On Corporate Power Non-profit corporate power: sheep in wolf’s clothing?

Why do corporations give billions of dollars to charitable foundations every year? Does it make their profit-making activities less exploitative? In the first of a monthly series of columns investigating corporate power, Michael Barker looks at non-profit foundations.

New in Ceasefire, On Corporate Power - Posted on Tuesday, November 16, 2010 0:00 - 2 Comments


By Michael Barker

Massive corporations wield immense power, and their ability to crush lives is commensurate with their insatiable demands for profit: profit that is derived from, and necessitates, exploitation. Therefore, working to end such anti-social activities should be a top priority for humankind. But if in some bizarre act of humanity a small proportion of the profits derived from capitalism are churned back to the very people who suffer worst from the necessary ill effects of corporate power, what then? Does such charity mean that the institutionalized exploitation of the bulk of human life is not so bad after all?

I would argue that the answer is ‘no’; corporate profit gained at the expense of humans can never be justified by such philanthropic gestures. No doubt such noblesse oblige is allocated by some elites with noble intentions; but if the price for such charity is for its recipients to ignore economic exploitation, then it is hardly distributed with altruistic intentions. Instead it is given with economic intent to profit more handsomely from a workforce, in a manner that assuages each individual capitalist’s desire to feel (and advertise) their own neglected humanity.

One could say that there are two types of charitable aid that derive from the massive financial riches wrenched out of our labour. In the corporate world, the first type of aid is usually considered under the remit of public relations activities, and its distribution is referred to as Corporate Social Responsibility. Needless to say the logic of this practice reminds us that the main profit-making body of the corporate structure is of course socially irresponsible. In the United States this PR responsibility is taken seriously and much of this ‘aid’ is dispensed to achieve strategic political objectives, whose magnitude, come election time, dwarfs PAC and soft money contributions combined.

The second and arguably more strategic form of corporate humanitarianism resides in the institutional form known as a non-profit corporation, a body more commonly referred to as a philanthropic foundation. In 2009, in the US alone, there were over 75,000 grant making foundations which together distributed just under $43 billion – a 8.4 percent decrease from the previous year, owing to the economic crisis. Such foundations come in all political persuasions, but, unsurprisingly, socialist-leaning foundations tend to be few and far between. Thus the most common foundations tend to be wedded to pro-capitalist charitable ventures like, for example, the promotion of the ideological project that came to be known as neo-liberalism.

To date the little progressive political attention that has focused on the detrimental impact of foundations on the political sphere has overwhelmingly zeroed in on conservative philanthropists. A focus which makes sense when we consider how closely their actions are tied to the promotion of for-profit corporate power. But this bias makes little sense when we recognize that the rapid growth of right-wing foundations in the United States was in large part a response to the immense success of left-leaning liberal philanthropies established at the turn of the twentieth century.

Historically speaking the most influential liberal foundations have been the Carnegie Corporation of New York, the Rockefeller Foundation, and the Ford Foundation, the former big three; all three being set up by America’s leading capitalists, in 1911, 1913, and 1936 respectively. A newcomer on the philanthropic scene is the Bill and Melinda Gates Foundation which is now the largest foundation in the world and gave away some $3 billion in grants in 2009. For the most part these agenda-setting foundations are best known for their support of progressive causes, yet a strong case can be made that their philanthropy plays an integral role in sustaining an unjust status-quo.

Elite philanthropy is of course not new, but the institutionalization of such aid in the form of foundations enabled capitalists to effectively undermine the threats posed by popular forms of radical political activism that blossomed in the early twentieth century. One might say that in response to massive labour unrest the foundations worked to constitute a “private alternative to socialism.”

Writing from prison in the late 1920s, the Communist writer, Antonio Gramsci, was one of the first political theorists to accurately document the ‘management’ dilemma facing corporate and political elites during this period.

Indeed, he successfully described how elites were able to successfully maintain ideological domination over the public through the use of consensual rather than just coercive institutional arrangements. Yet importantly one vital but overlooked organ of hegemony that Gramsci was unable to include in his work were philanthropic foundations.

The power of foundations, however, is arguably even greater than other hegemonic elements, like for example the mass media, precisely because their influence has been downplayed (or in many cases simply omitted) by intellectuals.

Liberal foundations thus bolster elite cultural domination through the use of a ‘charitable’ strategy that Professor Berman suggested: owed to the presence of mind of “more far-sighted” elites who “recognized that a societal consensus could only be achieved if the extremes of poverty and wealth were somewhat mitigated,” which in turn, could only come about when the “working classes were more integrated into society’s political and particularly its economic system and its dominant norms.”

Recall that the creation of the first major foundations occurred at a time when a strong progressive movement was attempting to “evolve a liberal consensus and to chart a more equitable political and economic path for the United States”. Indeed, one vitally important way of bringing the dispossessed and/or alienated into the capitalist system was for enlightened robber barons (e.g., Andrew Carnegie, John D. Rockefeller and Henry Ford) to create liberal foundations to support progressive causes like education, health care, and environmental protection schemes whose unstated purpose was to maintain the status quo by preempting potentially revolutionary social change.

Like many other unaccountable and undemocratic organizations, philanthropic foundations often downplay the magnitude of their influence on society, successfully disguising the crucial function they fulfill for ruling elites and, more generally, capitalism. Yet, while similar claims from other key power-brokers are rightfully met with skepticism, the influence of liberal foundations is rarely challenged.

Consequently, in most cases political theorists have accepted the foundations’ benign-sounding rhetoric and ignore or belittle their influence on democratic processes. This neglect is reflected by the fact that in the second half of the 20th century, one of the most important books critiquing foundations was published not by political scientists, but by educational theorists. In the introduction to this edited collection titled Philanthropy and Cultural Imperialism: The Foundations at Home and Aboard (1980) Professor Arnove notes that:

“A central thesis [of this book] is that foundations like Carnegie, Rockefeller, and Ford have a corrosive influence on a democratic society; they represent relatively unregulated and unaccountable concentrations of power and wealth which buy talent, promote causes, and, in effect, establish an agenda of what merits society’s attention. They serve as ‘cooling-out’ agencies, delaying and preventing more radical, structural change. They help maintain an economic and political order, international in scope, which benefits the ruling-class interests of philanthropists and philanthropoids – a system which, as the various chapters document, has worked against the interests of minorities, the working class, and Third World peoples.” (p.1)

Professor Arnove recently updated this critique noting that, while the Carnegie, Rockefeller, and Ford foundations’ “are considered to be among the most progressive in the sense of being forward looking and reform-minded”, they are also “among the most controversial and influential of all the foundations”. Indeed, as Professor Berman demonstrated in his book The Influence of the Carnegie, Ford, and Rockefeller Foundations on American Foreign Policy: The Ideology of Philanthropy (1983), the activities of all three of these foundations are closely entwined with those of US foreign policy elites.

So given the elitist history of liberal foundations it is not surprising that Arnove points out that although the Carnegie, Rockefeller, and Ford foundations’ “claim to attack the root causes of the ills of humanity, they essentially engage in ameliorative practices to maintain social and economic systems that generate the very inequalities and injustices they wish to correct.” Indeed although foundations have adopted a “more progressive, if not radical, rhetoric and approaches to community building” that gives a “voice to those who have been disadvantaged by the workings of an increasingly global capitalist economy, they remain ultimately elitist and technocratic institutions”.

Following the end of World War II, along with the phenomenal growth of the American chemical-industrial complex, this period in history also witnessed the equally dramatic parallel rise in the number and power of philanthropic foundations. Therefore, based on the knowledge of the aforementioned critiques, it is ironic that progressive activists tend to underestimate the influence of liberal philanthropists, while simultaneously acknowledging the fundamental role played by conservative philanthropists in promoting neoliberal policies.

Indeed, contrary to popular beliefs amongst progressives, much evidence supports the contention that liberal philanthropists and their foundations have been very influential in shaping the contours of American (and global) civil society, actively influencing social change through a process alternatively referred to as either channeling or co-optation.

So while some scholars have defended the need for foundations to shape democratic processes, they simultaneously fail to interrogate the contradictions posed by the necessity for extra-constitutional planning within democratic and capitalist societies. Indeed, their general approval of philanthropic interventions contrasts sharply with critical interpretations of these liberal philanthropists’ activities which is exemplified by the work of Professor Roelofs who in her seminal book Foundations and Public Policy: The Mask of Pluralism (2003) suggests that:

“[liberal foundations’] greatest threat to democracy lies in their translation of wealth into power. They can create and disseminate an ideology justifying vast inequalities of life chances and political power; they can deflect criticism and mask (and sometimes mitigate) damaging aspects of the system; and they can hire the best brains, popular heroines, and even left-wing political leaders to do their work.”

Or to put it another way, as Professor Roelofs recently argued,…

“…the pluralist model of civil society obscures the extensive collaboration among the resource-providing elites and the dependent state of most grassroots organizations. While the latter may negotiate with foundations over details, and even win some concessions, capitalist hegemony (including its imperial perquisites) cannot be questioned without severe organizational penalties. By and large, it is the funders who are calling the tune. This would be more obvious if there were sufficient publicized investigations of this vast and important domain. That the subject is ‘off-limits’ for both academics and journalists is compelling evidence of enormous power.”

Michael Barker is a researcher and activist.

His ‘On Corporate Power’ column appears monthly.



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Nov 17, 2010 15:44

An important article given that we are entering a period where Cameron’s Big Society ideology rules the roost.

Oct 5, 2011 0:07

See Zizek’s remarks about liberal philanthropists (in Violence): “The catch,of course, is that in order to give, first you have to take – or, as some would put it, create.”

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