What Can Philanthropy Do to Curb Polarization? A Conversation with Steve Teles

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Steven Teles is professor of political science at Johns Hopkins University and senior fellow at the Niskanen Center, a think tank founded in 2015 to “promote an open society” and push back “against a new breed of populists animated by a vision of a closed and exclusive national community.” Teles is the author of several books, including “The Captured Economy: How The Powerful Enrich Themselves, Slow Down Growth and Increase Inequality” (with Brink Lindsey), “Prison Break: Why Conservatives Turned Against Mass Incarceration” (with David Dagan), and “The Rise of the Conservative Legal Movement: The Battle for Control of the Law.”

Teles has been a keen observer of conservative philanthropy and also written incisively about the role of foundations in an increasingly divisive political environment, including his dual articles in the Stanford Social Innovation Review, “Philanthropy in a Time of Polarization,” written with Heather Hurlburt and Mark Schmitt, as well as “The Elusive Art of Evaluating Advocacy.” I recently connected with Steve to explore the topic of philanthropy and polarization in greater depth. 

Steve, it strikes me that philanthropy has played a powerful role in recent decades in fueling political division in this country — with both left and right donors underwriting ideologically driven think tanks, advocacy groups, opinion media, and more. I’ve played my own small part in this development, arguing since the 1990s that liberal foundations need to invest more deeply in policy and legal work to advance their values and also co-founding a progressive think tank, Demos. But I’m also concerned about our nation’s intensifying polarization. What openings do you see for philanthropy to help defuse this growing division — like helping foster new coalitions to solve national problems?

I think it is an open question how much philanthropy has actually contributed to polarization. I regularly teach a class at Johns Hopkins that addresses the causes of political polarization, and philanthropy is pretty far down the list of causes compared to the racial realignment of the parties, the rise of social issues on the political agenda, and the decline of intra-party factional competition. But I do think that philanthropy can play a really vital role in reducing — or at least working around — polarization. There are a lot of issues out there that are incredibly important to the future of the country, but which are not currently part of the central axis of party conflict. 

One great example is the housing crisis in many of our big cities, the root of which is restrictive zoning. That issue just cuts straight through the middle of both parties. The left cares about it because of the effects of spiraling housing costs on inequality and opportunity, and the right sees it as a classic case of the impact of overregulation. But despite the importance of the issue, the “YIMBY” (Yes in My Backyard) movement is just massively underfunded compared to a range of other issues. Philanthropists on the left and right should really be working to deepen the organizational bench on the issue, supporting everything from local political organizing to litigation, legislative work to research. 

There are a lot of other issues that have the same basic structure — enormous importance, low polarization and relatively low agenda status. That’s a natural place for philanthropists on the left and right to work together, and the more that policymakers start to work on those issues, the more they will get used to making cross-ideological coalitions and want to do more. That’s a really promising, slow-motion way to work against polarization. 

I want to come back in a moment to your suggestions for how philanthropy can help build cross-ideological coalitions. But let me just push a bit on the question of philanthropy’s role in fostering polarization. I agree that there are other, more important drivers here. But it’s also true that since the 1960s, philanthropy has underwritten a vast complex of ideologically driven nonprofits that have played a significant role in shaping public debates. So while 60 or 70 years ago, leading civil society organizations were largely membership-based groups, today, civil society is much more dominated by professional nonprofit leaders bankrolled by foundations and major donors. So my question is this: When we talk about how philanthropy can reduce polarization, don’t we also need to talk about ways it might change to stop driving this trend in the first place? 

There’s no question that the growth of what Theda Skocpol has called “associations without members'' has grown in the last half-century, and mass membership organizations have shrunk. Before the 1960s, if you were an idealistic person who wanted to drive social change in some way, you really didn’t have much choice to either build a mass membership organization or work within one. But things really did change in the 1960s. Foundations like Ford and Rockefeller began to fund a huge network of organizations in law, civil rights, feminism, consumerism and the environment, a process I examined as the backdrop to my book “The Rise of the Conservative Legal Movement.” Suddenly, if you were that idealistic person, you could skip over the step of building a mass movement and put out your shingle and start suing, lobbying and publishing. That model — a professionally staffed organization based in D.C., no members, funded primarily by foundations — came to be the dominant one on the center-left. 

That helped generate some of the characteristic features of contemporary elite polarization. You've got what I’ve called “advocacy” rather than representation, in which groups claim to speak for constituencies that they don’t actually have any organic structures of accountability to. I think that has had some important impacts on both the left and right. On the left, it has simultaneously encouraged an embrace of positions on social issues that are not widely supported by the actual people being advocated for, but also a kind of piecemeal, bite-sized economic policy that flows out of the fact that they are not trying to organize mass constituencies. On the right, I think it encouraged an economic policy that was at odds with the actual preferences of conservative voters (but aligned with conservative donors, whose preferences ran strongly libertarian on economics) on things like entitlements and trade. One way to think about the politics of the last few decades is that we’ve had an ideological conflict on both social and economic issues as a consequence of the incentives of the organizations competing for attention; that has left broad swathes of what the public actually cares about relatively unorganized. So in that sense, I think it probably does make sense to say that philanthropy has had an impact on polarization in shaping what we think it is we are supposed to be fighting about. 

Great points. Although to be fair, philanthropy has often worked to amplify social movements that do have strong popular support but lack financial resources. The problem, as you note, is that it can be hard to know which funder-backed groups speak for lots of people and which don’t. IP ran an article recently, for example, noting the seeming disconnect between the more moderate political views of voters of color and the very progressive priorities of many of the groups that purport to speak for those voters. Broadly, it does seem that nonprofit advocacy work draws ideologically motivated people and, thanks to philanthropy, it’s much easier for such people to have status and influence than in the past. 

Alas, though, it’s one thing for us to agree that philanthropy helps to drive polarization, and quite another to figure out what to do about this problem! It’s not so easy to restructure charitable laws to reduce the flow of money to places like the Heritage Foundations or the Center for American Progress. 

It’s unquestionably the case that, as you say, there’s a disconnect between the broad base of advocacy groups and the constituencies they speak for. And that’s not always a bad thing! Another name for being ahead of the constituencies you claim to speak for is leadership. But that usually has to occur within the context in which the leaders and the followers are actually part of some kind of relationship of accountability, and that’s what we mostly do not have on the left side of the spectrum. Michael Fortner of Claremont McKenna College wrote a great piece for the Niskanen Center on precisely this topic, in the context of the debate around defunding the police. It came out at a time when Democrats were thinking they needed to embrace the idea in order to be in solidarity with African Americans. But majorities of African-Americans didn’t actually want to reduce funding for police (although they wanted quite different policing, other services, etc.). But that part of the African American population isn’t well represented in the advocacy community, although they loom very large in the minds of African American elected officials (which is why Rep. Clyburn, for instance, saw almost immediately that the defunding the police idea was bad politics). 

Also, I don’t know that I particularly want to reduce the flow of money to Heritage and CAP. If anything, the think tank space is actually underfunded. In a world in which there’s so much money providing information to policymakers on behalf of organized special interests, especially business interests, it’s good to have other sources of information. And however imperfectly, think tanks do that. Heritage has actually played a pretty wholesome role on criminal justice in recent years, for instance, even as I’m not thrilled with most of the rest of what they do (and I should note that it wasn’t so many years ago, when Stuart Butler ran domestic policy there, that they actually contributed some pretty useful ideas into public discourse). 

So let’s turn the conversation to how philanthropy can play a proactive role in finding ways around today’s deep ideological fault lines and help catalyze breakthroughs on tough issues. Before getting into your housing example, I wanted to first ask about criminal justice reform, which strikes me as a great example of how an unusual left-right coalition has come together in recent years with help from philanthropy. 

I discuss this topic in my book with David Dagan, “Prison Break: How Conservatives Turned Against Mass Incarceration.” It is certainly the case that what was initially a pretty small group of funders played an important role in supporting the growth of a conservative policy infrastructure on criminal justice reform. Now, it’s important to recognize that some of that apparatus existed years before there was much actual right-left policy reform of the kind that we’ve seen in states like Georgia and Texas, the most important example of which was Chuck Colson’s Prison Fellowship. And that organization, which began by doing just prison ministry rather than policy work, got most of its support from Christian conservatives and not foundations. But many of the big policy breakthroughs happened because you got new conservative organizations on the right like Right on Crime, which was created by the very conservative Texas Public Policy Foundation (TPPF). 

The story we tell in “Prison Break” is that the most important donor in this process was the Pew Charitable Trust’s criminal justice program under Adam Gelb, who is a genuinely impressive political and policy strategist. He was mostly trying to get policy changed through these Justice Reinvestment Initiatives in various states that bring together all parts of state government, across both parties. He saw that the Right on Crime idea that Marc Levin at TPPF had would be a powerful ally in bringing conservatives to the table and helping to legitimate the idea that reducing incarceration has support on the right. So he put Pew funds behind building Right on Crime, and eventually other donors of somewhat more strident views supported them, as well. 

I think right now, however, that for those on the center-right to have a greater and more useful impact on the criminal justice conversation, there need to be more groups with really serious analytical chops and stronger connections to the best academic work being done on the subject. That would allow conservatives to play a role of injecting their own policy ideas into the conversation, instead of mostly playing a role of doing “identity vouching” for ideas that mostly originate on the left. That is what we have been trying to do with our criminal justice program at the Niskanen Center — not questioning the goal of reducing mass incarceration, but arguing that to do that, every other part of the criminal justice system is going to have to become massively more effective — parole, probation and police. We still have a considerable — and sadly, increasing — problem of violent crime, and if we don’t solve that problem in a way that doesn’t increase incarceration, it’ll get solved in a way that does. 

Sounds like interesting work. Good luck finding funding for it. Now, let’s get back to housing. How might funders on the left and right work together in new ways to make a greater dent in this problem?

The first thing I’d say is, compare the philanthropic investment in the issue to any other issue of comparable importance. In criminal justice, education reform and climate change, there are dozens of foundations pouring in hundreds of millions of dollars every year. The program officers meet regularly to chart strategy and identify gaps in advocacy and research, and they invest across 501(c)(3), 501(c)(4) and even direct campaign spending. There are a few foundations that have made really critical investments in the YIMBY infrastructure (like Open Philanthropy and Patrick Collison, among others), and a few foundations that focus on housing more generally who are moving into the space of the overall regulation of the housing market. But it is orders of magnitude smaller than comparable issues. And I know of no major foundation that has made this their No. 1 priority. In some ways, this has actually, perhaps ironically, been a strength of the YIMBY movement. The movement had to do a lot of bootstrapping, depending on the voluntary efforts of citizens. It really is a grassroots movement, in a way that it is hard to be when you are dependent on foundations for support. But at this point, there are just so many needs that the YIMBY movement has if it is going to really have an impact nationwide. 

Even in a highly polarized political environment like we have today, this is an issue that philanthropists who want to work across ideological and partisan lines will find enormous opportunities. You can support think tanks doing research on the issue like the Mercatus Center, Niskanen Center and Brookings. There are public-interest law firms on the issue, as well as places that have huge needs but almost no full-time lawyering. Many of the grassroots YIMBY organizations need paid organizers to get the most out of their base of volunteers. You could get enormous amounts of valuable labor out of students in law and business schools — both conservatives and liberals — if there was an apparatus in place, like legal clinics, to funnel them into activism. And even though there are some important ideological differences between left and right on the issue, there is still a pretty strong base of agreement on the need for more housing of all sorts. But someone has to take the lead on the philanthropic side, and I think this makes the issue perfect for a new donor just starting to figure out how they want to engage with social change, especially one with fairly unorthodox ideological preferences of the kind that are characteristic of the tech sector in particular.

All that makes a lot of sense. And with so many wealthy newcomers arriving in philanthropy looking to make a difference, we can only hope that a few of them will see that there’s a real opening here. Progressive funders should be drawn to YIMBYism to help relieve a housing crunch that hits lower-income families especially hard. Conservative funders should like the idea of pruning back regulation. 

What are some other areas where you see the potential for a similar left-right convergence? It seems like occupational licensing is a great example of overregulation that imposes high costs on those at the lower end of the income spectrum, but I haven’t seen any action on this issue by philanthropy at all. 

Libertarian donors have funded groups like the Institute for Justice to work on occupational licensing. But my sense is it is the kind of thing that really motivates libertarian lawyers and thinkers more than donors, and with donors, the kinds of things that motivate them are more the obstacles to low-level entrepreneurship rather than the things that really distort markets — which is mostly in healthcare, where you have both enormous upward redistribution and huge obstacles to innovation and cost control. But just like in housing, the whole field of regressive regulation is a fantastic opportunity for a donor who really wants to focus and help build up an advocacy network. 

I’ll just give three examples. Look at who is in the 1% and you’ll find quite an enormous number of car dealers. That’s almost entirely a function of state franchising laws, which require that cars be sold through independent dealers. Those franchising laws exist almost solely due to the enormous political influence of car dealers in state legislatures and the fact that there’s almost no advocacy on the other side (although that’s changing a little bit because new car companies, like Tesla, want to sell directly to consumers). An even more egregious example of upward redistribution is title insurance. Anyone who has bought a house probably saw this at settlement and wondered what the hell it was, but it’s quite a lot of money, and in most other advanced countries, there’s nothing like it. It is basically pure rent-seeking, but the title insurers show up in legislatures and the people who pay it do not. Or take the regulation of dentists. In most states, dental hygienists are required to work out of a dentist’s office. If they were able to set up their own practices to clean teeth and were able to refer to dentists when necessary, there’s little question that really basic dental care would be cheaper and more available, and the income of dentists would go down and that of hygienists would go up. But dentists are enormously powerful and show up at state dental board meetings, which look remarkably like meetings of the dental profession. 

Basically, any policy domain like that is ripe for a donor who is willing to put patient money into building up a network of advocates to bring the other side of the issue to policymakers and raise the issue up on the public agenda. And none of those issues have a clear ideological edge to them, but they can bring in the left because of the impact on inequality and the right because they have the potential to open up markets. But to make a difference, a donor really needs to pick an area like this — and honestly, the more technical and seemingly boring the better — and develop a very deep knowledge base and commit to building up high-quality organizations for the long term. 

Those are great examples. I’ll add another: the huge regressive tax deductions for mortgages, pensions and health benefits. These deductions cost the U.S. Treasury a few hundred billion dollars a year and overwhelmingly benefit better-off Americans — since many low-income workers don’t have a 401k or a health plan and rent instead of own. Progressive funders should be gunning to take out these breaks in the name of equity; libertarian funders should want to kill them for their market-distorting effects. As far as I can see, though, very few funders at all are giving attention to this area. That’s another missed opportunity. What’s striking to me is how many funders focus on the same crowded issues — like education — and ignore areas where their money could potentially make a greater mark while also helping disrupt today’s entrenched ideological fault lines. 

Going back to the tax stuff, my favorite example of this are state and local firm-specific tax subsidies. The most notorious example of this was the huge package that Amazon got out of New York City, which eventually created such controversy that it was dropped. Or take the example of the Washington Commanders essentially holding a bidding war with Maryland, D.C. and Virginia for their new stadium (which thankfully has cooled down, largely because of the odiousness of owner Dan Snyder and the mediocrity of the team). These are just the very tip of the iceberg, however. As University of Texas political scientist and Niskanen Center Senior Fellow Nate Jensen has shown, this kind of negotiation by every sizable firm over the tax and subsidy package associated with new investment has just become the norm for how states and localities do business. These subsidies do not actually create more economic development in the aggregate, but they do weaken the tax base for everyone and place more of a burden on firms too small to lobby for a special deal. 

I asked Nate one time who in the Texas State Legislature was opposed to these deals, and he said it was basically the left-most members and those associated with the Texas Public Policy Foundation (the pretty hardcore conservative think tank). The liberals mostly don’t like it because of how it reduces money for government services, but conservatives don’t like it because it represents crony capitalism and flouts any idea of the rule of law. There are some free-market think tanks who are working on this (the Mackinac Center in particular) and some liberal organizations (like Good Jobs First) but given the scale of the problem, there really ought to be some donor who just makes funding a full-spectrum attack on this stuff their life’s work. 

We are seeing some funders invest in ideological bridge-building work. MacKenzie Scott has given heavily in this area and several foundations have joined together in the New Pluralists, a funder affinity group that exists to support “the growing field that is addressing our nation’s crisis of division, distrust, dehumanization and disconnection.” Do you think such efforts are likely to have an impact? 

I certainly don’t want to say that what they’re doing is bad. And it’s important in this area to be really clear that absolutely nobody really knows what will work. But I’m slightly skeptical of efforts to solve the problems of polarization and mistrust too directly. Ultimately, my argument is that what teaches people to see each other’s humanity and treat those different from them as fellow citizens and neighbors rather than enemies is actually doing things together, needing people different from them in order to achieve their ends. So for example, on campus, I think the most effective way to cut through the conflict generated by the somewhat artificial battles between campus progressives and reactionaries is more support for social and political projects where parts of the left and right agree on ends, but for different reasons. Almost every issue I described above has that character, whether it’s housing, criminal justice, licensing, or taxation, and there are plenty more. Working together across ideological lines can make very vivid that people who disagree with them on many things are actually a resource rather than an obstacle — they can do kinds of work that those on the other side just can’t do, because they can communicate with people who would otherwise be out of reach. So my theory is that this vision of effective pluralism is absolutely the right end, but the way to get there is less by building organizations specifically designed for that end and more by working on specific problems where pluralism is the byproduct of cross-cultural work. 

I’ll just reiterate again, however, that nobody knows what will work! That’s why I believe so strongly in the idea of “spread betting” in philanthropy — supporting different ideas with sometimes contradictory theories of action. I have a theory of how to get out of what my friend Lee Drutman has called our polarization “doom loop,” Lee has another idea, the New Pluralists have yet another theory of action. We need to be doing all of them. It may turn out that they have valuable synergies that we can’t currently predict. 

Thanks, Steve. This has been really interesting.