Posted by Judith Siers-Poisson on July 28, 2006

Back of one-hundred dollar billThe July 2006 issue of In These Times magazine carries an enlightening and overdue article about how the Left is funded, or not. The New Funding Heresies, written by Senior Editor Christopher Hayes, focuses on the relatively new group of very wealthy liberal and progressive funders called the Democracy Alliance. This group of close to one hundred donors has pledged to individually donate a minimum of $1 million over five years to organizations chosen from a docket that is vetted by the staff and board of the Alliance. In addition, each Democracy Alliance donor pays a $25,000 entry fee and annual dues of $30,000 to cover the operating expenses of the Alliance according to the article.

The Alliance seeks to counter the juggernaut of right-wing think tanks and grassroots coalitions in part by creating a similar infrastructure on the liberal/left side of the aisle, and increasing the odds of reaching liberal political goals in the 2006 mid-term elections and beyond.

After George W. Bush's re-election in 2004, progressive activists and funders realized belatedly that the Right had been steadily and effectively building a powerful machine that used non-profits as a cornerstone. As Christopher Hayes puts it, "The single most important factor in the right's political dominance over the last several decades is its superior infrastructure -- a network of well-funded, tightly coordinated advocacy organizations, grassroots groups, think tanks and media platforms that are capable of mobilizing the base, drawing in new converts, moving the national political debate and exerting astounding influence on elected politicians." It was in response to this that former Clinton Treasury official Rob Stein laid the groundwork for the Democracy Alliance.

CMD Called It

Cover of Banana RepublicansReading the In These Times article created a sense of déjà vu because much of what is now widely acknowledged as the Right's successful strategy of funding local groups, national think tanks, and all types of political infrastructure was discussed in Banana Republicans: How the Right Wing Is Turning America into a One-Party State. Written in early 2004 by CMD Executive Director John Stauber and Research Director Sheldon Rampton, Banana Republicans lays out clearly how and why the Right has been effective in creating an echo chamber among think tanks, non-profit groups, scholarship recipients, academics, lobbyists, right wing activists and the media. The chapter "The Marketplace of Ideas" has a clear and concise description of how strategic funding and a concerted effort to focus on common issues instead of divisive disagreements has given the Right the edge they still enjoy today.

Far from Unanimous Praise

Both their approach and their potential influence have made the Democracy Alliance a lightning rod. Some of the criticism comes from predictable sources, like right-wing commentator Bill O'Reilly. In his reliably vitriolic fashion he labeled the Democracy Alliance and their grantees -- including Media Matters for America, and the Center for American Progress -- as "nefarious," a "far left Mafia," and "character assassins." Even his usually agreeable colleague Laura Ingraham thought he was taking it a bit too far. In a conversation with O'Reilly on the July 18th edition of The O'Reilly Factor, she said:

I disagree. I hate to disagree with you, Bill, but I disagree. If someone is intimidated by George Soros and Media Matters, then they have no business being in politics or in our business. If you can't stand up for what you think is right and for the values that you think most Americans hold and for what you think is good for this country, then get out of the game, get out of the kitchen, whatever you want to call it, because these people are going to do that.

But not all of the criticisms come from the right. In learning from the Right's successes, there is a sense that perhaps the Left is copying too closely their blueprint. The Cleveland Plain Dealer editorialized that "the ways in which the Democracy Alliance operates -- its closely controlled vetting of recipients, the pledges of secrecy it demands -- trouble not only Republicans and good-government groups, but centrist Democrats as well." They continue that "some Democrats see it as a left-wing, below-the-radar effort to take over the party, much as GOP conservatives fertilized their bumper crop of offices by supporting the think tanks that ripened the political fields for harvest." Their conclusion sounds a warning that mirroring the legal but murky tactics of the right should not be embraced. "Democrats might well ask themselves if becoming the polar opposite of the hard right will open opportunities, or simply broaden the No Man's Land where so many politically disenchanted Americans huddle today."

Sheila Krumholz, the acting executive director of the nonpartisan Center for Responsive Politics, agrees that the secrecy surrounding the members and grantees of the Democracy Alliance is "a huge problem." She notes that for years "all kinds of Democrats and liberals were complaining that corporations and individuals were carrying on these stealth campaigns to fund right-wing think tanks and advocacy groups. Just as it was then, it is a problem today."

In analyzing the Democracy Alliance, it's important to emphasize that the multi-millionaires who are its members are primarily disgruntled Democrats. They are tired of losing and want most of all to break the monopoly control that the Republican Party has over the Supreme Court, the White House, both branches of Congress and most gubernatorial and state legislative offices. The Democracy Alliance is highly partisan, and groups that don't fit in with an overall strategy of being "good Democrats" as the Democracy Alliance elite define it are probably not going to be funded by it. In that sense, there are political strings and expectations attached to Democracy Alliance funding, even for non-profit tax exempt organizations.

The Radical Act of Fundraising

I've worked as a professional fundraiser and development director for over a decade. During that time I have provided trainings to many small groups taking their first baby steps to seek funding in order to build an effective organization. I was both gratified to see some fundamental and important truths raised in the In These Times article and disappointed that they are still considered "heresies." The five major observations outlined in the article are these: big foundations aren't the answer; organizations need funders to support their general operating budgets, not specific programs; funders need to think for the long term and support fundamental social change, not band-aid solutions to social crises; funders should support innovative efforts and provide start-up money and, funders need to support the expansion of a base of smaller grassroots donors. I will address these points from both the perspective of a fundraiser and of a donor.

Foundations Shouldn't Be the Foundation

It is true that foundation support is not the ideal solution for a social change organization to both grow and enjoy long-term stability. Foundation support, for the most part, is difficult to secure, difficult to keep, and fairly "high maintenance" in both the application and reporting stages. But foundations could and should take a leadership role in reducing groups' dependence on them. Corrections officers, advocates for victims of domestic violence, and cancer researchers should all be working for the fundamental structural changes that would to make their jobs less necessary. Likewise, foundations should be striving to support organizations in ways that reduce organizational dependence on foundation funding itself.

Foundations can achieve this goal by give more general support grants, funding the basic infrastructure that is critical for any organization, regardless of size, to thrive. This is at the heart of the second heresy -- fund holistically instead of in small isolated chunks. Foundations should provide funding that will support fundraising and organizational development itself. These activities are indispensable for organizational success, but it costs money to raise money, and foundations for the most part are uninterested in providing support. Sometimes a one-time influx is all that is needed, but even that is hard to come by.

The Center for Media and Democracy was fortunate to receive a grant that allowed us to develop our fundraising capabilities. In 2003 a family foundation responded to a request for support by giving us a grant of $25,000 to use as we saw fit to increase our capacity to raise money. As a result of this visionary grant, CMD hired a development consultant who worked closely for six months with executive director John Stauber. That began a period of growth that has seen our effectiveness increase many-fold in the past three years. It led to my hiring as development and associate director in the fall of 2005. In the past three years our staff has quadrupled and our programming has grown exponentially. While infrastructure grants do not guarantee this kind of growth and development, they are a much-needed form of aid that, I would argue, is relatively low risk and in our case was highly successful.

We've Got Each Others' Backs

Another key aspect of funding whole organizations, which also comes into play with funding for the long haul, is trust. Progressive funders need to trust their grantees to use funds wisely without excessive oversight. This means prioritizing unrestricted operating support over project specific funding, and providing multi-year grants instead of single year awards. By treating the grantees as equal partners in this way, foundations will also free themselves up to do more technical assistance, education, and outreach in the time that would have been used for more intensive grant management. On the other hand, grantees need to trust foundations with information on what challenges they are facing, instead of painting every grant as a complete success. By sharing their struggles honestly, they give the program officers important insights into the work "on the ground" that will make the foundation more responsive to them and other non-profits. It is a positive new relationship paradigm for all parties involved.

Democracy Alliance Managing Director Judy Wade understood the need for longer-term funding from the early months of the Alliance. "Everything we invest in should have not just short-term impact but long-term impact and sustainability." In the same article, Democracy Alliance founder Rob Stein echoed that sentiment. "Liberal groups have been disproportionately dependent on one-year foundation grants for specific projects, Stein said, while the money flowing to conservative groups has often involved donors' long-term commitments with no strings attached."

A little over a year later, still in the early stages of the organization, Rob Stein reinforced that view:

To be effective in the 21st century in promoting your beliefs, it is necessary to have a financially secure institutional infrastructure that has the capacity to promote consistently and coherently a set of ideas, policies and messages. We understand that it's very hard to promote a belief system and to be operationally high performing if you don't have multi-year funding.

Investment is Risky, but That's OK

The fourth heresy involves the need to take risks in funding new groups by providing seed money. Christopher Hayes explains it well. "New organizations, particularly those with a novel approach or issue, face a Catch-22: They can only secure funding if they have a good reputation and a demonstrated record of achieving results, but without any money it's hard to gain much of a reputation or get much of anything done."

A group with connections to the Democracy Alliance is the New Progressive Coalition (NPC). Started in late Fall 2005, it was launched by entrepreneurs Andy and Deborah Rappaport. Building on their venture capital experience, the Rappaports first convened a group called the Band of Progressives in 2004, which met to assess new, cutting edge groups, especially those aiming to mobilize young people. Interestingly, the first meeting was a gathering to view Rob Stein's PowerPoint presentation on how the Right had been successful in their funding strategies.

According to their website, the NPC's basic structure is that non-profit organizations pay a sliding scale (based on budget size) fee that entitles them to be listed in the "marketplace," and also gives them access to technical assistance and professional advice. The areas in which organizations are grouped are Advocacy/Organizing, Electoral, Ideas generation/Dissemination, Infrastructure/Capacity, Leadership, and Media. Nearly 175 groups are listed. Many are familiar names on the Left, such as Free Press, Rainforest Action Network, and the Institute for Policy Studies. But there are also other groups that are not yet household names, like Youth Speaks, the Bus Project, Mainstreet Moms, and our upstairs office neighbors here in Madison, Workers Independent News.

Not Just Donors, But Partners

What donors get is theoretically one-stop shopping to provide "venture capital" to progressive political organizations and non-profit advocacy groups. I usually shy away from a capitalist overlay to non-profit development, but in this case it seems useful. Donors should think of themselves as investors in the non-profits that they support. Like the alternative credit model of micro-lending, it can create a clear, clean and healthy relationship between donor and recipient. It also acknowledges that the donor benefits by taking part in the worthwhile efforts of the public interest group they are funding. While the organization is obviously gaining financially, the donor is gaining from the "product" that is being produced -- social change and a stronger democracy.

The fifth heresy mentioned might be the most important. Kim Klein, a guru of grassroots fundraising, and the publisher of the Grassroots Fundraising Journal, is quoted in the In These Times article as saying, "The Heritage Foundation has 275,000 individual donors. The Right-To-Life organizations have thousands of small donors. The grassroots of the right wing is actually funded by the grassroots and the grassroots of the left wing is funded by foundations, and I think it's an enormous problem."

We Has Met the Funder, and He is Us

Despite my criticisms and others, I am still heartened that the Democracy Alliance and the New Progressive Coalition have formed, and that people like billionaire Warren Buffett set an example by giving their fortunes to charity (in Buffett's case, to the Bill & Melinda Gates Foundation). But one very real risk is that everyday people see philanthropy as a responsibility of "the rich," instead of an opportunity that we all have.

There is a common misconception that the "real" givers are people with more resources than most of us enjoy. It really depends how you define a real giver. The national average, according to JustGive.org is 3.2% of pre-tax, or gross, income. So if you earn $30,000 a year, that would be $960 a year, or less than $20 a week. The average household donates $1,620 per year.

What will most likely surprise you is what group is the most generous. Again according to JustGive.org:

The people that give the most actually make the least. Households earning under $10,000 a year -- far below the poverty line -- gave 5.2% of their income to charity. That's a larger percentage of their money than any other income group.

In a press release announcing the release of a report on 2004 charitable giving, C. Ray Clements, chair of the American Association of Fundraising Counsel, explained "About 70 to 80 percent of Americans contribute annually to at least one charity. Being a 'philanthropist' does not merely mean making huge gifts; it means giving to any cause that you value." Rob Stein of the Democracy Alliance agrees. "We will not build a healthy center-left movement in America without a diverse base of small- and medium-sized donors."

Reclaiming an Age-Old Practice

TithingThere is often strong resistance on the Left to religious overtones and concepts, which have unfortunately been handed over to the Right as "their" territory. (Jim Wallis and his colleagues at Sojourners magazine are doing their best to wrestle it back.) Let's adopt at least one unapologetically -- tithing. The concept of giving a pre-determined portion of your income, 10% is common in many religious traditions, goes back to Babylonian times. Giving of your time is great, and many people do. But we also need to each give organizations our financial support as well. We need to eliminate the taboos that surround money and start challenging ourselves and others to ensure that the organizations doing crucial, fundamental social change work have the support they need. Maybe 10% is too ambitious for the first year, but by setting it as a goal, we are likely to get closer to it than we would if we didn't aim for a specific amount. Let's not let the wealthy -- on the Right or the Left -- have all the fun!

Comments

Tax-exempt foundations like the Public Welfare Foundation purport to be "charitable" organizations. Yet, ironically, in 2009 it gave a $160,000 grant to In These Times magazine for the "charitable" purpose of just setting up a blog for middle-class "left" journalists.

By accepting such bribes/"grants" from various U.S. power elite foundations to subsidize their operations, U.S. left "ngo" groups seem to have involved themselves in a hyypocrtical classist tax-dodge and conflict-of-interest situation.

The extremely wealthy folks and plutocrats who control U.S. foundations, the U.S. mass media industry, the U.S. corporations and big banks and the U.S. electoral process should now be prohibited from using their tax-exempt grant money to exercise an undemocratic special influence over the U.S. left's political agenda in 2009, during the current U.S. economic depression..

It's time to finally reduce the special influence of the power elite foundations (and the middle-class grant-hustlers they currently subsidize) over the classist U.S. left and finally create an anti-corporate/anti-classist New Left that actually works to redistribute the surplus wealth of the "non-profit" foundations directly to U.S. working-class people and unemployed people during the current U.S. economic depression.

I really love the energy that comes from simple, "grass roots" type movements. But you are right--most things need some kind of funding to survive.

Bill Moyers presents "United States of ALEC," a report on the most influential corporate-funded political force most of America has never heard of -- ALEC, the American Legislative Exchange Council.