Foundation Watch

Lesson to New Health Foundation: Fund Health, Not Politics


In the world of philanthropy, not every grantmaking giant lumbers into the spotlight; some materialize overnight. Take the Mother Cabrini Health Foundation (MCHF), which opened its doors on May 8 and immediately became a behemoth foundation and the largest solely based in New York State.

The health legacy foundation was born out of the sale of Fidelis Care, a nonprofit health entity, to the for-profit Medicare/Medicaid provider Centene Corporation. The resulting foundation already commands a whopping $3.2 billion in assets, from which it is expected to make $150 million grants each year—making MCHF the second-largest health legacy foundation in the nation.

While the MCHF intends to use its vast resources for a noble cause—aiding the health of poor New Yorkers and immigrants in keeping with the work of its namesake, the Roman Catholic saint, Sister Frances Xavier Cabrini—the same can’t necessarily be said of the nation’s first-largest health legacy foundation: the California Endowment.

Like MCHF, the California Endowment sprang to life following a deal struck in 1996 between the state of California and the Blue Cross of California, when that organization acquired a for-profit subsidiary, WellPoint Health Networks.

It’s a peculiar situation further muddled by the California Endowment’s wealth: between 1999 and 2016, the Endowment gave a staggering $2.5 billion in 18,813 grants to various community-based organizations. Federal filings for 2016 show the group had over $3.6 billion in assets. And as a 501(c)(3) private foundation, that money’s virtually tax-free. As James Taranto pointed out in the Wall Street Journal in 2013:

[The Endowment’s] net investment income for the year was more than $160 million. If you took in that kind of money, you’d pay a federal income tax of 15% (20% effective this year), or $24 million ($32 million), and lefties would scream that you should be paying more like 40%.

As a 501(c)(3), the endowment paid an excise tax of 1%, or around $1.7 million [emphasis added].

And who are beneficiaries of the California Endowment’s generous contributions? The Endowment is a major funder of genuine nonprofit health entities like the Public Health Institute and the group CALM (Child Abuse Listening Mediation).

But a huge amount of the Endowment’s millions go to two politically active groups on the Left: the Tides Center and the Tides Foundation. Since 1999, the Endowment has funded the Tides Center to the tune of $96.8 million in 249 grants, and paid the Tides Foundation another $51.4 million. Together, the Tides groups have functioned as two of the Left’s biggest pass-through organizations—funneling millions of dollars from liberal donors and foundations to fund a flock of left-wing organizations, including Planned Parenthood, Black Lives Matter, 350.org, and the Sierra Club Foundation. They’ve also incubated dozens of such groups, like People for the American Way and the Natural Resources Defense Council.

The California Endowment also funds the Hispanic advocacy group UnidosUS ($1.55 million since 2003), the pro-DACA group Center for Community Change ($3.9 million since 1999), and the George Soros-funded Alliance for Justice ($2.1 million since 2005).

The Endowment was even involved in a 2012 campaign for Obamacare called “Health Happens Here.” As part of that campaign, it launched a video in January 2013 called “California Teens Demand a Plan to End Violence” depicting primarily Latino and African American children demanding stricter gun control laws. But when the Daily Caller asked the tax-exempt California Endowment about the overtly political message of the video, a staffer told the reporter, “We don’t take a position on legislation.”

The Endowment’s decision to dance on the edge of political activism isn’t surprising considering that many of its board of directors are wealthy liberals with left-wing pedigrees: a former board member of MALDEF (a Latino advocacy group); an Arcus Foundation board member; a senior research associate at the Cesar Chavez Institute for Public Policy; and a former ACLU staff attorney who later served as legal director for the San Francisco-based National Center for Lesbian Rights. The foundation has a worrying skew to the Left—and a lot of money to fund its board members’ favorite political causes.

Certainly, the Mother Cabrini Health Foundation’s goal of helping the poor and improving health in New York should be applauded, and it has the financial resources to make a big splash. But its leaders and supporters should avoid the unfortunate example set by the California Endowment. Leave the advocacy to other nonprofits and concentrate instead on the mental and physical well-being of people in need of health services. Anything else could do more harm than good.

Hayden Ludwig

Hayden Ludwig is a Research Analyst at Capital Research Center. He is a native of Orange County, California, and a graduate of Sonoma State University.
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