How the hard-fought battle for the soul of a foundation should inform the struggle to preserve even a handful of large grantmakers devoted to conservative causes will require more than abstract doctrine.
The conservative-philanthropy establishment was clearly unhappy with the House-passed version of the “One Big Beautiful Bill” because of its increase in the excise tax on net investment income of private-foundation endowments. Longtime Daniels Fund board member Jim Nicholson entered the fray with an op-ed in The Wall Street Journal, wondering “Why would conservatives, who have rightly fought against tax increases in the past, now take aim at private charities?”
“Some believe that American philanthropy is dominated by left-leaning activists,” he notes. Nonetheless, he insists, “center-right foundations are successfully tackling America’s toughest problems. These groups emphasize empowerment, personal responsibility and the dignity of work, and they refuse to treat people as victims of circumstance.”
Nicholson is a distinguished veteran and public servant, as well as a staunchly conservative Republican. His views must be given considerable weight. But it’s also important to understand why so many conservatives believe American philanthropy is “dominated by left-wing activists.” Because, as we’ve frequently argued here at The Giving Review, that’s simply true.
It is, to be sure, theoretically possible to establish a foundation prizing conservative values like personal responsibility and the value of work. But in practice, the overwhelmingly progressive character of the nonprofit sector works subtly but persistently to drag a conservative-leaning foundation leftward.
Many conservative donors set out to avoid the cautionary paths taken by Ford, Pew, MacArthur, and others. But within one generation, their dollars have been redirected to leftist causes. Conservatives have spent far too little effort analyzing this process. They believe that a strong written affirmation of the donor’s intent provides the primary ballast needed to prevent a port list. That is necessary, but not sufficient. Once a substantial body of money is introduced into the philanthropic world, quiet forces immediately gather to insure that it comes to serve progressive ends, no matter the “parchment barrier” provided by written donor intent.
Perhaps the only example
Ironically, nothing illustrates this process better than the history of the Daniels Fund itself. For it is perhaps the only example of a large conservative foundation that was snatched back from the progressive vortex, albeit with an enormous amount of effort while under intensely negative media scrutiny. Just how much effort was—and always will be—required to keep a foundation conservative within a progressive philanthropic world explains the atypical reach for taxation by some on the right to diminish the influence of a sector that is overwhelmingly and permanently on the left.
Two excellent accounts of this struggle for the Daniels Fund’s soul have been written, one by the late David Horowitz and Jacob Laksin and the other by Martin Morse Wooster. As they note, Bill Daniels was an extraordinary human being. From a humble background in New Mexico, he rose to become a much-decorated fighter pilot in World War II and Korea. He then got in on the ground floor of cable television, pioneering its basic commercial techniques and becoming wildly wealthy in the process.
When the Daniels Fund became active after Bill’s death in 2000, its principle amounted to almost $1 billion—enough to have made it by far the largest conservative foundation in the country, had that been his intention. And by every indication, it was to have been a conservative foundation.
Daniels himself was a lifelong Republican and a substantial donor to GOP candidates. Cableland, his Denver home, was generously sprinkled with effigies of elephants. In a memo to his board in 1997, he had written: “Remember I am a conservative and want no money going to liberal causes. The only thing I have in common with liberals is my concern for the homeless, the poor, and the downtrodden.”
Having established a general ideological direction for his foundation, Daniels went on to limit its grantmaking to Colorado, New Mexico, Wyoming, and Utah. He specified 11 areas of concern to which Daniels grants would go, as Wooster notes: providing scholarships to high school graduates in the target states, supporting “innovative education initiatives,” helping the homeless and disadvantaged, helping alcoholics and drug addicts recover, assisting the elderly, funding education programs emphasizing “ethics and integrity,” supporting amateur sports, and so forth.
Seeking further to insure that his precise intentions were carried out, Daniels established a board for the Fund that included several relatives, plus longtime friends, business associates, and political allies, including Nicholson. Phil Hogue, a longtime employee of the Daniels business, became the first president. All seemed to be arranged—family members and close friends in charge of executing a carefully prescribed agenda—so as to allow little room for the infiltration of specifically proscribed liberal ideas.
But the leftward lurch followed immediately. Seeking to establish a truly professional administration for such a substantial foundation, Hogue turned for counsel to the indisputably knowledgeable philanthropic experts at Harvard—at the time, not yet identified in the public’s eye exclusively with ultra-progressive ideas. Following their advice, he designed a grantmaking procedure that removed much of the decisionmaking from the “amateur” board and put it into the hands of seasoned philanthropic pros whom he had recruited from what he believed to be the best foundations in the land. (Staff had authority to make grants of up to $100,000 without board approval and did not have to report grant-request declinations to the board.)
Apparently unbeknownst to the conservative board, hiring “experts” from other large foundations armed with university degrees in the social sciences almost guaranteed a progressive tilt to grantmaking. Then, as always, only the unlettered believe that grantmaking simply involves locating effective groups and writing them checks. That is mere “charity,” and ever since the Carnegie, Rockefeller, and Russell Sage Foundations came onto the scene early in the 20th Century, philanthropy has aimed much higher.
It intends rather to penetrate to the root causes of human problems through the strategic application of social-science expertise. And the root causes invariably involve what are claimed to be serious deficiencies in American institutions like the free market and traditional religious and cultural values. These structural problems demand solutions that claim to be “scientific,” but cannot help but appear to average citizens as “progressive.” Without firing an ideological shot, and with the best intentions of the foundation’s conservative leadership, the Daniels Fund immediately assumed a distinctly leftward list.
As Horowitz and Laksin note,
Recounting the Daniels Fund’s political transformation, one conservative grumbles, “It’s a prime example of the way we lose good money. It isn’t that someone sets out to make [foundations] liberal. It’s that someone set out to make them professional and respectable, which means consulting with the Ford Foundation and others. The result is the same: a left-wing foundation built with right-wing money.”
(Disclosure: I may have been the grumbling conservative.)
Bias disguised as expertise
The problem with this arrangement didn’t become apparent until several years later, after Hogue had resigned for health reasons and was replaced by former U.S. Sen. Hank Brown. Reports came into the board about some of the grants not being made. The program officers, according to Wooster, had decided to “ban all grants to the Boy Scouts because of the Scouts’ decision at the time to reject homosexuals from membership.” But “Bill loved the Boy Scouts,” according to Linda Childears, a longtime Daniels associate and later Fund president, and “rejecting the Scouts was a firm denial of Daniels’ intentions as a donor.”
When the National Air and Space Museum applied twice to the Fund in 2002 for a grant to preserve “many of the planes that Daniels flew during the war,” staff denied the request, first saying that “it was not the fund’s policy to preserve ‘instruments of war’” and adding later that “the fund’s official policy was not to support preserving objects that ‘kill people.’”
Such blatant defiance of the donor’s intent, to say nothing of traducing his heroic military service, could not escape the attention of the Daniels board. This, combined with what he argued was excessive administrative expenses, prompted Brown to take dramatic steps in November 2003 to reverse direction. He closed offices outside Colorado and fired 21 employees, or one-third of the staff, some of whom had left good jobs at major foundations to join Daniels.
This triggered the sort of media reaction that suggests another factor quietly but firmly maintaining the overwhelmingly progressive character of the philanthropic sector. Arguably, trying to make Daniels more conservative once again was merely returning to the original design for the foundation. But to national, local, and trade publications, this was a partisan putsch demanding immediate reversal.
“Turmoil Hits Charity Fund Over Its Handling of Money” shrieked a headline in no less a publication than The New York Times. “Had his ashes—combined at his request with those of his beloved cat Sydney—not been scattered over the Pacific three years ago, Bill Daniels would probably be turning over in his grave,” claimed Times writer Stephanie Strom. To The Chronicle of Philanthropy’s news story, leading philanthropy scholar Pablo Eisenberg provided this comment: “I think there’s politics at play. This is sort of like a right-wing coup.”
Westword magazine quoted Wyoming Gov. David Freudenthal’s letter to Brown: “I do not believe this precipitous change in direction lives up to [Bill Daniels’] high standards.”
The overwhelmingly negative coverage said little about the Fund’s leftward tilt that had provoked the correction in the first place. After all, so the thinking went, the fired staff weren’t ideologues, they were just professionals. As the Westword article notes, “Several of the people in Denver who were laid off had years of experience in working on issues like homelessness and early-childhood education, reflecting a modern approach to philanthropy that emphasizes targeting donations to get at the root of problems rather than just high-profile giving.”
So hostile was press coverage of Brown’s reforms that he denied altogether that they were about the ideological direction of the foundation and concerned only excessive spending. “People weren’t sorted out in terms of keeping their jobs based on philosophy,” Brown insisted to Westword. But that only had the effect of prompting further media hostility, including press scrutiny of Brown’s salary (those jobs could have been saved if only he had taken a pay cut!), excessive board fees, and allegedly improper financial links between the Fund and board members’ private ventures.
The Daniels Fund board discovered the hard way that, even with clearly conservative purposes backed by equally conservative board members, it is extraordinarily difficult to maintain a foundation that will remain true to the donor’s intentions. It will be immersed in an overwhelmingly progressive institutional world, but one in which this ideological bias is disguised simply as non-ideological professional expertise. Any effort to resist the relentless gravitational pull of the left will be denounced by the media as an anti-professional right-wing coup, reinforced by sordid financial dealings.
Nicholson is right that we can learn a great deal from the example of the Daniels Fund. But he undersells his own accomplishments as a board member when he fails to mention the immense struggle that was required to keep the Fund focused on conservative principles like “empowerment, personal responsibility and the dignity of work.” A first-hand account of that battle written by Nicholson or some other board member would give us a much more helpful and realistic view of what it takes to maintain a conservative foundation in a progressive philanthropic world.
An indicator of resistance
The battle for Daniels goes on. The Fund devoted many hours of research among Daniels’ papers to come up with a more-comprehensive understanding of his intentions, and it commissioned a full biography of the donor. Board members and staff are required regularly to reflect and report on their efforts to live up to his expectations.
A bellwether grant for the Fund’s ability to remain true to Daniels’ conservative principles will be its support for a project named in Nicholson’s op-ed: Step Denver (formerly Step 13). I became acquainted with its founder, the late Bob Coté, through Bob Woodson, the architect of conservatism’s policy of support for grassroots self-reliance. Coté was an uncompromising advocate of immediate and complete abstinence as the solution to drug and alcohol addiction. As a result, Nicholson notes, a phenomenal percentage of Step’s clients remain sober and retain employment after completing the program.
Coté was dramatically out of step with the “modern approach to philanthropy that emphasizes targeting donations to get at the root of problems.” He loathed today’s preferred professional solution to addiction, “permanent supportive housing,” which holds that recovery can only be gradual and requires first the unconditional provision of housing and counseling. Coté contemptuously dismissed this approach as “bunks for drunks.”
Even though Daniels, a recovering alcoholic, had often visited and written personal checks to Step 13, I have no doubt that it was an embarrassment to Hogue’s staff experts and would soon enough have disappeared from the Fund’s grant list without the “right-wing coup” of November 2003. Whether or not the Fund continues to support Step Denver and similar “non-modern” projects emphasizing personal responsibility, rather than root causes, will be an indicator of the its ability to resist the pull of progressive social policy and adhere to Daniels’ intentions.
A staunch friend of Coté and Daniels, Colorado Springs developer Steve Schuck, was so scarred by his experience on the Fund’s board that he’s embarked on a personal crusade to persuade fellow conservative philanthropists to spell out as concretely as possible their exact intentions for their foundations. (Disclosure: I’m on the board of The Schuck Initiatives.) He has made a superb series of videotaped interviews describing his general philosophy of giving, with concrete examples of the sorts of grants he would, and would not, like his board members to make.
Schuck is a tenacious and undaunted battler for unpopular conservative causes like school choice. But it’s easy to see why other, less-courageous donors would seek to avoid the perpetual controversy such causes provoke. As longtime foundation official Jim Piereson observed in a recent interview, it’s much easier to be invited to, and to blend in at, cocktail parties when your giving isn’t supporting déclassé conservative causes. Little wonder that there are so few substantial conservative foundations today, even though the money behind philanthropy typically comes from the free-market system.
Rather than choosing to engage in the brutal, often-deeply-personal combat required to preserve a few islands of conservative grantmaking, it’s not hard to understand why some conservatives have concluded that philanthropy is simply a lost cause. Like the media, academia, Hollywood, and other major sectors of American institutional life, the foundation world now appears to be hopelessly imbued with progressivism—indeed, so much so that some on the right are willing to consider non-traditional measures like the threat of taxation to try to shock the field back to sanity.
The conservative-philanthropy establishment is having none of that, however. It prefers to defend to the death the principles of philanthropic freedom and minimally taxed endowments. But the struggle to preserve even a handful of foundations devoted to conservative causes will require more than abstract doctrine.
It will require a thorough understanding of the subtle but powerful forces conspiring to capture every last philanthropic dollar for progressive purposes. It will demand as well the development of sound, thorough-going, realistic strategies—including reconsideration of public policy toward tax-exempt organizations—to counteract those forces.
If any of those efforts are just cast aside, then conservatism will ironically have contributed to the preservation of a status quo in which progressivism utterly dominates the philanthropic landscape.
We can begin those efforts with attention to the hard-fought battle for the soul of the Daniels Fund.
