The MacArthur Foundation
A donor without a cause spawns a foundation with an agenda
(Foundation Watch, September 2005 PDF here)
With assets of nearly $5 billion, annual grants totaling $180 million, extensive name recognition, and global influence, the MacArthur Foundation is nothing if not secure. Perhaps that’s why it can’t recognize its own leftist political leanings.
What do the Federation of American Scientists, the American Civil Liberties Union, the Arms Control Association, the League of Women Voters, the Coalition for the International Criminal Court, and the National Commission on Energy Policy have in common–aside from solid leftist credentials? Each receives funding from the John D. and Catherine T. MacArthur Foundation.
John D. MacArthur was a hardheaded entrepreneur who created Bankers Life and Trust, a pioneering insurance company. But when MacArthur died in 1978 at age 80, he made the worst mistake a donor could possibly make: he left his fortune to charity without instructions on how it should be spent.
In a 1982 interview with Foundation News, MacArthur’s lawyer, William Kirby, said that MacArthur told him, “Bill, I’m going to do what I know best, I’ll make it. But you people, after I’m dead, will have to learn how to spend it.” Kirby said that on several occasions he asked MacArthur “to do something big for charities.” MacArthur explained that he wanted to defer the disposition of his fortune until after his death: “If I was trying to decide who to give the money to right now, I couldn’t sit at this coffee table, because I’d be bothered day and night. They’d all be after me to try and get my money, and I couldn’t lead the life I want to lead. So leave me in peace.”
When the MacArthur Foundation began, conservatives, most notably William Simon, dominated its board. But a titanic power struggle soon occurred, led by MacArthur’s far more liberal son, J. Roderick MacArthur. The conservatives were all ousted from the board by 1981, and the John D. and Catherine T. MacArthur Foundation has been a reliably liberal institution ever since.
The MacArthur Foundation is best known for the MacArthur Fellows Program, the “genius grants” which give its winners unrestricted $500,000 grants paid out over five years. Yet even though nearly all of the articles one reads about the MacArthur Foundation focus on the MacArthur Fellowships, the Fellows Program is in fact the smallest of the foundation’s four divisions. In 2004, MacArthur gave $178.4 million in grants. Of this, the MacArthur Fellows Program accounted for $11.6 million–about seven percent of the total MacArthur grants. (See my article in the January 1996 Philanthropy, Culture, and Society, available at www.capitalresearch.org.)
What is the MacArthur Foundation spending its money on? Given its large size–with assets of almost $5 billion, it is the nation’s ninth-largest foundation–one can’t cover all of MacArthur’s activities. But in this article I will cover the most important of MacArthur’s domestic and foreign programs.
As in many large foundations, the top officers of the MacArthur Foundation are very well compensated. A 2004 investigation by Chicago Sun-Times reporter Cheryl L. Reed found that MacArthur’s five highest-ranking officers collectively earned $2.4 million in 2003. (Chief financial officer Lyn Hutton, for instance, earned $764,904 in 2003.) For every dollar MacArthur spends on grants, it spends forty cents on overhead and administrative charges. Whenever MacArthur board members go to Chicago for meetings, for example, they stay at the Four Seasons, where the rack rate for rooms is $385 a night. In 2002, five MacArthur board members and one spouse went to Africa on a weeklong fact-finding mission that cost the foundation $63,137. A six-day trip in 2003 for four board members and three spouses to Moscow cost the foundation $73,723.
Radio commentator Paul Harvey was a close friend of John D. MacArthur, and served on the MacArthur Foundation board from 1978-2002. He reminded the Sun-Times that the founder prided himself on his thrift. “Mr. Mac could have afforded such luxurious travel, and yet he never did” take fancy trips, Harvey said. “He never had private yachts or private jets.” Had the founder known of the board’s extravagance, Harvey added, “He would have been exasperated, embarrassed, frustrated, and utterly unsympathetic. He would have loved to bang some heads together.”
“If my grandfather were alive today, he would have utter contempt for the MacArthur Foundation,” added Harper’s Magazine publisher John R. “Rick” MacArthur, son of J. Roderick MacArthur. “There’s no question that my father and grandfather wanted the lowest overhead possible.”
After reporter Reed’s investigative article appeared, Chicago Alderman Edward M. Burke demanded that the Illinois Attorney General investigate the MacArthur Foundation’s salaries and overhead policies, saying that he thought MacArthur salaries were “excessive” and that the foundation should spend more on “various needy causes.” If the Illinois Attorney General’s office has launched an investigation, it has not made its findings public.
John D. MacArthur was not only a thrifty man; like most of the founders of large foundations, he was a political conservative who treasured the free-market system that gave him the chance to accumulate his vast fortune. As someone whose enterprises were the subjects of intense government scrutiny (at one point in the 1950s, 14 state insurance commissioners tried–and failed–to show that MacArthur had broken the law) he developed an intense distaste for government bureaucracy and regulation.
MacArthur’s views on many issues are not known, because he was not a writer and gave relatively few interviews. His best-known comment came in a 1974 interview in Nation’s Business, in which he denounced environmentalists who tried to block development of properties he owned in Florida as “bearded jerks and little old ladies” who “are obstructionists and just throw rocks in your path.”
Jonathan Fanton has been president of the MacArthur Foundation since 1999. He has taken some pains to deny his foundation’s liberalism. In a 2001 interview in Philanthropy, for example, he offered proof of its nonpartisanship by pointing to its grants to organizations such as the Aspen Institute “that have conferences involving a full range of people?we try to promote conversation on the issues and have all points of view represented.”
In 2004, Fanton responded to a Wall Street Journal op-ed by William Simon Foundation president James Piereson that charged that the MacArthur Foundation was “firmly in the grip of orthodox liberalism.” Fanton said that the goal of his foundation was to “try to bridge rather than reinforce ideological divides, hoping that evidence will help the public and policy makers move beyond their preconceptions to find solutions that work.”
“I hope no one fails to put ideas and requests for support before the MacArthur Foundation because they self-censor in the belief that only ‘orthodox liberalism’ is welcome,” Fanton added.
In at least one case, Fanton said that leftist donors had gone too far. In 2002, Steve Kirsch, a Silicon Valley entrepreneur, announced that he was going to spend millions on an organization with the working title of “The Vast Left-Wing Conspiracy,” which he said would be the left-wing counterpart to Americans for Tax Reform. Fanton said that it was a bad idea for donors to give money to an organization that thought it already had the answers to public policy problems. “To go all the way to where a foundation thinks it has the answer and it’s going to try to work that answer through to a solution, that’s a more difficult question,” Fanton told the Wall Street Journal.
It is true that a small amount of MacArthur’s money goes to center-right organizations. Between 2001-2004, MacArthur gave three grants to the Center for Strategic and International Studies totaling $1.25 million for research into nuclear nonproliferation, Russian missile development, and biological weapons. The American Enterprise Institute received two grants totaling $100,000 for research into presidential succession in the event of a terrorist attack.
But this small amount given to the Right has been dwarfed by MacArthur’s stalwart support of the Left. For instance, the MacArthur Foundation showers money on arms controllers, including in the 2001-04 period the Arms Control Association ($650,000), the Center for Arms Control and Non-Proliferation ($575,000), the Center for Defense Information ($650,000), the Federation of American Scientists ($2.5 million), the Pugwash Conferences ($350,000), U.S. Pugwash ($150,000), and the Union of Concerned Scientists ($1.4 million).
A subsection of MacArthur’s funding of research on “pursuit of security here and abroad” is labeled “protecting fundamental values.” Here all of the grants go to left-wing groups including the American Civil Liberties Union ($1.25 million), the Center for Democracy and Technology ($250,000), the Center for Investigative Reporting ($250,000 “for support of a documentary film entitled No Place to Hide: Stories from a Surveillance Society”), the Chicago Lawyers Committee for Civil Rights Under Law ($65,000 “for work designed to reduce the evidence of hate crime and likely landlord and employer discrimination toward persons of Middle Eastern ancestry”), the League of Women Voters Education Fund ($225,000 “for support of the project called Local Voices Citizen Conversations on Civil Liberties and Secure Communities”), and Physicians for Human Rights ($200,000 “to send three two-person teams to the Afghanistan region to monitor and document the human rights situation there”).
Finally, MacArthur money is used to promote arms-control advocacy to the public. Between 2001-04, MacArthur awarded $400,000 to National Public Radio for reporting on terrorism and $500,000 to the WGBH Educational Foundation for support of “Frontline,” the public television documentary series. The Chicago Council on Foreign Relations also received $100,000 “in support of public education and networking related to the September 11 attacks.”
One of Fanton’s grantees, Human Rights Watch, which received $250,000 in 2001-04, has special resonance for him. On the morning of September 11, 2001, Fanton was chairing a Human Rights Watch board meeting in the Empire State Building when the Twin Towers were destroyed. “I saw the second plane plough into the World Trade Center,” Fanton told Philanthropy News Digest. “It was a sight never to be forgotten.” Yet he still doles out funds to Human Rights Watch, which has been more eager to point out American abuses in Iraq than any abuse by terrorists.
MacArthur’s Great Victory
In recent years Fanton has tried to concentrate his foundation’s resources on more limited areas of research. During 2000-2003, the MacArthur Foundation cut its staff by 24 percent and reduced the number of organizations to which it gave grants by a third. After its endowment fell in 2001-02, it even contracted out some of the initial screening of grant applications to nonprofits. For example, the foundation authorized Local Initiatives Support Corp. to do a preliminary screening of Chicago-area grant requests–which led some to complain that LISC was too closely connected to the office of Mayor Richard Daley and might veto grant proposals from the mayor’s foes.
Program pruning has indeed taken place, and the MacArthur Foundation now divides its initiatives into four programs: Global and Security Studies, Human and Community Development, General, and the MacArthur Fellows Program.
Domestically, the MacArthur Foundation prefers to support a few ideas with lots of money. For example, the foundation has, over several years, spent $23.6 million (or as much as it spends on two years of MacArthur Fellowships) on the research of Felton Earls, a professor at the Harvard School of Public Health, who is studying the reasons why neighborhoods go bad and criminals gain the upper hand. Many criminologists and police departments support the “broken windows” theory of James Q. Wilson and George Kelling, which argues that ignoring small crimes like not repairing windows broken by vandals gives a signal to bad guys that they won’t be punished if they commit more substantial crimes. But Earls argues that rather than try to punish all crimes (including very minor ones), police might do a better job fighting crime if they figured out ways to encourage neighbors to work together and solve community problems. Community cooperation, not more arrests, is the answer. Using his MacArthur grants and $18 million from the National Institute for Justice, Earls research teams have conducted extensive research on neighborhoods, including slowly driving a camera-laden SUV down 11,498 blocks in Chicago to record everything within the cameras’ view. They then compared their visual findings to police records in each neighborhood and conducted thousands of personal surveys.
MacArthur also spends a great deal on “juvenile justice reform.” In recent decades, there’s been growing pressure to streamline the juvenile justice system so that many juveniles–particularly alleged murderers–are tried as adults. But MacArthur grants fund both scholars and activists who oppose this position. In 2005, when the Supreme Court declared the death penalty for criminals under age 18 unconstitutional, the MacArthur Foundation could justly claim that it had scored a great victory.
When the U.S. Supreme Court ruled 5-4 in its March 2005 decision in Roper v. Simmons that the death penalty for minors was unconstitutional, many critics objected to Justice Anthony Kennedy’s citation of international treaties and foreign laws to support his position. Less noted were Kennedy’s five citations to the article, “Less Guilty By Reason of Adolescence,” by Laurence Steinberg and MacArthur Network member Elizabeth Scott.
Since the late 1990s, MacArthur money has funded work on juvenile justice and adolescence, particularly the research of Temple University psychologist Laurence Steinberg. Steinberg directs the MacArthur Foundation Research Network on Adolescent Development, whose members have argued that the brain continues to mature until the mid-twenties, and that 16- and 17-year-olds have immature brains that are unable to tell the difference between right and wrong. Therefore, Steinberg argues, teenagers under age 18 should not be tried as adults, and should not be subject to the death penalty, even if they are convicted of heinous murders. (He argues that children under age 15 should not be tried at all.)
“Most rational people would say we shouldn’t expose 6-year-olds to the death penalty because they’re too immature and that 25 year-olds are old enough to be held to some standard,” Steinberg told the Boston Globe. “Where do we draw the line?” (However, Steinberg admitted in a Washington Post op-ed that John Lee Malvo, the teen given a life sentence for his role in the 2002 series of sniper shootings in the Washington, D.C. area, “is not the best poster boy for repeal of the juvenile death penalty.”)
While Steinberg and his associates provide the intellectual justification for relaxing punishments against teenagers, two other MacArthur grantees lobby to make Steinberg’s ideas case law. The Coalition for Juvenile Justice, a professional association for juvenile justice case officers, received $435,000 between 2001-04 to publish reports calling for a rollback of the juvenile death penalty. The Justice Policy Institute received $300,000 during the same period from MacArthur during the same period “in support of policy advocacy and communications planning to promote juvenile justice policy reform in targeted states.”
The MacArthur Foundation’s interest in housing issues reveals its commitment to failed approaches. In November 2003, MacArthur announced that it would spend $50 million to try to preserve rental housing that would otherwise decay or be turned into condominiums. The grants would be given to community development corporations in several states, who would use the funds as capital to be loaned at below prevailing interest rates to cash-poor landlords who otherwise couldn’t afford to make repairs on their properties.
MacArthur is also aiding low-income neighborhoods in Chicago through the New Communities Project, which began in 2003. MacArthur is the largest grantmaker in this project, and has committed $17 million to it over a five-year period. The Annie E. Casey, Lloyd A. Fry, Polk Bros., and Surdna foundations, as well as Nationwide Insurance have committed an additional $7 million.
The New Communities Project is supervised by the Local Initiatives Support Corp., which subcontracts grants to 14 community development corporations (CDCs). These CDCs use the funds to hire staffers who then work with members of the community to come up with plans about what residents want their communities to be like. “Most often, it’s planning done to or for neighborhoods, not by them,” notes Chicago Tribune columnist John McCarron. “But what about plans laid by neighbors themselves–plans that haven’t been officially commissioned or required?”
The New Communities Project is relatively young, and it’s too soon to say whether or not these carefully wrought community-generated plans will actually improve neighborhoods or will be shelved by bureaucrats and left to collect dust. But skepticism about the project is justified given Jonathan Fanton’s hearty endorsement of other failed government housing programs that use subsidies, vouchers and loans to improve housing opportunities. Writing in the Chicago Sun-Times this March, Fanton opposed proposed Bush administration cuts in two Housing and Urban Development (HUD) programs known as HOPE VI and Community Development Block Grants (CDBG) would “have serious unintended consequences in cities like Chicago?. Cuts like those proposed to HUD’s budget may seem necessary at first glance, but ultimately they are shortsighted when one weighs their costs against their benefits.”
The Cato Institute, in a report on cutting the Federal budget, revealed how CDBG money is misdirected. It has been spent on “revitalizing shopping malls in California and building parking lots in New York,” and has been disproportionately allocated to already wealthy jurisdictions. And among HOPE VI’s many problems, the Dallas Morning News reported in 2000 that the program has built a great deal of its low-income housing in polluted areas close to factories, and critics have pointed out that HOPE effectively cements a segregated population in place.
Given Fanton’s hearty endorsement of failed federal housing policies, it is difficult to see whether the MacArthur Foundation’s investment in the New Communities Program will transform blighted inner-city neighborhoods or tighten the bonds that shackle poor people to the welfare state.
Programs: Dialogues, Movies,
and the ICC
Jonathan Fanton says that the MacArthur Foundation’s quite substantial grants to arms-control organizations are used “to combat the dangers of weapons of mass destruction and their delivery systems.” For example, a $2.3 million grant in 2004 went to the American Association for the Advancement of Science to create the Center for Science, Technology, and Security Policy. The goal of the center is to replicate the Office of Technology Assessment, a Congressional report-generating agency that ceased its operations in the late 1990s after a budget cut.
Other terrorist-fighting grants venture farther afield. The League of Women Voters Education Fund, for example, is using its $225,000 MacArthur grant to “foster public dialogue about the balance between civil liberties and homeland security.” “In this post-September 11th world, it is critical for all communities to explore the relationship between these two important topics,” says Education Fund chair Kay J. Maxwell. But has anyone’s mind ever been changed by one of these foundation-funded “dialogues”? And no one doubts that the outcome of the dialogues of such a deeply liberal organization are rigged–the League announced months in advance that the results of its recent “Local Voices” dialogues on civil liberties would be compiled and “released in the fall to coincide with the debate about the sunset provisions of the USA PATRIOT Act.” Surely the group wouldn’t have planned that unless it knew beforehand where its dialogues would end up.
Perhaps realizing that most Americans don’t read arms control reports or attend foundation-funded “dialogues,” MacArthur Foundation program officers have entered the feature-film business. In collaboration with the Carnegie Corporation, MacArthur funded the Nuclear Threat Initiative, a group founded by Ted Turner and former U.S. Senator Sam Nunn (D-GA), to produce “Last Best Chance,” a 45-minute docudrama in which the president of the U.S. (played by former US Senator Fred Thompson, who stars on “Law and Order”) confronts al-Qaeda-backed terrorists armed with multiple nuclear warheads.
The Nuclear Threat Initiative was unable to sell the docudrama to a network or to cable TV, possibly because a show vetted by arms-control wonks lacks entertainment value. Here’s some sample dialogue, between President Thompson and his Russian counterpart:
Fred Thompson: “As you know, you have dozens of facilities and hundreds of tons of nuclear materials that are not secure. Together we started trying to lock it down 10 years ago. If we had finished that job, we wouldn’t be having this conversation, but we both have layers of bureaucrats fighting over trivial terms.”
Russian President: “For some, it is not so trivial. You demand access to our most sensitive sites. My intelligence people call that spying.”
The Nuclear Threat Initiative is giving away DVDs of its docudrama to anyone who visits its website (lastbestchance.org). As of July 2005, the initiative says that it has given away 42,000 copies of the DVD. Berkshire Hathaway Chairman Warren Buffett endorsed the production and has encouraged the members of his board to watch the show.
The MacArthur Foundation also has distributed $1.7 million to bolster the International Criminal Court (ICC). The ICC was created in 2002, but the United States refused to sign the treaty supporting the organization and does not participate in ICC deliberations.
MacArthur grants have gone to three pro-ICC organizations. The Coalition for the International Criminal Court received $1.4 million “to raise awareness of the Court at both the national and international levels–among key officials, law enforcement and the general public–as well as developing a stronger base for support of the ICC.” The coalition is based in the offices of the World Federalist Association, the venerable Brussels-based one-world organization. In addition, MacArthur granted $196,000 to the Nigeria Coalition on the International Criminal Court to support pro-ICC lobbying in that nation and $162,000 to Redress Trust, a London-based organization that plans to use the money to ensure that “victims of human rights abuses are able to access and participate in the investigation of crimes and other proceedings of the International Criminal Court.”
In an op-ed published in the Los Angeles Times this March, Jonathan Fanton argued that the U.S. has nothing to fear from the ICC and should end its opposition. But critics fear the ICC may become a cudgel for those opposed to U.S. foreign policy, and they worry over its implications for national sovereignty. The fact that the ICC issued over one hundred charges against U.S. citizens in its first few years of existence–despite the fact that the U.S. is not party to the treaty that created it–provides ample justification for such fears.
On energy policy MacArthur money has gone to support the National Commission on Energy Policy, whose chairmen–John P. Holdren, the Teresa and John Heinz Professor of Environmental Policy at Harvard; William K. Reilly, Environmental Protection Agency administrator during the George H.W. Bush administration; and John Rowe, CEO of Exelon Corp., an electric power producer–and whose primary funders–the Hewlett, Energy, and Packard foundations and the Pew Charitable Trusts–almost guarantee a call for at least some restrictions on corporations in the name of global climate change.
The commission’s report, issued in December 2004, called for restrictions on greenhouse gas emissions by American corporations, though they are less draconian than those in the Kyoto Treaty. Commissioners also wanted increased government subsidies to construct an Alaskan natural-gas pipeline, funded research into new types of hybrid and electric cars, and studies of ways to produce ethanol from products other than corn. The commission also called for tightening the Corporate Average Fuel Economy (CAFE) standards, which punishes producers of gas-guzzling cars.
In his “President’s Essay” in the MacArthur Foundation’s 2004 annual report, Jonathan Fanton wrote that the foundation “is independent and nonpartisan, devoted to objective research that can inform public policy.”
Now it’s certainly true that MacArthur doesn’t fund as many activists as, say, the Ford Foundation. Nor is it as committed to creating activist organizations as the Pew Charitable Trusts is. But let’s review the research the foundation supports: MacArthur Foundation grantees oppose the death penalty, support increased environmental regulation, support failed public housing programs, and support international bureaucracies. On nearly every issue, MacArthur grantees favor ever-expanding, more intrusive government.
Given MacArthur’s funding history, it’s likely that in the future, MacArthur will continue to be one of the Left’s best friends. There will occasionally be a grant to a center-right organization, and conservatives may even be allowed to attend a MacArthur-backed conference. But the likelihood of more balanced spending from MacArthur is vanishingly small.
The MacArthur Foundation is one of the largest and most powerful foundations in America. So why is Jonathan Fanton afraid to admit that it is a pillar of the liberal philanthropic establishment?
Martin Morse Wooster is a visiting fellow at the Capital Research Center.
George Soros and the Judiciary
Following a less-traveled fork on the billionaire’s money trail
by Joseph de Feo
Last month’s Foundation Watch documented billionaire currency trader George Soros’s hope to add the Bush administration to his impressive list of toppled governments. His plans for the executive and legislative branches in 2004 have come to naught, but his money trail indicates a three-pronged attack: Soros money is helping to fuel the ongoing judicial confirmation battle.
For years, Soros has been donating to groups that deal with judicial matters. On the state level, Soros supports groups that seek to eliminate judicial election or impose severe campaign finance restrictions on them–under the rubric of “protecting judicial independence.” Other grants go to organizations that seek to reform the criminal justice system, for instance, by “reducing the excessive reliance on punishment and incarceration in the United States.” These grants are too numerous to list, but a good example is the League of Women Voters, which received over $500,000 between 2001 and 2004 for its grassroots work to promote a “fair and independent judiciary.”
The Supreme Court vacancy has focused attention on pressure groups ready to “bork” again. Below are the most significant contributions Soros’s Open Society Foundation has made to prominent groups in the debate over judicial nominations:
— Alliance for Justice: In 2002 received $75,000 for First Monday 2002 (a recruitment drive held every year on the day the Supreme Court opens its session). In 2003 received $175,000 for “the Independent Court Action Network which will address judicial selection issues.” Headed by Nan Aron, the group is a leader in the judicial fight.
— American Bar Association: Received $960,000 between 2001 and 2004 to support the work of the Standing Committee on Judicial Independence.
— The American Constitution Society for Law and Policy: In 2004 received $156,500 “to support an ACS ‘teach-in’ project on the importance of judicial appointments.” It also got $250,000 for general support and $270,000 for its Constitution in the 21st Century project.
— Leadership Conference Education Fund, Inc.: In 2003 received $100,000 “to support a public education campaign aimed at improving public understanding of…the need to ensure that fair and moderate judges who are committed to civil and constitutional rights are appointed to the federal bench.” In 2004 received $125,000 to support its judicial nominations project and $240,000 “to support a public education project to improve public understanding of the need for a fair and impartial federal judiciary.”
— National Women’s Law Center: In 2003 received $200,000 “to support the Federal Courts Project, a public education project to improve public understanding of the need for a fair and impartial federal judiciary.” Soros’s 2004 donation for $300,000 was earmarked for the group’s Reproductive Rights and Health Program; however, the NWLC states, “Currently this [reproductive rights and health] work includes judicial nominations advocacy.”
— People for the American Way Foundation: In 2003 received $150,000 “to support the Supreme Court project.”
The records indicate that Soros’s donations to groups dealing with federal nominations are a recent development, perhaps spurred by his defeats in the other branches of government. We’ll know for sure when records of Soros’s post-election giving are released. Stay tuned.