Reinventing Philanthropy on the Right

Changes spur debate over future of conservative foundations

The conservative philanthropy movement is undergoing a major change in leadership. Two chief executives of wealthy conservative foundations have left their posts, while the foundation that bankrolled many of the nation’s key conservative think tanks, academic programs, and other efforts to promote private enterprise has announced that it will distribute the remainder of its assets over the next three years. Meanwhile, President Bush has nominated two of the major thinkers in free-market philanthropy for top jobs in his administration, which could limit their ability to speak out as freely about philanthropy as they have in the past.

The developments have prompted discussions about the future of conservative philanthropy, especially whether it should continue to concentrate on fortifying intellectual institutions that foster conservative thinking or whether it should focus on direct services.

Among the recent announcements:

• Michael S. Joyce retired from the Lynde and Harry Bradley Foundation, in Milwaukee, last month, after 15 years as president. The foundation, which has $622.9-million in assets, is among the largest conservative philanthropies in the nation, and Mr. Joyce has been one of the movement’s ardent advocates. He has won most attention for making grants that paved the way for a state-supported program in Milwaukee that has become a model for people who want to give needy parents a choice of whether to send their children to public or private schools. He is now setting up a lobbying organization and a charity to promote the use of religious groups in providing human services and dealing with social problems.
• Richard M. Larry has left the presidency of the Sarah Scaife Foundation, a Pittsburgh philanthropy with about $396.6-million in assets. Michael W. Gleba, a vice president there, is managing operations at least until a successor is found. Sources say the foundation may linger in finding a replacement, as it tries to rethink its strategy after taking heat for supporting efforts to discredit President Clinton in the 1990’s under the direction of its chairman, the newspaper publisher Richard M. Scaife. Repeated calls to the foundation and Mr. Larry were not returned.
• The John M. Olin Foundation, in New York, has said that it intends to honor the wishes of its founder, a businessman who died in 1982 after making it clear to the board that he did not want the foundation to outlast the trustees who best understood his philanthropic ideals. After the death last year of its president, William E. Simon, whom Mr. Olin had selected in 1977, the foundation started making plans to close. Over the past two decades, Olin has striven to make university campuses more tolerant of conservative voices — and more likely to generate conservative scholars. It spent $40-million in the last 15 years creating and expanding programs in law and economics at such institutions as Harvard, Stanford, and Yale Universities, in addition to backing the Heritage Foundation, the American Enterprise Institute for Public Policy Research, and other conservative think tanks.

Beyond those changes at foundations, the president of the Philanthropy Roundtable, John P. Walters, has been planning his departure since he was nominated by President Bush to be director of national drug-control policy.

Mr. Walters oversaw a 75-percent increase in membership at the Washington group, a network of approximately 700 foundations, corporations, and individual donors that was developed by free-market proponents as an alternative to the Council on Foundations, and which has grown to attract many donors of a wide array of political persuasions under Mr. Walters’s leadership.

And Leslie Lenkowsky, a leading voice on conservative philanthropy, has been nominated by President Bush to be C.E.O. of the Corporation for National and Community Service, a federal agency that administers AmeriCorps and other volunteer programs. Mr. Lenkowsky, a co-founder of the Philanthropy Roundtable, now serves as professor of philanthropic studies and public policy at the Center on Philanthropy at Indiana University-Purdue University, in Indianapolis. Mr. Lenkowsky, a former contributor to The Chronicle’s opinion pages, was previously president of the Hudson Institute, a public-policy think tank in Indianapolis.

Influencing Policy

The three foundations undergoing changes — Bradley, Olin, and Scaife — together give about $85-million a year, a fraction of what the nation’s biggest grant makers each bestow. But by loyally supporting the same organizations year after year, often with general operating support, and carefully selecting new projects that complement the work of their longstanding grantees, both liberal and conservative nonprofit leaders say that the foundations’ influence far outpaces their spending.

Many of the ideas for the 1996 welfare overhaul, while a program of President Clinton’s, came from projects financed by conservative grant makers, and current debates about elementary and secondary education have been influenced by principles advanced by those grant makers.

“You never would have had welfare reform had you not had these foundations,” says Terrence Scanlon, president of the Capital Research Center, a Washington group that studies charities, and chairman of the Consumer Product Safety Commission during the Reagan administration. “You never would have had a school-voucher program running in Cleveland and Milwaukee and other places had there not been a Bradley Foundation. So much that has transpired in the last couple of years really was the direct result of a few conservative foundations.”

But many of the leaders in conservative philanthropy say that the successes of the past few years won’t be emulated unless foundations and donors start pursuing new topics.

“A lot of the conservative themes have been successful, but the problems are no longer there, or aren’t seen as important — crime, welfare, government spending, overregulation, foreign-policy threats,” says James Piereson, executive director of Olin. “There’s a challenge now for conservatives to reinvent themselves.”

To remain relevant, he says, conservative donors should pursue projects that deal with women and the country’s growing Hispanic population, and must devote more energy to promoting religious groups as a key to solving societal problems.

Importance of Religion

At Bradley, Mr. Joyce was also persuaded that religion is an especially important theme for conservative philanthropy to pursue.

He says “the single most important discovery I had” as a grant maker was the effectiveness of religious groups as providers of social services, whether they care for the elderly, offer recreational opportunities for inner-city kids, or reclaim housing projects from gangs. He believes more foundations should take a look at the “demonstrable success rates” of those groups, and he plans to encourage that in his new role. “Human beings are more than mere matter, and they are more than followers of material incentives,” says Mr. Joyce, who is Roman Catholic. “They have spiritual, moral dimensions, and many of the so-called intractable social problems are in fact tractable, but they are only tractable when the whole human being is taken into account.”

His new group, Americans for Community and Faith-Centered Enterprise, a lobbying group in Washington, was established with encouragement from President Bush to press Congress to pass tax credits to finance religious groups and legislative changes that would allow churches and other religious-oriented social-service organizations to compete for more kinds of federal grants.

Mr. Joyce said the effort is being supported largely by individual donors who are “friends of the president’s,” but the only supporter he would name is the group’s chairman, the businessman Paul M. Fleming.

Mr. Joyce’s second project is a charity, the Foundation for Community and Faith-Centered Enterprise, in Phoenix, that will attempt to put more private money into the hands of faith-based groups. Not yet open for operations, the charity is intended to be a long-term effort to promote policies that encourage giving. “Very few corporations and foundations pay any attention to this,” he says of the religious organizations that provide social services. “They’re not new. They’re newly discovered.”

Supporting Social Services

Mr. Joyce has yet to start raising money for the charity, but the group’s focus on helping direct-service providers find money comes at an opportune time. Throughout conservative philanthropy, both individual donors and foundation officials are showing an increased interest in financing direct services to the needy. That is a contrast to the donors and foundation leaders who in the past two decades emphasized philanthropy’s role in building the intellectual arguments and research that could guide policymakers.

For instance, Mr. Fleming, founder of the P.F. Chang’s China Bistro restaurant chain, retired from his business interests to serve as chairman of both of Mr. Joyce’s new groups. He said he was motivated to give time and money to the cause because of his experience supporting a Baptist organization that feeds the hungry.

“I see much better results on the dollars I contribute to this charity than I would get in getting involved with things I don’t understand or have never had exposure to, like think tanks,” he says.

And the financier Theodore J. Forstmann, and John Walton, heir to the Wal-Mart fortune, two leading conservative donors, gave $50-million apiece to create a program to provide scholarships to needy children.

While few observers fault the specific services being supported, some fear that the closing of the Olin fund and the potential changes at Scaife, combined with the lack of interest individual donors have shown in supporting scholarly projects, could lead to a decline in the amount of money spent on think tanks and academic programs.

Mr. Lenkowsky is among those who are worried that foundation support for conservative academics will be hard to come by in the next decade. He says foundations and donors should understand that “sometimes the book that takes 10 years” to write “will have a much bigger impact than immediate, hands-on activity.”

Elizabeth L. Haynes, program officer at the W.H. Brady Foundation, in Maggie Valley, N.C., shares that concern. Her fund spends $700,000 to $900,000 a year to support think tanks and other organizations that do research on family, culture, and public affairs. Ms. Haynes says the future is not just about spending on research versus services, but on making the research accessible. She says foundations have not spent enough on books and television spots that get the word out to “the average person” that conservative ideas are humane. “Bush blew it on the compassionate conservatism concept,” she says. “He couldn’t come up with the explanation of the vision, the catchphrase à la Kennedy that would help people understand that we’re not going to do away with all welfare programs, however we don’t think people should have a free ride.”

Competition for Money

While grant makers debate what efforts to emphasize, some conservative policy groups are already preparing for new difficulties in raising foundation money.

The Independent Women’s Forum, in Arlington, Va., a conservative public-policy group, has just begun an effort to attract corporations and individuals as supporters, in part to alleviate the loss of Olin, which has provided funds to the organization.

Nancy M. Pfotenhauer, the organization’s president, said she worries that when Olin closes, “there is going to be fiercer competition for a smaller pot of money, absent new players coming onto the scene.”

The closure of Olin won’t have an immediate effect on some nonprofit groups: At the end of 2003, the fund is expected to have between $30-million and $40-million in assets, says Mr. Piereson, and those will be distributed to 15 to 20 key programs, many of them think tanks. That sum means many groups will be able to run for several more years without feeling the loss of the Olin money.

But the shutdown of Olin is already causing a challenge for Mr. Piereson, who says he is unsure what to do next to best advance his interests in conservative philanthropy.

He sits on the board of the William E. Simon Foundation, in Morristown, N.J., which was created by the former Olin president. Some believe that the foundation, which today has about $30-million in assets, will become more influential over time, and that Mr. Piereson could play a significant role in shaping it since he knew what Mr. Simon wanted. Mr. Simon’s will stipulates that the foundation get approximately $20-million a year for 15 years.

Finding a new perch in conservative philanthropy will be a challenge, he says, if that is what he decides to pursue. “There are not many foundations like ours, so it is not all that easy to make a career in this field, whereas it’s somewhat easier if you’re on the social-services side or the liberal side because there is much more activity there.”