Philanthropy New Zealand News
July 15, 2005


Rachel's summary: "Democracy is in crisis in the so-called advanced
countries of the world and in the so-called developing countries. Here I
will reflect mainly on the United States because I know it best. In other
countries the issues of democracy will differ. In most cases with which I
am familiar the differences will be matters of degree. But the
obligations of the philanthropic sector are the same." -- Stephen

By Stephen Viederman*

"Hope has two beautiful daughters: Anger and Courage. Anger at the way
things are, and courage to change them." -- St. Augustine

The question of the session put forward by the organizers of the
Philanthropy Australia conference session was:

As I see it what is the role of philanthropy in modern democracy?

My answer:

To help ensure that modern democracy fulfils its obligations to the
commonweal by keeping governments and other institutions wielding
power, including the corporations, the media, educational
institutions, remaining accountable and transparent to all citizens
and residents. Philanthropy has a unique opportunity, and therefore
responsibility, since it is master of its own resources, and not
reliant on outside funding.

Democracy is more than voting, despite the rhetoric in the U.S. media
today. It requires of us all a commitment to the commonweal, the
common good: to justice, equity and community. Julian Burnside, in his
opening address to the Philanthropy Australia conference on October 9
spoke eloquently of the need for this when he directed our attention
to the vulnerable, the powerless, and unpopular.

Democracy is in crisis in the so-called advanced countries of the
world and in the so-called developing countries. Here I will reflect
mainly on the United States because I know it best. In other countries
the issues of democracy will differ. In most cases with which I am
familiar the differences will be matters of degree. The responses of
philanthropy, which I address later in these remarks, will also
differ. But the obligations of the philanthropic sector I assert are
the same.

** Reacting to hurricane Katrina, President Bush stated that the
government would do all it could, and called on all Americans to do
their part in the recovery and rebuilding. Subsequent actions have
shown that the government is not fulfilling its obligations either
administratively or financially.

Foundations in the U.S. are supporting rebuilding efforts through
local organizations in the affected communities dealing with
structural issues there.

** Federal rules require Government contractors to pay the
prevailing wage in the place where the work is done, and to hire
locals first. In a series of cost-plus contracts for Katrina cleanup
these rules were waived. If these rules had been implemented they
would have had a significant social and economic impact on the
survivors, and would have reflected what many believe to be the social
compact of the Government with its citizens.

Foundations support groups that monitor the press observing the
failure of the government and corporations to be transparent.

** In October the Government emasculated the National
Environmental Justice Advisory Committee by declaring that race was no
longer to be considered an issue in guiding federal agencies in their
cleanup of environmental problems. This despite the fact that studies
over the last two decades that lead to the formation of NEJAC, which
is to coordinate the work of all Federal agencies, have demonstrated
just the opposite.

Foundations are supporting constituency-based economic and
environmental justice community organizations to reverse this
decision, working through their elected public officials and public

** Voting is not required by law in the U.S. The proportion of
eligible voters who actually participate in elections is small, and
falling. Challenges to voting rights are increasing, especially for
the poor and people of color. In the November 2005 election for Mayor
of New York City, and for the governship of New Jersey, fewer than 50
percent of eligible voters went to the polls. Voter apathy is strong.
The influence of corporate money and lobbyists, the "K Street"
phenomena, induces a sense of powerlessness. The cost of elections
favors candidates who are among the very rich, like the New York
winner, Michael Bloomberg, and the competing candidates for the
governship of New Jersey, who all self financed their bids for office,
or those with great money raising machines that make big promises to
the givers, especially the corporations, to be made good at a later

Foundations are supporting nonpartisan voter registration and
education on the issues, and get out the vote campaigns.

** Prospects for significant campaign finance reform is stymied
by promises made. As a result some of the very best possible
candidates are discouraged from running for public office, at any
governance level. As populist commentator Jim Hightower, formerly an
elected Secretary of Agriculture in Texas in the sixties described the
situation in the title of one of his books, If God Intended Us to Vote
He Would Have Given Us Candidates for Vote For.

Foundations are supporting efforts to describe a fair program for
campaign finance, and are actively involved in public education around
these issues.

** The U.S. Environmental Protection Agency (US EPA) recently
proposed sweeping changes to the Toxics Release Inventory (TRI), which
became law in 1986, and which is the premier environmental regulation
credited with providing citizens with the right-to-know about
pollution sources in their neighborhoods. First, EPA has proposed
requiring facilities to report their toxic emissions only once every
other year instead of every year. Companies would not be required to
produce a report covering two years of data - they would simply get a
pass every other year. The second proposal would allow facilities to
release ten times as much pollution before triggering requirements to
report on the quantity of toxic chemicals released. In response, an
industry group, the American Chemistry Council has launched a major
chemical industry public relations campaign claiming that the TRI is
not so essential.

Foundations are supporting community-based and environmental
organizations to respond to this effort at emasculating an important
tool to protect the health and welfare of communities.

** Oct. 26, 2005 the House of Representatives passed
overwhelmingly the Housing Finance Reform Act, which includes a
provision that disqualifies nonprofits from receiving affordable
housing grants if they have engaged in voter registration and other
nonpartisan voter activities, lobbying, or produced "electioneering
communications." Organizations applying for the funds are barred from
participating in such activities up to 12 months prior to their
application, and during the period of the grant even if they use non-
federal funds to pay for them. Most troubling, affiliation or
association with any entity that has engaged in any of the restricted
activities also disqualifies a nonprofit from receiving affordable
housing funds under the bill.

Foundations are support vigorous efforts at public education and
mobilization to maintain the right of organizations to participate in
the democratic process.

** The Congress is now (mid-November 2005) considering
legislation that would reduce tax rates on the very wealthy while
considering cost-cutting offsets in Medicare, student loans, food
stamps for the poor, and programs for children. The bi-partisan
Congressional Budget office has found that similar tax cuts a year ago
have been ineffective in stimulating the economy.

Foundations are supporting public education efforts, advocacy and
mobilization to insure that people are aware of these assaults on the
'safety net' and activated to have their elected representatives know
their concerns.

** A foundation working on issues that are perceived as unpopular
by the present Administration was told by its lawyer not to engage in
policy or strategic discussions by email in order to avoid government
eavesdropping. What they are funding is perfectly legal.

The foundation in question is not backing down, and groups of
foundations are protesting at the federal the abridgement of their
rights as foundations to act in the public interest.

** The Administration has been secretly paying journalists
significant amounts of money to report favorably on its initiatives.

Foundations are supporting watchdog groups that are exposing
government's efforts to at best confuse, at worst to lie, to the

These observations on the state of democracy are not a counsel of
despair, as dispiriting as they are. They are rather a call to action
for the philanthropic community in the U.S. to assist community and
watchdog groups hold governments at all levels accountable to all
citizens and residents of the country, not just to a chosen few. They
can help groups to insist on greater transparency on all aspects of
government activities.

Foundations in the U.S. can fund organizing, advocacy and mobilization
around public issues, although they cannot fund support for the
passage of specific legislation. There are many non-governmental
organizations that desperately need support to defend the public good
at community, municipal, state and national levels. Foundations
support voter education and registration, and 'get out the vote'
campaigns. Voting is a basic right in a democracy. Foundations also
support public education campaigns around specific issues.

Many foundations in supporting these efforts focus on groups have real
constituencies. The groups they seek are those where the dialog and
decisions and part of a democratic process, to which the group is
accountable. Often membership groups do not reflect views of the
membership because there is no communication on the issues.

Foundations as owners of significant corporate assets also use these
assets to achieve great corporate accountability and transparency
toward the common good. Corporations are the greatest economic force
in the world today. Voting proxies in support of shareholder
resolutions that support human rights, the environment, workers, equal
opportunity, among other things, has been successful in changing
corporate behavior.

Some American foundations have taken the lead in filing successful
shareholder resolutions in areas that support their grantmaking. The
Jessie Smith Noyes Foundation got Intel to change its policies so that
they now share information with communities. The Nathan Cummings
Foundation has achieved greater transparency around political funding
of corporations in their portfolio. The Needmor Fund has achieved
better working conditions for farm workers. These efforts also reflect
on the democratic impulse.

The response to the challenges to democracy requires that foundations
look inwardly as well. To whom are we accountable? Are we transparent
in our relations with grant seekers and the public at-large?

As the African-American slave, abolitionist and intellectual observed
in the 19th century: "If there is no struggle, there is no progress.
Those who profess to favor freedom, yet depreciate agitation, are men
who want crops without plowing up the ground...Power concedes nothing
without a demand."

South African Archbishop and Nobel laureate Desmond Tutu a century
later notes: "There can be no neutrality. If you are neutral in
situations of injustice, you have chosen the side of the oppressor. If
an elephant has his foot on the tail of a mouse and you say that you
are neutral, the mouse will not appreciate your neutrality."

Philanthropies in each country will have to assess the problems of
democracy in their countries, the political and social culture, and
design appropriate responses to protect and nourish democracy. To
reframe Julian Burnside's challenge to foundations, democracy cannot
survive without including the vulnerable, the powerless, and
unpopular. Who comes to the table of democracy will decide what
democracy really means. This is the challenge to philanthropy.


* Stephen Viederman is an activist, educator, writer, speaker and
consultant on a wide range of issues including sustainability; the
social role of higher education; the future of philanthropy and
whether it can meet the challenges of democracy and civil society;
environmental and economic justice; redefining fiduciary
responsibility and issues of social investment; the limits of
corporate social responsibility within the context of how we define
the economy; population and the environment; and science and public
policy. An underlying theme in his work is the problem of effecting
long-term institutional change toward a just society.
In 2000 Steve retired as President of the New York-based Jessie Smith
Noyes Foundation.

Reprinted from Philanthropy New Zealand News, Vol. 2, No. 40, Summer
2005, pgs. 14-16.