The Racist Backlash on Private Foundations, Then and Now
A really interesting article in Fast Company explains that private foundations are the real targets of racist, anti-woke and anti-DEI legislative and judicial efforts these days. But let me first admit that I wasn’t aware of the racist motivations for the private foundation excise taxes until Alexander Reid told me about the history when we were on an ABA tax panel marking the 50th Anniversary of the excises taxes. I am almost embarrassed to say it. John Fishman was there too and he later published a thoughtful retrospective. These guys might be critical race theorists. As it turns out, Dixiecrats were doing everything they could to preserve a racist culture allegedly gone with the wind by now. It seems the Dixiecrats knew that Martin Luther King, Jr.’s travel funds and SCLC‘s operating budget came from wealthy organizations the law now calls “private foundations.” They wanted to shut those organizations up or at least stop the flow of charitable dollars to grass roots public charities risking life and limb for civil rights. How did I not know this? Fishman really paints the picture:
On the third day McGeorge Bundy, President of the Ford Foundation, testified. At age 34, Bundy had become dean of Harvard’s Faculty of Arts and Sciences. In 1961, he joined the Kennedy administration as National Security Advisor and was instrumental in the expansion of the Vietnam conflict. He became president of the Ford Foundation in 1966 and redirected the Foundation’s emphases into controversial areas of civil rights, voter registration, and seemingly political activities.
Ford’s voter registration grants were not to traditional groups like the League of Women Voters, but to organizations that enabled underrepresented groups to vote, a definite challenge to Southern political leaders, whose seniority controlled the committees and leading positions in Congress. In 1967 Ford gave a large grant to the Cleveland branch of CORE, the Congress of Racial Equality, which used the funds for a voter registration drive in African-American areas of the city to elect Carl Stokes as the first black mayor of Cleveland. In New York City Ford financed community school boards and a desegregation experiment in the Ocean-Hill, Brownsville section of Brooklyn, which led to a teacher’s strike by the United Federation of Teachers, and confrontation with the African-American community.
As for the grant to Cleveland CORE for a voter registration drive, Bundy stated that Ford never examined the question of the relations between any voter registration campaign and the election of any candidate, an answer largely met with disbelief.
. . .
Foundations were prohibited from expenditures “to influence the outcome of any specific public election campaign.” The Ford grant to Cleveland CORE resulted in restrictions on voter registration drives unless they were run by nonpartisan organizations active in at least five states and not confined to just one election. The grants to the Ocean Hill-Brownsville School District resulted in the requirement of expenditure responsibility for awards to organizations other than public charities. To ensure funds were spent solely for the purposes for which they were given foundations would have to provide complete accounting of funds expended to the Secretary of the Treasury.
Oh, so that’s why the Texas Attorney General is bringing frivolous cases, trying to depose nuns, and using unconstitutional Gestapo raids against little old ladies. He’s never won, not even once. And that’s why Wisconsin Institute for Law and Liberty is suing the the Cleveland Clinic for trying to cure stroke in African American men. WILL asserts that tax exempt Cleveland Clinic is discriminating by race in its charitable effort by researching strokes among black men, never mind that the Clinic is attacking a disease that discriminates by race. The Clinic, it argues, can study a disease peculiar to Black men without focusing on Black men. Make that make sense. The study of peculiarities, by the way, lead to broadly applicable outcomes so this effort won’t just hurt black men if its successful. It’s all thoroughly nonsensical until we understand that its not the small or even large public charities the racists are going after. It wasn’t then, it isn’t now. It’s the private foundations funding Fearless Fund and Cleveland Clinic . How did I not know this!
I only really understood after an article about the precipitous drop in private foundation funding of grass root nonprofits protesting George Floyd’s murder. The authors attribute the drop to “white backlash” against Foundations. Check this out:
It’s a familiar story. After the police murder of George Floyd in 2020, there was national soul searching and protests, and racial justice suddenly became fashionable. Money that once had been a trickle flowed into racial equity and anti-racism efforts across the board, from corporate diversity, equity, and inclusion programs to Black Lives Matter.
Almost as quickly, the intensity of the epiphany began to fade as the public’s attention was absorbed by Covid and other political crises. Predictably, the right wing stepped up its critiques of “wokeism,” especially calls to reallocate funding for police, pointing—ironically—to the street protests as proof of escalating crime that actually necessitated more police.
While white backlash is part of the historic ebb and flow of the racial justice movement, the 2020 fallout is unique: Emboldened by the popularity of Trumpism and a right-leaning judicial system hostile to racial equity, conservatives are now seeking to defund racial justice itself. What this means is that in 2024, Black nonprofits say funders and foundations are in retreat. They are either reducing racial equity granting or watering down the language of Blackness and anti-racism or both.
. . .
Funders are fearful of legal repercussions, but fearful in a deeper, more existential way as the nation contemplates the political sea change of a second Trump term that feels more than possible. For Black nonprofits long vested in racial equity, the fight is not just to preserve dollars but to make sure donors don’t lose their nerve, now or in the future.
The article makes a very good case that the anti-DEI litigation and legislative efforts are really about warning the donors to private foundations against being on the wrong side. All the stupid stuff in Ways and Means, the well-funded litigation against DEI, and a lazy-eyed Cowboy persecuting Catholic Nuns and little old ladies is part of a bigger effort to shut off the money from private foundations to grass roots nonprofits working against racism. Then and now.
darryll k. jones