How a Legacy Funder is Taking on Democracy, Race and Capitalism in a Transformative Moment
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Milwaukee voters waiting in line for hours to cast their ballots in Wisconsin's disastrous April election. Henry C Jorgenson/shutterstock
Though its name conjures up images of Gilded Age wealth and old-school legacy philanthropy, the Rockefeller Brothers Fund isn’t averse to risk, nor is it stuck in the past. Take its decision to divest from fossil fuels despite its origins in the world’s most famous oil fortune. Or look at its pledge to embrace intersectional movement building, a path that may be growing in popularity but remains an outlier in philanthropy.
The historic challenges of 2020—a global pandemic, a simmering crisis of democracy, and a society-wide reckoning on race—have upped the ante even further. Despite potential impact on endowments, some leading foundations are exploring new ways to give more, and those who choose to cut back risk the sector’s opprobrium. Yet for all the hand wringing over what types of “risks” grantmakers should be taking right now, philanthropy still operates from an immensely privileged and secure position in American society.
That fact doesn’t seem lost on Stephen Heintz, who heads the Rockefeller Brothers Fund. “When I came to philanthropy with no experience except as a grantseeker, one of the things I began to realize was what a hyper-privileged position foundations hold,” he said. “In my view, which is not necessarily widely held, we are lightly regulated, and the oversight is not terribly intrusive.”
As a product of concentrated wealth, philanthropy is not a very democratic institution, and neither are the typical practices by which it gives money away. At the same time, philanthropy is also a key ingredient in civil society, that venerable third sector in American democratic life that sits apart from government and business, and, with luck, nudges both toward the common good.
It’s in that spirit that RBF recently committed to expand its grantmaking, which has become something of a pattern at the foundation David Rockefeller and his siblings set up back in 1940. Meant to seize what Heintz calls “a hinge moment in history,” the new spending encompasses $48 million over five years. Bolstering RBF’s democracy funding is one priority, as is setting up a new grantmaking initiative for racial justice. There’s also funding to catalyze “new economic thinking” around capitalism and climate change, as well as $10 million simply to help RBF grantees weather these tough times.
Each of those commitments is interesting in its own right, but RBF sees them as intersectional—one legacy funder’s attempt to move beyond incrementalist thinking and embrace a time of transformation.
A Democracy Funder Evolves
The advancement of liberal democracy has long been a priority for RBF. In the post-WWII era, the foundation joined other top American philanthropies in efforts to solidify institutions of global governance and prop up a liberal democratic consensus. While global security is no longer the philanthropic focus it once was, RBF is still funding that space. That’s in no small way due to David Rockefeller, whose lifelong interest in global peace influenced RBF through his passing in 2017.
The foundation’s work to strengthen democracy inside the United States began in 2002. Though boosting civic engagement and promoting effective governance have always been core tenets of RBF’s U.S. democracy portfolio, the work has evolved to embrace institutional leverage points (i.e., campaign finance reform and election protection) as well as what Heintz referred to as democratic culture—those “habits of the heart” necessary to maintain a vibrant democratic tradition.
The foundation’s 2018 decision to apply a movement framework to its U.S. democracy work reflected those more expansive goals, acknowledging liberal democracy’s interdependence with racial justice and an inclusive economy. “These ideals must be pursued collectively for people to believe that they live in a democracy that works for them regardless of life experience,” said Keesha Gaskins-Nathan, who leads RBF’s democracy work in the U.S.
RBF’s evolving concept of its place as a democracy funder teed it up for a central role in the American Academy of Arts and Sciences’ Commission on the Practice of Democratic Citizenship. Launched in 2018, the learned society’s bipartisan effort set out to examine the steep challenges facing American political and civic life, and what, if anything, can be done about them. Heintz served as one of three co-chairs for the project. It relied on feedback from 50 listening sessions conducted across the country to produce 31 recommendations laid out in a report the academy released last month.
While RBF supported the commission, the majority of its funding came from a living donor’s funding vehicle: the S.D. Bechtel Jr. Foundation. Bechtel, now 95 years old, has long embraced the role of philanthropic “super-citizen”—that is, a donor whose largesse bolsters their home region (California, in Bechtel’s case) and who often seeks to partner with the public sector. The S.D. Bechtel Jr. Foundation is also in the process of spending down.
Interestingly, the quest for greater impact in the moment has also led RBF’s board to conversations about perpetuity. As the Chronicle of Philanthropy reported when RBF’s expanded funding announcement went out, the foundation probably won’t abandon perpetuity anytime soon, but additional payout increases may be waiting in the wings.
Toward a “Fourth Founding”
When it comes to this payout increase, RBF has earmarked $18 million in additional funds for its U.S. democracy practice. That includes $4 million in immediate funding to safeguard the upcoming election ($2 million back in March and another $2 million this summer), as well as $14 million to be deployed over the longer term to achieve goals set out in the commission’s report. The foundation “is going to invest a substantial amount of money in the campaign to achieve the recommendations in the report,” Heintz said.
So what are those recommendations, exactly? Well, some lend themselves better to 501(c)(3) funding than others, but among those that do, there are plenty of entry points for interested grantmakers. In total, the recommendations reflect what RBF and other democracy funders have learned over the years—that a vital democracy depends not only on sound political processes, but also on the health of civic society and political culture. “All three domains must work in concert,” Heintz said.
Facing gloomy prospects if current trends hold, the report calls for a reinvention of American democracy, a kind of “fourth founding” to build on the American Revolution, Civil War and Civil Rights eras. Its prescriptions are bold. For example, to achieve “equality of voice and representation,” the report suggests expanding the House of Representatives, the widespread adoption of ranked choice voting, and citizen-led redistricting commissions. It also recommends a constitutional amendment to curtail the influence of money in politics and full transparency for donations from 501(c)(4)s and LLCs.
The second set of recommendations calls on federal and state governments to “make voting less burdensome, wherever and whenever possible.” That could involve logistical adjustments like voting centers and early voting (as well as vote-by-mail), the restoration of voting rights to convicted felons who’ve served their time, and moving the federal election day to coincide with Veterans Day. The report also calls for mandatory voting—voting for “none of the above” would, of course, be an option—as well as pre-registering 16- and 17-year olds.
The third set of recommendations suggests changes to the mechanisms of civic engagement apart from voting. That includes making local public meetings easier to access, extending them into the digital domain, and experimenting with strategies like citizens’ assemblies to make Congress more representative.
Aside from indirect advocacy, there isn’t much philanthropy can do to advance most of those recommendations. That changes with the fourth category: expanding civic bridging capacity. “Civic bridging” refers to the civil society organizations held up by commentators from Alexis de Tocqueville onward as vital to American-style democracy. As scholars like Robert Putnam have noted for a while now, that arena of American life has seen a measurable decline. The digital revolution is one part of that story, but so is the arrival of women and people of color in positions of power, reshaping an old social order headed indisputably by white men.
The report calls on philanthropy to provide seed funding for a National Trust for Civic Infrastructure, to be modeled loosely on the National Endowment for Democracy (NED), an NGO that channels federal funding toward the promotion of democracy abroad. NED is prohibited from doing so at home, and Heintz sees a national trust as a potential antidote to that. “After a few years of driving the concept, the goal is to go to Congress and say: Let’s make this a public-private partnership,” he said.
Such a national trust would direct resources to what the report calls “hyper-local” organizations like community boards, places of worship and youth civic organizations. The idea would be to target community groups with plenty of engagement potential but fewer avenues for traditional fundraising, with an emphasis on those serving the historically marginalized. In addition to a trust, the report also calls on philanthropy to move a lot more money to the “civic 1 million”—homegrown community leaders doing the most to engage their neighbors in civic life.
The fifth set of recommendations pertains to civic information architecture: media, research and digital policy. We’ve written quite a bit about the funders fighting to keep local news and investigative journalism afloat in the age of Facebook and Google. The commission suggests additional paths for funders, including backing a centralized project to study democratic engagement, advocating for legislation to fund and protect public-interest media, and demanding greater data transparency from digital media platforms.
The sixth and final category deals with “democratic culture,” which sits up there with “narrative change” as an objective most agree is vitally important, but remains hard to pinpoint with targeted funding. Storytelling is one way in, and the report calls for civil society organizations to lead open-ended conversations about what constitutes “the American story” for their members. It also suggests funding media campaigns to promote democratic citizenship as a kind of counterweight to the divisiveness of electoral messaging. Finally, it recommends investments in civic education for youth and adults, a priority with traction in the conservative funding world as well as the progressive one.
Thinking Systemically
The American Academy lists a number of organizations that have signed on as “champions” for the goals laid out in its report. That list doesn’t include too many major philanthropic players, but Heintz says a fundraising effort is ongoing among foundations spanning the ideological spectrum. However that pans out, RBF doesn’t see this democracy work as an isolated enterprise. It’s meant to work in concert with the foundation’s other objectives, including a heightened commitment to racial justice.
“RBF supports many organizations whose work is rooted in the belief that a strong and vibrant U.S. democracy cannot be achieved without racial equity in all democratic and economic systems,” Gaskins-Nathan said. In addition to heading RBF’s U.S. democracy portfolio, she will be in charge of a new racial justice initiative, to which the foundation is committing $10 million over three years.
Though RBF is still working out exactly how this racial justice initiative will work, it’s the product of several years of increased attention to systemic racism. For one thing, RBF has been engaged in an internal DEI effort for several years, which Heintz described as “intensive work” requiring “change at the personal level.” The foundation’s board—which includes a number of Rockefeller descendants—also toured the Deep South in fall of 2019 to meet with grantees working at the intersection of democracy and racial justice.
A few of RBF’s grantees engaged in that kind of work include national organizations like the Roosevelt Institute, Color of Change, the NAACP Legal Defense Fund and the Electoral Justice Project for M4BL, as well as local and regional movement nonprofits like the New Georgia Project, New Virginia Majority, and the Minnesota-based ISAIAH. While RBF hasn’t funded efforts that specifically tackle criminal justice issues, the foundation is considering doing more in that area.
According to Heintz, one goal of the new racial justice initiative will be to figure out how to incorporate racial equity into other aspects of the foundation’s work. “We’re open to what we haven’t done in the past,” he said.
For instance, RBF may cover new ground in its funding for sustainable development and climate change solutions. Confronting climate change is one of the foundation’s largest funding areas, and it’s possible RBF may place greater emphasis on environmental justice going forward. What we do know is that the foundation’s current spending increase includes $10 million to galvanize “new economic thinking” toward potential climate change solutions.
Rather than the typical menu of climate research and advocacy, the focus for that funding will be on something more experimental: “reimagining the theory and practice of capitalism” to reduce reliance on fossil fuels and mitigate inequality. If commitments to reimagine capitalism sound familiar, that’s because funders like the Omidyar Network and the Hewlett Foundation are already working in that space.
Along with Omidyar, Hewlett and others, RBF participates in an informal group of funders examining how philanthropy might shift the dominant economic mode toward something more equitable. Heintz says this new commitment grew in part from those conversations. “This is complementary to climate,” he said, “but it’s really more about thinking about capitalism as a system of organizing the economy, and what changes need to be made to that system to achieve equity goals and climate goals.”
“A Moral Obligation”
The dominant theme running through all of RBF’s new work seems to be intersectionality—not just in the progressive social movement sense, but as a means to approach a foundation’s disparate funding areas as a unified whole. The democracy work in particular feels like a linchpin for RBF’s efforts. In an electoral environment rife with voter suppression targeting people of color, the racial justice connections are clear. And with millions out of work due to COVID-19, even as the super-rich prosper, calls to empower the working class at the voting booth are also getting louder.
In a recent post, Heintz points out just how few philanthropic dollars make their way to democracy, civic engagement, and investigative journalism—less than 2% over the past decade. “The stunning indifference of American foundations to democracy is self-defeating in more ways than one,” he writes. Not only do funders lose a chance to advance their goals by failing to back effective government adequately; funders’ inattention to democracy may undermine philanthropy’s very legitimacy.
Philanthropy’s undemocratic nature and the tax benefits it enjoys come with a responsibility to bolster democratic processes and culture, Heintz argues. “We have a moral obligation to be as democratic as we can by being open, transparent and engaged with the people we are trying to assist or serve,” he said.
Even if more funders move in that direction as this year’s historic disruptions take their course, philanthropy is slow to change. Legacy foundations, some of which are more willing to fund movements than living donors, can also be among the slowest to shift. On the verge of a pivotal election, “the greatest risk is a lack of creativity and imagination,” Gaskins-Nathan said. “The danger of settling for marginal reforms and slow evolution rather than taking the opportunity presented by this moment to be transformational and to metamorphosize democracy is very real.”
