Too Close for Comfort? Obama and the Foundations

Foundations should take a stance of engaged and critical discomfort with government no matter who is in charge, said Gara LaMarche, The Atlantic Philanthropies’ President and CEO, in this speech at the Hudson Institute-Betsy and Walter Stern Conference Center.

I am always glad to take part in Hudson Institute events organized by my good friend Bill Schambra, though I was slightly wary of today’s topic, since I had a sense that I might be expected to carry the flag for excessively close partnership between government and philanthropy.  In fact, as I told Bill, my feelings on that subject — informed not just by the experience of the last year of engagement with the Obama Administration, but of many years of involvement in and observation of government-philanthropy engagement at various levels in the U.S. and in half-a-dozen other countries — leads me to take a much more nuanced view of the matter, which I’ll take a few minutes to elaborate.  So let me apologize in advance for letting anyone down who expected from me a full-throated call for philanthropy and government to walk down the aisle together to a life of connubial bliss.

A year into a new Presidency seems like a good moment to share some thoughts, though, on the relationships between philanthropy and government – relationships that Atlantic has considerable experience with in each of the countries in which we operate.

In the just society in which we all wish to live, government, business and the nonprofit sector all have key roles to play. We operate in a societal ecosystem where the economic and social health of all will be damaged by weakness in any of these elements. In recent years in the United States, in my view, there has been a growing imbalance in this ecosystem, with government failing to provide a sufficient safety net for members of the community in hard times, and derelict in providing sufficient regulatory oversight for consumer protection from institutions like banks and insurance companies, or for health, safety and the environment.

Government has experienced a steady loss of confidence in the last few decades, some of it well-earned, borne of failing schools and opaque and unresponsive bureaucracies.   A good deal of it, though, is the consequence of a sustained attack from conservatives like Grover Norquist who boasted of shrinking government to the size where it could “drown in a bathtub.”  That unfortunate metaphor came to life, we saw, as the flood waters of Hurricane Katrina overtook New Orleans.

There is debate, and always will be, about what government should and should not do.   I think most people would agree it should save people from drowning, protect them from economic exploitation,  try to shield them from terrorist attacks, and assure that the bridges their cars and trucks must drive over don’t collapse.  But whatever government does, we all share a stake in its effectiveness.  Atlantic wouldn’t need to support programs like Single Stop, which helps low-income families get counseling to obtain the benefits to which they are legally entitled, if government always worked as it should. And we wouldn’t need to spend resources making sure the state of Florida actually implements the restoration of voting rights for former prisoners, if government always worked as it should.

Foundations, for their part, can innovate, demonstrate, spur, fill in gaps, foster knowledge, identify talent, and do many other things that contribute to the betterment of society. But they cannot through their own funds alone begin to feed the hungry, care for the sick, and educate for participation in contemporary society many millions of young people. By definition their role must be catalytic.  Since the federal budget alone dwarfs the combined endowments of America’s foundations – to use just one measure, last year’s much-debated “stimulus” package was more than twenty times the annual spending of all foundations put together – no foundation concerned with education, health, employment or any other core human undertaking can afford to be unconcerned with government policy.  Government is the only institution that is both democratically controlled and can deliver, to use a philanthropy buzzword, at “scale.”

In my first few years at Atlantic, which works in seven other countries around the world in addition to the United States,  I’ve learned much about models of working with government from Atlantic’s staff in other geographies, and they illustrate to some extent the relationships between government and philanthropy in the U.S.  In the Republic of Ireland, there is little tradition of investigative journalism and few think tanks to influence policy.  Some of our work there aims to fill those civil society gaps.  Government is very centralized, so we form relationships with civil servants that pay off in co-investments by Atlantic in youth development programs, and in the appointment of key ministers to advance the concerns of older adults in both the Republic of Ireland and Northern Ireland.

In South Africa, we negotiate with the national Department of Health to support some the costs of upgrading nursing training facilities, and partner with the Department of Land Affairs to provide legal advice and support to farm-workers who face illegal eviction. The Legal Aid Board, which provides legal support for indigent people, has entered into a partnership with our grantee, the Association of University Legal Aid Institutions, to provide support in some rural areas. The Department of Social Development provides support to some advice offices in the Western Cape which also receive support from Atlantic, and the Department of Education matched an Atlantic grant to build a Life Sciences Complex at the University of the Western Cape.

In Viet Nam, of course, the government’s role is quite pervasive, and Atlantic’s program has to interact quite closely with it. But there are many levels of government, and depending on projects’ needs and administrative requirements, and we work with the appropriate level of government as needed. In Viet Nam this ranges from public health programs such as mandating motorcycle helmets to dramatically reduce traffic fatalities to co-financing the upgrading of rural commune health clinics. The Ministry of Health is also our partner in raising needed matching funds for large projects such as the National Hospital of Pediatrics.  At times, we also press the Office of the Prime Minister and Deputy Minister to facilitate progress and overcome administrative hurdles, and support civil society groups who are moving into the increasingly larger space for advocacy on health and other public policy matters.

Here in the United States, Atlantic’s relationship to government has taken two forms. The first is in a sense adversarial. We fund organizations that monitor, criticize and sue the government, like civil rights groups fighting draconian restrictions on immigrants cropping up all over the country, and civil liberties lawyers challenging torture, extraordinary rendition, and warrantless wiretapping. The second is an attempt at partnership, from working with the U.S. Labor Department during the Bush Administration to provide more employment opportunities for older adults in economically challenged regions of the country, to the State of New Mexico and the cities of Oakland and Chicago to match our investments in integrated services for middle school students.

While Atlantic is a non-partisan institution, when Barack Obama was elected President,  we saw opportunities to assist our grantees in moving forward more rapidly and broadly in a number of areas central to our mission.  With the first few months of the inauguration, the President signed children’s health legislation that had been vetoed by President Bush despite bipartisan support.  The President also signed a national service bill that contained significant provisions for tapping into the idealism and energy of older adults, something our grantees had long been pushing.  I was pleased to attend the signing ceremony and watch Senator Orrin Hatch assist his good friend, the late Senator Edward Kennedy, for whom the bill was named, in his shaky steps to and from the podium.

We were relieved to see the President declare an end to torture and call some of its manifestations, like waterboarding, for the illegal and abusive practices they were.  And as a foundation concerned with health, which had supported a public education campaign called HCAN – Health Care for America Now – to prod all Presidential candidates and members of Congress in both parties to pledge to repair this  gaping hole in the U.S. safety net, we were encouraged by the President’s commitment to take this issue on as the signature effort of his young Administration.

Here we are a little more than a year later.  On the plus side, children’s health coverage and national service have become law, though our grantees face years of diligent effort to assure effective implementation.  More comprehensive health care reform, which looked like close to a sure thing for many months, seems to be on life support at this moment, thanks to last month’s election in Massachusetts and to costly missteps by the Administration and its allies.  The President has had a difficult time keeping his promise to close Guantanamo, and our human rights and civil liberties grantees, seeing insufficient discontinuity with the practices and policies of the Bush Administration, continue to sue and complain.  Promised immigration reform has yet to emerge, and tough enforcement Homeland Security enforcement policies have dismayed many whose hopes were raised for more fundamental change.

Where are foundations like Atlantic in all of this?  To be sure, we talk more with various administration officials – a number of whom have emerged from the ranks of our grantees – more often than in recent years, and this is useful in getting a view of the Administration’s priorities and views, though it rarely differs from what is available in the public press now that a 24-hour blogosphere is trained on the minutiae of government.  Our grantees also have more regular access than they have enjoyed in prior administrations.  This has not, as I note above, always translated into better policies, and despite the relationships we enjoy, we’ve tried not to pull our punches.

For example, a few days after I met at the White House with Cecilia Munoz, a former Atlantic grantee and board member who is now Director of Intergovernmental Relations and a key figure in immigration policy, I wrote one of my bi-weekly columns sharply critical of the Obama Administration’s immigration enforcement policies.  Having been on the outside herself as a Vice-President of the National Council of La Raza, Cecilia understands better than most the need for those on the outside to push and hold accountable those on the inside.  Those we fund have often been scathing – usually in sharper terms than I would employ, but that’s their prerogative – of Obama’s action or inaction on civil liberties, immigration reform, health care, financial reform, jobs, lesbian and gay rights and host of other matters.  That is as it should be in a healthy democracy.  Access and communication are not inconsistent with vigorous scrutiny and criticism; in fact, they demand more of it.

Atlantic has been a leader in encouraging foundations and non-profits to engage in policy advocacy to the full extent that the law permits, and we stepped up the pace and scale of our efforts in light of the opportunities that seemed to be at hand with a new, more progressive White House.  We made some big bets on health care and immigration reform, and more broadly, on the idea that a transformational moment might be at hand to address long-overdue social challenges and strengthen the appropriate role of government.

As Sarah Palin might ask, “how’s that hopey-changey thing working for ya?”  In fact, the last year has been sobering – among other things, it has been a civics lesson in how Senate rules and the institutional rivalries between legislative chambers and branches of government can combine to frustrate reform.  But it is too soon to tote up the scorecard and to assess the role played by non-profit organizations in whatever victories may be achieved.  Assigning causality is always a tricky business calling for healthy skepticism and strong doses of humility.  We will be careful to study the experience of engagement during the past year and learn from it.  It seems evident to me that the campaigns and civil society organizations that have been built and strengthened by the support of Atlantic and other foundations have improved the climate for more progressive policies and helped keep the Administration accountable to its professed values and goals.  But in the end-game of policy, particularly where huge economic interests are at stake, as in health care and financial reform, this is far from determinative.

What I’ve had to say so far focuses on the realm of advocacy and policy, but in closing, I need to address the other major realm in which the Obama Administration has engaged with philanthropy and the larger non-profit sector.  That is its efforts to change the way government funding works, moving to base policies and programs on a sound evidentiary basis.  The establishment of the White House Social Innovation Fund, inspired by the rigorous approach to evaluation and evidence promoted in recent years by foundations like Edna McConnell Clark, Gates and Hewlett, is the most visible example of this commitment, though it can be seen, at even greater scale, in the Race to the Top Fund of the Department of Education, newly flush with stimulus funds, and in numerous other government agencies.

The foundations mentioned and several others have been quite closely engaged with this because the Social Innovation Fund represents a welcome and audacious effort to take a strong philanthropic trend of the last five to ten years and employ it in government, which, as I have noted, is a much larger funder than private philanthropy.  There are plenty of reasons why the Obama Administration’s  evidence-based initiative might not work out.  The money being offered is relatively modest, the matches required of intermediaries and non-profits are fairly steep, the number of qualified intermediaries may not be high enough for necessary critical mass, normal politics may at any point raise its head and compromise the effort, and so on.  But I don’t see who could argue with the goal of having government funds flow to proven programs, or who would have a reason not to wish the effort well.

A year into an administration whose policies and objectives track more closely than its predecessor did the strategic objectives of America’s largest foundations, there have been disappointments and setbacks.   Political leaders always disappoint, and rarely do the right thing in the right measure unless pushed and prodded from civil society organizations and social movements.  But in looking at our recent experience and adjusting for the years to come, foundations also need to look into themselves.  Most move far too slowly to capitalize on actual opportunities to achieve long-sought goals once they are at hand.  Many are too skittish about engagement in policy advocacy.  Few have a strategic vision broad enough to fit the key issues together into a coherent narrative.  Dominant funding practices imprison their grantees in silos, reinforcing interest group politics, and the lack of multi-year core support in most cases hobbles foundation beneficiaries in effort to plan, prepare and seize the moment for change when it arises.

I doubt that foundations and the Obama Administration are “too close for comfort.”  But comfort is not the goal.  Engaged and critical discomfort is more likely to produce the best results for society, foundations and our political leaders.

For further coverage of the event, please visit the Hudson Institute.