[R-G] The Philanthropies and the Economic Crisis

[Anthony Fenton]

http://www.counterpunch.org/roelofs05282009.html

  May 28, 2009
Where Were the Foundations?
The Philanthropies and the Economic Crisis

By JOAN ROELOFS

We in the United States have been endowed with enormous philanthropic  
foundations, which have been fixing up the world for the last 100  
years. One might wonder how their activities relate to the current  
economic crisis. News on this subject is not found in the headlines,  
or even on page 23.  There is more exposure of foundation garments  
than of the opulent structures overpinning our system.

We should remember that these institutions, taking to heart the  
“robber baron” accusation, were not intended to dispense charity, but  
to apply resources and “social engineering” to forestall the “evils of  
capitalism.” Thus the Sage Foundation created the field of  
professional social work. The Rockefeller Foundation, directly and  
through its subsidiary, the Social Science Research Council, helped to  
shape New Deal programs, including social security. Its massive  
manual, Recent Social Trends, was a blueprint for the reform of  
laissez-faire capitalism. The Ford Foundation created prototypes for  
the “War on Poverty” programs, and more recently was the designer of  
Individual Development Accounts to provide funding for worthy low  
income people.

In addition to the billions donated to non-profit organizations,  
economic development, and policy-oriented think tanks, foundations  
have been prime creators of international organizations designed to  
promote and defend capitalism against any and all threats. After World  
War I, Rockefeller and Carnegie foundations originated the Council on  
Foreign Relations. Coordinating with its foreign affiliates, it is  
still going strong. Post World War II, the Bilderberg group was formed  
(named after the hotel in the Netherlands where the first meeting was  
held in 1954), an informal palaver that meets in secret (no press and  
don’t tell) at a different high-security location each year. It  
gathers the elite of North America and Western Europe; its originators  
included David Rockefeller, Dean Rusk (then head of the Rockefeller  
Foundation), Joseph Johnson (head of the Carnegie Endowment), and John  
J. McCloy (Chairman of the Board of the Ford Foundation), along with  
European notables. While this encounter does not conclude with any  
formal plan of action, the idea is that these powerful people have the  
means to implement the sense of the meeting. The list of attendees  
provided by aggressive investigative journalists at www.bilderberg.com  
will give an idea of the clout involved. As with similar gatherings,  
Bilderberg is an arena where rookies are fielded for selection to the  
big leagues; Tony Blair, Bill Clinton, and Mary Robinson were invited  
when aspiring politicians.

Bilderberg was too narrow a selection, as “non-Western” nations are  
becoming economic “giants.” Primarily initiated by Rockefeller  
institutions, the Trilateral Commission (Europe, North America, Japan)  
was convened in 1973 to deal with political threats and economic  
instabilities in the capitalist world. An even more inclusive  
gathering became necessary, and foundations and corporations created  
the World Economic Forum in 1974.  In addition to the prime ministers  
and corporate and foundation executives, it includes rock stars,  
“emerging young leaders,” and representatives of non-governmental  
organizations such as Greenpeace, Amnesty International, and Third  
World Network. While some of its sessions are in secret, it has a vast  
public component, welcoming the press, webcasting the panel  
discussions, and so forth. Its consistent theme is that globalization  
and economic growth will promote wealth and happiness for all,  
although participants are divided among advocates of the “free market”  
and government regulation.

Foundations are concerned about the dysfunctions of globalization, and  
consequently fund many groups active at alternative summits such as  
the World Social Forum, initiated as a radical response to the World  
Economic Forum. The protesting organizations at the WSF receive grants  
from pro-globalization foundations and corporations, which also  
provide general support for the Forum and its regional affiliates.  
There is now a Funders Network on Trade and Globalization created  
primarily for the WSF that includes the Ford, Rockefeller, Mott,  
Tides, and Levi Strauss Foundations, along with progressive funders  
such as the Funding Exchange and the Unitarian Universalist Veatch  
Program. The group of 160 funders sends a special delegation to the  
WSF. A major purpose: “The participation of funders and donors has  
allowed them to build a common analysis, in partnership with their  
grantees, of the underlying structural causes of community problems:  
the institutions involved, the flow of money, the constraints on  
democracy and other factors.”

While promoting/saving/improving capitalism over the long term,  
foundations are also deeply entrenched in the corporate sector,  
including the military-industrial complex and finance capitalism,  
through their trustees and investments. In 1971, the Ford Foundation  
established the Commonfund for managing the investments of private  
universities, schools, and foundations. Its charge was to break away  
from the traditional conservative investment policies of these  
entities in order to produce more robust returns.

As a consequence, the largest foundations became “powerhouses” in  
investing, seeking to increase their yields through hedge funds,  
distressed debt, venture capital, buyouts, real estate, and  
international resource and energy ventures. The investment committee  
of the Ford Foundation’s board is headed by Afsaneh Beschloss, who was  
recruited from the Carlyle Group where she was a specialist in hedge  
funds. According to Commonfund’s report, about 40% of foundations  
screen their investments; however, the major evil avoided is tobacco.

While critical scrutiny of foundations is rare, it is almost entirely  
absent from major media. A notable exception was Charles Piller’s 2007  
investigation of Gates Foundation investments (published in The Los  
Angeles Times) that concluded: “The Gates Foundation reaps vast  
profits every year from companies whose actions contradict its mission  
of improving society in the United States and around the world,  
particularly the lot of people afflicted by poverty and disease.”

Foundations are quick to publicize their “cause-related” investments,  
but for the bulk of their portfolios they go along with the crowd, and  
that has made all the sameness.

Joan Roelofs is Professor Emerita of Political Science, Keene State  
College, New Hampshire. She is the translator of Victor Considerant’s  
Principles of Socialism (Maisonneuve Press, 2006), and author of  
Foundations and Public Policy: The Mask of Pluralism (SUNY Press,  
2003) and Greening Cities (Apex-Bootstrap Press, 1996).Contact: joan.roelofs at myfairpoint.net