Editors’ Note: David Suárez, Kelly Husted and Andreu Casas complete HistPhil’s preview of a symposium on foundations as interest groups which Kristin A. Goss and Jeffrey M. Berry have co-edited for the October issue of Interest Groups & Advocacy. Below, Suárez, Husted, and Casas summarize their contribution to the forum.
Years of gridlock in policymaking at the national level in the U.S. has led to more policy change efforts shifting to the state and local levels. California passed internet regulations rules and Washington state attempted to pass a first-in-the-nation carbon tax—issue areas that in the past were most often viewed as federal issues. Several cities—from San Francisco to Flagstaff, Arizona to Portland, Maine—have passed higher minimum-wage laws.
Heightened focus on the state and local arenas as venues for policy change opens opportunities for political actors at these levels to garner newfound importance and prominence in the policy making process. One of these potential political actors has mostly flown under the radar: community foundations. Some community foundations have seized the opportunity and are advocating for issues from immigration to education to the environment. But others resist taking on an advocacy role. Why? In a recent symposium on foundations as interest groups in Interest Groups & Advocacy, we argue that the environmental context in which community foundations are situated and particular structural characteristics of community foundations influence the extent to which these organizations embrace a role as advocates for social and policy change. At the broadest level, environmental context refers to the political opportunity structure that organizations confront – or the regulative, normative, and cultural-cognitive forces that shape organizational behavior. In this paper we treat environmental context more locally, focusing on characteristics of the community in which foundations operate such as wealth and political orientation.
Community foundations are 501(c)(3) public charities that fundraise on an ongoing basis from a broad base of donors in a defined geographic area to make grants that primarily support nonprofits and causes in that area. More than that, community foundations often act as important local leaders, identifying community challenges and potential solutions to those challenges. Like other nonprofits, community foundations can engage in advocacy and have a broad suite of advocacy tools to do so, such as public information campaigns, policy research, and coalition building. This advocacy can include lobbying, which the IRS defines as activities that attempt to influence legislation. While the IRS prohibits private foundations from lobbying (though they can engage in advocacy more broadly), community foundations—given their status as public charities—can engage in limited lobbying without jeopardizing their tax-exempt status.[i]
Past research from Craig Jenkins (1998), Alice O’Connor (2010), and others has found that foundations have historically been reluctant to push for significant policy change. Notwithstanding that reluctance, the role of foundations—particularly private foundations such as Ford and Rockefeller—often has come under intense scrutiny in relation to social and policy change activity. At different periods in U.S. history, foundations have been described as cultural imperialists that attempt to co-opt social movements to preserve the dominant social order and as financiers of revolution that face virtually no accountability as they work to undermine the dominant social order.
However, the philanthropic landscape seems to be changing, and foundations are increasingly viewed as interest groups rather than disinterested patrons. Recent studies indicate that foundations have started to embrace advocacy and have become emboldened as policy entrepreneurs, significantly influencing a range of issues including education and the environment. This important line of work reveals that some foundations are working together to leverage resources for policy change and demonstrates that a few (usually very large) private foundations have become quite proactive in pursuing a policy agenda, such as how the Gates Foundation and Broad Foundation have worked to expand charter schools. Most of this research thus far has focused on a handful of large private foundations, while community foundations have received scant attention.
We concentrate on community foundations since these organizations often act as local leaders, yet are poorly understood players and networks in the philanthropic and policy change arenas. As an example, the Seattle Foundation has a current initiative called Communities of Opportunity, where the community foundation partners with the King County government and community organizations to improve health, social, racial, and economic outcomes by focusing on places, policies, and systems changes. As part of the initiative, the foundation lobbied for Best Starts for Kids, a county-wide levy to raise funds for programs to support positive child development. The foundation also furthers this initiative by providing funding to organizations that work to increase health, housing, and economic opportunities in the county through policy and systems reform. The Seattle Foundation’s position as a respected grantmaker and local leader with many ties to local nonprofits, businesses, and government organizations seems to facilitate their capacity to advocate on local issues.
The South Florida Community Foundation is another example. The foundation recently launched an Immigration Program Grant initiative. In their announcement of the initiative, the foundation acknowledged that recent changes in federal immigration law and policies have made life more challenging for noncitizens living in the U.S. To address these growing challenges, the foundation plans to fund organizations that provide legal services to immigrants as well as to organizations that advocate for immigration policy change at the local, state, and federal levels. While private foundations also support these types of activities, advocacy by community foundations has largely gone unnoticed and unstudied in the academic literature.
Clearly some community foundations are engaging in advocacy, either directly through activities such as lobbying or indirectly through their funding. Yet, other community foundations do not. We seek to understand the environmental contexts and structural characteristics of community foundations that drive this difference. We use machine learning techniques to analyze the text of nearly 600 community foundation websites and to measure advocacy discourse. We combine this advocacy measure with data from the IRS and other sources to determine the factors that influence community foundation engagement in advocacy.
We find that the environmental context in which community foundations are situated and certain structural characteristics of these foundations influence the commitment to advocacy. The three strongest predictors of community foundation advocacy are the community wealth of the foundation’s surrounding community, the level of paid staff, and the extent to which a foundation participates in networks with other foundations and organizations. Our findings demonstrate that the environmental context clearly matters for community foundation engagement in advocacy, with those foundations in wealthier communities being more likely to advocate. This finding suggests that community foundations reflect what research has found at the individual level—wealthier individuals tend to be more politically active. While individual determinants do not necessarily aggregate to the organizational level, operating in a wealthier community may mean that these community foundations have more ability to take advantage of opportunities to influence policy whereas community foundations in areas of lower wealth may need to prioritize more immediate community challenges. Greater reliance on paid staff is also associated with increased advocacy, which may mean that having human resource capacity fosters a foundation’s ability to engage in advocacy activities. Additionally, network participation is an important factor as those foundations that belong to more inter-organizational networks are more likely to engage in greater advocacy, suggesting that networks might be a key way in which information and ideas about advocacy are spread.
Community foundations—particularly in comparison to private foundations—are often viewed as being deeply connected with the people and nonprofits within their respective communities, and their involvement in advocacy can be seen as strengthening community voices. To encourage advocacy among community foundations, our results suggest that investing in paid staff and participating in inter-organizational networks would likely promote this activity. However, while community foundations can (and do) promote policy change to help those who are marginalized or disadvantaged, we also see from our results that community foundations in wealthier communities are more likely to engage in advocacy, which may raise concerns that community foundation engagement in advocacy may simply serve to reinforce “the heavenly chorus [that] sings with a strong upper-class accent.”
There is still much work to be done to develop our understanding of the role philanthropic foundations, including community foundations, play in influencing social and policy change. Our measure of advocacy does not distinguish among the tactics that these organizations mention on their websites, including an important distinction made in some of the literature on interest groups and advocacy organizations: participation in insider versus outsider forms of advocacy. Some community foundations may focus exclusively on lobbying and other insider tactics that involve contact with legislators, while others may limit involvement to outsider tactics like local organizing and grassroots mobilization. Besides attending to the distinction between insider and outsider tactics, future research could build on our work by exploring whether a foundation engages in advocacy directly or indirectly. Some foundations engage in advocacy directly, for instance by taking public positions on issues, and some community foundations advocate indirectly by providing grants for organizations to engage in the activity. Whether or not community foundations and other foundations differ systematically with respect to tactics (insider/outsider) or approaches (direct/indirect) is unclear, and research on these topics is critical for developing a better understanding of foundations as interest groups.
-David Suárez, Kelly Husted, and Andreu Casas
David Suárez, Ph.D., is an associate professor at the Evans School of Public Policy & Governance, University of Washington. His current research explores a) the relationship between management strategy and organizational performance in social sector organizations and b) the consequences of professionalization for nonprofits and foundations. He is particularly interested in collaboration, advocacy, and civic engagement—issues that link nonprofits and philanthropic institutions to public agencies and the policy process.
Kelly Husted is a PhD candidate in public policy and management at the Evans School of Public Policy & Governance at the University of Washington. Her research focuses on the role philanthropic foundations play in attempting to influence public policy.
Andreu Casas, Ph.D., is a Moore-Sloan Research Fellow at the Center for Data Science at New York University. His research interests encompass the areas of political communication, public policy processes, and computational social sciences. He is particularly interested in how social movements and interest groups influence the political agenda and the decision making process in the current media environment. His methodological interests and strengths are natural language processing (text as data), computer vision (images as data), and machine learning and artificial intelligence in general.
[i] Public charities with a 501(c)(3) designation are distinct from 501(c)(4) social welfare organizations. Like 501(c)(3) public charities, 501(c)(4) social welfare organizations also have tax-exempt status with the IRS. However, contributions to 501(c)(4) organizations are not tax deductible for donors. Organizations with a 501(c)(4) designation can engage in unlimited amounts of lobbying and limited electioneering. While 501(c)(3) organizations can engage in limited lobbying, they cannot engage in any electioneering.
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