The Washington PostDemocracy Dies in Darkness

Will consultants kill the open society?

Regarding the future of George Soros’s Open Society Foundations

Billionaire George Soros speaks at an event at the World Economic Forum in Davos, Switzerland, in 2020. (Simon Dawson/Bloomberg News)
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Next month, the United States will host a “Summit for Democracy.” According to the State Department, the goals of the meeting are to “set forth an affirmative agenda for democratic renewal and to tackle the greatest threats faced by democracies today through collective action.” According to Politico’s Nahal Toosi, the means to achieve those ends are more inchoate, and “it’s far from clear how many countries attending the summit will sign up for commitments or how many will follow through.” What everyone seems to agree on is that this is happening during a moment when the global zeitgeist is trending away from liberal democracies and open societies.

The hard-working staff here at Spoiler Alerts is likely to have more thoughts in the coming weeks about whether President Biden’s democracy summit will amount to anything. What seems undeniable, however, is that Biden’s initiative stands a better chance of succeeding when civil society is thriving. Civil society organizations, in turn, lean on philanthropic foundations to sustain themselves.

This brings me to George Soros’s Open Society Foundations (OSF) and its recent transformation. According to its website, OSF aims to “build vibrant and conclusive democracies” and is “the world’s largest private funder of independent groups working for justice, democratic governance, and human rights.”

Earlier this year, OSF decided that the current threats to democracy warranted a rethink of the organization. According to OSF Vice President Binaifer Nowrojee:

A changing world warrants self-examination to make sure that we are responding as nimbly as we must to the changing reality of the world.
Moving forward, we will reinforce George Soros’s original premise that the people closest to the problem are best suited to define the solution. We are shifting greater funding, control, and decision-making to our six regional offices to identify opportunities at the national and regional level. At the global level, we can be more effective if we focus on fewer key priorities at greater scale.

This jibes with how the Chronicle of Philanthropy reported these changes. According to the New York Times’s Nicholas Kulish, however, not everyone at OSF was thrilled with the redesign: “The announced funding changes set off months of recrimination and criticism within the sprawling Open Society Foundations.” What kinds of recriminations? “At an all-staff meeting in early May ... some Open Society employees demanded to know why staff members had not been more closely consulted and accused the foundation’s leadership of ‘gaslighting’ them. Several argued that the changes did not address internal problems with racism and sexism that the organization needed to deal with.”

Kulish’s story is a perfect display of all the trends discussed in my book “The Ideas Industry” and then some. There is the partisan blowback that the Soros-funded organization has faced in the United States, Hungary and elsewhere from a constellation of populists, reactionaries and antisemites attacking OSF without remorse; tensions between the founder and OSF staff; accusations of sexism and racism; and the role that consultants play in philanthropic change.

It is the consultant angle that caught my eye, however. According to the Times’s reporting, OSF staff “described a corporate-style streamlining recommended by the Bridgespan Group, the Bain & Company nonprofit spinoff.” Bridgespan explicitly compared OSF to the Gates and Ford foundations and concluded that Soros’s shop had greater overhead, too many grant-offering units, and gave less per grant than the other philanthropies.

It is easy to conclude that Kulish’s sources included a lot of disgruntled OSF staffers who were losing out from this reorganization. And Soros has every right to reallocate his philanthropy as he sees fit. Some of Bridgespan’s observations seem on point.

And yet, the thing I cannot shake about this story is Bridgespan’s methodology for how to tell OSF what to do. The classic consultant move is to investigate best practices and have the client try to adopt as many of them as possible. That might make sense in a for-profit market sector in which the goal is to wring greater profits out of existing inputs.

What can be lost in this approach, however, is heterogeneity. When confronting challenges like the democratic recession or the rising tide of illiberalism, is it actually a good thing for OSF to copy what the Gates and Ford foundations are doing? One of the themes in “The Ideas Industry” is that as traditional philanthropic giving atrophied following the 2008 financial crisis, think tanks and nongovernmental organizations started seeking out alternative streams of income. That shift affected a lot of public sphere outlets and not for the better.

Full disclosure: My reaction is probably colored by my research for “The Ideas Industry.” OSF’s reforms fall under the “reasonable people can disagree” category. It is entirely possible that Bridgespan is simply catering to the wishes of Soros and OSF President Mark Malloch-Brown. This would not be the first time an outside consultant has served as the convenient scapegoat for a change that the management team wanted to happen anyway.

Still, I have a lot invested in the continued existence of an open society, which means I have a rooting interest in the success of the Open Society Foundations. So I sure hope OSF and Bridgespan know what they are doing.