Profit Non-Profit: The Influence of Corporate Foundations on Nonprofits and Social Movements

By Brian Crawford
Crises are endemic to capitalism. Increasingly, even when economic indicators point toward prosperity, this prosperity only extends to a very thin layer within society. Labor has for many decades experienced wage losses and massive reductions in state interventions to ameliorate the worst aspects of capitalism. Lacking sufficient federal funding for social needs, the working class and poor become more dependent on non-profit organizations to fill the void. The decline of the left has brought about disunity among the workers of the world as we confront capital, a void that has allowed the bourgeoisie to visit punishing global economic liberalization on our class. One of capital’s strategies to disorganize the working class is its attempt to control the direction of organizations that seek to address inequality. Firms which hold near monopolies in a given industry invest in non-profits with specific objectives. Capital, which itself created the conditions of working class immiseration, poses as the savior. Its philanthropic endeavors are a façade designed to mask the true nature of the system.

Populist Anticapitalism and the Rise of Philanthropy

To understand the current role played by non-profits, we need to look at their origins in the history of charitable foundations. Prominent examples,  such as the foundations established by Rockefeller and Carnegie, emerged over a century ago. Monopolists reaped public scorn for the wreckage they left in their wake. Progressive era politics concentrated working class anger toward capital and popular antagonism toward the “Robber Barons” forced legislation to mitigate the power of the monopolists. Philanthropies were thus early forms of public relations through which the Robber Barons sought to cleanse their reputations, influence public opinion, and meet the threat to plutocracy represented by the populist zeitgeist of the Progressive era.
Suspicion of philanthropists was common one hundred years ago. Even more conservative figures of the day expressed hostility: “In spite of his close ties to big business, Progressive presidential candidate Theodore Roosevelt opposed the effort (philanthropy), he declared that “no amount of charity in spending such fortunes [as Rockefeller’s] can compensate in any way for the misconduct in acquiring them.” Samuel Gompers, president of the American Federation of Labor and the epitome of conservative craft unionism, sneered that “the one thing that the world would gratefully accept from Mr. Rockefeller now would be the establishment of a great endowment of research and education to help other people see in time how they can keep from being like him.”[1]
Roosevelt, a member of the bourgeoisie himself, was more concerned with how Rockefeller’s rapaciousness would undermine the public’s perception of the system, therefore intensifying the collective anger from the working class at a time of increased exploitation. A quarter century later, another Roosevelt would face the greater challenge in saving the very existence of the free “enterprise system”.
Fear of revolution was fresh on the minds of the bourgeoisie less than two decades after the Russian Revolution. Capitalism was in its deepest crisis in history. This was the context of Franklin D. Roosevelt’s pursuit of the “New Deal” which included an assortment of programs and government agencies. These programs provided public sector jobs, the right to organize unions, and social security. The FDR period initiated an era of Keynesian economics in US politics, a regime that promoted government intervention and that would prevail for over four decades.
From the beginning, the government programs of the New Deal were attacked as socialism. This is the case with any government intervention in favor of the popular masses. Capitalist orthodoxy places the market as the prime source of all that should be provided. Government intervention should be limited, according to this ideology, to the protection of private property and national defense. Thus, taxation for social programs is anathema and capitalists should be able to dispense with their largess (appropriated from labor) as they see fit. Their belief is that they can best benefit society.
Government programs dedicated to addressing housing, poverty, and other maladies afflicting the working masses were the focus of “New Deal” and “Great Society”. This need to address  structural inequality caused by capitalism is no longer considered part of a solution. Nearly half a century later socio-economic policy shifted in the opposite direction.

Neoliberalism Intensifies the Onslaught

Neoliberalism’s onslaught commenced in earnest during the 1980s. The Reagan administration eviscerated social programs, ostensibly to balance the federal budget. The urging of fiscal responsibility coincided with massive military spending in the last decade of the Cold War. The national debt reached a trillion dollars for the first time, starving programs of their lifeblood. Revenue became scarce due to tax reductions, of which the greatest benefit went to wealthy individuals and corporations. As the need for social services grew more acute, nonprofits or NGOs became more vital. NGOs became a way for the state to “outsource its responsibility” to the working class and the poor. Benefits flowed to the top as the wealthy found their taxes reduced then engaged in philanthropic endeavors for the purpose of tax write-offs. Yet the intentions of capital extends beyond taxes.
Firms and their respective industries adapt methods which protect their interests and the free enterprise system as a whole. Radical movements of the 1960s posed a direct threat to capitalism just as the radicalism of the 1930s had done. Racial justice struggles, the anti-Vietnam War movement, and the general political evolution during the decade led many to draw connections between oppression domestically and the oppression abroad. Corporations through their foundations applied the philanthropic strait jacket to subdue radical and left-liberal movements. As sociologist Efe Gurcan shows, through joint efforts with the state, “foundation-funded liberal-left organizations became co opted by the state and transformed into non-antagonistic social service and pro-state reformist agencies that fill the empty spaces left by the decline of the welfare state.” Capital dilutes the political content of movements, neutralizing oppositional forces, and provides a modicum of relief to communities, while providing the state with another means of social control besides violence. Through foundation control, the ruling class also forces their former opponents to subordinate principle to the needs of funding and capital’s interests. As Jennifer Ceema Samimi writes:
When funders have agendas that are inconsistent with the mission of the organizations that they support, organizations then risk becoming predisposed to mission drift […] The concept of mission drift questions whether the organization maintains its original values and goals, exposing it to a potential compromise of its contribution to the community it serves.
Nonprofits resort to a quest for additional funding when government funding is inadequate. Dependency on foundation money results in a loss of independence and the increased likelihood of mission drift. As Samimi puts it, “grants from foundations also come with an unfavorable set of requirements that must be met […] an organization may feel compelled to modify its programs, and sometimes even its mission statement, in order to fit into the requirements of the grant application.” Nonprofits begin to shift their attention from “the redistribution of wealth to the temporary provision of social services to keep people alive,”  allowing the wealthy to create a “buffer zone” to avoid chaos, to maintain faith in institutions, and to establish control over those with an inclination toward social change.
Basic organizational structure of nonprofits are patterned on the corporate model. Each has a CEO/President, a Chief Financial Officer, a Chief Operations Officer, and a Board of Directors, reflecting these organizations growing distance from democratic, rank-and-file control or community accountability. Furthermore, as Ramsin Cannon explains, “the acute competition to qualify to receive donor and government grant money the NGO industry has developed a professional class of executives, grant writers (i.e. fundraisers) lawyers and compliance officials. This class of professionals are linked together through professional associations, funding networks, academic programs and conference circuits.” Ultimately, “whenever a profession comes into being so does a material interest in protecting an industry.”
Ironically the development and expansion of an NGO in many instances illustrates the divide between the working class, and the bourgeoisie and the professional managerial stratum that serves it. Campaigns on behalf of the organization or the biennial electoral campaigns cause conflicting interest; the material interests of the working class are delayed in order to serve that of the NGOs and their benefactors.

Containing Black Radicalism

Gurcan cites the work of Dylan Rodriguez, who defines the relationship between corporations and nonprofits as “the set of symbiotic relationships that link together political and financial technologies of the state and owning-class proctorship and surveillance over public political discourse, including and especially emergent progressive and leftist social movements, since the mid 1970s.” In particular, the Black Power movement was co opted, and one of its offshoots, Black capitalism, became for many an antidote to the Black masses’ political struggle as well as that of the broader political activity of the 1960s. Given that discontent was inevitable among the working class, a means of containment became necessary.
Re-entrenchment of market liberalization and budget reductions have had a disproportionately crushing effect on Black communities. By the 1970s, as a result of direct action by the Civil Rights movement, Black people won civil and voting rights, which allowed for an increase of Black representation within the state. In turn, the national Black political leadership began to shift emphasis from independent, oppositional, and revolutionary politics to electoral reformism at all levels of government. Historically Blacks challenged structural oppression through various incarnations of the liberation movement, and tended to constitute a force outside of the nation’s institutions. This changed as the legislative successes of the Civil Rights movement created the conditions for the emergence of a Black political class. As Adolph Reed argues, “a growing professional managerial stratum within the Black community converged with those of pro-growth white elites to produce a new framework for Black political activity in the post-civil rights era”(p. 88). Redistributive politics is at odds with pro-growth political and economic approaches. The latter invariably steers politics toward accepted forms which do not conflict with capital. The practical result is dispossession of Black communities even when the local administration is itself African American. Prior to this period, Black communities experienced the outflow of capital to other regions of the country or overseas.
In spite of the drift toward liberal reformism among the Black national leadership, Black communities still fought at the grassroots for basic needs against the recalcitrant white ruling class. Legislation did not inoculate Blacks from discrimination.
In lieu of federal dollars and a hollowed-out core, cities resorted to increasing collaborations with private entities. Federal housing programs, constructed on a public private relationship, proved not to be fruitful. The profit motive was rooted in racial discrimination, which kept white neighborhoods white to preserved property values. Blacks were still entrapped in Jim Crow’s web, with no means of escape. When improvements were made to Black neighborhoods, they proved not to be for their benefit, and this is still the case today.

Nonprofits as Agents of Imperialism

Liberalization of the economy was not confined to the United States. Indeed, Africa and Latin America were the laboratories for structural adjustment which held nations in perpetual debt. The end of the Cold War meant that Eastern Europe and the Soviet Union would be forced to adhere to market orthodoxy. Just as with the discovery of the “New World,” these new markets would be visited by missionaries, spreading the word of the virtues of the free market.
Cold War polarity broke down in the early 1990s, providing the United States with a means to compel the world, including the former Soviet Union, into submitting to capitalist hegemony. The unipolar post-Cold War world meant that United States capitalism faced no impediments to markets and bent the world to its will. State run entities and programs were dismantled, exposing countries to foreign capital and speculation. Former state functionaries became wealthy from privatized industries. Africa and Latin America found themselves in debt to the International Monetary Fund. A primary condition of the loans was that countries needed to liberalize their economies. Whole nations were bled dry. Water was privatized and the health and education sectors also provided “interesting niche opportunities for European investors,” as Patrick Bond has discussed with respect to Africa.
In this unipolar world, NGOs and international institutions such as the International Monetary Fund aid US capital’s drive to access new markets. As  the head of an international consulting company business alliance explained: “We need people to understand our foreign assistance program is a vital element of our ability to increase our visibility and our market share.”
Imperialism contains within its arsenal more than weapons of mass destruction. It employs  something equally devastating: the threat of economic destruction. Institutions such as the International Monetary Fund and the World Bank are global capitalism’s loan sharks. More seemingly benign are the new missionaries of capital creating “favorable conditions for agribusiness export, sweatshops, resource mines and tourist play-grounds,” as McMillan has shown. When market forces ravage a country, philanthropy masks the identity of the perpetrators. Neoliberal policies, backed by US imperial force, devastate the redistributive state globally. Outsourcing social need becomes prevalent as “populations in both imperial core and periphery (countries) become increasingly conditioned to get their needs met by shuffling from charity health clinics to food banks to a myriad of other ‘civil society’ agencies,”as McMillan puts it.  “Benign” benefactors, in turn, arrive to “save the day.” But in actual fact high profile philanthropy is an attempt to conceal the corrosive effects that capital  has on society. Both domestically and internationally, corporations, through foundations and their funding of NGOs, underwrite the oppression of the masses and, to a degree, receive their consent. Organizations dedicated to social welfare become vital to a community starved of resources with no other assistance forthcoming.

Revolutionary Working Class Politics, not False Nonprofit Solutions

Working class emancipation cannot be achieved through philanthropy or through organizations dependent on foundations whose conflicts of interest are manifest. Capitalism’s funding of class conscious organizations would be the equivalent of supplying the knife to cut their own throats. Furthermore, the adoption of corporate structures and dependence on market forces only perpetuates conditions that produce the need for non-profits. As Carl Rhodes and Peter Bloom explain in their article, “The Trouble with Charitable Billionaires,”: “what we are witnessing is the transfer of responsibility for public goods and services from democratic institutions to the wealthy, to be administered by an executive class.” As Marxists, we would go further, placing democracy in its class context: the problem with charitable billionaires and their philanthropies is that they mystify the class roots of exploitation and oppression and divert the working class from independently struggling for proletarian democracy.
The retreat of the left from revolutionary politics to reformist strategies leaves the working class adrift when the tide of class anger rises. Small-scale solutions are prescribed for structural problems which can only lead to frustration and eventually demoralization when results aren’t forthcoming. Capitalism’s antidote is invariably market based. Even during the pandemic there are suggestions that the profit motive be used to prompt capital to invest in research and development for vaccines and medical supplies. Consider the reasoning: only by bribing the pharmaceutical industry will they engage in practices that should be their raison d’etre, producing drugs to treat and cure illness. Hospitals close (leaving shortages of beds and ICUs), drugs are unavailable because certain illnesses affect only a small section of the population or  because the treatment will be administered to the poor. If there is a cure, the costs are prohibitive. From healthcare to housing and education the bourgeoisie causes crises from which the working class cannot extricate itself through this system. Nonprofits are the medicine provided to live with the disease rather than providing the cure.
[1] Peter Dobkin Hall “A Historical History of Philanthropy, Voluntary Associations and Non-Profit Organizations in the United States 1600 – 2000.” The NonProfit Sector: A Research Handbook – Second Edition. Ed. Walter W. Powell and Richard Steinberg. Yale University Press, 2006, 32-65.

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