More Foundations Are Engaging in Public Policy — and Experimenting With Different Legal Structures to Do It

More foundations are starting to engage in public policy, but to be successful, they need to take a broad approach and engage with a range of partners, grant makers said during a panel discussion at the Urban Institute on Tuesday. Some have adopted different legal structures to be able to engage in politics more directly than they could as a 501(c)(3).

Ninety percent of foundations in a recent Center for Effective Philanthropy survey reported they are advocating for policy changes, and they say this advocacy is crucial to achieving their goals, according to Phil Buchanan, president of the center, who moderated the discussion. The report on the survey has not yet been released.

The shift is recent. Nearly three quarters of those surveyed said that they have intensified those efforts in the past three years.

“We can never outspend any of the problems we care about,” said Kelli Rhee, CEO of Arnold Ventures, a philanthropic limited-liability company. “We have to think about driving change differently.”

In its previous iteration as the Laura and John Arnold Foundation, the organization used to fund scientific research that it handed over to policy makers, but there was a gap between the research findings and implementing the policy. The foundation created an LLC so it could engage in politics directly, or through the groups it supports, while continuing to fund scientific work.

Changing a Law Is Only the First Step

Brian Hooks, president of the Charles Koch Foundation and CEO of Stand Together, an umbrella organization for groups funded by the Kochs and others, says Stand Together has funded work on political campaigns. It supported a Koch-backed group, Americans for Prosperity, that was involved in the successful Florida ballot initiative to restore voting rights to felons. The group had to change the law to achieve its goal, but a lot more was required to succeed.

“Once people get out of jail, we need to be investing in nonprofits, community organizations, to ensure that they find a successful path in life,” Hook said. His organization also worked with the Society for Human Resource Management and Richard Branson to help newly released prisoners find employment. “Philanthropy can help rally the business community,” he said.

The Bill & Melinda Gates Foundation recently created a 501(c)(4), an organization that can engage in political activity but to which donations are not tax-deductible. Mark Rigdon, deputy director of state and local government relations at the foundation, said that the effort is new, but it opens up opportunities for more focused advocacy.

“It allows them to have conversations about specific pieces of legislation in a way that under the 501(c)(3) we were restricted from doing,” Rigdon said.

Convening Clout

The Hudson-Webber Foundation, which focuses grant making on its hometown of Detroit, has found that it can use its clout and local connections to bring important groups together without pushing for particular legislative solutions, fund CEO Melanca Clark said.

For example, it recently met with representatives from the local prosecutor’s office, the police department, and members of the judiciary to start a discussion about the county’s jail population. The foundation could initiate those conversations and then bring in its community partners, Clark said.

The panelists also emphasized that organizations shouldn’t expect to see short-term progress. When it comes to policy change, things can move slowly, and metrics can be hard to come by. “Effective advocacy takes longer than you want it to,” Rigdon said. “The status quo interests are very well organized to maintain the status quo.”

Look for Issues With Bipartisan Support

Small steps can be a good proxy for progress on an issue that may take 15 or 20 years, Hooks told the audience. If groups are forming coalitions with others they might not normally work with, that is an important sign of progress. “Philanthropy can do a real disservice and real harm if we’re insisting on unrealistic time horizons,” Hooks said. For example, groups might target only those things that are easy to achieve in the short term rather than working on crucial issues that will take longer to solve. Local foundations can also help bring a long-term perspective to ensure that the community is being well served, Clark said.

Several speakers emphasized the need to identify policies that could attract bipartisan interest and support. For example, in Florida, the ACLU and Americans for Prosperity, two groups often on opposite sides of big issues, worked together on the voting-rights initiative.

Immigration is another issue that is ripe for this kind of effort, Hooks said. So is prescription-drug pricing, according to Rhee. “I consider it a responsibility that philanthropy look for places to bring different points of view together,” she said, “particularly on an issue where the public is crying out for action.”

Jim Rendon is a senior writer who covers nonprofit leadership and fundraising for the Chronicle. He recently wrote about how low pay hurts nonprofits and workers and about the challenges that nonprofit leaders of color face. Email Jim or follow him on Twitter .