Foundations vs. Democracy


Foundations vs. Democracy

By Shea Howell

Michigan Citizen, Jan. 30- Feb. 5. 2011

I grew up in a company town. These were the small villages throughout the country where those who owned the mines and mills also owned just about everything else.  They owned the houses their workers rented. They owned the local grocery and clothing stores. Paychecks were in the form of script, reflecting the owner’s accounting of what was earned and owed to their various enterprises.

For most people, most of the time, what was owed outstripped what was earned.  This condition was celebrated in the line from the old country song, “I owe my soul to the company store.”

One of the hallmarks of this arrangement was the clarity with which economic power was used to silence political dissent. If anyone objected to working conditions or questioned the accounting methods of the company, they would soon find themselves without credit for food or a place to live. Unions became the only way for individuals to confront this kind of abuse of power. Over time, as unions expanded, the company towns disappeared.

But in Detroit lately they seem to be reemerging with a 21st Century twist. Raw economic power, wielded by foundation elites, is bending public polices to their will. With no public oversight, foundation and the corporate elites who support them are deciding what is best for all of us.

The activities of more than a dozen foundations in the shrinking of Detroit and the reshaping of our public schools have been too little recognized or  analyzed. But it is much discussed. As in the old company towns, this discussion rarely happens in public. Instead, leaders of community organizations, intellectuals, academics, artists, activists, journalists and a fair number of preachers find themselves dependent on foundation dollars for their paychecks. As a result, they are reluctant to openly criticize what many of them know to be disastrous public policy.

This lack of honest criticism by those whose livelihoods depend on grants is compounded by the power of foundations to control the intellectual climate surrounding their activities. In this month’s issue of the Atlantic, Chrystia Freeland writes of the new global elites behind foundations who “are using their wealth to test new ways to solve big problems.” Matthew Bishop and Michael Green call this practice “philanthrocapitalism” in their book with the same name.

This new kind of venture philanthropy includes the creation of think tanks and other propaganda efforts to erode resistance to their activities. Frequently, these philanthropic activities  are in line with the growth of personal fortunes.

By funding programs, data collection, evaluation processes, resource groups and think tanks, foundations are developing a closed system to support their ideas. This closed system is supported by grants to universities, TV networks and news organizations.

A recent article in the Columbia Journalism Review was among the first to raise concerns about the “large and complex web of media partnerships” taking shape.

In a recent book, With the Best of Intentions, Frederick Hess notes that “[A]cademics, activists and the policy community live in a world where philanthropists are royalty—where philanthropic support is often the ticket to talking big projects, making a difference and maintaining one’s livelihood.”

Joanne Barkan, writing recently in Dissent,  concludes, “The cozy environment undermines all players—grantees, media, the public and the foundations themselves.”

Most importantly, the growing power of foundations to direct public policy through the massive use of untaxed private wealth  erodes the very foundations of democracy in our city and our country.

We in Detroit have the opportunity to challenge this growing threat to democracy. We should demand that foundations disclose the financial holdings of all board members. Moreover, we should demand that they conduct their meetings with public oversight. No other government-sanctioned body operates behind such closed doors. It’s time we demand that they open up.


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