, the Bill and Melinda Gates Foundation spends billions annually on improving global health and public education. The Chan-Zuckerberg Initiative, a limited liability corporation, aims to use technology to facilitate social change. And in September, Amazon founder Jeffrey P. Bezos pledged $2 billion to reduce homelessness and bolster preschools in low-income communities.
These titans of the tech industry have embraced philanthropy to cement their legacy and responded to calls to share their enormous wealth.
But these initiatives are not just charitable; they are also political. As we and others are showing in a new line of research, philanthropies often act as interest groups, shaping the agenda and dynamics of policymaking.
Here is how we did our research
We noticed these dynamics when the two of us compared notes from two separate research projects, each looking “under the hood” of U.S. policy development and implementation. We had been talking to foundation employees, policy advocates and government administrators, as well as attending public meetings, reviewing documents like annual reports and 990 forms, and identifying grant acknowledgments. That let us see how foundations used their largesse to advance policies they favored, such as universal prekindergarten and extended foster-care policies.
Here are three main takeaways from our research.
1. Foundations set agendas for policymakers
With independent sources of funding, foundations have unparalleled freedom to select and pursue any agenda. They are established simply to give money according to the founder’s mission — which gives them a very broad scope. No other kind of organization — for-profit or nonprofit — has this kind of flexibility. The only thing foundations cannot do is lobby for particular legislation. But they can educate the public and serve as thought leaders, which they do with great success.
For example, between 2002 and 2011, the Pew Charitable Trusts invested more than $104 million to expand universal prekindergarten. Pew decided to fund a policy idea that emerged from research on the importance of early brain development and the benefits of preschool: Investing in pre-K could improve education outcomes and lead to a more educated workforce. Pew funding for advocacy in 21 states and the District helped reframe “child care” as “pre-K,” which helped to mobilize child advocates, as well as the business community, law enforcement, and professional associations of public school administrators, state lawmakers and governors.
Pew’s evaluation of this campaign claims that the foundation was “decisive” in expanding pre-K education by 89 percent, reaching more than 1.3 million 4-year-olds. Although others were also working on this effort, Pew played a central coordinating and leadership role in elevating the “universal pre-K” policy idea in many states.
2. Foundations use their credibility as experts
Because foundations often fund research — including evaluations of social innovations — they have a lot of credibility as experts. They can point to data instead of saying “trust me.” We find that foundations often fund respected academic centers and offer incentives for top researchers to take up new lines of research. This generates an evidence base for the foundations’ favored policies, which they then disseminate among advocates, who use that knowledge when talking to lawmakers.
People are often suspicious when for-profit companies, like those in the pharmaceutical industry, sponsor research. But foundation-funded research gets a pass, perhaps because the general public perceives foundations as primarily charitable, with a lack of material interest in policy outcomes.
3. Foundations anchor interest group coalitions
Foundations exploit these advantages of flexibility, resources and credibility to build informal “coalitions of interest” — nonprofit service providers, journalists, researchers, think tanks and advocates who work to advance the same policy goal. By funding those groups, linking them to one another and helping coordinate their actions, foundations play a crucial and all-but-invisible role in shaping what Americans know and how they think about a variety of social, environmental and health issues.
In California, for example, a coalition of foundations — all of which favored legislation to expand foster care to age 21 — used their resources to connect researchers to advocates, arrange meetings with influencers, enable nonprofits to do public outreach, hire consultants to coordinate efforts and fund sympathetic lawyers to help write state regulations for understaffed state agencies. In doing so, foundations engineered a comprehensive and focused implementation of the policy. The funders themselves were not involved directly. But their vision shaped both program goals and activities.
One foundation executive told us, “Because we are in philanthropy, we can’t really go out there and pound the pavement and promote policies, but we can promote ideas.”
Foundations’ hidden role raises questions about accountability
Although foundations must release annual reports and IRS documents detailing their giving and revenue, foundations work behind the scenes in these coalitions — making it difficult to know who is supporting what policy initiatives and how. That’s even more of challenge with philanthropists such as Bezos or Priscilla Chan and Mark Zuckerberg, who are not forming foundations and whose efforts are not subject to any meaningful oversight.
Just as the Citizens United decision raised concerns about the democratic accountability of wealthy actors’ influence in political campaigns, so does the role of philanthropy in developing and advocating for policies. Funding advocacy that benefits children may be laudable. But what happens when the goals are less noble?
In an era of extreme income inequality and rising congressional deadlock, philanthropy by the ultrawealthy has a great deal of influence. Accumulated wealth is shaping the ostensibly democratic outcomes of the policy process. Recent books by Rob Reich and Anand Giridharadas investigate whether democracies want their wealthiest members taking tax deductions for shaping policy. Philanthropy can be a powerful force for good when it helps subsidize innovation and experimentation that would not happen otherwise. But given their power — and tax advantages — perhaps philanthropists deserve our scrutiny as much as our celebration.
Brenda K. Bushouse is an associate professor of political science and public policy at the University of Massachusetts at Amherst.