Foundation Watch

The Rhode Island Community Foundation at the Century Mark


Summary: The Rhode Island Community Foundation, which turned 100 years old last year, is a massive hub of activity in a tiny state. The problem is its grant-making focuses on causes dear to the Left, in betrayal of its founders’ intentions.

Ask Rhode Islanders what they are most proud of and they will tell you that the smallest state in the Union occupies a special place in America’s history. Rhode Island was the first colony to declare its independence from the British crown, but the last state to ratify the U.S. Constitution.

In fact, Rhode Island boycotted the 1787 Constitutional Convention in Philadelphia and refused to ratify the U.S. Constitution until after the Bill of Rights was added.

Nicknamed the Ocean State because of its many bays and inlets that let in the Atlantic Ocean, Rhode Island (full name: the State of Rhode Island and Providence Plantations) has a story to tell about the way that laudable charitable efforts have been converted over time to advance left-of-center crusades. As it turns out, the policies advocated in these crusades are often at odds with the convictions of the state’s citizens today and with the benefactors who originally endowed the foundation. (See the extensive writings of Capital Research Center’s senior fellow Martin Morse Wooster on the betrayal of “donor intent.” The fourth edition of his seminal book, The Great Philanthropists and the Problem of ‘Donor Intent,’ will be published by CRC later this year.)

Unfortunately, the betrayal of donor intent in favor of radical politics is an all-too-familiar story for Americans devoted to constitutionally limited government who struggle to resist a well-funded network of left-wing organizations. But it’s a story that the Ocean State is well-positioned to tell through the Rhode Island Community Foundation (which also does business simply as the Rhode Island Foundation) now that it has passed the 100-year mark.

On June 13, 1916, a small group of prominent citizens gathered at the Rhode Island Hospital Trust Building to establish the Rhode Island Community Foundation. According to the foundation, “It was modeled after the first community foundation established in Cleveland two years earlier. ‘There is a growing belief that the charitable problems of each generation can better be, and should be, solved by the best minds of each generation,’ the founders wrote.”

The key player at this meeting was Jesse H. Metcalf, a wealthy industrialist from Providence who would later be elected to the U.S. Senate as a Republican representing Rhode Island from 1924 to 1937. Metcalf’s initial donation of $10,000 gave life to the foundation in 1916 as a small charitable trust.

But today, with $792 million in assets, the foundation bills itself as Rhode Island’s largest grantmaker, awarding more than $40 million a year, according to its annual reports.

In 2015 it gave away $41.5 million in grants and took in $43 million in donations. Last year, in honor of its 100th anniversary, the foundation gave Centennial Community Grants to fund community-building activities in every city and town in the state. The foundation is also leading a $10 million campaign to preserve Roger Williams Park, a lush and spacious city park named after the colony’s founder that covers more than 400 acres in Providence.

So far, so good. Metcalf would be pleased.

But not all of the foundation’s donations have been funneled in the direction of benign, charitable causes. Recent IRS filings show the philanthropy has directed much of its funding to left-of-center organizations, with a particular emphasis on green groups that support so-called sustainable development exercises connected with the U.S. Department of Housing and Urban Development (HUD) and the United Nations. The foundation has also made substantial contributions to organizations some Ocean State residents describe as “anti-capitalist” and “anti-free market,” and has a penchant for supporting outfits devoted to the dubious abstraction known as social justice.

Judging from the Foreword in a booklet the foundation circulated at the time of its inception to describe its charitable mission, the Rhode Island citizens who gathered with Metcalf at the Hospital Trust Co. a century ago seem like they would have been more inclined to support ideologically neutral community development programs than the left-wing causes that have burrowed into the foundation today. The Foreword reads in part:

Many persons conscious of their obligations to the community and state, desire to make gifts, large or small for the public advantage, during their lifetime, or by means of devise or request by will. They often find difficulty, however, in selecting objects for their generosity which are enduring in their nature and which they may be assured will permanently receive safe, economical and intelligent management. To aid such persons the Rhode Island Hospital Trust Company has prepared a plan to be known as the Rhode Island Foundation, under which it will become a trustee of such funds as may be placed in its charge with this purpose in view, and which it offers for consideration….

The trustees described the foundation’s mission as one rooted in the “upbuilding of Rhode Island—the strengthening of philanthropy, the relief of distress, and the conserving of resources, which might otherwise be dissipated.”

But the trustees also made clear that the foundation “will have a varied field for its helpful activities” and that it “may aid permanent enterprises of a charitable or humanitarian character” and provide emergency funds in time of need.

Challenges and needs change over time. So, it was certainly reasonable to provide the foundation with something in the way of latitude going forward. But it’s also evident from this document that the foundation was conceived and organized in apolitical terms with an eye toward the broad public interest as opposed to narrow special interests.

RHODE ISLAND POLITICS

Since the Great Depression, Rhode Island has been a reliably Democratic state—Hillary Clinton won 54.4 percent of the state’s popular vote versus Donald Trump’s 38.9 percent. But there is at least one important caveat: As of April 2016, most voters were unaffliated with either major political party, according to the voter database in the secretary of state’s office. There are 380,000 unaffiliated voters, 295,000 Democrats, and 78,000 Republicans.

A 2012 analysis of Rhode Island politics by Micah Cohen declared “Rhode Island is the most elastic state, a large swatch of its electorate are persuadable voters unaligned with either political party” (New York Times, Oct. 18, 2012).

Today, Rhode Island also plays host to a growing Tea Party movement that draws from a broad cross-section of concerned citizens opposed to big government schemes. Clearly, not everyone in Rhode Island concurs with the public policy orientation of the liberal organizations that receive generous sums of money from the foundation.

Hundreds of Ocean State Tea Party activists have turned out in force each year on Tax Day at the Rhode Island State House in Providence to protest higher taxes. Another top priority of the RI Tea Party is to galvanize citizen opposition to a “sustainable development,” “smart growth” plan known as RhodeMap Rhode Island.

HUD provided the initial funding for RhodeMap RI through a Sustainable Communities Regional Planning Grant in 2011. In this e ort HUD has partnered with the EPA and the U.S. Department of Transportation. e Rhode Island Division of Planning is responsible for administering RhodeMap RI, which it describes as a statewide strategy to bolster the economy and meet “current and future housing needs” while planning for “future growth through the development of integrated plans and guidance consistent with existing strategies for transportation, land use and environmental protection.”

But within this nebulous jargon about “sustainable development,” Tea Party critics of RhodeMap RI see too large of an opening for big government and centralized planning. Mark Zaccaria, a former chairman of the state Republican Committee, says these concerns are well-grounded, given the “fine print” attached to the HUD grants.

“The ultimate goal is to have something like 75 percent of our landmass go back to wilderness and to pack the population into certain areas with restrictions on the kind of housing that is permitted,” Zaccaria told The Daily Signal, the news site of the Heritage Foundation. “There’s also a certain emphasis on public transportation, which means personal, individual transportation means like automobiles are now considered a bad thing, and you’re going to see taxes and regulations on automobiles.”

Since the foundation is “populated with liberals” who support centralized planning under the guise of “sustainable development,” Zaccaria suspects that any group committed to advancing this political agenda will nd it is eligible for nancial support. And in truth, Earthjustice, EcoRI News, the Climate Action Network, the Environment Council of Rhode Island, the Environmental Justice League of Rhode Island, and Grow Smart Rhode Island have each received tens of thousands of dollars in donations from the foundation in recent years, according to IRS lings.

In 2013, Earthjustice received $10,000, EcoRI News received more than $30,000, the Environment Council of Rhode Island received more than $29,000, the Environmental Justice League of Rhode Island received more than $70,000, and Grow Smart Rhode Island received $112,000. In 2014, the Environment Council of RI received more than $140,000 and Grow Smart received more than $114,000.

The contributions to Grow Smart RI cry out for special scrutiny, because that nonprofit has emerged as a high-profile supporter of RhodeMap RI. Grow Smart is built around a coalition of business leaders, religious leaders, university presidents, builders, realtors, historic preservationists, environmentalists, affordable housing experts, and municipal planners who all have a vested interest in “sustainable and equitable economic growth.”

WHAT IS SUSTAINABLE DEVELOPMENT?

So what exactly is meant by “sustainable development”? Why are the grantmakers inside the Rhode Island Community Foundation and the political figures in the Rhode Island General Assembly so keen on the idea? And what are the ramifications for communities in Rhode Island that adopt “smart growth” plans within the framework of sustainable development?

Bonner Cohen, a senior fellow with the National Center for Public Policy Research, has some insights. The concept of sustainable development, he explains, was first introduced as part of “Agenda 21,” the 800-page global warming blueprint adopted at the U.N. Conference on Environmental Development at Rio de Janeiro in June 1992. But the blueprint dances around a specific definition.

“The lack of any clear understanding of what is and is not sustainable bestows a huge amount of discretionary power in the hands of regulators and other government officials acting in accord with a term whose meaning is withheld from the public,” Cohen warns. He adds:

Smart growth is a sub-set of sustainable development. The former is primarily concerned with land use and transportation in urban, suburban, exurban, and, more recently, rural areas. Sustainable development covers a broad spectrum of issues, including, smart growth, agriculture, energy, building codes and building materials, “sustainable” manufacture of products sold in retail outlets, “green” chemicals, etc.

Mike Puyana, president of the Rhode Island Tea Party, has expressed concern that the “smart growth” schemes that the foundation continues to fund are designed to “push people out of rural areas and into more highly concentrated, densely packed urbanized communities.”

He has good cause for concern, because that kind of coerced urbanization is precisely what former Governor Lincoln Chafee’s “Land Use 2025” plan envisioned and what his successor continues to pursue. The portion of the document that deals with urbanization should most concern Rhode Islanders:

This pattern of low density, large lot, single use and scattered sprawl development unnecessarily consumes vast natural resources, requires redundant taxpayer investments in facilities and infrastructure and is not sustainable. Land Use 2025 established an Urban Services Boundary (USB) that covers areas of the state with existing infrastructure resources and traditional population centers. It also built on the concept of growth centers—areas within and outside the USB that can be the target of denser development at rural, suburban and urban scales….

In the name of “sustainable development” and its close cousin “smart growth,” Chafee’s government favored “a more efficient pattern of land use” built around “growth centers” as an alternative to “sprawl.”

This vision has carried over into the administration of Governor Gina Raimondo (D). But as the Rhode Island Tea Party makes clear, not everyone is on board with centralized planning from Providence and Washington, D.C. Unfortunately for Puyana and other Tea Party supporters, the foundation’s big-government policy preferences do not end with RhodeMap RI.

COVERT LEFTIST GRANTS

Other left-leaning recipients of the foundation’s largess include Planned Parenthood branches in Rhode Island and Massachusetts; Direct Action for Rights and Equality, an anti-capitalist “social justice” group; the Economic Progress Institute, a Rhode Island-based progressive research group; and the Rhode Island Coalition Against Gun Violence, which seeks new gun controls.

While each of these grant recipients pursues overt policy goals, the foundation is adept at couching its donations in the language of community service that camouflages

any political overtones. In a June 2015 press release that discussed a $250,000 grant program, Neil Steinberg, the foundation’s president and CEO, said, “Supporting the development of a comprehensive primary care system that promotes healthy lives is a core strategic initiative for us. These grants will further our ongoing efforts to make quality health care more accessible and a ordable across the state.”

Who can object to that?

But what does it mean in practice? Well, Planned Parenthood of Southern New England received $50,000 from the foundation as part of this particular grant program to “expand its services in Providence to include certain forms of primary care to better serve the community.” Tax records from 2014 show Planned Parenthood of Southern New England received more than $65,000 from the foundation that year.

Another clearly left-wing grantee is Direct Action for Rights and Equality, which is based in Providence and claims to advocate on behalf of “poor and working class families, people of color, oppressed nationalities including immigrants regardless of documentation status, women, LGBTQ community members and youth.” Direct Action also “fights against” capitalism, which it describes as “oppression of the poor and working class by the rich and ruling class.” In 2013, Direct Action received $23,500 from the foundation, which apparently does not count as part of the rich and ruling class, even though it enjoys assets of upwards of a billion dollars and its president receives annual compensation over $500,000.

Yet another grantee fighting hard for a left-wing political agenda is the Economic Progress Institute, which testified on behalf of legislation for a carbon tax, a higher minimum wage, increased unemployment benefits, penalties on employers for “wage theft,” and drivers’ licenses for illegal aliens. It received more than $65,000 from the foundation in 2013 and more than $105,000 in 2014.

A CONDUIT FOR TAXPAYER-FUNDED LEFTISM

While everyone in Rhode Island is entitled to their own political beliefs, Tea Party activists argue that tax dollars shouldn’t be used to advocate for policy choices that run counter to many taxpayers’ convictions. But government records show the Rhode Island Community Foundation

has received roughly $600,000 from the state’s Office of the Health Insurance Commissioner since 2013, causing Puyana, the Tea Party group president, to complain that the foundation is a conduit for taxpayer-funded leftism.

“The Rhode Island Foundation is getting hundreds of thousands of dollars in taxpayer money, and that includes my money, and the money of other taxpayers, which are going to support groups and causes that I would never voluntarily donate my money to and that many other taxpayers would never voluntarily donate their money to. Many of us agree that this money is going to support an agenda we don’t think is in Rhode Island’s best interests,” he says.

“Take a good, hard look at the groups the foundation is funding, and you will see it is a who’s who list of every loony left entity that is out there.”

After The Daily Signal ran a news story in January 2016 calling attention to the connection between the foundation and taxpayer funds, a spokesman for the foundation told local media outlets that the foundation did not actually benefit from taxpayer funding and was instead just a “pass-through” agent. The $600,000 figure that can be pulled up on the RI government’s transparency site were grants made out to an entity called the Rhode Island Chronic Care Sustainability Initiative, the spokesman explained, and the foundation simply served as a fiscal agent.

This explanation was acceptable to WPRI reporter Ted Nesi, who tweeted out the foundation’s spin, and to other local media, but not to Justin Katz, the lead researcher for the Rhode Island Center for Freedom and Prosperity, a free-market think tank.

If the foundation were simply a “pass-through,” it should be simple to find a nonprofit other than the foundation which received the money. But as Katz points out in a blog post, a GuideStar search of listings for the Rhode Island Chronic Care Sustainability Initiative (CSI-RI) produces no results and neither does a search of the secretary of state’s corporate database.

Moreover, a fact sheet available through the state Office of the Health Insurance Commissioner describes the initiative as a program, not an organization, administered by the Rhode Island Community Foundation. Katz also asked for and received documents related to the grants from the state health commissioner’s office to the foundation.

“A review of the 75-page Access to Public Records Act (APRA) response does not leave the reader with the impression that the Rhode Island Foundation is simply a pass-through entity processing payments for some other organization,” Katz wrote.

“The official contract and invoice language acknowledges that the foundation is the sole fiduciary for the CSI-RI, but that fact is presented as a reason that the Foundation should be awarded a no bid contract.”

The language of the agreement demonstrates that the foundation was hired on behalf of CSI-RI to complete a series of tasks, Katz concludes. Furthermore, these tasks are described as “RIF Activities” for which the foundation is invoicing the state.

So it’s clear the foundation is benefiting from taxpayer funds in some form.

What should Rhode Island taxpayers who object to RhodeMap RI and other left-wing initiatives make of the spin from the foundation?

“Watching progressives, like those who run the Rhode Island Foundation, operate raises the question of whether they’re knowingly manipulating the system or truly can’t see that what they’re doing is unfair and wrong,” Katz says. “One gets the sense that they’re sincere, but that they’re operating under the same rules as a theocracy. They think their beliefs are objectively correct and that their actions are true charity that is legitimately imposed on taxpayers.”

Katz continued:

“Of course, the standard is completely different for those who start from conflicting assumptions. at which they see as charity is treated as if it is nakedly political, and often an outright attempt to undermine people’s rights.”

GETTING COZY WITH GOV. RAIMONDO?

The Rhode Island Community Foundation provided partial funding for a $1.3 million study from the Brookings Institution, a left-leaning think tank in Washington D.C. which some free-market critics see as an extension of RhodeMap RI.

The foundation and its team appear at the top of a list of “major stakeholders” consulted for the report entitled, “Rhode Island Innovates,” which was released in January last year. The report identifies seven industries worthy of private and public investment to spur economic growth

in the Ocean State, namely, biomedical innovation; information technology software, cyberphysical systems, and data analytics; defense shipbuilding and maritime; advanced business services; design, food, and custom manufacturing; transportation, distribution, and logistics; and arts, education, hospitality, and tourism. But here’s the kicker: Brookings recommends public and private spending in those areas totaling, and possibly exceeding, $100 million.

Mike Stenhouse, CEO of the RI Center for Freedom and Prosperity, describes the Brookings plan as “trickle-down socialism.” The governor, the Rhode Island Community Foundation, and Brookings have conspired to create a “big-government set of recommendations” that will only lay more burdens on the state’s already beleaguered taxpayer’s, Stenhouse warned in an op-ed for the Providence Journal.

“Rhode Islanders do not want more of the same special interest deals that have dragged down our economy for decades,” Stenhouse wrote.

“We do not want state government controlling major industries via a complex system of socialized tax giveaways. Conversely, we need broad market-based reforms that put every family and business owner on a level and more competitive playing field, both in-state and regionally, with a better chance to improve the quality of their lives. is is the philosophical difference between a big-government and a free-enterprise approach.”

Chris Barnett, a spokesman for the Rhode Island Community Foundation, has defended his organization’s support for left-of-center outfits that attract Tea Party-type critics. “In a state with one million people, we’re sure even someone who finds fault with one of our investments still benefits from our work in many ways,” he has reassured the media.

Stenhouse, the Center’s CEO, does credit the foundation for many of the efforts built around its centennial celebration, such as the restoration of the Roger Williams Park. But he also sees the Left operating at any unfair financial advantage, thanks in no small part to the foundation.

“It is a conflict of interest to push public policy when you are receiving public funds,” Stenhouse says. “It is difficult for a free-market think tank like ours to sustain itself in Rhode Island, and we work very hard at development and it’s dispiriting to see left-wing groups automatically qualify for large grants from the foundation.”

THE GASPEE AFFAIR

Political activists who pine for a return to constitutional government in Rhode Island invoke the “Gaspee Affair,” which served as a catalyst for the American Revolution. The HMS Gaspee was a British customs schooner involved in anti-smuggling operations. After the Gaspee ran aground in shallow water on June 9, 1772, a group known as the “Sons of Liberty” attacked the ship and set fire to it. The burning of the Gaspee took place near the city of Warwick at what is now known as Gaspee Point. The episode didn’t go over well with the British, who wanted the “Sons of Liberty” to stand trial in England. No arrests were made, but the threat to send Americans to trial in England sparked protests throughout the colonies.

Today, two new 501(c)(4) organizations seek to honor that legacy. One is the Gaspee Project, which is open to average citizens, and the other is the Gaspee Business Network, focused on business owners. The Gaspee Project is closely aligned with the Property Rights Activists of Rhode Island, an anti-Agenda 21 group, and the Beachhead Organization, a group of volunteers ready to respond quickly to sudden events.

“The Rhode Island Tea Party is augmented by all these groups,” says Zaccaria, the former GOP chair who is now a candidate for the state House of Representatives.

Many of us who are connected to the Gaspee groups and the property rights group are also connected to the Republican Party, the Libertarian Party, the Rhode Island Sportsmen’s Federation, and groups such as Common Cause and Operation Clean Government. As a practical matter, this means any center-right group has a core group of as many as 200 people who all know each other from each such outing.

Can modern revolutionaries level the playing field with the well-funded network of left-wing groups that benefit from the Rhode Island Community Foundation’s largess? For starters, Stenhouse would like to see the “tight, cozy” relationship between the foundation, the governor, and the Brookings Institution attract greater scrutiny, because it raises questions about the proper role of a nonprofit charitable organization.

If Stenhouse and company can exert enough pressure to push the foundation back in the direction of its original mission as outlined in June 1916, then perhaps the smallest state in the Union can spark another revolution.


Kevin Mooney, a frequent Capital Research Center contributor, is an investigative reporter for the Daily Signal.

Kevin Mooney

Kevin Mooney, a frequent CRC contributor, is an investigative reporter for The Daily Signal.
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