Drag anchors, hubris, and funding the SOBs: Mark Dowie on philanthropy and more

Mark Dowie is widely recognized as one of this nation's leading investigative journalists. During his twenty-four years in journalism, Dowie has written for more than fifty national magazines and newspapers and won seventeen journalism awards. He served as publisher and editor of Mother Jones magazine for eleven years, where his muckraking distinguished him as a successor in the line of shit-disturbers such as George Seldes and I.F. Stone.

His most notable work uncovered the corporate history of the Dalkon Shield intrauterine device; the hazards of the Ford Pinto (exposing its explosive gas tank); the inadequacy of the American system for testing the health and safety of products and chemicals; and the export of' banned and hazardous products, substances, and waste from developed to undeveloped countries.

Dowie wrote a critical history of the American environmental movement, Losing Ground: American Environmentalism at the Close of the Twentieth Century (1995; MIT), which was nominated for a Pulitzer Prize. His research on foundation philanthropy, American Foundations: An Investigative History (see review, page 83) was published in 2001. Dowie's other books include We Have a Donor: The Bold New World of Organ Transplanting; Patchwork Man: Transplanting Organs in a Technological Culture,' and WasteLand: A Short History of the Term "Wise Use."

Mark and I talked at his home in west Marin County, California.

DAVID KUPFER: American Foundations came out about a year ago. What has been the reaction to it?

MARK DOWIE: Predictably, anyone who reviewed the book who had anything to with foundations gave it a bad review. I expected that. Then The New York Times reviewed it and almost every review since then has been good.

DK: And its impact?

MD: The foundation world appears to be reading it and reconsidering some of the ways things are done. Smaller foundations seem to like my proposals better than larger foundations. Of course, most of my proposals were aimed at larger foundations. These things take years and years to show results. I don't expect something as intransigent as foundation enterprises to turn around suddenly just because I think they need to.

DK: Do you think that foundation culture, thinking, and decision-making mirror corporate thinking and decision-making?

MD: In some ways they do, in some ways they don't, and in some ways they should. There are some decision-making processes in the corporate world that I think would work better than the methods in the foundation world. If they'd speed things up a little in the foundation world, I don't think they'd be as far behind the issues as they are.

DK: You emphasize democratizing the decision-making process of American foundations. What do you recommend?

MD: I'd break up the big ones. You've got boards sitting on 5, 10, 20 billion dollars of assets, giving away 5 percent of the assets while trying to search for the root causes and solve serious social problems. I don't believe that elite boards can accomplish that. I would limit the size of foundations to a billion dollars in assets. That would break up about forty foundations into about 250 to 300 foundations. And I would not allow any board overlaps so that you'd have whole new boards for all those new foundations. That would force the democratization of the decision-making process, bringing about 3,000 more people into it. I would allow founders to sit on all boards, so Bill Gates could sit on twenty foundations if he really wanted to. I would diminish the influence of families as foundations matured. For the first five years of a foundation's life, a majority of the board could be family members, but then they'd have to reduce themselves to a minority. A lot of foundations do that automatically, but a lot don't. I think the more effective foundations are the ones that bring strangers on board and broaden the whole profile of their boards as they grow and mature.

DK: What do you think the priorities of American foundations ought to be?

MD: Paul Ylvisaker, a legendary officer at the Ford Foundation, described foundations as America's passing gear. I like that metaphor, the idea that democratically managed private wealth has an opportunity that government doesn't have and that individual philanthropy really can't respond to. That is to provide high-speed solutions to serious and immediate social problems--"passing-gear" solutions. Government is slow. Individual philanthropists are often misinformed, especially by direct mail appeals. Junk mail, with all its hype, exaggeration, and lying is hardly a reliable or accurate source of information. And that is primarily what informs individual philanthropy--the lion's share of which is suckers like you and me responding to a direct mail appeal with a $25 check.

But here is this pile of managed money that has an opportunity to identify and do something about serious social problems quickly. Some foundations are that way and more of them appear to be thinking that way. But too much money is spent very conservatively, not just politically, but culturally.

DK: Why do you say that American foundations are on the verge of an evolutionary shift from arbiters of knowledge to overt mediators of public policy?

MD: I think it is because of the way they are evolving as institutions, moving away from family structure, from very, very rigid interpretation of donor intent. I think that the public is starting to realize that foundations are not strictly private institutions. They are kind of quasi-public/private institutions, 45 to 50 percent of whose assets in fact belong to the public because they would have ended up in state and federal tax revenues had the foundations not been created.

I think the foundation executives and trustees realize the public is on to them, and are beginning to think of themselves as public/private hybrids. They are beginning to brand themselves publicly, particularly on public radio, which not only credits sponsoring foundations by name, but also describes their mission in short sound bites. Beyond the sound-bite branding, foundations are beginning to realize that they've got to lift the veil, and open up their decision making process. That is a major cultural change in $400 billion institutions.

DK: You've used the term "drag anchor" to describe some foundation initiatives, and said that even progressive foundations have this characteristic. How widespread is it?

MD: It is still widespread. As I said earlier, they tend to be slow coming into their issues, and to be deliberately moderate. A drag anchor is not necessarily a bad thing; it can prevent a shipwreck. It is designed to keep a boat on course and to slow it down in a storm. That is what foundations tend to do--to be moderating forces in the midst of social upheaval. They don't very often fund things that run counter to a social movement, but they will fund things that moderate and slow down the movement, because they tend to fear revolutions (even though they are part of the American Revolution). The best examples of drag-anchor funding occurred during the civil rights movement.

DK: Tell me about the downsides when foundations set agendas, design tactics, and offer organizations money to carry them out?

MD: There is no way most foundation staffers, program officers, boards, or trustees can know enough about a problem or movement or a crisis to create a solution themselves. What they do know, or should know, is how to find the people who are capable of solving the problem and help them do it. Philanthropists and philanthrocrats develop a hubris that says "I am sitting on and spending a lot of money, so I know how to solve problems." Time and time again foundations attempt to solve the problem themselves by trying to create and pay for the solution, rather than pay real experts to solve the problem. I think that is going to be true for a long, long time, until foundations change fundamentally as institutions.

I don't have a problem with operating foundations, as long as they bring really good people in. But I do have a problem with people sitting in New York or Philadelphia or Seattle or Boston and saying, "I know how to solve this problem and I am going to overlook all the institutions trying to solve it, simply because they have not done so yet, and I am going to create an institution to do it." The examples of that sort of grant making are legion.

Two big ones: The Green Revolution, the largest, longest-lasting philanthropic effort in American history, if not world history, fifty years and counting, billions going into the very singular effort, which has largely failed, of feeding the world. It has created enough food to feed the world, but it hasn't created the distribution infrastructure to feed the same number of starving people that existed when the program began, and in many parts of the world it has created more problems than it has solved. The other example is the Energy Foundation, a ten-year philanthropic effort that poured money into a new foundation that undermined its own best work by funding people who took a really unfortunate position on deregulation.

DK: You speak of "investment dissonance" in the foundation world. What do you mean?

MD: I have a problem with foundations investing money in corporations and then giving a small portion of dividends of that investment to institutions that are fighting what those corporations are doing. That's dissonance, and it is unnecessary. You can analyze this from the right or the left. Pew, the largest environmental grant maker of all the foundations, was earning more money in dividends from the nation's largest polluters than they were giving to the environmental movement. Pew is a big investor and could have issued a statement--that the corporate world would hear--saying that we are divesting from the dirty dozen and are going to reinvest, in what may not pay off right away, in people who are developing solutions like renewable technologies. I do not know why they do not do that.

On the other end of the spectrum, a lot of right-wing foundations are railing about the destruction of village culture and civil society, while owning stock in Wal-Mart and Disney and other companies that are doing what they are railing against. Why? Why not put that money into efforts that are really building civil society and preserving village culture? They are not using their investments wisely. A lot of them actually have no idea what's in their portfolios. The foundation program officers, even the trustees, have no idea what is there. It's their job to find out. And foundations should vote their shares, they should get involved in proxy fights. If they don't want to get directly involved, they should at least vote for the side they are interested in. But they generally either vote "management" or they shit-can the proxies.

DK: But certainly you have been heartened by the successful efforts to pursue environmentally and socially proactive proxy initiatives such as by the As You Sow Foundation (www.asyousow.org)?

MD: Yes, but that is a tiny little foundation. I am impressed with a lot of very small foundations, but their efforts are comparatively pretty minimal. The good things that happen in the larger foundations often occur first in the smaller foundations. One of the archdruids of philanthropy was a guy named David Hunter, who left the Ford Foundation as a young middle-aged man and went to work for the Stern Family Fund. He got the fund to invest heavily in the civil rights movement in ways that were actually effective, particularly with voting rights. He used the success of that work to lobby the Ford Foundation into the civil rights movement. That is an example of very successful hands-on work on the part of an exemplary philanthrocrat. The guy had no money of his own but figured out early in his life how to put big-money resources into solving a serious social problem.

DK: You've said that most foundation trustees and directors have been well aware of impending disasters but have been slow to respond with meaningful grants. Is that changing? Have you found foundations which are the exception to that rule?

MD: Well, yes and no. If there are a bunch of refugees all of a sudden created by some disaster in the world, the foundation world will dump money into the issue. But if the crisis is a more permanent, protracted, seemingly insolvable thing like AIDS, you're not going to see a lot of foundation money very quickly going into the problem. In emergencies they do respond, but usually it's a one-shot deal, then they go back to their old ways, funding the "SOBs"--symphony, opera, ballet.

DK: Your thoughts on solutions to the global ecological calamity we are facing?

MD: The solution is for the president of the US to admit that a substantial part of the problem of global warming is anthrogenic and that a substantial part of the anthrogenic contribution comes from this country--25 percent at least--and to say that we are going to play our part now in reducing our share of the problem. I don't care which party gets up and says it, I would work for them. We have to bite the bullet and make the necessary investments, change our lifestyle and pay more for oil.

DK: What is your reading of the recent corporate scandals, cooking of accountants' books, corporate lies and deceptions?

MD: I've been telling you about it for twenty-five years. I am a member of a 4,000-strong national group of investigative reporters and editors. Several years ago we were asked, what is your primary area of interest. Six people, myself being one, said corporations. Look at our civilization, the most corporate society in the world. Every institution in our culture is either corporate or corporatized, including the churches and foundations. It all comes from the entity called the corporation, and there are only six reporters out of thousands who are interested??!! This is why Enron happened. And it explains every scandal since. No one was watching.

We have far too few forensic accountants in the media looking for crimes in the books. Financial analysts, who are trained to look for good things in income statements, are hired by the media to pump up the markets. Forensic accountants are trained to look for the bad stuff. They get hired by shareholders, after the stockholders have been thoroughly screwed by a corporation.

DK: I understand that you have been researching the patenting of life forms.

MD: Yes, I've just finished a monograph, and am writing an article for Harper's.

DK: How concerned are you about what is being decided on this issue behind closed doors?

MD: Very, and for several reasons. As a democrat (with a small "d"), I believe the public should be involved in deciding the direction of biotechnology. And I'm also concerned about the lack of scientific sophistication of the most technically educated culture in the world, the American public. We need to ground ourselves in this science. Molecular biology is not simple stuff, and it's very easy for either side on the biotechnology issue to distort and misinterpret the facts and mislead the public on the science.

The thing about biotechnology that makes it difficult to contest is its promise. There are really good things being developed in biotech labs. But behind it is the most profoundly libertarian industry in America right now, and its practitioners want absolutely no oversight, regulation, control, or messing around with their business. That is an invitation to catastrophe, and we are already starting to see early signs of that in the monarch butterfly problem in the Middle West, the Mexican maize controversy in Chiapas, and things blooming that should not be blooming in Southern Asia. I think there is a catastrophe about to happen, maybe more than one, on that front.

DK: How did we get to this point?

MD: It is interesting that the thing that started it all was a little microbe developed for General Electric by a scientist named Anand Chakrabarty. It's a bacterium that he altered slightly so that it would eat oil. General Electric saw it as a solution to tanker and wellhead spills. So they applied for and were granted a patent, by the Supreme Court, in a five-to-four ruling.

The irony of it is that although it opened the floodgates for all patented life forms, that patent was never used, partly because of the fear that the little microbe would self-replicate and eat more oil than intended, a horror beyond the imagination of anyone in the oil industry, They'd rather pay billions of dollars to clean up spills on the occasion they happen than throw a little bug on the water and have it scarf up all the oil on the planet. But that fear has been subsumed under larger issues, as we move closer and closer toward patenting human life.

DK: How do you keep a sense of hope?

MD: Hope is easy. It's optimism that gives me difficulty. I am hopeful because our history is one of progress. We have made remarkable progress in this country over the past two centuries if you consider all its accomplishments. I am hopeful that will continue. Am I optimistic? Not immediately, but there have been many moments in our history when optimism was difficult.

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