Rockefeller’s Dubious “Resilience” Push

Rodin

Rockefeller’s Dubious “Resilience” Push
A large old foundation tries to stay sexy but can’t even persuade its White House pals to dance with it
By Martin Morse Wooster, Foundation Watch, April 2016, (PDF here)

Summary: The Rockefeller Foundation is trying not to show its age by wrapping itself in the wisps of “new ideas” it hopes will cover up its failure to achieve much in recent years, to say nothing of its failure to respect the donor intent of its sternly religious, entrepreneurial founder. Not long ago, president Judith Rodin embarrassed herself by trying to parlay her friendship with the Clintons into a plum governmental appointment, but she couldn’t quite manage it.

The Rockefeller Foundation celebrated its centennial in 2013. Its mission has been redefined several times since its creation. But what it stands for today is vague notions about “resilience” and spending an inordinate amount of its budget on publicists.

Like most great philanthropists of his era, John Davison Rockefeller Sr. (1839-1937) practiced charity from a very early age. A devout Close Communion Baptist, he believed that helping the less fortunate was a necessary part of life. As Rockefeller’s biographers, John Ensor Harr and Peter J. Johnson note, “there was no question that Rockefeller’s exclusive motivation for giving was his religious conviction and the old-fashioned concept of stewardship, not the expiation of guilt or the buying of public favor.”

Rockefeller made his fortune as an oil refiner. The company he founded, Standard Oil, was one of America’s great companies until the Supreme Court ordered it broken up in 1911. (The largest pieces became ExxonMobil, Chevron, and a portion of BP.)
In the 1890s, Rockefeller’s fortune grew exponentially, particularly after gasoline was transformed from a non-essential product of oil refining into an indispensable motor fuel. Biographer Ron Chernow estimates that Rockefeller’s fortune increased tenfold after his retirement from Standard Oil in 1897, making him the first billionaire in America and arguably the world.

The vastness of his wealth was almost unimaginable.

“By the time Rockefeller died in 1937, his assets equaled 1.5% of America’s total economic output,” writes Carl O’Connell. “To control an equivalent share today would require a net worth of about $340 billion dollars, more than four times that of Bill Gates, currently the world’s richest man” (Forbes.com, July 11, 2014)

Rockefeller was business-like and methodical in his philanthropic endeavors. “I investigated and worked myself almost to a nervous breakdown in groping my way, without sufficient guide or chart, through the ever-widening field of philanthropic endeavor. It was forced upon me to organize and plan this department upon as distinct lines of progress as our other business affairs.

“I have always indulged the hope that during my life I should be able to establish efficiency in giving, so that wealth may be of greater use to the present and future generations. If the people can be educated to help themselves, we strike at the root of many of the evils of the world.”

He also contributed heavily to education, founding the University of Chicago and the Rockefeller Institute for Medical Research that eventually became Rockefeller University. Like many rich donors, Rockefeller was surrounded by mendicants wanting a piece of his giant fortune. His chief philanthropic adviser, the Rev. Frederick T. Gates, urged him to practice “wholesale” instead of “retail” philanthropy, giving large grants to a smaller number of organizations rather than a large number of small grants.

A $100,000 grant in 1905 to the American Board of Commissioners for Foreign Missions to promote Congregationalism overseas was to prove wildly controversial. His critics seized on a piece the Congregational Church’s moderator, the Rev. Washington Gladden, had written a decade before, in which he denounced giving by the rich as “tainted money” and declared these fortunes had been acquired “by methods as heartless, as cynically iniquitous as any that were employed by the Roman plunderers or robber barons of the Dark Ages.”

“Is this clean money?” Gladden declared. “Can any man, can any institution, knowing its origins, touch it without being defiled?”

The Congregational Church did not come to the Rockefellers by whim or chance. The Foreign Missions Board, an arm of the National Baptist Convention, USA, Inc., had been corresponding with the Rockefellers since 1902, and both John D. Rockefeller Jr. and Gates spoke to board members before the grant was made. Foreign Missions Board secretary James D. Barton wrote, “I never had any question whatsoever regarding the propriety or even the duty of soliciting help for the needy institutions and work of the board from Mr. Rockefeller, as from other people of means who are members in good and regular standing of Christian churches.”

The attacks from Rockefeller’s critics were exacerbated by Rockefeller’s refusal to address them or to ally himself with potential defenders of his wealth. Eventually, Gates persuaded Rockefeller to address the “tainted money” question by setting up a foundation. After failed attempts to get a congressional charter, the Rockefeller Foundation obtained a New York state charter and began operations in 1913.

As historian Robert Kohler notes, there were two factions that fought over how Rockefeller Foundation money would be used. The more liberal faction wanted Rockefeller wealth to solve social problems. But it lost to a less liberal faction, led by Gates, which wanted the foundation to concentrate its wealth on non-political medical and scientific causes. In addition, Gates, a follower of “Manchester school” free-market economists Richard Cobden and John Bright, did not want Rockefeller funds directed to government entities. (Gates was forced to retire from the foundation in 1922 after losing a fight over whether a grant should be given to the University of Iowa’s medical school.)

John D. Rockefeller stopped having anything to do with the Rockefeller Foundation after 1919. In that year he wrote to his lawyer, Starr Murphy, saying that he thought “the education that some professors furnish” was “drifting, in cases, toward socialism and some forms of Bolshevism.” He asked Murphy if it would be possible to use foundation money to deal with the problem of “textbooks which from my standpoint at least, are calculated to lead astray and do more harm than good.”

Murphy responded with the claim that such a grant would violate academic freedom and “it would be extremely unwise for any donor to attempt to place limitations on the character of the teaching which shall be given in an institution to which he contributes.” Rockefeller then went into retirement and is not known to have made any further attempts to influence the foundation. (For more on the sad story of Rockefeller’s donor intent being ignored by those who gained control of his charitable fortune, see Martin Morse Wooster, The Great Philanthropists and the Problem of ‘Donor Intent.’ The Capital Research Center will publish a fourth edition of this work later this year.)

In its founding era, the foundation’s great strength was its funding of medical research and other scientific ventures. The Rockefeller Institute for Medical Research (now Rockefeller University) underwrote many important, Nobel Prize-winning discoveries, including developing the vaccine for yellow fever and helping advance the production of penicillin.

The foundation also played a crucial role in helping great European intellectuals, most notably physicist Leo Szilard and author Thomas Mann, escape Nazi-dominated Europe in the 1930s.

Unfortunately, the Rockefeller Foundation also helped promote the growth of racist ideology in the 1930s through its support of eugenics. As Wikipedia summarizes this chapter of the foundation’s history:

Beginning in 1930 the Rockefeller Foundation provided financial support to the Kaiser Wilhelm Institute of Anthropology, Human Heredity, and Eugenics, which later inspired and conducted eugenics experiments in the Third Reich. The Rockefeller Foundation funded Nazi racial studies even after it was clear that this research was being used to rationalize the demonizing of Jews and other groups. Up until 1939 the Rockefeller Foundation was funding research used to support Nazi racial science studies at the Kaiser Wilhelm Institute of Anthropology, Human Heredity, and Eugenics (KWIA.) Reports submitted to Rockefeller did not hide what these studies were being used to justify, but Rockefeller continued the funding and refrained from criticizing this research so closely derived from Nazi ideology. The Rockefeller Foundation did not alert ‘the world to the nature of German science and the racist folly’ that German anthropology promulgated, and Rockefeller funded, for years after the passage of the 1935 Nuremberg racial laws [in the words of anthropologist Gretchen Schafft]. The Rockefeller Foundation, along with the Carnegie Institution, was the primary financier for the Eugenics Record Office, until 1939. [The Eugenics Records Office was a leading advocacy group for forced sterilization of the “socially inadequate.”]

In the 1950s, the Rockefeller Foundation played a dubious role in social science. It was an early funder of the population control movement, albeit as a junior partner to the Ford Foundation in its efforts to curtail population growth. Rockefeller money also funded Alfred Kinsey’s research on human sexual behavior, which has since been attacked for failing to uphold proper scientific standards and for contributing to a sexual “revolution” that has encouraged social trends that especially harm poor families.

The Rockefeller Foundation’s greatest achievement in its first century was the “Green Revolution” which began in Mexico in 1943 and continued in Latin America and Asia until the 1990s. Led by Norman Borlaug, winner of the 1970 Nobel Peace Prize, Rockefeller-funded agricultural researchers developed new strains of wheat and rice, which led to dramatically improved crop yields, which in turn helped to feed tens of millions of people who might otherwise have starved.

The Rockefeller Foundation and Divestment
At the end of 2014, the Rockefeller Foundation reported having assets of $4.2 billion, making it the fourteenth-largest foundation in the United States, according to the Foundation Center. David Rockefeller Jr., 74, a great-grandson of John D. Rockefeller, is chairman of the board, a position he has held since 2010. (He has been a trustee since 2006.) David is the only Rockefeller family member currently serving as a Rockefeller Foundation trustee.

The Rockefeller Foundation also retains ties with the wealth that ensured its creation. In 2014, newspapers around the world announced that “the Rockefeller family” and its allied foundations had divested themselves of stocks in hydrocarbon-fuel companies. “Rockefellers Go Green: Rockefeller Foundation Divests Funds in Fossil Fuel Industries,” read a headline in the British newspaper The Independent.

“The American family that for decades has been synonymous not just with great riches but with riches created by oil said on Monday that it was moving to divest itself entirely from all oil and fossil fuel interests,” wrote David Usborne.

Divestmentfacts.org, a blog of the Independent Petroleum Association of America, provides some clarity. The Rockefeller Foundation did not in fact divest any fossil fuel stocks. The “Rockefeller foundation” in the headline was the far-smaller Rockefeller Brothers Fund, created in 1940 as the personal philanthropic vehicle of the five sons of John D. Rockefeller Jr. It was joined in the divestment effort in March 2016 by the Rockefeller Family Fund, created in 1967 to serve the philanthropic interests of the great-grandchildren of John D. Rockefeller. (I analyze the history of the Rockefeller Brothers Fund and the Rockefeller Family Fund in the January 2005 Foundation Watch.)

The fund’s chair, Valerie Rockefeller Wayne (a daughter of former Sen. John D. Rockefeller IV, a West Virginia Democrat), was the only descendant of the family patriarch present at the Rockefeller Brothers Fund press conference announcing the divestment.

As Michael Bastasch noted in the Daily Caller, a year after the Rockefeller Brothers Fund announced its divestment, the share of the fund’s endowment in fossil fuels had only fallen from 5.5 percent to 4.5 percent. The fund said it would take several more years to rid itself of its fossil fuel stocks.

One winner in the divestment was former Vice President Al Gore, because the fund announced it was putting a total of $67.5 million into four “green” investment funds. One of the four, Generation Climate Solutions II, was a $750 million fund created by Gore and his partners in 2014. (To buy into this fund requires a minimum investment of $3 million.) It was unclear how much of the Rockefeller Brothers Fund’s endowment will go to Gore’s fund.

All About Judith Rodin
Since 2004, the Rockefeller Foundation’s president has been Judith Rodin, who was previously the president of the University of Pennsylvania. A 2006 profile of Rodin in the Economist noted that in her first two years at Rockefeller, 58 people—nearly a third of the staff—had left. Rodin, the magazine said, “now talks of the ‘new Rockefeller,’ while deploying the favourite buzzwords of the new philanthropists, stressing the importance of being ‘strategic,’ of ‘leveraging’ the relatively small sums of money at its disposal (it makes grants of around $100 m a year) through partnerships, and, above all, of achieving ‘impact.’”

Rodin is a close friend of both Bill and Hillary Clinton. Her friendship has tied her—and the Rockefeller Foundation—into the continuing scandals over Hillary Clinton’s use of a private Internet server to transmit government emails, many highly classified, while she was Secretary of State.

At issue is the role of Huma Abedin, who served as Clinton’s chief of staff between 2009 and 2012. Early in 2012, Abedin (who gave birth to a son in December 2011) asked to leave the government and become a “special government advisor” to the State Department. Her request was granted, and in March 2012 Abedin was simultaneously a part-time government employee (making $62 an hour), a consultant to the Bill, Hillary and Chelsea Clinton Foundation, and a consultant to Teneo, a consulting firm run by Doug Band, a long-time assistant to Bill Clinton.

Abedin’s work for Teneo and the Clinton Foundation is of intense interest to the Federal Bureau of Investigation in its continuing probe of the Clinton email scandal. As Judicial Watch notes, Teneo is “a global consulting firm with deep Clinton connections. Teneo serves as a kind of private-enterprise satellite to Clinton Inc. … Bill Clinton was both a paid adviser to Teneo and a client.”

“Teneo is rather shadowy, with only a few known corporate clients,” Judicial Watch notes. One of them was the Rockefeller Foundation, which paid Teneo $5.7 million in 2012. In addition Rockefeller has donated at least $1.8 million to the Clinton Foundation since 2007.

In September 2015, Politico obtained an April 10, 2012 email chain between Doug Band and Huma Abedin regarding Judith Rodin’s desire to be appointed to the President’s Global Development Council, an unpaid position. Band, in an email whose subject line was “She is expecting us to help her get appointed to this,” noted the Rockefeller Foundation’s payments to Teneo and to the Clinton Foundation.

“Judy rodin, huge foundation/cgi supporter and close pal of wjc Teneo reps her as well Can you help?” [original punctuation in email]

As Politico reporter Rachael Bade notes, “wjc” is a reference to William Jefferson Clinton, and “foundation” is likely the Clinton Foundation. “Cgi” is probably a reference to the Clinton Global Initiative, which sprang out of the Clinton Foundation. (For more on the dubious activities of the Clinton Foundation, see the May 2015 and September 2014 issues of Foundation Watch.) The next link in the chain came from Teneo senior vice president Orson Porter to Teneo managing director Tom Shea. “Could someone from [Sen. Chuck] Schumer’s office place a call to the WH?”

“Doug is willing to push with Valerie or HRC, but I can’t find out who the decision maker is,” Shea wrote. (“Valerie” is probably a reference to President Obama’s senior adviser, Valerie Jarrett.)

Orson Porter then wrote to Doug Band. “Hey brother—it’s been a lift in the white house. She [Rodin] is not on anyone’s friend list—VJ’s office promised to send it up the flag pole, but they will need to hear from someone outside of us—I keep pushing Tom to have a congressional office send a note. Do you think Bruce Reed would be helpful?” (Reed was Vice President Joe Biden’s chief of staff.)

Next Porter emailed Band saying, “a huma call to USAID would be helpful.” Band then forwarded the entire email exchange to Abedin with his note. Nothing happened. So on May 22, 2012 Porter forwarded the entire email exchange to Band with a new note. “DB, I haven’t heard anything from the WH on this appointment (Judy R_.) Did you have any luck with the State Department?”

Rodin never received the appointment. Sen. Charles Grassley (R-Iowa), chairman of the Senate Judiciary Committee and a long-time philanthropy watchdog, said the Rodin episode was “a troubling example of Teneo and the Clinton Foundation seeking State Department help for a Teneo client and Clinton Foundation supporter” that raised “serious questions” about “potential conflicts of interest” surrounding Abedin’s multiple employers.

The Nonprofit Quarterly’s redoubtable Rick Cohen noted in September that the Rockefeller Foundation’s IRS filings show that between 2011 and 2013, the philanthropy paid Teneo $18.5 million, including $7.4 million in 2013. By contrast, the next four contractors to the Rockefeller Foundation—all of which were banks or investment firms—received a combined total of $11.5 million during this period. Cohen noted that although Rockefeller said it stopped funding Teneo, it’s not clear when the cut-off took place. The foundation’s 2014 IRS 990-PF form does not disclose payments to Teneo and its 990-PF form for 2015 was not publicly available at press time.

Cohen opined that if you’re a foundation CEO wanting a government position, “it probably doesn’t hurt if a foundation can shell out high seven-figure contracts to a PR firm that happens to be run by an aide to former President Clinton and a close associate to key staff of Hillary Clinton.”

The Rockefeller Foundation responded to the story through its chief of staff, Patrick Brennan. He said Rodin followed “standard procedures” in her failed attempt to be appointed to the Global Development Council. He said that the large sums paid to Teneo were to “manage the development and implementation of the Global Centennial programming. During this time, Teneo was also engaged to assess the Foundation’s strategic and operational communications needs and to staff the communications office on an interim basis.”

Brennan said much of the money given to Teneo was paid to subcontractors who assisted in launching “significant global convenings, extensive digital engagements, innovation competitions for funding, and a series of in-depth publications” that showed “the positive impact of our grantees.” Brennan did not identify these subcontractors and did not explain why Rockefeller felt compelled to spend vast sums promoting itself.

Big Ideas and Shallow Ones
Perhaps one reason why the Rockefeller Foundation spends so much money on promotion is that it has very few ideas. Currently, its chief idea is that the foundation should stress “resilience,” and the primary goal of the foundation is to make cities more resilient. “We’re trying to transform systems and create tipping points, not just make individual grants to individual organizations,” Rodin told the New York Times in 2010.

In 2014 PublicAffairs published Rodin’s book, The Resilience Dividend, describing her ideas of how organizations can become more resilient. She discussed her book on “The Charlie Rose Show.”

“In the 21st century, crises may be the new normal,” Rodin said. “There actually isn’t a week that goes by that somewhere in the world there isn’t a violent storm, a flood, or a cyber attack, civil unrest, a new epidemic, an outbreak like Ebola. And so those who are going to do best are those who are prepared for the worst, no matter what the worst may be.”

In 2013, the Rockefeller Foundation announced a global competition in which it would pay 100 cities $1 million each to create a position called “chief resilience officer.” At the time of this writing, the foundation had awarded grants to 67 cities, with a final tranche of 33 cities to be selected later this year.

Still, it’s clear that the final amount that Rockefeller will expend will be less than $100 million. “Cities only receive direct funding to hire a CRO, and those costs vary from city to city,” the foundation states on its “100 Resilient Cities” website. “Therefore, it is important to note that cities will not be receiving a check for $1 million.” The foundation says, however, that “the value of its core offerings,” which includes “technical support to develop a holistic resilience strategy…and inclusion in the 100 Resilient Cities Network,” are worth more than $1 million.

Cash-strapped cities eagerly applied for the Rockefeller grants, happy to pad their budgets with a foundation-funded freebie. But what does a chief resilience officer do—and why is one necessary? Aren’t cities already funding disaster planning?

The foundation admits that cities don’t have much money, but “resilience offers a way to maximize benefit for the cost, allowing governments to spend to their funds [sic] in the best way possible, which is important in a time of fiscal austerity and budget cuts.” The foundation offered no evidence that their grants would pass an objective test of costs versus benefits.

Different cities have different interpretations of what a chief resilience officer does. St. Louis, Mo., for example, says it needs a chief resilience officer to deal with problems of civil unrest, such as the riots that enveloped nearby Ferguson in 2015. “A major and protracted event of civil unrest or rioting in the city of St. Louis could radically alter, weaken, and delay the city’s prospects for continuing revival and revitalization,” according to the city’s successful application.

Montreal, Canada, by contrast, was traumatized by a major rail disaster in nearby Lac-Mégantic in 2013. The city plans to use its chief resilience officer for disaster planning.

One aim of the resilience effort is to convince cities to spend a great deal of money combating alleged near-term effects of climate change. This past December, the foundation announced the creation of the “Detailed Resilience Pledge” at the United Nations Climate Change Conference (COP 21) in Paris. If a hypothetical mayor of a city pledges to spend “the equivalent of 10 percent of the city’s budget per annum to fund defined resilience goals, as outlined in our [current or future] Resilience Strategy, for each fiscal year that I remain in office,” the city is promised $5 million “in Platform Partner goods and services” from the Rockefeller Foundation and its corporate allies.

The press release accompanying the pledge states that cities that shift their budgets towards resilience would do so “without additional funds or taxes.” The release offered no details of any penalties cities would suffer if they boosted taxes to pay for “resilience.”

The American cities signing this pledge included Berkeley and Oakland in California, Boulder, Colo., New Orleans, La., Norfolk, Va., and Tulsa, Okla. These cities joined with other world cities such as Athens, Mexico City, Paris, Rio de Janeiro, and Rotterdam.

In January, the Rockefeller Foundation unveiled one of its products. It announced it was teaming up with the Swiss Re and Veolia companies to offer cities assessments of their “risk exposure of critical assets under current and future climate scenarios.” Neither company is a disinterested observer. Veolia is a French firm that is a European leader in contracts for waste disposal and water supply, but its North American business is relatively limited. Swiss Re is a “reinsurer” (an insurer that insures other insurers) beloved by environmentalists for issuing gloomy forecasts of the consequences of climate change, perhaps because the company well knows that the more dire the prophecy, the more money it can charge in premiums.

Another facet of Rockefeller’s focus on “resilience” came in the form of a commission on “planetary health” that was a collaboration between the foundation and the staff of the Lancet, a British medical journal. The commission published a report last July that offered a “comprehensive action framework to safeguard planetary health” which “requires strengthening resilience and governance capacity.”

The report called on countries to perform various measures to save the planet, including punitive increases in taxes on “alcohol, tobacco, refined sugars, and ultra-processed foods. As the Commission points out, these products harm the health of the planet and its people. Their production results in higher greenhouse gas emissions, land use change, and agrochemical pollution. There is a large opportunity for progress in this area. In 2013, only 3% of countries had taxes on high-fat foods.”

Conclusion
In her 12 years as Rockefeller Foundation president, Judith Rodin has transformed her foundation into a crusading environmentalist war chest focused on making cities “resilient.” It was a big idea, which is more than you can say for most old, large, liberal foundations that are bereft of ideas.

But it remains to be seen if “chief resilience officers” are a good idea. History shows that when foundations spend large sums to change government bureaucracies, the bureaucracy absorbs the money but changes very little. Recall that in the 1990s the Annenberg Foundation spent hundreds of millions of dollars to reform public schools. Yet the schools changed very little, and the foundation received an infinitesimal return on its investment. (I discuss the Annenberg Foundation episode in my book Great Philanthropic Mistakes.) In 2010, Facebook CEO Mark Zuckerberg tried to change Newark, New Jersey’s public schools through a $100 million grant. But as author Dale Russakoff showed in his 2015 book, The Prize: Who’s in Charge of America’s Schools?, the effect of Zuckerberg’s money was to help senior teachers have a more comfortable retirement. Very little of Zuckerberg’s lavish gift helped students do better in school. (Zuckerberg’s philanthropy was examined in the February 2016 Foundation Watch.)

Given this pattern, it’s quite likely that 10 years from now we will see that the Rockefeller Foundation’s efforts to aid “resilience” have done very little to change how cities are governed or managed.

As for the episode involving Judith Rodin and Teneo, the foundation will likely be required to show what it spent the tens of millions of dollars in grants to Teneo on. Most likely, the subcontractors spent the funds on lavish conferences where the great and the good tell each other how special they are.

The story of the Rockefeller Foundation reminds us that the most effective foundations are the ones with the smallest communications offices. The foundation presidents who are the most productive are the ones with the smallest egos.

Martin Morse Wooster is senior fellow at the Capital Research Center. He is author of several books, including Should Foundations Live Forever? and The Great Philanthropists and the Problem of ‘Donor Intent,’ now in its third edition. Capital Research Center will publish an expanded fourth edition of The Great Philanthropists later this year.

FW

Share this post!