It's a Wide Spectrum
Private foundations have a wide variety of options for trying to affect public policy without lobbying. Some foundations stay far away from the IRS line for lobbying. Others walk close to it. Here are some examples of public policy grantmaking.
Public Policy Fellows Program
For the past five summers, the Charles G. Koch Charitable Foundation has run a program to give bright college students a chance to study economics and public policy and work as interns at policy-oriented nonprofits in Washington, D.C. The intent is to introduce young people to market-based solutions to problems, says Victoria Hughes, vice president for the Washington, D.C.-based foundation. The foundation pays out approximately $250,000 each summer to house and support 30 studentsand pay George Mason Universitys Center for Market Process to administer the program. Among the organizations that provide internships for the public policy fellows: the Institute for Justice, Capital Research Center, Cato Institute, Citzens for a Sound Economy Foundation, the Federalist Society and the Tax Foundation.
General Support But Not for Lobbying
The Beldon Fund, a private pass-through foundation in Washington, D.C., often gives general support to environmental groups that lobby but doesnt permit its money to be used for lobbying. We believe really strongly that for public policy initiatives to be successful there has to be a process of educating the public, says Beldon Executive Director Diane Ives. Often, she says, the foundation will make a grant before theres any lobbying to be done. For example, in 1995 it gave $15,000 to the Northern Plains Resource Council in Billings, Montana, to work with five other environmental groups to educate the public about threats to clean water in the state. The next year the same organizations went on to fight for a Montana ballot initiative that would restrict the mining industry from polluting the water. When it came time for the group to lobby, Beldon was no longer involved.
Research and Public Education on Campaign Finance Reform
Foundations cannot make grants to charities and earmark them for lobbying. If a foundation makes a general support grant to a charity and the charity decides to spend some of its funds on lobbying within the legal limits, the charity may do so and the foundation hasnt violated any rules. The IRS considers campaigns in support of statewide ballot initiatives to be lobbying.
In a November 1996 referendum, Maine voters passed a lawthe first of its kind in the nationthat permits candidates running for state office to receive a grant from the state to pay for their election campaigns if they refuse all private contributions. Foundations gave grants to a campaign finance reform project run by the Northeast Citizen Action Resource Center (NECARC), a regional organization in Hartford, Connecticut, which made it possible for the Maine referendum to pass.
In this case, just telling the story makes a huge difference, says Nick Nyhart, director of the campaign finance reform project for NECARC. No one really thinks the system is that goodeven the people who benefit from it.
Since 1991, NECARC has been conducting research and public education on campaign finance reform in several states. Foundation moneyfrom the Florence and John Schumann Foundation, Arca Foundation, Carnegie Corporation of New York, and Caritas Fundpaid for nonpartisan research on where campaign money was coming from and why, media work and coalition-building around the general issue of campaign finance reform and the drafting of general proposed policies. Grants helped NECARC find answers to questions such as: What would the ideal campaign finance system look like? How do you take research and get it out into the hands of reporters and decisionmakers? How do you shape a message about campaign finance reform that the public will act on?
NECARC built a coalition in Mainewith participants such as business leaders, the AFL-CIO, the Maine Common Cause, and the Maine American Association of Retired Personsaround the topic of campaign finance reform without directing participants toward any particular solution.
Later, several of the groups in the coalition split off to form an organization to push forand lobby fora referendum on campaign finance reform. This group organized 1,100 volunteers, who collected 65,000 signatures by standing outside polling places on election day in November 1995. The volunteers gathered enough signatures to put the clean money referendum on the November 1996 ballot.
After the campaign finance reform discussions took the form of a ballot initiative, NECARC made the decision use some of its unrestricted funds (or general support funds) for lobbying. These funds come from a wide variety of donors, including foundations.
Nonpartisan Analysis of a Statewide Ballot Measure
Under Section 4945(e) of the Internal Revenue Code, a private foundation such as the California Wellness Foundation cannot make any attempt to influence any legislation . . . other than through making available the results of nonpartisan analysis, study, or research. . . California Wellness acted on the IRSs literal word.
There was no time for a private letter ruling from the Internal Revenue Service. Armed with full legal opinions from two law firms well-versed in nonprofit law, in 1994 the California Wellness Foundation stepped perhaps closer to the IRS line for lobbying than any private foundation had ever trodden before. In an impromptu board meeting held by teleconference call, the California Wellness Foundation decided to fund the Public Media Center, a 501(c)(3), to carry out a media campaign offering nonpartisan analysis of a California ballot measure.
The measure, called Proposition 188, involved smoking regulations. According to San Francisco lawyer Gregory L. Colvin, the proposition resulted from efforts by Phillip Morris to convince voters that the state needed a uniform law on smoking. Colvin represented the foundation and Public Media Center during the media campaign and analyzed the events in the Journal of Taxation of Exempt Organizations (for a copy of A Case Study in Using Private Foundation Funds to Educate Voters, call Silk, Adler & Colvin, 415/421-7555). Supporters of the law called it an anti-smoking measure; yet the Institute of Health Policy at the University of California in San Francisco said it would result in an overall loosening of regulations and a higher level of smoking in the state.
According to Gary Yates, president and CEO of the California Wellness Foundation, the foundation became interested in the initiative because of how the Institute of Health Policy analysis pointed to a potential health problem and because a poll showed that voters were very confused about what the measure meant. The Institute of Health Policy estimated in a March 1994 study that if Proposition 188 passed, it would cost the state from $111 million to $441 million a year in additional medical costs.
The foundation paid $3.9 million for the media campaign. The Alliance Health Foundation, also in California, chipped in $7,500. Colvin calls this the largest single expenditure directed at a piece of legislation since the IRS issued new lobbying regulations for charities in 1990.
The Public Media Center placed ads in newspapers, on the radio and on television using only information from government sources and presenting the facts in a neutral way. A typical ad asked Californians if they knew who the major contributors were on each side of Proposition 188. The ad answered its own question: The Phillip Morris tobacco company is the largest contributor to YES on 188. The American Cancer Society is the largest contributor to NO on 188. After it was all said and done, the ballot initiative was defeated, and California newspapers credited Public Media Center with providing information that led to the defeat.
Gary Yates advises foundations considering similar approaches to make sure they understand both the federal and state laws concerning foundations and public policy. Colvin received a call from a deputy of the state attorney generals office in response to a complaint, but the deputy concluded the foundation was acting within the law. Proponents of Proposition 188 filed a complaint with the states Fair Political Practices Commission, arguing that the media campaign should have been reported as a campaign expenditure, but the commission ruled that it should not have been.
Funding Local Community Meetings
The Burnett Foundation in Fort Worth, Texas, has provided money for Fort Worth community leaders to do some city planning. In the early 1990s, it gave $35,000 in start-up money for the Collaborative Leadership Council. Council members include the Fort Worth mayor, two city council members, the city manager, county government officials and leaders from the public school district, the public housing authority, the chamber of commerce, the transportation authority and the United Way. The group continues to meet monthly to discuss how to handle community issues together. It has coordinated planning in employment, welfare reform and economic development. It formed a childrens health council, which has established a network of school-based primary health care centers.
Three years ago, the Burnett foundation granted $65,000 (other sponsors were the City of Fort Worth, Downtown Fort Worth, Inc., and the Transportation Authority) for a process to plan the development of downtown Fort Worth. Thomas F. Beech, executive vice president of the Burnett Foundation, said the process helped to spur financial commitments from the private and public sectors, which has led to improved retail opportunities, housing, infrastructure, public safety, parking and incentives supporting development. All of these things happen much more effectively when there is a rational and well-thought-out plan, Beech said.
Improving Local News by Educating Journalists
The W.K. Kellogg Foundation in March announced it would give the Foundation for American Communications in Los Angeles a $1.26 million grant for programs to teach journalists how to better cover devolution and environmental issues. The tools for teaching will include conferences to be co-sponsored by news organizations and held all around the country, and an online service that will provide background information for journalists. The curriculum will be big on economic and scientific concepts. It will help journalists to examine welfare, transportation, health care and other public policy issues that are being affected by devolution.
Introducing City Officials and Grantmakers to Each Other
Since 1991, the City Connect program of the New York Regional Association of Grantmakers has organized activities for grantmakers and public officials to meet and discuss common interests. Out of these meetings arose a partnership between New York City and private funders to help small to mid-sized nonprofits in the city apply for federal grants. The city provided office space and data needed for the applications. Private fundersincluding Chase Manhattan Bank, Chemical Bank (now merged with Chase), New York Community Trust and the Joyce Mertz-Gilmore and Booth Ferris foundationsprovided $700,000 over two years to pay for staff to find and circulate information about federal grants and teach organizations how to write good proposals. As a result, 14 organizations that help poor people, from the homeless to the mentally ill, each with budgets of less than $3 million a year, brought in $9.5 million in federal grants.
Grants for litigation are not lobbying since there is no attempt to affect the passage or defeat of legislation.
A minor water rights lawsuit funded with $15,000 from the Bullitt Foundation in Seattle has mushroomed into one of the largest water rights case in the history of Washington state. Heres how it happened.
The Bullitt Foundation gave a grant to the Seattle-based Center for Environmental Law and Policy in 1996 to file an appeal with a statewide hearings board arguing that in the interest of the public, the Department of Natural Resources should not have been given a permit to withdraw water from the Columbia River basin.
The premise underlying the case is that the state agency issuing permits for water rights did not take into consideration how withdrawal of ground waterlets say, digging a well for a housing development or golf coursemay impair the flow of nearby streams or rivers. The lawsuit pointed out how this concept, called hydraulic continuity, has been well documented by scientists and should be emphasized more in the states water rights law.
The states hearings board and Department of Ecology decided that Rachael Paschal, the executive director of the center and the lawyer who was arguing the case, had a good point. In fact, the board realized that 140 other water rights cases sitting on its doorstep at the time had similar issues at stake. The hearings board consolidated the cases to look at the issues common among them and issued a Statewide Order Ruling requiring that hydraulic continuity and public interest be considered in water allocation decisions and disputes. The hearings board then applied the ruling in each of the 140 water rights hearings held across the state.
The ruling, says Denis Hayes, executive director of the Bullitt Foundation, shut down development for the entire state of Washington. This little lawyer with this little case found herself up against the cream of the law firms in Spokane and Seattle. Bullitt followed up with a $70,000 grant for more litigation.
The centers role now is to participate in the ongoing hearings to assure that the state does indeed consider the public interest and apply the statewide order in the cases, explains Michele Lechak, another attorney working on the case. Litigating to keep enough water flowing in streams and rivers to support salmon and other wild life is one way the center fights to protect public interest.
We are now looking at defending our statewide order decision in various state courts, says Lechak. As it stands, the statewide order requires denial of water right applications that threaten stream flows. The center expects several of the cases to go to Washington states supreme court.
Testifying Before Congress
Foundation executives are permitted to testify before Congress about public policy issues. They cannot comment on specific legislation unless the legislation involves self-preservation of foundations or they have received a written invitation from the legislature to do so.
Karen Davis has testified before Congress 15 times since she joined the Commonwealth Fund as president in July 1992. Shes made presentations before congressional committees on Medicaid, Medicare, womens health and health insurance coverage, but hasnt testified on specific legislation. Davis, an economist who worked for the U.S. Department of Health and Human Services under the Carter Administration, testified on health topics 65 times before she became a foundation executive. Shes normally thought of as somebody who should be a witness on these issues, says Mary Lou Russell, director of communication for the Commonwealth Fund. The foundation doesnt do anything to get her invited to testify.
Research Intended to Inform Election Debate
This study avoided lobbying restrictions because it was nonpartisan and disclosed information in a manner that permitted readers to draw their own conclusions.
A survey of womens attitudes about work and family, paid for mostly by foundations, received quite a bit of attention before last Novembers presidential elections. The Washington, D.C.-based Center for Policy Alternatives hired two pollstersa Democrat and a Republicanto survey American women about their solutions for some of todays problems. The center then presented the solutions to anyone who was trying to win a vote in the election.
After the study was released, both the Democratic and Republican parties called staff of the Center for Policy Alternatives over to their headquarters for briefings. Staff were also invited to speak about the survey at an annual meeting of the National Conference of State Legislators.
The Ford and Nokomis foundations and the Rockefeller Family and Swanee Hunt funds picked up $105,000 of the $150,000 tab for the study. The rest was paid for by individuals.
Called Womens Voices, the survey found that 83 percent of American women work full time and 79 percent of married women with children work full time. It reported that the two biggest problems facing women today are combining work and family and receiving equal pay for equal work. One solution favored by women was tax incentives to support expanded child care and the creation of small businesses, even if it means higher taxes.
Articles about Womens Voices appeared in the Chicago Tribune and Washington Post. Carol Kleiman, a columnist for the Chicago Tribune, called it one of the best end-of-the-year employment studies shed seen and reported the findings in detail. The White House has since invited the center to work with it to plan a conference on women and the economy.
Books About Public Policy
In Newt Gingrichs first speech in 1995, after he was elected Speaker of the U.S. House of Representatives, he mentioned four books that he thought the American people should read. One of them was the Tragedy of American Compassion, by Marvin Olasky, a professor of journalism at the University of Texas at Austin. Olasky wrote about how people who receive welfare or other social help in America should be expected to give something in return.
Olaskys book was published by Crossway Books in Wheaton, Illinois, but research for the book was paid for through the Heritage Foundation by the Lynde and Harry Bradley Foundation in Milwaukee. Each year the Bradley Foundation gives the Heritage Foundation $350,000 to produce three books about public policy. The books are intended to have scholarly rigor but commercial appeal, says Adam Meyerson, who edits the books and the Heritage Foundation publication Policy Review. The goal of the books program, he says, is to promote institutions that represent the revival of self government and citizen involvement in the United States.
The Heritage Foundation tries to find commercial publishers for each of the books. In 1996, Free Press published a Heritage Foundation book promoting the conservative view of corporate social responsibilityThe Heroic Enterprise; Business and the Common Good, by John Hood, president of the John Locke Foundation in Raleigh, North Carolina. In 1998, Free Press will publish a Heritage Foundation book by John Miller, vice president of the Center for Equal Opportunity, about the movement to Americanize immigrants at the turn of the century. In the works is a book by David Dalin, a rabbi and associate professor of Jewish history at the University of Hartford. His book will be entitled, Helping Others to Help Themselves: The Jewish Philanthropic Tradition From Biblical Israel to Modern America.
General Support for Public Education
Grants for effecting change in government regulatory agencies, such as the U.S. Food and Drug Administration, are not lobbying because specific legislation is not involved.
A foundation-funded nonprofit has done a great deal to bring the French abortion pill, known as RU-486, to the United States. The nonprofit, Reproductive Health Technologies Project, directed by Marie Bass, brought together for meetings people interested in the drug, urged them to agree on the need for and safety of the drug, and used them as sources for educational materials. The project targeted the medical community, media, reproductive health and reproductive rights organizations and policymakers, including both elected officials and appointed officials at local, state and national levels. We wanted people to know a very good product that could save people from a surgical abortion was not in this country purely because people were scared of the politics of abortion, says Bass.
The drug, called mifepristone in the United States, can be taken up to seven weeks after conception. It causes the equivalency of a miscarriage.
The project helped focus everybody on getting through the political process that brought mifepristone to the FDA, says Gloria Feldt, president of Planned Parenthood Federation of America.
Last September, the Food and Drug Administration approved mifepristone, the generic name for the pill, as safe and effective. The FDA is still working out details concerning the manufacturing and distribution of the drug. Its expected the drug will be on the market by the end of the year.
The Wallace Alexander Gerbode Foundation was one of the first funders of the project; it gave a $30,000 general support grant to Reproductive Health Technologies Project in 1988 and helped to get other funders interested. The organization has been completely funded by foundations, including the David and Lucile Packard Foundation, Ford Foundation, Wallace Global Fund, and Moriah Fund. The Gerbode foundation and the Stewart R. Mott Charitable Trust gave program related investments to the company that was expected to distribute the pill.