← The PM Podcast
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- [00:00]
A
I've been interested in philanthropy because so much power is invested in that, in that sector. But I always ask the question, which I think everybody should, is like, where am I making my unique contribution? How am I deploying my competitive advantage, whatever it may be, to make the world a better place?
- [00:24]
B
Welcome to the PM Podcast, brought to you by Donor Search, the show that takes you inside the lives of thought leaders, innovators and change makers in fundraising, philanthropy and civil society. I'm your host, Jay Frost. David Callahan is the founder and editor of Inside Philanthropy, the leading site tracking who's funding what and why, and founder of Blue Tent, which guides progressive donors raised in hastings on Hudson, New York. He earned a BA from Hampshire College and a PhD in politics from Princeton. The author of nine books, including the Cheating Culture and the Wealth, Power and Philanthropy in a New Gilded Age, callahan has become one of the most prominent voices examining how wealth and philanthropy shape American democracy. A former think tank co founder, he now leads journalism and media ventures that hold donors accountable and reframe the conversation on giving. In this episode, we explore his journey from politics and ethics to journalism, his critiques of philanthropy's growing power and what it all means for democracy in America. Maybe I'll start with one of those things I'm not sure is right. And we can always edit this out. Do you share a birthday with a political figure?
- [01:40]
A
I was born on June 14, 1965, and I don't know any other political figure who was born on June 14, 1965. So I'm going to say the answer is no.
- [01:55]
B
Wow. Well, not 1965, but June 14th. Flag day is, of course the birthday of our current president.
- [02:05]
A
Yep.
- [02:08]
B
And my wife's birthday. So it's a happy day in some quarters somewhere for you and for her anyway. But that's unusual. That must be a strange thing to wake up to on your birthday.
- [02:21]
A
I have tried not to think about it.
- [02:24]
B
I'm so happy I could bring that up for you.
- [02:28]
A
Thanks for getting us off on a happy foot here.
- [02:31]
B
Well, I know you work in this world where you just spend so much time obviously focusing on politics throughout your entire career, probably personally as well as journalistically, and then a big part on philanthropy where a certain figure obviously has made glancing blows at that. So that's why I start there, because those two pieces aren't often true for many people in our field that they're interested in both politics and philanthropy, or at least they don't engage in them professionally as you've done. I'd like to know beyond Your birthday, what that comes from. Can you take me back a little bit? I think you're from Hastings on Hudson, is that right?
- [03:15]
A
Yeah. So I grew up in a suburb of West New York City in Westchester county called Hastings on Hudson. My father was the co founder of a think tank called the Hastings center and helped create the field of bioethics. And so I grew up around the world of ideas, and I grew up also around the world of fundraising since my father was hustling grants from different foundations and major donors. And I wasn't involved in it, but I kind of, through ambient exposure, learned about places like the Ford foundation and Rockefeller Foundation. I like to think that successful grant proposals paid for my college education. And when I was at college, I became quite interested in national security issues and wrote my first book on a major diplomat named Paul Nitze, who was involved in the Cold War, and then later went to get my PhD in politics at Princeton University. However, I was never involved in electoral politics as a younger person, never worked on campaigns or anything like that.
- [04:36]
B
But that does at least explain some of the inspiration behind the focus on some of these ethical issues. I mean, if you grew up around ethics and I hadn't thought about the fundraising piece, that, that must have come to you, at least in some way through osmosis. But often we reject that stuff.
- [04:54]
A
You.
- [04:54]
B
You became a part of who you are and what you do.
- [04:58]
A
Yeah. I have five siblings and I'm the only person who really went into the family business. You know, both my parents have PhDs and are writers, books, and involved in the world of ideas. And I'm the only person who chose to go that pathway. And so I got a PhD. You know, I wrote a couple books and then ended up co founding a think tank in 1999 called Demos, which is a public policy organization based in New York City and helped build that for 14 years before starting Inside Philanthropy. And when I was at Demos, I wrote a book called the Cheating Culture, which was about ethics, and particularly about the way in which economic inequality was bringing out the worst in people and in corporations, but both in, in individuals. And follow that up with another book called the Moral Center. So I have spent quite a bit of time kind of thinking about issues of ethics and values that.
- [06:11]
B
Sometimes comes from what we're exposed to and what we read or what we think about, but it's also sometimes a product of the culture of the places we come from. I didn't grow up too far away from you. I was born in Westport in Connecticut, and there was A certain amount of inequality that we would have experienced not within our communities, but between our community and those surrounding us. So where I was in Fairfield county, do, let's say Bridgeport, and maybe from where you were to, I don't know, Yonkers is maybe a bad example, but.
- [06:43]
A
Yep, no great example.
- [06:45]
B
I wonder how that, how that registered for you as we're growing up. Sometimes it doesn't register at all, but sometimes it has deep meaning.
- [06:54]
A
I was acutely aware as a teenager or even before that I had been born into this incredibly high position in the grand scheme of things in the world. I was born in the United States as a white male, two parents who were highly educated, who lived in a major metropolitan area, the biggest metropolitan area in New York City, and that I had exposure to all sorts of ideas and opportunities that so many people didn't have, both the United States and worldwide. I had won the ovarian lottery, as Warren Buffett likes to call it, that I was not born in Pakistan or someplace like that. And so I always have been aware of how much inequality there is in the world. And then locally. Yeah, yeah. If you drove a mile down the road from my 98% white middle class suburb of Hastings where I grew up to Yonkers, it was a very different world, primarily black city with a lot of poverty and lack of opportunity. So I was acutely aware of that growing up and always had a very strong social justice orientation as a kid. And I've. I'm not sure whether that's something that people are born with or learn. Like many of my siblings don't have that feeling. My, my son, who's 17 year old, a 17 doesn't, you know, despite sort of some of the influence he's had for me and his mother and. But I had it at a, at an early age and I, I've often sort of thought of it as kind of a monkey on my back, you know, this des. To make the world a better place and this awareness of suffering and inequality in the world and in your own country, that's a big burden to carry around. And it's hard to escape. Right. It's not like I can just go, you know, work in some other, you know, could do. Go do something that doesn't involve trying to make the world a better place. Like I wouldn't, I would feel like I was being a bad human being if I just relaxed and, you know, worked in advertising or something.
- [09:25]
B
There were a lot of people who worked in advertising in our communities, which is why I'm laughing at that comment. That was. That was true, too. But do you remember maybe a moment when that kind of crystallized for you because you said you weren't involved in electoral politics? That was probably even true in school, or else you would have mentioned that. But do you remember a moment when you were kind of thinking, oh, no, this is. This is really the state of the world and I am at odds with it or want to change it in some fashion.
- [09:54]
A
I grew up in a period of lots of alarm about the possibility of nuclear war. This is the early 80s when I was coming of age. Ronald Reagan was president. He seemed to be taking steps to escalate the arms race, such as, you know, Star wars, the initiative that he rolled out, a big buildup of nuclear weapons. The United States was funding a war on Nicaragua by backing the Contras. And, you know, meanwhile, we were spending all this money on defense in ways that struck me as often unnecessary, while at the same time we had a lot of poverty and unmet needs at home. So those were the issues that first galvanized me and then continued to motivate me through graduate school.
- [10:46]
B
And you did jump right into the thick of it with those topics that you were studying. So I guess you were at Hampshire and then you were doing your PhD. But you've written a lot. And the people who will be able to listen to this, and I know we'll enjoy hearing some of your background because they won't know about it, certainly won't even know about some of these subjects. You have this book, Unwinnable wars, which I think was talking about conflicts in places that were post. Post Reagan era. Right. So Bosnia and Herzegovina and things like that, where maybe the US Took a more decisive stance. It could be argued. It's not necessarily. There's not universal acclaim for the decisions that were made, but they were decisions, and they were made, sometimes argued to be made on humanitarian grounds. But. But I wonder how that impacted you, not just as an author, because you wrote about it, so you understand it better than I ever would, but also how it influenced your thought about the role of politics versus what we're going to talk about a lot, which is this kind of individual action through philanthropy.
- [11:56]
A
Yeah, Well, I was always very interested in policy. As I said, not electoral politics, but rather policy, which, as we'll discuss, really lives downstream from electoral politics, because who has power determines what policies get pursued? But, yeah, I was very interested, starting with foreign policy. And I did write a book about America's approach to different ethnic conflicts around the world. Not just Bosnia, but also Rwanda and going back further to Biafra and Bangladesh and, and the United States made decisions that had life or death consequences. Right? We did not intervene in the rwanda conflict and 800,000 people were slaughtered when many, many argued that we could have done something. So I was very appreciative studying policy, foreign policy, just what huge consequences those decisions have. And then later shifted over to domestic. I kind of got sick of studying foreign policy. The Cold War was, there was a lot less attention to those issues. And so I sort of shifted out to domestic policy. In the late 1990s, at a moment when there was tremendous kind of political upheaval. The Gingrich Congress, the conservative revolution was, you know, conservatives are really engaged in this big attack on the New Deal Great Society legacy. A lot of conservative think tanks and philanthropists were really firing up and doing, making a lot of progress in terms of changing the debate to attack, attack big government. And so those became more my areas of focus in the, in the 1990s.
- [13:52]
B
And right before that. I guess you probably made the decision, many people do when they're getting their, their, their PhD about going postdoc and academic or doing something different. And you eventually, of course, then founded Demos, as you just said. How did you make that decision not to go on the one track where you're with other people who are exploring these ideas, these policies in that setting where you can really bash around ideas, but, but you're doing it in kind of at a protected environment. And I mean that in a positive way that you're able to really discuss ideas. And, and it's a, it's an environment where, where it's okay to throw spaghetti on the wall versus, as you say, in a political environment, even downstream, a lot of guidance comes from who's got the power, who's got the money. How did you decide to do one and not the other?
- [14:38]
A
I was never planning to go into academia. When I got a PhD, I joked that I got a PhD so I didn't have to work twice as hard to prove I was just as smart. Having a PhD from an Ivy League university turns out to be a pretty handy credential in the world. And my goal was really to go into the think tank sector and maybe into government someday. And I had, as an example, my father, who had started a think tank and had a PhD and was not in academia and actually had a pretty low opinion of academia. You know, I heard a lot of academia bashing growing up from my father, who thought that it was a Very kind of naval gazing sector that was not involved enough in the real world decisions. I like the idea of being intellectually sophisticated or having theoretical tools through getting a PhD, but the goal was never to go into academia. In fact, I went directly into the think tank world. After graduate school. My first job was at the 20th Century Fund, which is now called the Century foundation. In the 1990s it was a foundation that had been created by Edward Filene, who was the clothing retail magnet who started Filing's Basement. And he used his fortune to endow the 20th Century Fund to support public policy research. And so I became became a resident scholar there and also a program officer supervising some grants. And so came to learn about philanthropy by working at that very small foundation, which later morphed, as I said, into more of a policy organization. And then around the time that was happening is when I left to create a new think tank called Demos.
- [16:41]
B
So I guess it turned out to be a positive experience being on both sides of that equation within the think tank where you were raising money, but you were also presumably writing. And in that setting, again, people may or may not know this who are listening. The story in D.C. at that time was that a place like American Enterprise Institute, I think, or Heritage would create something that you could read in the time it took you to get from K Street or wherever the think tank was like Brookings to, to National Airport. So it was a very different sort of way of generating ideas that were digestible for people in policy. But when you were experiencing that firsthand, did you start to develop kind of a different thought about the role of philanthropy right there? Because as you said Filene supporting the think tank, you were generating grants. But. But what do you think the relationship was like at that point between philanthropy and thinking?
- [17:44]
A
Well, around the same time that I was contemplating helping start Demos or got involved in that effort, I was hired to write a research report by the National Committee for Responsive Philanthropy on conservative funding of think tanks. And the report is called $1 billion for ideas. Conservative Think Tanks and you know, the. The Rise of Conservative. I can't remember the subtitle, but Ed looked at the ways in which conservative foundations and major philanthropists like Charles Koch had invested over a long period of time in building not just think tanks, but also legal networks and leadership institutes and media publications and all with an idea to really shifting debates and capturing the high ground of ideas. So I was very steeped in what the right was doing to use philanthropy to shape a public policy agenda. I wrote my first article on the Failures of liberal foundations to invest more in ideas. Actually, in 1995, I've been at this for a while. Yeah. And. But I had the experience when I was helping start Demos of going out and raising money. So I had studied philanthropy, but then I found myself trying to raise money from philanthropy. And so I've always been interested in both sides of the coin, like what is the role of philanthropy in shaping America and shaping public policy, and also what are the challenges to fundraisers and how do you get the money? How do you get your foot in the door? And who are these donors anyway? And what do these foundations do and how do they operate? For people who read Inside Philanthropy regularly, they will see both parts of that interest playing out. We write a lot about the impact of philanthropy on public debates and its influence. And we also just offer a lot of how to information and to help people get in the door.
- [20:11]
B
I'm imagining what it must have been like for you to go from writing about it to going and asking for the money from some of these people, getting to know the donors personally, because you've had a lot of interviews since, but at that time you probably hadn't. So you came away from it, I guess, not jaded, or at least not so jaded that you didn't continue all this writing you've done. What was the initial experience like?
- [20:35]
A
Well, Demos was incubated by the Nathan Cummings foundation, and Charlie Halperin, then the president of the Nathan Cummings foundation, was the catalyst in starting Demos. And he brought me in early and I ended up wanting to keep people along with Steven Heinz, who now runs the Rockefeller Brothers Fund. So we were very well plugged in to the New York philanthropic scene starting out and could get meetings at the Ford foundation, the Rockefeller foundation and other places. But just be being plugged in doesn't mean that you get the money. Right. So it was very challenging. And I think that everybody who has dealt with these foundations has experienced high levels of frustration. Right. They are very opaque. It's very difficult to know how their processes work or who to talk to. And even if you do get your foot in the door, it can be very hard to actually get a grant in any sort of timely way.
- [21:42]
B
How did doing the work there at Demos, running Demos, how did that begin to alter, if at all, your. Your thinking, your perceptions, or broaden them maybe, or deepen them about the. These questions, these big fundamental questions that you explore all the time now about not just philanthropy, but democracy and inequality?
- [22:01]
A
Well, Demos had two focuses. One is on economic inequality and the others on political inequality, challenges in our economy, challenges in our democracy and the intersections between them. And so, you know, just did a lot of research on those in those areas and came away just always profoundly worried about the United States and the high levels of inequality we have, the low levels of political participation, especially in primary elections, the obstacles to voting. I mean there's a lot of challenges here and have been writing on those issues ever since and also writing a lot about what role philanthropy can play in tackling those two different challenges and often being disappointed by what philanthropy has and hasn't done in those two areas.
- [23:04]
B
Yeah. What was the biggest disappointment at that time? Maybe the biggest thrill as well, because I'm sure there were successes. You were having it right there. Yeah, but.
- [23:13]
A
Well, the biggest disappointment almost everybody has trying to raise money from foundations is getting enough general operating support in, in large enough chunks over multi year period to have some level of stability. Right. So Demos, like so many other think tanks and organizations of every kind, had to string together a lot of different project support grants from many different funders. And I have long felt that the way in which these, these foundations spread their grants around so thinly and keep so many non profits on near starvation diets and with so many non profits failing to scale to any adequate level has, you know, is really problematic. And also I was aware of how conservatives do it, which is quite differently. Like they, the conservative donors tend to give multi year operating general operating support and often in large chunks and concentrate their grants on a smaller number of organizations. And their think tanks operate at a larger scale than those on the left. And they also believe more in multi issue organizations. Demos was a multi issue think tank, which is very uncommon in the left of center world. Most left of center groups work in different issue silos. They work on the environment, they work on reproductive rights, they work in specific niches. But most groups don't knit together a bunch of issues under one roof. And I think that's really important because it allows you to create a overall narrative of what's wrong with America and how to move in the right direction. Conservatives have understood that for a very long time and many of their multi issue policy organizations have grown to a real significant size. Like the Heritage foundation is almost 100 million dollar a year organization last time I looked and, and that's just always been a challenge for the liberal world to get funding of that kind.
- [25:43]
B
Why do you think that's so? I mean, because it sounds like you're saying that wasn't just so then it's true now. So why?
- [25:49]
A
I think that conservative funders are more strategic in that they are very focused on power and how to get it and how to leverage their scarce resources. Many of those foundations on the right are actually much smaller than the Ford foundations of the world. They have focused on leveraging their resources to command the high ground of public policy debates and power. Right. So they've invested a lot of money in think tanks because they know that ideas structure a lot of what happens in politics. Ideas, narratives. If you can control those sort of broad debates, a lot of good things will follow for your side. They've invested a lot in legal groups because they understand the importance of the courts. If you control the courts and you, you populate them with judges sympathetic to your worldview, you can achieve a lot of progress that way. And they've also invested heavily in media and narrative because they understand that if you control the narrative, you will help structure debates. Especially if you control. If you invest both in ideas and narrative, those things can work together. And finally, they've invested heavily in leadership, right. So that they have pipeline of people who can occupy positions within this infrastructure that they've been building for the past 50 years. Meanwhile, funders on the left tend to be much more interested in a technocratic approach to solving problems one issue at a time. They're less attuned to power and they're more more interested in pragmatic ways to move forward progress on an issue like climate change, or how do we train more kids from the inner city for jobs or how do we build more affordable housing. I think that approach very much grows out of the mid 20th century ideal in philanthropy, that these are nonpartisan organizations that are guided by evidence, that are rooted in reason and that they're problem solving institutions. That's how they self identify. The problem, of course, is that so much of what happens in public policy exists downstream from the realms of power and narrative and ideas that if you don't invest upstream in those areas, you're going to be at a disadvantage and won't be able to solve the problems that you want to solve.
- [28:39]
B
Right. Well, you were doing this for how long at Demos, working that work?
- [28:46]
A
14 years. Yeah.
- [28:48]
B
When did you decide it was time to do something different?
- [28:56]
A
After I'd been there for about 12 years, I started wanting to do something different and started thinking about a digital media site. I was interested. You know, I'm a writer and blogger and have long been interested in the world of tech startups and digital media and of course thought that being an Entrepreneur seemed really cool and exciting being a business entrepreneur. I had been an entrepreneur in the policy area, think tank zone, but being an entrepreneur in business seemed like fun to me. And so I was like, I want to do startup and digital media and I want to do it in some place in this space of non profits and philanthropy. And then settled on philanthropy as being the place which made the most sense and thought from the beginning that if we could produce a lot of high quality content on what foundations and major donors were doing and put it behind a paywall, that grant seeking organizations would pay decent money to access that information. That was always the business model from the beginning.
- [30:15]
B
Did that turn out to be correct? Because often when we start a business, we imagine the revenue might come one way, but it ends up coming from another.
- [30:25]
A
Yes, it turned out to be correct. Inside philanthropy is a successful business. Not nearly as successful as I had hoped, but successful enough. You know, we have 12 or 13 full time employees who are able to do the job. And you know, who doesn't want to be inside philanthropy if you're trying to raise money? Right. So it's like the value proposition is pretty clear and it's a B2B business in that almost everybody who subscribes is pulling out the company credit card to sign up. So it's expensive. It's, you know, $400 a year. A lot more than, say, the Chronicle of Philanthropy or, you know, Newsweek magazine. But you make a return on your investment if you, if it allows you to do your job better of raising money or actually many foundations also subscribe because they need to know what's happening in philanthropy so that they can deploy their money most effectively.
- [31:32]
B
Yeah, I did want to ask you how much of this is if it's 60, 40 or 20, 80 in terms of the people who are on the. I don't know how you call them because in different parts of the sector they're described by different names. But practitioners or fundraisers or the non profits versus the grant makers.
- [31:50]
A
Yeah, I call them just divide them into. Between grant seekers and grant makers.
- [31:55]
B
Sure.
- [31:55]
A
And occasionally people are both. Like a funding intermediary or community foundation will both be raising money. And granting that most people are on one side or the other.
- [32:06]
B
Right. And I didn't mean to suggest that I didn't know if it was successful, but rather just that we're in an environment where I think most people know that even the New York Times and others have struggled to figure out what's the right way to generate the revenue and do the work. But it sounds like you had the right model from the start because you knew that the marketplace needed what you were offering on both, as you're saying, kind of almost the competitive intelligence for the grant makers as well as the grant seekers who, as you say, they. They want to know what's going on. Inside Philanthropy, the title says it all. Yeah.
- [32:43]
A
Good thing the domain name was available.
- [32:47]
B
That's true.
- [32:48]
A
Yeah.
- [32:49]
B
But. But what? Maybe. What were some of the hurdles, though, that you encountered initially? Did people, well, asking another way, were people forthcoming? Were they ready to tell you their stories?
- [33:00]
A
The hurdles were as follows. First, I bootstrapped it. So it was, I'm the 100% owner of Inside Philanthropy. I financed it with credit cards and with some, you know, got my parents to lend me some money, use my savings. So we always had modest resources at the start, which made it hard to pay for reporters who would go out, had the time to go out and investigate stories. And as a result, a lot of our early content was kind of blogging content, often by me. And we had problems getting access because nobody knew what Inside Philanthropy was and didn't trust us. And also I came out with sort of critical perspective early on in philanthropy, so I had a lot of critical things to say about the sector, having hung around it for 20 years, usually as a grant seeker, being frustrated. Right. So Insight Philanthropy was new and was often critical of funders, and we had few resources. So I often joke that initially Inside Philanthropy was really outside philanthropy because we were just on the outside blogging and loving, you know, loving hand grenades and. And. But over time, you know, people sort of got used to us being around and accepted us, and we started getting better access and. And, you know, doing more and more reported pieces. And now pretty much all the pieces we do are reported pieces. And, you know, we have, I think, a lot of ability to really be inside philanthropy for real.
- [34:55]
B
As you were talking about that, it just struck me that with. With demos, you had access to many things, including some revenue because of who was with you when you, you know, who brought you to the party, who danced with you initially. But here you were on your own with your credit cards and a little bit of support, but all. And all the information in your head, but that didn't necessarily lead to people immediately picking up the phone, which I guess they would have been picking up the phone back in those days.
- [35:26]
A
Yeah, well, we had email in 2014, but there's no real reason that foundations or major donors have to talk to the media. They don't have to and often they don't. And you can't make them. And especially if you're an obscure trade publication like Insight Philanthropy. It's, you know, people talk to the New York Times because if they don't, maybe they'll really be on the wrong end of a critical story. So they want to shape the message. You don't. Nobody cares so much about. Well, people do care what Insight Philanthropy says, but it's not the same as a major media outlet. And, and a lot of donors we've never been able to talk to, a lot of foundations have never been talked to us at all.
- [36:27]
B
I'm so tempted to ask you who, but I know you can't answer that.
- [36:30]
A
Yeah, and this is a problem in the sector. The lack of accountability, the feeling like, you know, it doesn't really matter whether you pay any attention to the outside world. The insularity of philanthropy and you know, and a kind of arrogance of. We don't, we don't have to pay attention to our, to anybody.
- [36:53]
B
Right. There's a general lack of transparency. How do you feel about that now? I mean, not just in terms of your work, but as a whole. Not just the dark money, but virtually all the money is not transparent.
- [37:08]
A
It's very problematic. The, if you think about the private foundation as embodying a social contract between rich people and the public. And the contract is simple. You, the rich person can take a bunch of money and you can stash it in tax deferred, tax free and stash it away. But we, the public get a guarantees along a couple lines. One, we know that you're paying some of it out every year, which are payouts, minimum 5% payout every year established in law. Two, we know that where the grants are going because they're in your 990. So that's transparency. Three, we know how you're investing the money and that's something that's supposed to be in 990s as well. Four, we know how much you're paying your top employees, which is listed in a 990. And five, we understand that. We, the public understand that you cannot use this money for political purposes because you are a 501 nonpartisan organization. If you think about that social contract, it is now completely in ruins. Right. Because you can put money in a donor advised fund. There's no payout requirement, there's no transparency in a donor advised fund. You're one of, if you're at Fidelity, for example, you want a 50,000 grant. You know, your grants are mixed in with 50,000 other ones on the 990. Right. Nobody's going to know where your money goes. Nobody can say how much. You know, it's hard to know how much you pay consultants and contractors. And of course, there are many ways to put philanthropic dollars into the political process. And we could talk about a whole bunch of them, but funders are quite savvy in that regard. And so a lot of the elements of the social contract around philanthropy have broken down. And I've been pointing this out, you know, along with others for a long time. And the powers that be in philanthropy don't care. You know, they're, they're not interested in reforming the sector and they resist almost all efforts to do so. And obviously this regulatory regime that we came up with for foundations in the late 1960s is completely archaic at this point, you know, with this end run around represented by donor advised funds in particular. But there's just no real desire on the part of, you know, the philanthropy establishment to the degree there is one, to deal with that reality. And that's been a major current of my writing and criticism for a long time.
- [40:12]
B
Right, and I know that you're just giving us a taste test here, which is one of the many reasons people should be subscribing and reading. But before we go away from those two things you've just mentioned, I'm going to get back to the powers that be and also the political, the ways that people can give politically when maybe people don't know that they can. But even before that, there's another transparency issue, which I don't hear people talk about much. And I'm curious if you have thoughts on it, and that is with the organizations themselves, many of the people who would be listening to this, and they don't necessarily disclose who their donors are. They might put them on a list on a website, they might put them on a donor wall. Not all of them. Do you have any feelings about whether that should be more, they should be more transparent, and if so, why or why not?
- [41:07]
A
I have argued for a long time that the lack of transparency, particularly around giving for policy organizations and legal organizations, is a bad thing. Money is being deployed to affect public policy. The public citizens have a right to know who's giving it. All that said, in the current political environment, with the high levels of polarization and weaponization, I am not in favor of, of revisiting laws around transparency and nonprofits because there's enough fear as it is among donors about political retaliation. And I don't, I don't think now's the time to, you know, make changes in that area. We got to wait until things are a little less polarized.
- [42:06]
B
Would, would the donors also make the same argument whether they're on the right or the left or whatever the middle is?
- [42:13]
A
Now, donors love anonymity, right? And, and they like it for different reasons. And donors have always wanted anonymity. And philanthropy, trade groups have always been responsive to that desire. And so they've never backed more transparency.
- [42:33]
B
Well, maybe that gets into the powers that be. You made that, that you use that phrase. I have to ask you, so who are today? Because things have evolved. You've been describing that evolution throughout this whole conversation. Who are the powers that be today?
- [42:47]
A
I wrote an article maybe a decade ago called Is there a philanthropy establishment? And if so, who's in it? And it's an interesting question because obviously philanthropy is a big and fragmented world. Once, maybe 30 years ago you could say, yes, there's a philanthropy establishment. It's the president of the Ford foundation, the Rockefeller foundation, the Carnegie Corporation, the Council on Foreign Relations and a couple handful of other institutions. Things have changed a lot in the last 30 years. We've had all these new billionaire donors show up on the scene, many of whom go off and do their own thing. They're not even in these regional associations of grant makers. They don't come to the council and foundations annual meeting. They don't really know the people in legacy foundations often. So you have all those new people who've showed up and then you have funding intermediaries and donor advised funds and consulting groups. And so lots of different philanthropy serving organizations. And so things are much more diffuse and fragmented than they were a few decades ago. At the same time, these foundation presidents, those who run big legacy foundations, they talk to each other, they know each other, they meet, they strategize together. They've been doing a lot of that lately in the last eight months. There's a set of philanthropy serving organizations that have convenings and meetings and people know each other and see each other do collaborative things. And there's a lot of different kinds of points of collaboration across the sector. And so there are a set of people who are, would comprise something like an establishment today, but it is diffuse and it cannot necessarily make things happen. You know, it's not like you get a bunch of people together in a, in a room and can execute some sort of shift in direction for philanthropy.
- [45:06]
B
So does that make things more or less difficult for change or for that matter even documenting what's Happening.
- [45:16]
A
Yeah. I mean, it's, it's fragmented and it's diffuse. And as we discussed, it's not so transparent. Right. So. And it continues to be in flux. Right. So new mega donors show up on the scene all the time, and many of them are. Do things differently. Right. You know, creating LLCs like the bomber Group or the Chan Zuckerberg Initiative or the, you know, Midiar Network. And, and so, and they have different ideas. And so it's hard to, you know, it's not like you can build consensus among the powers that be in philanthropy and say we need to all do X, because a bunch of wealthy fat cats and foundation presidents aren't all going to act in unison anytime soon.
- [46:09]
B
I'm wondering how that is, especially now. If I'm thinking of the Ben Franklin quote, I'm going to misquote it, but that we all, we must all hang together, or assuredly we will all hang separately. And I'm wondering if there's a certain element of that in philanthropy vis a vis governmental change, the political environment that we're in, because I believe that some of the intermediaries now are under attack as well, and certainly act blue. So are we, because of this fracturing, this decentralization of, of the lack of the big cigar chomping guys in the back room. Has that also meant that some sectors of philanthropy are more vulnerable, that it's easier to pick off one or another donor who have a political leaning or policy leaning or just a humanitarian leaning that isn't in vogue in the White House.
- [47:05]
A
Well, this is where foundations have been doing a lot of talking and thinking among themselves, and they have come together to sort of pledge mutual assistance. And there's an initiative called Unite in Advance with funders who have all sort of pledged to kind of support each other and defend the ideals of democracy and philanthropic independence. We'll see how long that lasts if the Trump administration decides to weaponize the IRS and come after. Or the Justice Department to come after foundations. But that's the idea. So in that sense, I think funders have done a good job to sort of prep for as much as possible for attacks that may be coming down, down the line.
- [47:55]
B
It's coming up on, I think it's. Is it eight years since you published the Givers? So you've been doing all this writing for Inside Philanthropy, but then you've continued your, your own writing for your books. And there are a couple things you said in there that I want to, to just touch on, because I'm wondering if your Views have continued to evolve as well, or your interpretation of events now where we are. And one of them comes from right at the beginning where you said, just how much influence are the givers wielding these days and to what end? How should we feel about that clout here in the world's oldest democracy? How would you answer something like those questions now?
- [48:34]
A
It is very troubling the way in which wealthy people have so much more influence than ordinary citizens. And one way wealthy people exercise influence is through philanthropy. I have often seen, always seen philanthropy as a kind of political money. It is used for influence. I mean, there's plenty of philanthropy which is not about influence. But it's very easy for a donor who wants to influence the laws and policies and culture of this country to do so while getting a big tax deduction to do so through philanthropy. Actually, the best way to think about money in politics is it's a mighty river with three tributaries. One we're all familiar with, which is hard campaign dollars, money to candidates and political parties. Two is another tributary we're familiar with, which is money for lobbyists who go and work, you know, in the halls of power to pass legislation or what have you. And the third tributary in the big river of money and politics is philanthropy. It's tax deductible dollars that goes to think tanks and legal groups and is used for, you know, finds its way in to the arenas of power. In many ways, that is something that people are less familiar with. And I've been trying to bring more attention to that. And, you know, just to be clear, there's a lot of big donors out there with. With different political views. Right. And so the defenders of all that money in politics say it's okay because it's. We have pluralism. Right. There's George Soros funding this stuff, there's Charles Cook funding that stuff. And, you know, it all sort of balances out ideologically and politically. It's not like one side has their thumb so much on the scale. But the big losers in all of that are ordinary citizens who have less of a voice. And not only that, they are paying through this tax subsidy so that wealthy people can use philanthropy to wield political influence. And that's just problematic.
- [50:59]
B
Yeah. Towards the end of the book, I think it's in the epilogue, actually, you'd said something else that I wanted to ask you about, which is you describe philanthropy as one of America's greatest inventions, and you said it would come to trump this nation's more. It could come to trump this nation's more important invention, democracy. I know it's only been eight years, but are you, how are you feeling about that statement or that possible outcome?
- [51:29]
A
We'll have to see what all these wealthy people do with their political fortunes. Because if you think that the foundations left behind by the likes of Rockefeller and Ford are big, just wait. You see the foundations left behind by Sergey Brin and Larry Ellison and Jeff Bezos, who are worth so much more money. I mean, the Ford foundation has assets of $15 billion. Sergey Brin, one of the co founders of Google, has assets 10 times that. We could see foundations that dwarf the size of foundations that exist today and just more and more and exercising influence in more and more different corners of American life. And that that influence will grow greater as federal, state and local spending is squeezed by our aging population and by our huge public debts. Right. So it's, you have, you know, discretionary spending by government is going to be increasingly squeezed out by mandatory spending on debt and entitlements. And all these billionaires will be showing up with ever larger amounts of money just in time to be the people who help fill the gap. But as they do so, they will also have enormous power.
- [53:02]
B
So if you're writing this book now, maybe. Well, I should ask that first. Are you thinking about revisiting what you talked about then with something that addresses kind of where we are and the predictions you might make for the future?
- [53:14]
A
I'm not writing a new book, but I address these issues in ongoing way and have talked about them a lot lately in my writing that what we're seeing right now with funding cuts for nonprofits is really the future on fast forward. It's a future of scarcer resources. It's a future where nonprofits are getting less government money and are more dependent upon private donors, with those private donors wielding more influence as they have, as they become more indispensable in more different areas of American life.
- [53:53]
B
You're involved in other things, too. I mean, you founded Blue Tent, I believe. So first of all, I should just ask you to describe what it is for people who aren't familiar with this terrain. And then how are you involved with that today? And how does that satisfy part of, I'm sure, the breadth of your thinking about these issues, because it must be satisfying in a different way from the work that you're doing at Inside Philanthropy.
- [54:15]
A
Yeah. Well, I had never, as I said, been involved in electoral politics. And that changed in 2021 when I just became deeply alarmed about the authoritarian turn of the Republican Party. To me, it's the biggest political development in my lifetime is that one of our main parties is no longer committed to the norms of democracy and that many of the candidates they've run, not just the very top of the ticket, but for key jobs like Secretary of State and Attorney general, were in 2022, explicit election deniers. And a lot of those people are now in positions of power. And I just felt that I have to get involved in electoral politics because if we lose our democracy because of these very close elections, everything else I care about is going to be washed away. I became involved in electoral fundraising specifically to help move more money to the most effective groups that do voter engagement work to help elect Democrats. And so I've been doing that for the last couple of years.
- [55:41]
B
How is that feeling for you? I mean, it's a totally different kind of activity.
- [55:45]
A
Yeah, it feels good to do something. I don't particularly like the world of electoral politics. I don't find it that intellectually interesting. It's very tactical. It's, though, incredibly important. And the margins are very, very close. So, for example, last fall, the Democrats fell short of retaking the house by only 7,500 votes across three different congressional districts. And as a result, this big mega bill was able to pass Congress, which is going to lead to massive cuts for Medicaid and food stamps, and also completely gutted the Inflation Reduction act, wiping away half a trillion dollars in clean energy tax credits, all because of a few seats in Congress. And to me, that underscores just how high the stakes are. I think we could have won those few seats in Congress with more strategic deployment of. Of donor dollars, because many donors on the left, I think, given ways that are ineffective. And so Blue Tense has been trying to push people to give more effectively to, you know, win more votes.
- [57:10]
B
And I'm sure some people might listen to this and say, but didn't they just raise on the Democratic side a billion dollars for the last campaign? What happened?
- [57:19]
A
A lot of that money was spent on ineffective advertising as opposed to spending spent on turning out voters in key congressional districts. The resources are not deployed strategically.
- [57:36]
B
If I were trying to figure out the through line between when we started the conversation and today and some of the things that drive you, including the fact that it has to be intellectually interesting, because otherwise, if it's just tactics, I mean, that can only hold a certain amount of interest. Except you want to win. I don't just mean a one political race, but you want the right ideas to win in the right ways. Right? That's the grounding of both the moral imperative, but also the ethics of it. But I wonder where that takes you as you look forward, not only with your writing and inside philanthropy, but more generally, because it must be as frustrating for you as it is for many people to be so close to, to that, to the thing itself. But yet, like you talked about before, not necessarily having the full the ability to put your, your foot on the pedal because that's somebody upstream, right?
- [58:34]
A
Well, I've always had this social justice monkey on my back, and I've always wanted to make the world a better place. And over time that has taken different forms. I was very interested in foreign policy and national security because those issues seemed very present, very interested in domestic policy. I've been interested in philanthropy because so much power is invested in that sector. But I always ask the question, which I think everybody should, is like, where am I making my unique contribution? How am I deploying my competitive advantage, whatever it may be, to make the world a better place? And so I don't know how that's going to evolve in coming years, whether I'll stick mainly focused on philanthropy or whether I'll move more to the political space. I guess we'll see.
- [59:36]
B
Well, that's it for this episode of the PM Podcast. You can learn more about David and his work@insidephilanthropy.com and bluetent us. Our thanks to our sponsor, Donor Search, the global leader in AI powered fundraising intelligence solutions for the nonprofit world. Our producer is Jack Frost, and our theme music is Moving Out, Moving in by Jay Taylor and is provided courtesy of Epidemic Sound. If you like what you heard, make sure to subscribe wherever you like to listen. Check out our sister shows, Front Lines of Social Good and How to Raise, and come back next weekend for another conversation with a leader in the world of social good. Until then, this is Jay Frost. Thanks for joining me.