How Conservative Philanthropies and Think Tanks Transform US Policy

by Sally Covington

Covert Action Quarterly, Winter 1998

Speaking truth to power is all well and good, but applying the dictum, “money talks, ” conservative foundations have long been bankrolling like-minded thin tanks and advocacy groups. Together, they have effected far-reaching changes in US social, political, and economic policy.

Proclaiming their movement a war of ideas, conservatives began to mobilize resources for battle in the 1960s. They built new institutional bastions; recruited, trained, and equipped their intellectual warriors; forged new weapons as cable television, the Internet, and other communications technologies evolved; and threw their resources into policy and political battles. By 1984, moderate Republican John Saloma warned of a “major new presence in American politics.” If left unchecked, he accurately predicted, “the new conservative labyrinth” would pull the nation’s political center sharply to the right.’

Today, that labyrinth is larger, more sophisticated, and increasingly able to influence what gets on-and what stays off- the public policy agenda. From the decision to abandon the federal guarantee of cash assistance to the poor, to changes in the federal tax structure, to interest in medical savings accounts and the privatization of Social Security, conservative policy ideas and rhetoric have come to dominate the nation’s political conversation, reflecting what political scientist WaIter Dean Burnham has called a “hegemony of market theology.”

Spearheading the assault has been a core group of 12 conservative foundations: the Lynde and Harry Bradley Foundation, the Carthage Foundation, the Earhart Foundation, the Charles G. Koch, David H. Koch and Claude R. Lambe charitable foundations, the Phillip M. McKenna Foundation, the JM Foundation, the John M. Olin Foundation, the Henry Salvatori Foundation, the Sarah Scaife Foundation, and the Smith Richardson Foundation. In 1994, they controlled more than $1.1 billion in assets; from 1992-94, they awarded $300 million in grants, and targeted $210 million to support a wide array of projects and institutions.

Over the last two decades, the 12 have mounted an impressively coherent and concerted effort to shape public policy by undermining-and ultimately redirecting-what they regard as the institutional strongholds of modern American liberalism: academia, Congress, the judiciary, executive branch agencies, major media, religious institutions, and philanthropy itself. They channeled some $80 million to right-wing policy institutions actively promoting an anti-government, unregulated markets agenda. Another $89 million supported conservative scholars and academic programs, with $27 million targeted to recruit and train the next generation of right-wing leaders in conservative legal principles, free-market economics, political journalism and policy analysis. And $41.5 million was invested to build a conservative media apparatus, support pro-market legal organizations, fund state-level think tanks and advocacy organizations, and mobilize new philanthropic resources for conservative policy change.

The strong role that conservative foundations have played in shaping national and state policy debates reflects not only impressive cash reserves, but also a sophisticated funding strategy:

* Their grants are overtly and unabashedly political. They single out and support aggressive and entrepreneurial organizations committed to government rollback through the privatization of government services, deregulation of industry and the environment, devolution of authority from the federal to state and local governments, and deep cuts in federal anti-poverty spending.

* They work to build strong institutions by providing general operating support rather than project-specific funding. This unrestricted money allows groups considerable flexibility to attract, train, and keep talented people, launch special projects, and develop their databases and skills.

* They recognize that national budget and policy priorities significantly impact what happens on the state, local and even neighborhood levels, and fund accordingly.

* They emphasize marketing and communications techniques, funding grant recipients to flood the media and political marketplace with conservative policy ideas and to communicate with and mobilize their constituency base on behalf of these ideas.

* They emphasize networking with other groups around a common reform agenda.  They invest in the recruitment, training, placement, and media visibility of conservative public intellectuals and policy leadership.

* They fund across the institutional spectrum, recognizing that institutions or programs that support conservative scholarship, rapid-fire research and advocacy, lobbying, strategic litigation, leadership development and constituency mobilization are all important components of an effective policy movement.

* They have made long-term funding commitments, providing large grants over a multi-year and, in some cases, multi-decade period Long-term funding has financially anchored conservative institutions and enabled them to take the political offensive on key social, economic, and regulatory policy issues.

* They concentrate their grants, with 18 percent of the grantees getting more than 75 percent of the funding.

A significant portion of the conservative foundations’ largess has flowed to a small group of think tanks that according to a sociologist “were particularly critical in the shift of the economic debate to the right [and] provided much of the groundwork for the radical change in policy taking place from 1978 through 1981.” Well endowed with the financial and human resources to market their policy ideas, these institutions have effectively repositioned the boundaries of national policy discussion, redefining key concepts, molding public opinion, and pushing for a variety of specific policy reforms. Through the constant repetition and dissemination of conservative policy ideas, they have provided a philosophical underpinning for many of the most important fiscal and social policies developed and implemented over the past 16 years. And in the end, they have succeeded in making “positive government action in social welfare and economic development policy seem off limits and inappropriate.”

Supply Side Swipe

The ramifications of conservative funding streams have been profound. In terms of political process, the existence of powerful and well-funded conservative “counter-institutions” raises the specter of what some have called “supply-side’ politics. Political scientist Samuel Kernell has suggested that when aggressive marketing is linked to modern means of communication, consumer marketplace irrespective of existing demand. This “supply-side politics, he contends, is “so psychologically powerful as to determine what voters will think they want.

One of the most impressive supply-side successes has been shaping national economic policy As Ronald Reagan assumed the presidency, conservatives saw and seized their opening. Four private institutions-the National Bureau of Economic Research, Hoover Institution on War, Revolution and Peace, American Enterprise Institute, and Center for the Study of American Business-led the push for “trickledown” policies. Large tax cuts-they argued, using everything from sound bites to scholarly journals-would generate revenues by stimulating the national economy

Supply-side economic theory laid the basis for what became the Economic Recovery Tax Act of 1981, a piece of legislation that reduced federal income tax rates by 25 percent over a three-year period. This deep and sweeping tax cut not only meant a cumulative loss of $1 trillion to the Treasury Department by 1987, it also helped to create unprecedented federal deficits during the 1980s. The federal deficit was then used politically to justify “a frontal assault on the revenue base of the modem welfare state” by creating a zero-sum legislative environment, pitting individual programs against each other in the fight for revenues while rendering an expansion of federal social policy extremely difficult.

James Galbraith was one of many who tried in vain to debunk trickle-down theory as “reactionary and deeply implausible,” saying that “it springs from a never-never land of abstract theory concocted over 25 years by the disciples of , Milton Friedman and `, purveyed.” But with few research and advocacy institutions having the money and clout to focus policy attention on such matters as wage stagnation, rising inequality, real and hidden unemployment, and poverty, the “conservative fiscal consensus” triumphed. The government’s main economic management task devolved to balancing the budget, with debate centering on how many years that goal should take. There is “a common ground on economic policy,” lamented Galbraith, “that now stretches with differences only of degree from the radical right to Bill Clinton.’

This conservative victory established a strategy model, set the stage for some of the most aggressively anti-poor legislation in a century, and ushered in a right-wing revolution likely to dominate both policy forums and the popular debate for years to come.

The War on the Poor

As conservative grantees hammered home on the revenue side of national fiscal policy, they did not neglect the expenditure side. Indeed, it is in the particular area of federal anti-poverty programs that conservative grantees have launched their most sustained and vitriolic attacks. In the early 1980s, the Manhattan Institute sponsored and heavily promoted two publications that urged the elimination of federal anti-poverty programs. George Gilder’s book, Wealth and Poverty, contended that poverty was the result of personal irresponsibility coupled with government programs that rewarded and encouraged it; Charles Murray’s Losing Ground: American Social Policy, 1950-1980 extended the argument, stating that AFDC and other anti-poverty programs reduced marriage incentives, discouraged workers from accepting low-wage jobs, and encouraged out-of-wedlock births among low income teenage and adult women. These books were followed by Lawrence Mead’s Beyond Entitlement: The Social Obligations of Citizenship, which blamed governments for perpetuating poverty by failing to require welfare recipients to work.

Other conservative grantees have used their funds for more than a decade to capitalize on and extend the works by Gilder, Murray, and Mead, spreading conservative political rhetoric and policy opinion through major media and conservative controlled print and broadcast outlets. They have redefined the problem by arguing that poverty is a relative concept, that the poor are significantly better off than is popularly understood, that moral failure causes the poor to be poor, and that government action has perpetuated rather than alleviated poverty by coddling the poor and entrapping them in a system that debases and clientizes them.

The 15-year conservative campaign to demonize the poor and eviscerate the government programs that minimally support them culminated in the passage of welfare “reform” in 1996. That legislation dismantled the Aid to Families with Dependent Children, eliminating the only federal program guaranteeing cash assistance to poor women and their children. The antipoor crusade also led to significant cuts in federal anti-poverty spending, with programs serving the poor absorbing a full 93 percent of the 1995 and 1996 budget cuts, even though those programs constituted only 24 percent of all entitlement spending.

The conservative attacks on poor people, affirmative action, and government programs serving low-income constituencies-and their constant reaffirmation of market efficiencies without recognizing market inequities or failure-has not only led to an array of specific policies, but has also inhibited the development of alternative policies to address growing concentrations of poverty and inner-city decline, the social costs of which are astronomical.

Despite recently reported gains in the incomes of poor Americans last year, the nation remains an economically and racially divided one, with more than 40 million Americans lacking health insurance, an appalling 20 percent child poverty rate, a rising prison population, the disappearance of jobs in inner city neighborhoods, and sharp and continuing inequities in education and educational opportunity.  Although such economic inequities and social divisions might be expected to raise serious questions about the nations political ethic, the current institutional forces during federal and state policy debates almost guarantee that these will not even be asked.

Marketing the Product

The proliferation and continued heavy funding of policy institutions such as the American Enterprise Institute (AEI) and the Heritage Foundation threatens to tilt the debate even further to the right on key policy issues and options. These groups flood the media with hundreds of opinion editorials. Their top staff appear as political pundits and policy experts on dozens of television and radio shows across the country And their lobbyists work the legislative arenas, distributing policy proposals, briefing papers, and position statements.

Given the growing political importance of the media, conservative policy institutions have clearly stated the need for strong marketing and communications. “I make no bones about marketing,” said AEl’s former president, William Baroody: we pay as much attention to the dissemination of the product as we do to the content. we’re probably the first major think tank to get into the electronic media. We hire ghost writers for scholars to produce op-ed articles that are sent to the one hundred and one cooperating newspapers-three pieces every two weeks

In the late 1980s, the Heritage Foundation made the same point in an article advising others how to start and run an effective think tank:

The easy part is getting your message right. The real test is getting your message out. .. Everything you do, every day, must involve marketing in as many as six dimensions Market your policy recommendations, market the principles and values behind them, market the tangible publications and events your organization is producing, market the think tank concept itself, then market your specific organizations, and never stop marketing yourself and the other key individuals who personify the organization. “

A decade later, the marketing strategies of conservative institutions are even more sophisticated and aggressive. The Hoover Institutions public affairs office, for example, links to 900 media centers across the US and 450 abroad. The Reason Foundation, a national public policy research organization that also serves as a national clearinghouse on privatization, had 359 television and radio appearances in 1995 and more than 1,500 citations in national newspapers and magazines. The Manhattan Institute has held more than 600 forums or briefings for journalists and policy makers on multiple public policy issues and concerns, from tort reform to federal welfare policy And the National Center for Policy Analysis reports that “NCPA ideas” have been discussed in 573 nationally syndicated columns and 184 wire stories over the 12 years of its existence

Relying not just on the mainstream media to disseminate their ideas, conservative institutions have created a  variety of conservative-controlled media outlets and projects, newsletters and policy journals, web sites, and television and radio broad casting networks. The Claremont Institute for the Study of Statesmanship and Political Philosophy for example, launched a strategic venture in 1995 to co-publish with William F Buckley’s National Review, the National Review West, that goes out to 80,000 political conservatives in the Western states. The Free Congress Foundation, in addition to its National Empowerment Television, is publishing NetNewsNow, a broadcast fax letter sent around the country to more than 400 radio producers and news editors, and the Heartland Institute’s PolicyFax, which makes a variety of easy-to-read policy reports available free to journalists and legislators.

Conservative foundations also provided $2,734,263 to four right-of-center magazines between 1990 and 1993, including the The National Interest, The Public Interest, The New Criterion, and The American Spectator. Over the same time period, however, four left-of-center publications- The Nation, The Progressive, In These Times, and Mother Jones-received only $269,500 from foundations. Based on such funding disparities, one journalist concluded: “America’s conservative philanthropies eagerly fund the enterprise of shaping opinion and defining policy debates, while similar efforts by progressive philanthropies are, by comparison, sporadic and half-hearted.

“Think tank” journals also fit nicely into the conservatives’ broader communications strategy by providing publishing opportunities for conservative thinkers and policy advocates. These in-house publications, as journalist Lawrence Soley has noted, “bear names that closely resemble those of [more] legitimate journals, ” masking the “academic anemia” of think tank staff while giving them apparently impressive publications records. AEl’s William Schneider, for example, published 16 articles in the Institute’s Public Opinion-but not a single article in Public Opinion Quarterly.

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