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Foundations

Democracy and Philanthropy

How private giving can contribute to the needs of American democracy.

ReCoding Good

From the Field Series: An ongoing report of the Philanthropy, Policy, and Technology Project, which explores the use of private resources for public good.

What role does philanthropy play in a democracy? And what role ought philanthropy play in a democracy?

These are old questions made new again through the confluence of several powerful trends in the United States:

• Rigid political polarization in US politics
• A growing interest in and experimentation with online civic and political engagement, including open government and civic crowdfunding
• Community organizations threatened by decades of federal and state budget crises
• Record low levels of public confidence in Congress
• In the wake of Citizens United, increasing concern about the expanded role of nonprofits in electoral politics

Such trends call into question the appropriate role of civil society and philanthropy in democracies. The topic is especially pressing in light of the new efforts of prominent foundations—such as Hewlett Foundation and Democracy Fund—engaging in grantmaking for revitalizing our democratic institutions.

It is within this context that the fifth in our series of ReCoding Good charrettes addressed philanthropy’s role in democracy. A small gathering of scholars and foundation executives, as well as advocates for the nonprofit sector and those who work on advocacy from within nonprofits, came together to consider the question in two parts: First, as above, what ought to be philanthropy’s role in a democracy? Second, recognizing the deep imperfections in our current democratic institutions, should philanthropy play new and expanded roles? Can philanthropy help repair democracy?

Much of the discussion about philanthropy’s various roles centered on the nature of majority rule and pluralism. If a requirement of democracy is that all citizens have an equal opportunity to make their voices heard, then we must find ways to help that happen. A longstanding argument on the role of civil society is that it should do two related but somewhat opposite things: 1) serve as a means for bringing forward new ideas that with the support of the majority are put forward into government, and 2) serve as a place to support the ideas and interests of multiple minorities.

Philanthropic organizations thus serve as a pipeline into democratic engagement, and as an incubator and home for ideas and communities that are still emerging or may not have found awareness or favor with the voting majority. In doing so, these organizations should be able to foster both innovation and pluralism.

Concerns about this role come into play when the reality of unequal wealth and potential for unequal voice are factored in. In particular, endowed foundations, which create an exclusive perch for our wealthiest citizens, superficially seem like a mechanism for privileging plutocratic over civic voice. In this respect, some charrette participants expressed their fear that foundations, with their deficit of public accountability, may threaten democracy by channeling inequalities of political influence. Others noted that—given the many dysfunctions of our current political system—foundations may be well positioned to play a role in repairing, rather than undermining, democracy. Foundations can and do play an important role, both in supporting “orphan” or unpopular issues, and in funding—without expectation of financial reward or electoral payback—community and civic organizations committed to democratic ideals, and minority views and communities. While foundations, as “plutocratic” institutions, may seem at odds with the theoretical ideal of a democracy of equal voices, we might also view the combined 80,000 foundations and 1.2 million nonprofits in the US as pluralistic contributors and, most importantly, counterweights to the majority rule nature of American democracy. These institutions, with their strategic risk capital, can serve as a catalyst and driver of social change.

The trappings of philanthropic institutions—their practices, regulatory structures, and industry norms—provided a good transition point to the question of how these institutions can address the dysfunctions of our current democracy. Democracy or governance reform as an area for philanthropic support is experiencing a moment in the sun. Very rough estimates of $30-$40 million per year in funding for government, civic engagement, and election process reform, and to address the issue of money in politics were put forward as starting points for foundations thinking about potential strategies. One of the challenges facing the small group of funders who identify themselves as active on these issues is their diverse range of interests. Some are committed to fixing the democratic process without regard to short-term outcomes; others are interested in process reforms that would benefit a particular partisan perspective. This diversity tends to fractionalize the possible impact of foundations and reduce their effectiveness. Further, all of these funders are concerned that their involvement raises reputational concerns and may threaten the overall effectiveness of the programs they support. One foundation proffered as a working set of desired outcomes: “more moderation in political votes, or what used to be called compromise and political leadership.”

The scope of the challenges to democratic systems—including institutional reform, broad access, and credible information—are difficult for foundations to address because of the large-scale dimension of the problems and the long time horizon necessary to engage to make a difference. Moreover, for foundations seeking long-term, nonpartisan process reform, being cast as partisan can have a damaging ripple effect. Backlash may limit necessary relationships or crossover into other program areas. Some foundations handle pushback well; others don’t. Most participants agreed that foundations that deal with it well expect pushback, prepare for it, and are staffed with the experience and expertise needed to fund advocacy efforts for the long-term.

One inspiring example of the role foundations can take in a broken democracy is California Forward, a joint effort by several foundations in California, maintained over several years, that has helped take the legislative redistricting process out of the hands of the legislature itself, return the state budgeting process to one of simple majority rule (rather than a supermajority), and introduce online voter registration.

Our conversation took place in the context of other interesting and relevant events, including a seminar on Philanthropy and Political Polarization at The Hewlett Foundation and an NYU conference on Philanthropy and Money in Politics; the release of a report on the intersection of the open government movement and charitable sector data, and a new national ranking of state’s election management efforts; a conference of State Charity Regulators at Columbia University; and a hearing about the charitable sector by the Committee on House Ways and Means. It’s clear that we are in a moment when philanthropy has chosen to examine democracy just as democracy is examining philanthropy.

This discussion on democracy is essential to the broader project on Philanthropy, Policy and Technology. A theme throughout the day was the difference between the reality of how our political institutions actually function and the inherent value of a diverse, disbursed, and locally controlled associational sector for a flourishing democracy. The group was hard pressed to find examples of where changes in news, media, and online organizing were helping to bridge the extremes, soften the furthest edges of debate, or even provide common ground. If technological trends are not, of their own design, enhancing the civic values on which our independent sector rests, and if policy frames and institutional norms have morphed over time in ways that no longer reflect either the needs of present day institutions or the historical values they were meant to preserve, then we have an opportunity—perhaps an obligation—to consider and reshape the role of philanthropy and civil society in our democracy.

All materials from and information about the project can be found at ReCoding Good and Stanford PACS. We invite you to join our email list, talk with us on Twitter (#ReCodeGood), and to share your thoughts with us.

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