Goodbye, Mr. Olin

by John J. Miller on July 27, 2009 · 2 comments

in Philanthropy

  • SumoMe

June 11, 2001

When conservative funds dry up


Nobody likes to think too much about the death of an aging parent. Yet it’s something most people must confront at some awful moment in their lives. Today, conservatives find themselves in this painful predicament as they watch the John M. Olin Foundation head for the grave. They may want to blame Henry Ford II.

That’s because Ford quit the Ford Foundation in 1977, complaining that a creation of capitalism had become an enemy of it. “I’m just saying that the system that makes the Foundation possible is very probably worth preserving,” he complained in a letter to the board. A man named John M. Olin took note. “This riveted his attention,” recalls Michael Joyce, who was executive director of the Olin Foundation from 1979 to 1985. Olin wanted to use his fortune to promote the intellectual and political interests of conservatism-and he also wanted to ensure that his money never fell into the hands of people who had other designs.

Recollections differ as to when and how Olin made clear his desire for his foundation to expire one day; he apparently did not put it in writing. But it is generally agreed that he thought the foundation should not live much longer than his hand-picked successors. He wanted people he knew personally to control the money, and when they were gone, the foundation would go, too. And last year, William Simon, president of the foundation since it assumed its explicitly conservative mission in 1977, died. “All our funding decisions will be made within three years,” says Olin executive director James Piereson, “and all of our money will be gone within five years.”When that happens, it will leave a big black hole in the world of conservative philanthropy. Last year, Olin distributed more than $20 million in grants, and its demise is the most obvious sign of an ominous development for the Right: the disappearance of foundations that have made so much of the conservative movement possible. This is not an entirely new problem. In the 1980s, the Smith Richardson Foundation played the same dynamic role for conservatives as Olin, but its focus in recent years has moved sharply away from these causes. Over time, of course, the interests of foundations are bound to change. But the problem for conservatives may be especially acute.

For two or three decades now, the Olin Foundation and its peers have provided venture capital for the most important political movement of our time. Name a meaningful emanation of conservatism-whether it’s a think tank like the Heritage Foundation, a debating club like the Federalist Society, or a book like Charles Murray’s Losing Ground-and behind it you will find the financial support of these philanthropies. They changed the landscape of American political life, and conservatism would not exist in its current form without them. “They made it possible for a figure like Milton Friedman to go from being considered a fascist to being recognized as a mainstream economist,” notes Michael Horowitz of the Hudson Institute.

For its part, the Olin Foundation won’t go quietly. Most observers believe it will end with a bang, giving major grants to several of its top projects. This is an odd choice in some ways, given Mr. Olin’s determination to keep his money from existing in perpetuity. Who’s to say the recipients of these parting gifts will remain as true to his principles as the people now heading his foundation?

Whatever the reasoning, Olin’s exit is only a piece of the puzzle. The Milwaukee-based Lynde & Harry Bradley Foundation, which gave out more than $44 million last year, just announced the departure of its president and CEO, Michael Joyce. Another stalwart, Dick Larry, recently retired from the Sarah Scaife Foundation, which dispersed about $18 million in 2000. For anybody who believes personnel is policy, these are troubling developments.

There’s no particular reason to worry about the Bradley Foundation, other than the fact that leadership transitions necessarily include uncertainties. The board picking Joyce’s successor is made up of committed conservatives (including NR president Thomas L. Rhodes) who say they won’t veer off course. The several foundations affiliated with the Scaife family, however, are another story. The family patriarch, Richard Mellon Scaife, is a private man who came under tremendous scrutiny during the 1990s for supporting various anti-Clinton projects. His second wife is said to be troubled by her husband’s bad reputation in the liberal press, and she has tried to channel the Scaife fortune toward more traditional forms of philanthropy in the Pittsburgh area. Meanwhile, Scaife’s two children aren’t known to be conservatives, and their father won’t live forever.

Despite all this, there is reason for hope. The country is simply sloshing with money that will one day go toward philanthropy. Over the next two decades, by some estimates, the baby boomers will inherit $12 trillion. “This new money should be the object of our attention,” says Neal Freeman of the Foundation Management Institute (Freeman is also an NR contributor). “Too many Beltway conservatives are scrambling for the loose change on the sidewalk while bags of gold bullion sit untouched on the front stoop.” The Heritage Foundation, to take a single example, thrives in this environment. Its recent capital campaign had a fundraising goal of $85 million, but the effort pulled in $20 million beyond that. There are plenty of untapped fortunes out there, and conservatives are getting a piece of them. In theory, they should be able to draw on plenty more soon.

But it’s always been a challenge. “The good news is that we can do a much better job than the Left with just one-hundredth of the money,” says Manhattan Institute president Larry Mone. “The bad news is that we’re still not grabbing our fair share.” Entrepreneurs are notorious for obsessing over who will take over their companies when they leave, and at the same time caring hardly a whit for who runs their foundations. Many simply turn to the Council on Philanthropy for advice-most of it bad, because the council is a hothouse of nonprofit liberalism, staffed by people who have the same insulated worldview as university professors. Conservatives recently have tried to build competing organizations, such as the Philanthropy Roundtable, to provide an alternative. One of the movement’s most innovative creations may be Donors Trust, an Alexandria, Va.-based nonprofit group that runs a set of donor-advised mutual funds. Individuals put money in Donors Trust, take a more favorable tax write-off than they would receive by setting up their own foundations, and then direct the giving. There’s just one condition: The money is technically no longer theirs, and Donors Trust will disperse it only to causes that promote personal liberty. “Greenpeace won’t get a dime from us,” says executive director Whitney Ball. The group already controls about $14 million in assets, and it’s growing rapidly.

The dominant trend in philanthropy of all kinds is toward hands-on and results-oriented approaches, and this offers undeniable benefits to the Right. To take just one example, millions of dollars are flowing into private scholarship programs for children of low-income families, and creating a constituency for school choice. But the results-oriented approach may also undercut one of the traditionally vital functions of conservative philanthropy: the production of knowledge. Ideas have consequences, but it’s difficult to measure the impact of a book. Mere sales figures won’t do: Myron Magnet’s book on poverty policy, The Dream and the Nightmare, was a commercial flop-but Karl Rove happened to read it, and gave a copy to a client of his named Bush, who found it revelatory.

To complicate matters, some conservatives-current and potential philanthropists among them-hold the mistaken belief that they have triumphed in the war of ideas, and therefore no longer need to fund them. This is foolish and arrogant, as anybody who has recently set foot on a college campus must know.

There is occasional talk about some new source of conservative money materializing to fill this constant, pressing need, but the promises don’t often pan out. Nobody knows who the John M. Olin of the next generation will be, or whether there will be one at all. Conservatives surely can agree that there ought to be one-or several. Locating candidates and recruiting them for this task ought to be one of the movement’s most important projects. It was just half a century ago that Lionel Trilling famously said that conservatives had no ideas, only “irritable mental gestures.” Fifty years of neglecting ideas could turn that silly statement into a prescient one.

There may be no better illustration of both the opportunity and the problem facing conservatives than Robert P. George’s James Madison Program in American Ideals and Institutions at Princeton University. Just one year ago, George started raising money for the project, and by this spring he had amassed $6.5 million. The biggest single gift-$3 million-came from a family with no Princeton connection at all. George himself is one of the brightest young scholars on the right, and the startling success of his program-which promises to become a hub of conservative intellectual activity-is cause for celebration. But there’s a catch: George’s first grant came from the Olin Foundation. “That was the seed money that got us started,” says George. “Without Olin, this would not have happened.”

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