CHAPTER 5

From Humanitarianism to Cold War

The clear division of labor between government and civil society that the New Deal had insisted upon to lift the country out of the Great Depression became irrelevant during and after World War II. American philanthropic organizations now turned their attention overseas to rescue war victims and assist in reconstruction. Although there was no grand design, the ways in which Americans combined government and philanthropic resources made humanitarianism an important part of the Pax Americana. Humanitarian aid emerged as, in Secretary of State John Foster Dulles’s words, “a force of enduring strength that can bind together the peoples of the world.”1 Big foundations provided the organizational framework and personnel to help the U.S. government achieve its policy goals. Mass philanthropies collected millions of individual remittances from ordinary Americans who wanted to participate in alleviating suffering and restoring “normal” life in liberated countries.

For the American administration, philanthropy became at once a resource and a force to reckon with. At home, the courts, Congress, and the Treasury Department insisted that philanthropy not interfere with the political process, but on the soil of freed nations, government policy mixed humanitarian action with politics.

As the Cold War came to dominate international relations, philanthropic programs more than once became entangled in the ideological battles that pitted Washington against the Kremlin. Several foundations—most prominently the Ford Foundation—played a major role in rebuilding local civil societies in Western Europe capable of shouldering the American “psychological war” against communism. In the Third World, philanthropic institutions pioneered American methods of agricultural development and technical aid before Washington embraced these same programs selectively as Cold War strategy.

Focus on Humanitarian Aid

By the time Germany invaded Poland in 1939, little was left of the League of Nations’ fragile institutional network that had linked peoples of different countries together. Economic protectionism and nationalist movements had gained ground over cultural exchanges, industrial standardization, and a common science. In the United States, isolationist feelings that Americans had overcome in the 1920s had resurfaced in the 1930s. While maintaining official neutrality early in the war, the American government was suspicious of its philanthropies sending money abroad; its immediate concern was to prevent American aid from falling into the hands of belligerent governments. Thus the Roosevelt administration required all voluntary agencies engaged in soliciting and collecting donations for countries in the war to register with the Department of State under Section 8(b) of the Neutrality Act of 1939.2 The initial registration measure applied only to organizations providing aid to belligerents and left organizations helping other countries outside of State Department supervision.³ However, in March 1941, with the lend-lease act signed, and “neutrality” finally redefined to favor Allied forces, Secretary of State Cordell Hull wanted greater control over the maze of ongoing private fundraising and relief activities. President Roosevelt appointed his former Ambassador to the Soviet Union, Joseph E. Davies, to head a President’s Committee on War Relief Agencies.⁴ Charles P. Taft (son of President William H. Taft and former president of the International YMCA) and Frederick P. Keppel (president of the Carnegie Corporation) also sat on the committee.⁵ The committee’s contribution was initially modest, as it established only a voluntary reporting procedure for these agencies not registered with the State Department under the Neutrality Act.⁶ This changed when the U.S. became involved in the hostilities.

Entering the war paradoxically gave Americans an opportunity to start anew a humanitarian movement through which they could eventually reconnect a fragmented world. President Roosevelt enlarged and recast the Davies Committee as a proactive President’s War Relief Control Board.7 The board launched large, nation-wide campaigns to raise funds for the aid of troops and victims (as had been done in World War I—chapter 2). At the board’s behest, Winthrop W. Aldrich, chairman of Chase National Bank, coordinated a national campaign to provide humanitarian relief on the front in the fall of 1943. Two more would follow in 1944 and 1945. In his fundraising, Aldrich joined forces with local community chests, which were in the process of launching a national drive of their own, and together the war board and the community chests created the National War Fund, a private philanthropic federation.⁸

President Roosevelt understood the potential benefit of this philanthropy for Americans’ image in the world. He saw the National War Fund as evidence that “Our men and our allies know they have made no covenant with our Government alone. They know that they have the backing of all the resources and spirit of the American people themselves. In that conviction alone lies the winning morale which no slave of a dictator can ever know.”⁹ The war board timed its appeals to avoid competition with Red Cross drives or the sale of U.S. bonds.¹⁰ The war board also intervened in the administration of philanthropy, consolidating agencies licensed to operate abroad whose missions overlapped (their number dropped from 300 in 1941 to 67 in 1943) and thus drastically reducing overhead.¹¹ It insisted that charities, regardless of the sectarian nature of their appeal, adopt a single image of America that they would project abroad. It applied special pressure on refugee organizations that dedicated all the money they raised in America to their homeland to rename themselves. The French Relief Fund became American Relief for France, the Queen Wilhelmina Fund became American Relief for Holland, and Russian War Relief became the American Society for Russian Relief.¹²

Religious charities with their established networks of donors created their own wartime federations. In 1943, the Roman Catholic Bishops of the United States and the National Catholic Welfare Conference began War Relief Services (which later changed its name to Catholic Relief Services) under the leadership of Monsignor Patrick O’Boyle. The Protestant churches also collaborated, forming the Church Committee for Overseas Relief and Reconstruction, which gave way in 1946 to the Church World Service.13 The war board endorsed the United Jewish Appeal to run a combined campaign on behalf of the American Jewish Joint Distribution Committee, the United Palestine Appeal, and the National Refugee Service.¹⁴

This large humanitarian mobilization on the part of the American population, important in itself, took on an entirely new dimension when put to the service of the first international organization in charge of feeding the liberated populations—the United Nations Relief and Rehabilitation Administration (UNRRA), which the Allies created in 1943. As early as 1940, Britain had floated the idea of creating a novel transnational agency for the future peace, whose mission would be to make such basic commodities as food and medicine available and to provide technical aid in health, education, and industrial rehabilitation. In the U.S., Assistant Secretary of State Dean Acheson was independently drafting a plan for a United Nations Relief Administration. In 1942, the Soviets also submitted proposals to the U.S. and the U.K. Meanwhile, the U.S., Great Britain, Australia, Canada, and Argentina were setting aside wheat reserves in anticipation of famine following the end of hostilities.

The U.S. government took the first concrete step towards creating an international relief organization by setting up the (short-lived) Office of Foreign Relief and Rehabilitation Operations (OFRRO) in September 1942.¹⁵ Roosevelt asked his friend, New York governor Herbert H. Lehman, to resign his position and become its head. Putting an American Jew in that position was important symbolically. OFRRO then administered relief work in North Africa in the wake of military advances there in early 1943.

In the fall of 1943, the federal government closed the national OFRRO to join other nations in the newly formed United Nations Relief and Rehabilitation Administration, which it dominated by virtue of being its main funder. Forty-four nations joined in the consortium. Roosevelt again appointed Lehman to head the new organization, and Lehman, in turn, brought in the private charities as partners. He needed them to carry out his humanitarian mission free from constraints imposed by the various constituent governments. That Lehman could count on the active collaboration of a large charitable network in his own country made an enormous difference in shaping the humanitarian movement, and conversely the new organization gave American charities access to means never before at their disposal and dramatically broadened the scope of their relief missions. From this beginning, American humanitarian agencies would not only participate in the creation of the postwar network of international organizations but would provide it with direction.

American philanthropy kept UNRRA’s humanitarian mission on track and helped the new international agency keep some political independence. While private voluntary organizations had paid for the bulk of American charitable work in World War I, this time the voluntary sector raised the equivalent of only from 7 to 10 percent of U.S. government appropriations.16 But UNRRA’s effectiveness nonetheless depended in large part on its ability to cooperate with private philanthropy, as Congress put severe restrictions on the funds it appropriated.¹⁷ In a move designed to mollify those American congressmen who resented long-term American commitments around the world, UNRRA was not to give away commodities but to sell them at subsidized prices in local currency (collected by local governments from the sale of UNRRA-delivered supplies). Hence the need Lehman felt to supplement revenue from these sales to liberated countries with food and medical supplies offered free of charge, and for this he needed private American organizations. In addition, voluntary organizations lent experts to UNRRA. Thus, Wilbur Sawyer, director of the International Health Division at the Rockefeller Foundation, became director of UNRRA’s Health Division.¹⁸

As American troops made progress first in North Africa and then Europe, the American army was initially reluctant to permit American voluntary organizations to work in occupied territories. In principle, the army was to retain full control of operations in all occupied zones, while UNRRA would begin its work in countries only after governments had been re-established. But the situation on the ground was unstable. It became critical to provide humanitarian aid to war victims to forestall food riots and to prevent the black market from dominating food distribution. The army soon let UNRRA distribute relief in not-fully-pacified areas, and UNRRA, in turn, brought in the private agencies.19

Lehman struggled to get the army to free up some of its own supplies for relief operations and to provide cargo space for their transport. As the war drew to a close, in December 1944, Roosevelt responded to Lehman’s many pleas by instructing the War Shipping Administration to provide shipping space for UNRRA. Roosevelt also pressured the army to allocate some of its supplies to civilian relief. Better able now to achieve its goals, UNRRA became the chief organization supporting refugees, administering camps, and supervising the work of the voluntary agencies that staffed the camps.²⁰ Within them, groups like the Red Cross, the YMCA, Friends’ Relief (rewarded after the war with a Nobel Peace Prize), and the Jewish ORT provided educational and training programs.²¹

In a separate effort, American voluntary organizations had for some time been working on the problem of distributing relief in war zones. Solving it required some institutional creativity. Already in November of 1942, Joseph P. Chamberlain, a professor of public law at Columbia, had brought together seventeen private voluntary organizations, including the YMCA, the American Friends Service Committee, the Joint Distribution Committee, the Near East Foundation, and Catholic Agencies. Together they approached the War Relief Control Board to outline their intended course of action in the territories under army control. These seventeen organizations formed the nucleus in 1943 of what would become in 1944 the American Council of Voluntary Agencies for Foreign Service, the organization that would prove most effective in working with the American army in distributing supplies in the occupied territories. At Charles Taft’s suggestion, the new body represented all voluntary agencies in dealing with army relief operations in liberated Europe, with the War Relief Control Board acting as liaison.²² The American Council of Voluntary Agencies for Foreign Service became the coordinator for mass philanthropies dedicated to humanitarian aid. It created specialized committees, such as one on the Balkans and one on displaced persons. Among them was the Council of Relief Agencies Licensed to Operate in Germany, formed in 1946, which in the next two years would distribute several hundred million pounds of clothing, food, and medicine, especially much needed penicillin and insulin.23

In April 1946, eleven participating relief organizations, including all the members of the American Council of Voluntary Agencies for Foreign Service, as well as many of the agencies that had formed the Council of Relief Agencies Licensed to Operate in Germany formed Licensed Agencies for Relief in Asia. This was the only voluntary organization authorized by the Supreme Command for Allied Powers to ship supplies into Japan. General MacArthur was so impressed by the member agencies’ ability to provide food in time to avoid riots that he asked them to continue and expand operations in 1948.²⁴

To foster the new charitable internationalism, two important figures devised a plan that would encourage all Americans to send packages abroad. Arthur Ringland of the War Relief Control Board, who had acquired key experience with food relief during World War I with Hoover’s American Relief Administration, and Lincoln Clark, a professor at the University of Maryland, also an official in UNRRA, in 1943 convinced members of Catholic Relief Services and the American Friends Service Committee to join in their project. By 1946, with pledges from twenty-two member organizations, they created the Cooperative for American Remittances in Europe or CARE (the name was later changed to “Relief Everywhere”).²⁵

CARE built on the vast distribution systems that the army had created during the war, but made it possible for every donor to make his personal mark by identifying package recipients. By personalizing contributions to such a large-scale organization, CARE became associated in everybody’s mind with enlarging the meaning, as historian Merle Curti explained, of the “old American custom of neighbor helping neighbor.”²⁶ At the end of its first five years, CARE packages had reached one out of every five families in Germany and one out of every five persons in Austria. Many recent immigrants or American-born children of immigrants working at blue-collar jobs and making inroads into the middle class were also sending goods to family members in Eastern Europe and thus taking a small role in the beginning of the Pax Americana.

While running UNRRA, Lehman gave CARE a boost. By 1946, UNRRA controlled 7.7 million Ten-in-One packages initially meant for the army (each designed to feed one soldier for ten days or ten soldiers for one day). With the army releasing supplies, Lehman sold 2.8 million of these packages to CARE once he was satisfied that the organization had its financing in place as well as adequate storing and shipping facilities.27 Davies of the War Relief Control Board also assured availability of supplies before he licensed CARE. Once this was done, the U.S. Army assisted with logistical support, as did the War Relief Control Board and the State Department. This translated into distributing agreements with the governments of Norway, Finland, the Netherlands, Belgium, France, Italy, Greece, Yugoslavia, Czechoslovakia, and Poland, and with the military authorities in Austria and Germany.²⁸

The value of CARE overseas relief peaked in early 1948 but fell after that, in no small part due to Stalin’s decision in October 1947, after refusing Marshall Plan aid, to cut off the Soviet satellites from all aid—first governmental, and soon thereafter private—from the United States. The “people-to-people” connection, which kept many recent Americans rooted in their countries of origin, stopped at the Iron Curtain. The Detroit auto worker, symbol of American postwar prosperity and emblem of the victorious American century, could no longer send some of his excess income to help family members in Poland or elsewhere in the Soviet bloc, any more than American government and philanthropic organizations could. And yet, the knowledge of such aid was critical in promoting a benevolent vision of America throughout the world.

Unfortunately, UNRRA’s ability to manage budgetary constraints and political pressures, and its relationship with the army, proved fragile. The Office of Strategic Services precipitated the early end of UNRRA when its head, William “Wild Bill” Donovan, suggested assigning men to UNRRA offices in the Balkans who would relay information back to him. Lehman, who refused, resigned in March 1946, citing health reasons.29 Fiorello LaGuardia, who replaced Lehman, remained an indefatigable advocate of UNRRA’s humanitarian mission, even to communist-dominated countries. But the danger of American aid landing in the communist camp, as well as OSS pressures, kept undermining the organization. When Tito attacked U.S. forces even while he was receiving UNRRA supplies, the U.S. withdrew from the organization.³⁰ Shortly thereafter UNRRA, which was primarily funded by the U.S. government, ceased operations—in Europe in 1947 and in China in 1948.

The international humanitarian cause did not die with the demise of UNRRA, however, nor did the activities of the voluntary agencies that played such an important role in it. Rather, as initially envisioned, UNRRA’s multiple functions were absorbed by the new international institutions of the postwar world, most prominent among them the United Nations. Technical services to promote industry, agriculture, and health became the purview of the new array of private agencies affiliated with the U.N., which were designated as nongovernmental organizations (also called PVOs for private voluntary organizations, a broad term that included philanthropic foundations). Americans took the lead in carving a place of choice for NGOs during the United Nations’ formation, a natural consequence of the role they had played in the humanitarian effort after the North African and Italian invasions. Practically all NGOs representatives who attended the August 1944 Dumbarton Oaks planning conference for the establishment of the United Nations were Americans. Forty-two primarily American NGOs served as advisers to the first American delegation and signed the U.N. charter as “consultants.”³¹ They earned for all NGOs a place in Article 71 of the charter, which provided for further “consultation with nongovernmental organizations” by the economic and social council. In the years following, the U.N. created sixteen specialized agencies dedicated to particular global issues. These included the United Nations High Commission on Refugees, the World Health Organization, the Food and Agriculture Organization, and the United Nations Educational, Scientific, and Cultural Organization (UNESCO). Private groups assisted in fundraising for U.N. programs, and oftentimes the U.N. channeled its funds for the administration of these programs to them. UNRRA’s closing thus signaled the advent of a more integrated and wide-ranging international structure of world relief and development, one that American philanthropy had done much to launch.

As if to symbolize American philanthropy’s lead in this international humanitarian movement, the Rockefeller family helped attract the new United Nations’ headquarters to New York by donating the land.32 After considering the gift of one of the family’s country estates, Nelson Rockefeller scrambled to purchase a seventeen-acre tract in Manhattan that was slated to become a new office complex. His father, John D. Rockefeller, Jr., agreed to put up the money, and the U.N accepted the large donation. Congress even passed a special bill to make the gift tax deductible.

Focus on “Psychological Warfare”

American ideals of postwar philanthropy as embodied in the early history of the United Nations were quickly challenged. Hopes to export capitalism for the world’s greater good turned into ideological confrontation. When President Truman declared the Cold War in 1947, American philanthropy came to shoulder the national encounter with communism. Commitments to promoting peace, freedom, and democracy abroad became interwoven with programs to alter public opinion and undermine communist ideology and Soviet power. America’s largest foundations provided funds and collaborated in organizational strategies with the U.S. government. They invested heavily in European cultural and educational institutions in an effort to put culture to the service of what became known as “psychological warfare” against communist ideology. Grassroots organizations were involved as well.

In devising Cold War strategies, the alliance between American diplomats, intelligence agents, and a small group of foundation officials was held together not only by common institutional goals, but also by a tight professional and social network linking them. The early history of the Ford Foundation—then a newcomer to the big philanthropic scene—(the creation of which I examine in some detail in chapter 6) suggests the closeness of these ties.

Henry Ford II and the foundation’s trustees appointed Paul Hoffman its president in 1950. Who could possibly be better qualified for the job of running the world’s newest giant of private philanthropy than the former Studebaker salesman who had risen first to the presidency of his automobile company and then become the successful administrator of the Marshall Plan in Europe?

Hoffman brought several of his former Marshall Plan staffers to the foundation, including Harvard law professor Milton Katz and also Richard M. Bissell, who had worked for the Office of Strategic Services and pushed for a firm but open-minded approach to the Soviet Union.³³ Hoffman consulted with George Kennan, one of the chief architects of America’s “containment” policy. Kennan presided over the Free Russia Fund, a nonprofit corporation Ford established to help resettle Soviet exiles in the U.S. One objective of the fund was to learn from exiles about life behind the Iron Curtain. When John J. McCloy, U.S. High Commissioner to Germany (who had administered Marshall Plan aid), returned home in 1952 to head up the Chase Manhattan Bank, he joined the Ford Foundation’s board of trustees.³⁴

McCloy also chaired the Council on Foreign Relations, a New York-based think tank founded in 1921 that counted among its members virtually the entire foreign-policy elite (including Kennan and the Dulles brothers), and was funded by the Carnegie Corporation and the Rockefeller Foundation. The Ford Foundation joined in funding it during the postwar years. It was in the council’s journal Foreign Affairs that Kennan published in 1947, under the pen name Mr. X, “The Sources of Soviet Conduct,” which would serve as a guiding text for the policy of containment. Other important figures of the foundation world emerged from the foreign-policy elite. Dean Rusk, Rockefeller Foundation president during the 1950s, came from the State Department (later returning as President Kennedy’s and then President Johnson’s secretary of state).

Hoffman made the Ford Foundation a full partner in foreign policy during his short tenure. As the Cold War intensified, Hoffman launched the foundation’s international program, openly acknowledging that is was a means to export American values against communism. He hired McCloy’s public affairs officer Shepard Stone to direct the foundation’s division of international affairs.35 There is “no doubt that every effort must be made to unite the free world,” Hoffman reported to the Board of Trustees, and to achieve this, the free world must “do more than arm itself; it must develop its strengths.”³⁶ To that end, Ford officials conferred directly with officials from the State Department and the Central Intelligence Agency in plotting out a European program directed in some fashion at fighting communism and promoting Western culture and democracy—as well as defusing European antipathy toward America and American culture.

Education and cultural activities were an important part of this psychological warfare. In West Berlin, the Ford Foundation directed huge resources towards the new Free University. Organized in 1948, the university could count an enrollment of 5,500 students by 1951 with about 40 percent coming from the Soviet Sector. McCloy, in particular, praised this program as advancing education and morale in Germany in a way that even more substantial government funding could not.³⁷ Maintaining a center of intellectual accomplishment and democratic education, the foundation knew, was “playing a significant role in the ideological conflict between the Soviet Union and the West.”³⁸

In 1951 the Ford Foundation gave $500,000 to aid Reinhold Niebuhr’s campaign to relocate professionals from European refugee camps to America.³⁹ Churches and civic groups the foundation supported were involved in the related work of teaching democracy. The Unitarian Service Committee, a Massachusetts nonprofit corporation, developed in the Western zones of Germany a cooperative German-American project to improve human relations and to inculcate the German people with democratic practices and principles. The organization developed workshops to disseminate knowledge and practical techniques related to mental health and childcare so as to free the youth from their parents’ predisposition towards authoritarianism in family and institutional life. As the Ford Foundation described it in the behavioral language of the 1950s, “A primary task of psychological warfare is to analyze the beliefs and attitudes of the people of each area and to develop techniques for manipulating these factors to evoke desired behavior responses.” Milton Katz assigned as the project’s final goal destroying the “enemy’s will or capacity to fight or otherwise impair U.S. interests.”40

Mutual understanding among nations was indispensable for fighting the battles of the Cold War. Senator J. William Fulbright conceived in 1946 of a bilateral international cultural exchange that would be funded by Congress through the sale of surplus military equipment.⁴¹ By the late 1940s the program was sending hundreds of U.S. graduate students abroad, both to Europe and other regions, and it had gathered much needed support from private voluntary agencies that assisted with government-run visits.⁴²

American families participated in the cultural cold war by receiving foreign students and sending their own sons and daughters abroad. At the high-school level, a broad array of voluntary associations supported exchange programs, including the International Christian Youth Exchange, the Conference on Christians and Jews, the International Farm Youth Exchange, the Grange and 4-H, Kiwanis, Rotary, Catholic Welfare Conference, and others. U.S. colleges and universities, too, began sending off increasing number of students, aided by improved language training at American schools, cheaper trans-Atlantic travel, and free tuition abroad. Many of these same institutions also attempted to offer financial incentives to bring foreign students to the U.S.⁴³

These exchanges, conducted with close collaboration between state and civil society institutions, often had the intended outcome. Akira Iriye, a historian who grew up in Japan, remembers his discovery of the United States as a Grew Foundation scholar (Joseph Grew was a former ambassador to Japan) at Haverford College, from 1953 to 1957, as years of “virtually total” intellectual freedom. Although the Cold War dominated international relations, the young undergraduate encountered American ways in its civil society of “churches, farms, private homes, and colleges,” from which he eventually emerged as a distinguished scholar of international relations.⁴⁴

Efforts at mutual understanding were not limited to stays at small liberal arts colleges. American foundations were eager to promote “area studies” in large universities. In 1947 the Carnegie Corporation funded the creation of a new Russian Research Center at Harvard. Though not the first such institution devoted to the investigation of strategically important regions, it did represent the beginning of a postwar boom in the social science study of the problematical parts of the world. When Ford supported “area studies” in several schools, Hoffman reported to the Board of Trustees in 1951 that “no university has a center dedicated to discovering the common elements in the eastern and western traditions and to arranging for intellectual exchange between the east and west.”45 Harvard would soon boast programs devoted to East Asia and the Middle East, while Carnegie would support additional ones focused on Latin America, Japan, and East Asia.⁴⁶ The new centers moved away from traditional emphases on history and literature in favor of the newer behavioral approaches of the social sciences that were transforming psychology, sociology, and political science. The study of international law also expanded in these postwar years. Aimed at measuring human action, the behavioral approach—when applied to Russia and elsewhere—thus meshed conceptually with the methods of psychological warfare. It was a matter of giving young Americans the tools for understanding different cultures in enough depth to effect changes in them.

Such psychological warfare entailed some division of labor between government and philanthropy, at least theoretically. When Hoffman directed the Marshall Plan, he believed that the government was totally justified in using at least 15 percent of its propaganda budget for covert operations. Keeping the source of funding a secret was often necessary. Propaganda, Hoffman felt, was not a job for those always moving “within a goldfish bowl.”⁴⁷ But as head of the Ford Foundation, he refused to cross the line from overt to covert operation. In 1951, CIA director Allen Dulles approached Hoffman about using the foundation as a secret conduit for agency funds. After some soul searching, Ford officials declined to channel CIA money, satisfied that they were already helping the agency with anti-communist propaganda in Eastern Europe, the re-education of communist defectors in the U.S., and other CIA-supported causes.⁴⁸ This refusal stemmed in part from concerns that the foundation’s goal of promoting peace not be conflated with the actual “prosecution of the cold war.”49 But Ford officials also believed that refraining from such direct collaboration would actually allow the foundation to promote American aims more effectively, taking action in areas where government involvement was impossible or ill-advised.

The CIA, however, feeling that the Soviet government’s own covert cultural activities of funding newspapers and symposia were enough of a justification, found other foundations willing to transmit its funds and created some philanthropic organizations of its own for this express purpose, most notably the Farfield Foundation.⁵⁰ CIA-funded foundations supported newspapers, magazines, and other cultural events in Europe, including the Congress for Cultural Freedom (CCF). At its first meeting in June 1950 in Berlin, the CCF attracted much of the liberal intellectual elite from both Western Europe and the United States—many of them former communists now intent on discrediting their earlier creed. Designed to counter similar congresses run from Moscow—including one such event at New York’s Waldorf-Astoria Hotel in 1949—the CCF’s major target was European intellectuals on the non-communist left, men and women prone to denouncing the dehumanizing traits of American mass culture as well as McCarthyism, but who had not become communists and might yet help tip the scales in favor of the West. Most CCF members were unaware of the CIA’s support for the organization until CIA funding was finally exposed during the mid-1960s in the context of a congressional investigation of foundations’ tax loopholes (see chapter 7).⁵¹

Focus on Development

While the psychological war was being pursued in Europe and Japan, in the developing world the state-philanthropy partnership focused on agriculture. Washington paid special attention to newly independent nations as a way of containing communism. Keeping the free world free would mean returning to the old philanthropic formula of development, that is, to attacking the roots of developing nations’ economic distress, rather than simply securing their alliance in order to access their raw materials.

In launching its postwar foreign aid program, the U.S. government benefited from a few philanthropic experiments in public health and agricultural extension, going back to investments in the depleted American South during Reconstruction (see chapter 1). Philanthropies were as much precursors of rural developmental programs abroad as they were partners with government. In 1930, Near East Relief, an organization founded fifteen years earlier in a valiant American effort to provide humanitarian assistance to the victims of the Armenian genocide, transformed itself into the Near East Foundation for agricultural improvement and village life assistance. In the late 1920s, Harold B. Allen, a faculty member in vocational agriculture at Rutgers University, launched at Near East Foundation an experimental rural development program in forty-eight Macedonian villages on land donated by the Greek government.⁵² Other agricultural demonstration projects, as well as home sanitation projects (mosquito control, sanitary latrines) followed in Syria, Albania, Bulgaria, and Iran. The Near East Foundation insisted “that native personnel, government agriculturalists, nurses, and ministries share in the work from the beginning,” until such time as the project becomes “a completely native product.”⁵³ The Rockefeller Foundation (which had contributed to Near East Relief from the beginning) provided continuous support to the Near East Foundation, which, lacking an endowment, had to raise its own money.⁵⁴

The Rockefeller Foundation had been for some time the leading organization in the field of rural development both at home and abroad. The foundation achieved extraordinary new momentum in the 1940s with the “green revolution” that it initiated in Mexico after Henry A. Wallace, Vice-President of the United States, had casually suggested it.⁵⁵ J. George Harrar, the plant pathologist from Washington State University who directed the program, would later serve as foundation president. Mexico provided land, local labor, and covered construction costs, while the foundation paid for the operating costs and sent the professional personnel. Plant scientist Norman Borlaug endlessly crossed varieties of wheat under very difficult conditions until he achieved dramatically improved yields. Borlaug was eventually recognized with a Nobel Prize.56 After him, hunger became a political problem of access to food and no longer an issue of productive capacity.

Rockefeller spent more than $12.5 million on its agricultural development program in Mexico between 1940 and 1949, and followed this up with similar programs in Colombia and Chile in the 1950s. Working with Mexican government officials, researchers, and agricultural colleges, the foundation developed a corps of Mexican agricultural experts trained at the college and graduate levels, sometimes in the U.S., in market-oriented farming techniques. The foundation’s biggest failure was in its inability to reach out to the nation’s small-scale subsistence farmers, a problem that would persist in exporting the “green revolution” to Asia.⁵⁷

One of the Rockefeller brothers, Nelson, pushed hard for a philanthropy-government partnership for rural development in Latin American countries, where his family had large oil interests. He and New Dealer Beardsley Ruml, a former Rockefeller Foundation official and a major promoter of the modern social sciences, approached Harry Hopkins in 1940 about creating an office of Coordinator of Inter-American Affairs (CIAA) within the State Department. Hopkins, who had by then become FDR’s closest confident of the war years, agreed, and the president established the agency by executive order with Nelson Rockefeller as its head.⁵⁸

Rockefeller feared that a government program might be short-lived, so he founded with family money the Institute of Inter-American Affairs (IIAA, to which the U.S. Congress gave a charter of incorporation of the sort it had once denied the Rockefeller Foundation—see chapter 1). IIAA pioneered an administrative structure for government-NGO cooperation (including representatives of both U.S. and Latin American governments, as well as U.S. and indigenous experts) called a servicio, to conduct public health and agricultural productivity studies. The servicio, staffed initially with American experts, would gradually come under indigenous control.⁵⁹

As in the case of other large philanthropic programs, rich Americans were not the only sponsors of rural projects. Now that the war was over, American missionaries resumed providing technical assistance in community development around the world. By 1950, U.S. Protestant groups (united under Church World Service during the war) engaged in overseas technical assistance spent $150 million. In comparison, in 1952 the U.N.’s Expanded Program spent just short of $23 million, while the U.S. government in 1954 spent $122 million.60

Despite the potential of the green revolution, feeding the world remained a major concern in the 1950s as demographers predicted a vast increase in the world population that revived fears of declining resources. Between 1900 and 1960, the world’s population doubled, and after World War II a growing cadre of social scientists expressed grave concern that the planet might not withstand another such doubling in a mere thirty years.⁶¹ Postwar America therefore experienced a resurgent wave of Malthusian thinking and was slow to recognize the mitigating effects of productivity.

John D. Rockefeller III, Nelson’s older brother, played a historic role here. While the family foundation was a leader in agricultural development, Rockefeller pursued a long-standing interest in birth control, dating back to his father’s financing of Margaret Sanger’s efforts (chapter 3). He lent his considerable support also to the rejuvenated field of demography, which still retained the taint of its eugenic past, and to population research. Rockefeller’s travels during the war had convinced him that population restriction was a worthy goal. Having developed an intense interest in the culture of the Far East, he worried especially about overpopulation there.

In supporting population research, Rockefeller followed in the footsteps of newspaper entrepreneur (and friend of Japan) Edward Scripps, who had created the Scripps Foundation for Population Research in 1922. Another precursor, the Milbank Memorial Fund, sponsored academic research and held a conference in 1931 that led to the formation of the Population Association of America. In 1936, Milbank supplied funds for the creation of the Princeton Office for Population Research, the base for many leading demographers to this day.⁶² Rockefeller took over the leading role during the war. In 1943 he made a large personal gift to the Scripps Foundation. Nine years later, in 1952, Rockefeller convened a population conference in Colonial Williamsburg, Virginia (which his family had begun restoring in 1926), under the auspices of the National Academy of Sciences, and a few months later founded the Population Council, which was to take on the mission of bringing the overpopulation issue to the attention of governments and the public. His efforts brought in other large funders who supported a worldwide movement for population control. The same year, the Ford Foundation began investing in population control. Few then worried about such abuses as the involuntary sterilization programs in India and other places that have since been exposed.63

President Truman naturally turned to philanthropic programs and to the expertise of the people who had been instrumental in promoting them when he launched an official American plan of economic development and long-term technical assistance. Philanthropy would give the Cold War its humanitarian face. In the “fourth point” of his 1949 inaugural address, the president prompted Americans to “embark on a bold new program” for “the improvement and growth of underdeveloped areas.” The International Development Act of 1950 established the Technical Cooperation Administration to carry out the program that became known as “Point Four.” The idea was to blend humanitarian goals with those of economic development and American national interest and security.

Nelson Rockefeller’s impact on Point Four was critical. In his more optimistic moments, Rockefeller believed that an effective blend of public and private action, as well as for-profit and not-for-profit enterprise, would render traditional philanthropy obsolete.⁶⁴ Benjamin Hardy, the speechwriter for the State Department’s Office of Public Affairs, and the person who first floated the Point Four idea to Truman, had been a press officer in Rockefeller’s office of Coordinator of Inter-American Affairs.⁶⁵ Hardy had begun to conceive of technical assistance as a major arm of U.S. postwar policy as early as 1948. Though confronted with resistance from his superiors in the State Department, Hardy managed to send his idea up the chain to members of the White House staff working on the president’s 1949 inaugural address, where it was finally presented to Truman by advisor Clark Clifford. Truman wanted to use his address to make a major foreign policy statement and was enthusiastic about incorporating the idea, despite its lack of detail. Rockefeller later provided more substance on private enterprise’s ability to undertake public work and deliver social services in his 1951 International Development Advisory Board report Partners in Progress, which Truman read closely.66

In his inaugural address, Truman advanced humanitarian and developmental goals for the Cold War. He sought support by appealing to democratic impulses. His agenda was to contain communism by teaching poor countries how to raise their own standard of living. As Samuel P. Hayes, Jr., special assistant secretary of state for economic affairs explained to the League of Women Voters of Massachusetts in January 1950, “We cannot … entrust our security even to a possible preponderance of power.” Instead Hayes believed in the classic philanthropic formula, temporarily suspended during the war, of attacking the root causes of social problems. As he put it, “we cannot confine ourselves to dealing with symptoms. We must go much deeper and try to root out the germ causes of mankind’s chronic ailments. We must help build a world society in which every man has a real personal stake in peace. Then, if tyrants and governments try to disturb the peace, they will stall against the abrasive antagonism of the great mass of peoples.”⁶⁷

The tight interweaving of philanthropic and government projects in rural development abroad was nowhere clearer than in India. The first head of Truman’s Technical Cooperation Administration, Henry G. Bennett, and Douglas Ensminger, the long-term Ford Foundation representative in India, were almost mirror images of one another. A former president of Oklahoma A&M, U.S. delegate to the Food and Agricultural Organization in Quebec in 1945, and a member of an agricultural survey mission for the U.S. Army in Germany, Bennett was an evangelical Christian who believed in the export of “Christian democracy” as a concomitant of technical assistance.⁶⁸ He saw Point Four as a self-help program that would operate not through large infusions of monetary aid but through the “people to people” dispensation of knowledge and training. His models included the agricultural extension service that employed county agents to bring new agricultural technologies to American farmers. Bennett saw the need to recruit similar agents for work overseas. Under his watch, educational institutions in the U.S. and abroad came to absorb the largest share of the Point Four budget.

Ford’s programs in India preceded Point Four. In New Delhi, Ensminger immediately developed a privileged relationship with Prime Minister Nehru, who otherwise protested America’s intrusion into Indian affairs.69 As a result, American ambassador to India Chester Bowles made sure Ford was closely associated with Point Four programs. The legislation contemplated from the start the utilization of private agencies “to the greatest extent practicable.” To congressmen who wondered why a governmental agency was necessary if private businesses and agencies were to be so relied upon, Secretary of State Dean Acheson responded that “many of the projects were not financially attractive to private enterprise” and that the resources of “the great foundations” were “limited.”⁷⁰

Ensminger was impressed with the direction Bennett gave to Point Four. The two men understood one another. Ensminger had degrees in agriculture and rural sociology and had worked with the USDA from 1939 to 1951. While at USDA, he had taken a deep interest in the servicio program of Nelson Rockefeller’s Institute for Inter-American Affairs and was in fact about to join the Rockefeller program in Latin America in 1951 when he decided to join Ford.⁷¹ Ford’s programs in India (and also Pakistan) mirrored Rockefeller green revolution activities in Latin America. Ford and Rockefeller eventually created together the International Rice Research Institute in the Philippines in 1960. With their cooperation, the green revolution would put an end to the huge deficit in wheat, corn, and rice production in the region.

Bennett for his part was an effective defender of the developmental-educational-humanitarian ideal of Point Four, which undergirded its connection to philanthropy. There were those in the State Department who believed that massive infusions of aid oriented for short-term political and economic ends would be more effective than a long term program, but we will never know how much longer Bennett might have resisted their influence. On December 22, 1951, the developmental-educational-humanitarian option suffered a tragic setback when all of its most important advocates died together in a plane crash over Iran.

Bennett along with Point Four originator Benjamin Hardy and fourteen other administrators of the program were surveying the Middle East in search of new projects. As Douglas Ensminger noted after this tragic accident, “the Point Four program lost its direction and never regained it.”72 The other side quickly won in the State Department. In 1952, with a new Mutual Security Act, the State Department succeeded in turning Point Four increasingly into a way to pump short-term economic aid into developing countries in the name of fighting communism, a strategy more in line with the military directives of NSC 68 than Bennett had been willing to follow.

The state-philanthropy partnership, based on a blend of humanitarian aid, technical assistance, and democratic proselytizing, proved fragile. Its progressive elements were no more effective at escaping the strategic Cold War framework than other parts of American society. Challenges came from aid recipients as often as from Washington. Dictators understood how they could use American foreign aid to achieve their ambitions. Ethiopia was among the more important sites of early Point Four programs, as the administration had an erroneous image of Emperor Haile Selassie as a progressive leader and of the country as a breadbasket of Africa, an image based on local reports of its alleged fertility. Bennett himself had given one of the first Point Four contracts to his own Oklahoma A&M College for establishing a new A&M college in Ethiopia.⁷³ Its goal was increasing food production and improving storage and distribution facilities. Selassie had little interest, however, in adopting the kind of land-tenure reforms needed to raise the country’s productivity. He accepted the program’s assistance in hopes of parlaying it into military aid as well as U.S. support before the U.N. for annexing Somaliland. When he did not get the military aid he wanted, Selassie accepted development aid from the Soviet Union in 1959 as a way of leveraging more support from the U.S.⁷⁴

In other places, the alliance remained productive. Some voluntary agencies were successful in aligning government efforts at technical assistance with their own “experience and altruistic purposes.”⁷⁵ International Voluntary Services was one of these. Charted in 1953, it was a Christian organization with a board comprised of representatives from fifteen denominations. It received funds from the Technical Cooperation Administration as well as from the Ford Foundation, the Rockefeller Brothers Fund, the Arabian American Oil Company, and World Neighbors. By 1960, young volunteers recruited by the organization had completed agricultural and village projects in Egypt, Jordan, Iraq, and Nepal. But many NGOs and university extensions operating abroad feared partnership with the government, preferring not to be perceived as government agents. The American Friends Service Committee established a program in India in 1951 under the TCA. After five years, the AFSC bowed out of the relationship when the TCA required that its personnel undergo security checks.76 The fewer agreed-upon U.S. requirements, the more fragile the alliance. Philanthropists had wanted to see their work as enlarging American foreign policy. Paul Hoffman of the Ford Foundation thought as much. It was a vision that turned out to be more utopian than real.

Cracks in the Government-Philanthropy Partnership: American Jews and U.S. Policy Towards Israel

The mid-century philanthropy-government partnership experienced its most significant test with the creation of Israel. The birth of the new state provoked a deep crisis between a vastly expanded American Jewish philanthropy, which stood behind Israel, and an American government preoccupied with befriending the oil-rich Arab states so critical for supplying Europe. The government had at first allowed philanthropy to play a political role, but then found that it could not always control the outcome. Objecting to the political obstacles the Eisenhower administration was posing to Israel, philanthropies supported by American Jews took matters into their own hands. With huge donations to Israel they countered the official U.S. stand of support to Arab countries so effectively that American policymakers several times threatened to prevent them from doing so. But in the long run the tide ran in the opposite direction and a dramatically enlarged, Zionist-inspired Jewish-American mass philanthropy helped push a reluctant Eisenhower administration to take a more conciliatory stance towards the Jewish state and clearly affirmed philanthropy’s ability to influence foreign policy.

The American Jewish community’s support for the new Jewish state after World War II represented a dramatic but understandable change of heart for a community that had been historically apathetic toward Zionism. Of the several forms of Zionism that had competed in the early days, the dominant view did not advocate that American Jews should settle in Palestine. For American Jews, America was already Zion. Justice Brandeis thought Palestine should be the homeland of refugees and the destitute, not of established American Jews.

The likelihood that Palestine could someday become an independent Jewish state seemed very remote to Jewish-American philanthropists. Five times as many Arabs as Jews lived in Palestine in the interwar years, and consequently American donors supported other settlement projects instead—especially in Russia, but also in Argentina. Julius Rosenwald, a major figure in American philanthropy and definitely not a Zionist, gave money to Palestine only for some agricultural experiments in which botanists at the University of Chicago had expressed an interest.77 Most American Jewish philanthropy was oriented towards local community needs in the United States.

Germany’s increasingly virulent anti-Semitism led to an increase in Jewish-American philanthropy abroad before World War II, but still little of it went to Palestine. Although American Jews had practiced federated fundraising early on (see chapter 2), American Zionists, feeling cheated in the distribution of funds, were reluctant to work with the United Jewish Appeal after its creation in 1929. They agreed to help raise funds for non-Zionist activities only after the burning of Germany’s synagogues in November 1938. Thus in 1939 the separate campaigns of the Joint Distribution Committee, the United Palestine Appeal, and the National Coordinating Committee Fund (refugee assistance) were all conducted by the United Jewish Appeal. But final totals for Palestine still disappointed the Zionists in the early 1940s. In the 1930s American Jews sent only about $1 million a year to Palestine. By 1948 that figure had risen to $98 million.⁷⁸

After World War II, when American efforts to help holocaust victims finally began in earnest, the Zionist project became a great experiment in social engineering. American Jews, the only Jewish community in the world that still commanded large wealth, were the sole source of continuous financial support for the resettlement of Jews in Palestine and, after 1948, for the new state of Israel. Guided by their own convictions and under pressure from Israeli leaders, American Jews sent hundreds of millions of dollars to the new Jewish nation during the late 1940s and 1950s. Their financial contributions to Israel amounted to twice the amount of money provided by the United States government.79

This philanthropy had major repercussions for Israelis and American Jews alike. Israel’s economy was small enough that American philanthropic money really made a difference for economic development and refugee settlement, and also enabled the purchase of the arms and military equipment that Washington refused to provide. Fundraising for these goals became the overriding preoccupation of the American Jewish community, but this put the community at odds with official American policy.

At the White House, President Truman personally supported the 1947 U.N. resolution partitioning Palestine into separate Jewish and Arab states.⁸⁰ He did not depart from the established policy of friendship with the Arab states, but he helped Israel in several important ways. Among other gestures, he made sure the United States was the first country (before the Soviet Union) to recognize de facto the newly proclaimed state in May of 1948, over the objections of both the State Department and the Pentagon.⁸¹ When the State Department proposed to withhold the unallocated portion of a recently approved $100 million loan from the Export-Import Bank over the issue of Palestinian refugees, Truman did not permit it. And when the State Department again moved to take away the tax-exempt status of the United Jewish Appeal, Truman killed the idea.⁸²

President Eisenhower was less inclined to support Israel. With Adlai Stevenson winning 75 percent of the Jewish vote in the 1952 election, Eisenhower felt he could disregard American Jewish entreaties. This led to a major rift between American Jews committed to Israel and the administration, which maintained a policy of so-called “friendly impartiality” in the Middle East.

Although the UJA directed the bulk of its funding to Palestine during the late 1940s, American Jews were eager to display their loyalty to the United States and its foreign policies, and UJA leaders stressed the essential Americanness of their mission. In a speech delivered in Tel Aviv in October 1948, Henry Morgenthau, Jr., former treasury secretary in the New Deal and a key leader of the UJA, asserted that the new nation’s struggle was a replay of George Washington’s fight against the British during America’s “early critical days.” As a defender of Holocaust survivors, Morgenthau was doing for his fellow Jews what his father, Henry Morgenthau, Sr., had attempted to do for the Armenians when serving as Woodrow Wilson’s ambassador to the Porte.83 Upon his return to the United States, Morgenthau recast his remarks in Cold War terms, claiming that Israel would become a “hard core of resistance” against communism in the Mediterranean.⁸⁴ Leading Americans, including Eleanor Roosevelt, Supreme Court Justice William O. Douglas, Democratic Senator Paul Douglas, and New York Governor Thomas Dewey also endorsed the UJA objectives.⁸⁵

That American Jews backed American Cold War policy objectives by supporting Israel was the key idea behind the UJA campaign. UJA advertisements published during the 1950s emphasized again and again the ideological and historical affinity between Israel and the United States. Displaying the faces of resolute-looking Israeli men and women, one 1954 UJA ad published in the New York Times insisted that Israelis were inspired by “a dream like our own American dream.” Significantly, at a time when the U.S. government was trying to bring Arab states into its orbit, the UJA argued that these same nations opposed American goals in the Cold War. “Beyond the border is an enemy with contempt in his heart for everything your country represents; opportunity for all, aid to newcomers, democracy.” “In his hands are late model communist arms—swift jet bombers, sleek fighters and heavy tanks—weapons designed for attack. On his lips is a threat—to sweep all Israel” and “Western-style progress into the sea.”⁸⁶

In 1950, Herbert Lehman, who had served as the influential director of UNRRA and was now a senator from New York, insisted that the UJA helped advance democracy both at home and abroad. Morgenthau likewise noted Israel’s value as a bastion of democracy. In contrast to the Arab regimes that the American government supported, it was, he argued, the one place in the Near East “where democracy is a vital and compelling part of people and government alike” and would “given time … serve to transform that whole region from its present feudal state to that of a vigorous democratic society, fashioned in the image of our own.” “A democracy in Israel is a source of strength for America. A focus of freedom in the Near East is a focus of freedom for the entire world,” he said.87

The UJA’s fundraising ability matched its sophistication in public relations. By the end of the war, it was collecting money in 3,371 U.S. communities, many of which doubled their giving to the UJA each year from 1943 to 1948. The number of givers also increased rapidly, doubling between 1945 and 1946, and then rising another 70 percent between 1946 and 1948.⁸⁸ The number of contributing Jewish organizations also grew. In 1948, UJA collections added up to four times the total national fundraising of the American Red Cross, and thirteen times that of the American Cancer Society.⁸⁹

National Jewish organizations increasingly booked their annual conventions in Miami Beach, where the peak winter season drew legions of wealthy Jews from across the country. This time, it was the Zionists who attracted the most money to the United Jewish Appeal and turned it into a big show. The UJA therefore concentrated its efforts on refugee resettlement in Palestine. Miami gave 58 percent of the proceeds from its 1951 UJA drive to Israel. Other communities did the same. After hovering around 60 percent at first, the national percentage went up rather rapidly, reaching 80 percent in 1952–53.⁹⁰

In Miami, the fundraisers resorted to all sorts of stratagems to locate vacationing Jews. They acquired guest lists from hotel clerks and waited for the guests at the hotel’s beach club. The UJA threw star-studded galas to kick off its annual drives.⁹¹ UJA fundraisers in Miami Beach also brought in Israeli leaders to help stimulate giving. At one such event in February 1948, Golda Meir made it plain that the American Jews’ role in the ongoing war for independence in Palestine was to give money: “This is your war, too. But we do not ask you to guard the convoy. If there is any blood to be spilled, let it be ours. Remember, though, that how long this blood will be shed depends upon you.”92

Other Israeli leaders, who felt that more Americans should “guard the convoy,” repeatedly called on American Jews to immigrate to Israel during the late 1940s. But while American Jews gave generously, fewer than 100,000 chose to settle in the Jewish state—and most of those ultimately returned home, leading to the charge that American Zionism was merely checkbook Judaism. It was a sensitive issue. In the late 1940s, the American Jewish Committee, a traditionally assimilationist (and formerly anti-Zionist) organization, even threatened to cut off aid to Israel if the state did not cease its efforts to recruit American Jewish settlers. Following a confrontation with AJC president Jacob Blaustein in August 1950, Israeli Prime Minister David Ben-Gurion finally relented and agreed to state publicly that “the Jews of the United States, as a community and as individuals, have only one political attachment and that is to the United States of America.”⁹³

After Blaustein and Ben-Gurion put the immigration issue behind them, the campaign for Israel Bonds in September of 1950 gave the Jewish state a new, direct, and powerful financial tie with their coreligionists in the U.S. American Jews could now invest directly in Israel’s economic future and acquire a stake in a surrogate home. By offering the bonds for sale at numerous rallies, dinners, meetings, and receptions, Israeli officials created opportunities to approach American officials and lobby for their cause. As it turned out, U.S. Treasury regulations worked in favor of the bond campaign. Many who bought the Israel bonds, which came without a tax deduction, donated them to the United Jewish Appeal, a charitable organization, thus gaining for themselves the full deduction allowed by the IRS for charitable contributions, while at the same time supporting a controversial political objective in opposition to their government’s foreign policy.

Jewish rhetoric notwithstanding, the Eisenhower administration did not see Israel as a bastion of democracy, nor did it discount the importance of Arab states and oil. In this context, two major crises during the Eisenhower administration brought the conflict between UJA fundraising and U.S. foreign policy into the open. Israel’s Jordan River project of 1953 and the Suez Crisis of 1956–57 revealed the extent to which both Israel and the United States perceived Jewish-American giving as a major bargaining chip. In both instances, the Israeli government conceived of the Jewish-American community’s gift as big enough to substitute for lost aid from the American government, and the American government implicitly agreed with this assessment by threatening to stop the flow of private money to Israel.

In the fall of 1953 Israel began constructing a hydroelectric power plant near the Syrian border at the B’not Yaakov Bridge, located in the demilitarized zone between the two countries. Syria objected, claiming it would rob Arab farmers of water from the Jordan River and give Israel a military advantage. Moreover, Israel had launched the project despite the fact that the dam threatened a soon-to-be completed U.N. plan for joint use of the Jordan River. The U.N. quickly demanded that Israel stop work on the project, and the U.S. supported the U.N. decision, cutting off public aid to the Jewish state.

In reacting to the sanctions, Ben-Gurion and the Israeli cabinet concluded that the hydroelectric project was important enough to defy the U.N. and risk the loss of U.S. aid. The Israeli cabinet debated whether American Jews would be able to increase their level of giving sufficiently to compensate for the loss of foreign aid from the U.S. Ben-Gurion believed that they would. Foreign Minister Moshe Sharett was the major voice of dissent. He did not object to Ben-Gurion’s conclusion but was justifiably concerned that Eisenhower might move to block American Jewish money.

In the midst of the crisis, Israel decided to retaliate against Arab raiders from Jordan. In October of 1953, Ariel Sharon led a night assault on the Jordanian village of Kibya, an action condemned by the international community. The American government temporarily suspended aid to Israel, and Jewish philanthropic organizations responded with intensified fundraising efforts of their own. In early 1954, the UJA floated a five-year $75-million loan—in addition to the regular fundraising for the year—to help Israel meet its short-term obligations. By summer, the UJA had sent 80 percent of that sum to Israel.94

The American Jewish community again mobilized to raise emergency funds after Great Britain and France joined Israel in launching a military campaign against Nasser in the fall of 1956 in an unexpected retaliation for his restricting access to the Suez Canal. The attack, coming only a week before the American presidential election, took American Jews as much by surprise as the Eisenhower administration. Eisenhower strongly condemned the three countries, demanding their withdrawal, and, at least initially, the Presidents’ Conference (of major American Jewish organizations) and other Jewish lobbying groups pursued a line that offered only limited support for Israel while carefully avoiding outright criticism of Eisenhower.⁹⁵

But the crisis stimulated a massive new round of gifts to Israel. In November, the UJA launched an Emergency Rescue Fund seeking $100 million over and above the normal campaign goal to help 80,000 Jews depart from Egypt. At the kickoff meeting in New York City, Nasser was attacked as the “spiritual heir of Nazism.”⁹⁶ In February 1957, the Israel Bond Organization made a record $15,450,000 at the organization’s three-day conference in Miami—covering 20 percent of that year’s goal of $75,000,000. In addition to a birthday celebration for celebrity entertainer Eddie Cantor, the event was highlighted by a keynote speech from Harry Truman railing against Eisenhower’s Middle East policy. On March 3, 1957, two days after Israeli Foreign Minister Golda Meir announced to the U.N. General Assembly Israel’s decision to withdraw from the Gaza strip and the Gulf of Aqaba, she again told UJA delegates that their fundraising work was an integral part of the “struggle for Israel’s security, for Israel’s welfare, for Israel’s economic rights.”⁹⁷

Eisenhower saw the matter differently. In early 1957, after Treasury Secretary George Humphrey reported that Israel received about $40 million a year in private, tax-deductible gifts, and that about $60 million worth of Israel bonds were sold each year in the United States, Eisenhower pushed for proposing a U.N. resolution to suspend not only governmental assistance to Israel but also private assistance. In a last-ditch attempt to get some support from within the Jewish community, Eisenhower advised Humphrey to “get in touch with one or two leading Jewish personalities who might be sympathetic to our position and help to organize some Jewish sentiment.”98 But in effect, there was little Eisenhower could do, and he knew it. Given the state of Jewish-American public opinion, the notion that the Jewish leadership might support restricting aid was wishful thinking. This did not, however, prevent Eisenhower from cabling Ben-Gurion that the U.S. might vote for sanctions in the United Nations, and that those measures might include restrictions on private contributions.⁹⁹

The administration, however, did not clarify its plans and seemed to be doing nothing more than sending a warning. As the New York Times reported in February 1957, “There appeared to be divided councils in the State Department on the question of private contributions.” The issue remained cloudy: “It is uncertain whether the proposed resolution would apply only to United States Governmental assistance to Israel, or would also forbid private contributions through the United Jewish Appeal. The State and Treasury Departments would also have to decide whether private contributions could be stopped by executive action or would require new legislation,” the newspaper reported in a later article.¹⁰⁰

Mass giving on the part of American Jews combined with effective lobbying by the American Zionist Council, the American Israel Public Affairs Committee (founded in 1953), the Presidents’ Conference, and others helped to secure bipartisan congressional opposition to Eisenhower’s stance on unconditional withdrawal from Sinai and Gaza, as well as support for guaranteeing Israel’s security.¹⁰¹ Jewish-American lobbyists were able to muster the backing of the Democratic Senate majority under the leadership of Lyndon Johnson. To get Johnson to speak out against sanctions, Texas Jews—encouraged by both secular leaders and rabbis in Saturday sermons—inundated the Senate Majority Leader, as well as Speaker Sam Rayburn, with more than 5,000 telegrams in the course of a single weekend. In response, Johnson sent a letter to Dulles objecting to possible sanctions and then took the Senate floor to urge a settlement—and to assert that the administration policy would remain stalled in the Senate for as long as needed.¹⁰²

The Israeli state-building project was the great unifier of American Jewish philanthropy. That Israel and American Jews ultimately prevailed on the United States government to establish a closer relationship with Israel undoubtedly had much to do with the Soviet’s new commitment to the Arab states and Nasser’s ingratitude towards the United States in the aftermath of the Suez Crisis.103 But the Jewish community’s fundraising also played a major role in the policy shift. In order to sustain the historic movement unfolding in Palestine, American Jews had been moved to take action on an unprecedented scale, and in so doing they had challenged the Pax Americana. They had ventured beyond the humanitarian and economic initiatives that had up-to-now bounded the partnership between philanthropy and government.