In trying to grasp how philanthropy shapes society, it can be tempting to go with a “great man” theory: Titans of business harness piles of money to big visions of progress, at least as they define it, and forge ahead over years to have a major impact. Certainly there is much to that view, and you could imagine a Mount Rushmore of philanthropy that included the likes of John D. Rockefeller and Andrew Carnegie—along with contemporary figures like Bill Gates, Chuck Feeney, and George Soros. (People would fight like hell over who should be on such a monument, needless to say.)
Yet there’s another big way that wealth is converted into power in the philanthrosphere, which is through networks.
Even donors with many billions of dollars tend to be acutely aware of how puny their resources are compared to the problems they seek to tackle. Bill Gates has often made this point. And if you’re a more ordinary philanthropist, with mere millions to give away, or even less, the odds of having an impact can seem very long indeed.
One way to improve those odds is to hook up with like-minded donors who share your goals. If you pool your money with that of others, and direct it in a coordinated way, it just might be enough to make a difference. And elite networks of philanthropists can mobilize more than money. They can combine their social capital to push a cause to political leaders, the media, and corporations. They can make stuff happen in a big way.
It may come as no surprise that women have led the way in thinking outside the “great man” approach to giving. Women have been the star networkers in the philanthropy world, building up several strong outfits to pool contributions and direct them toward specific causes—often with a policy agenda.
One group at the center of this action lately is Women Moving Millions (WMM). It’s a network of several hundred high-net-worth women donors who have all given at least $1 million to support work for gender equality around the world. “We exist to promote women for women philanthropy,” Jacki Zehner told me. Zehner, who joined the network as a member in 2009, is the group’s chief engagement officer as well as a donor.
Two ideas lie behind Women Moving Millions. One is that wealthy women are the most logical champions of gender equality, an issue that funders often ignore. The other idea is that there are many more such women today than ever before who can be mobilized to give, and at a high level.
Recent years have seen a jump in the number of women who have gotten wealthy through their own efforts, as opposed to through marriage. Research also shows that women often take the lead in family philanthropy—and in quite a few cases, end up controlling foundations when their husbands die before them. Two of the biggest foundations in the United States these days, the JPB Foundation and the Charles and Lynn Schusterman Family Foundation, are run by women who outlived their husbands. A third, the Susan Thompson Buffett Foundation, is run by Warren Buffett’s daughter. A fourth, Margaret A. Cargill Philanthropies, is carrying out the detailed wishes of its benefactor, who was among the wealthiest women in the United States when she died in 2006.
Women Moving Millions has estimated that women control $13.2 trillion of wealth in North America alone. Jacki Zehner herself is an example of new women’s wealth, as a former partner at Goldman Sachs. After leaving that firm, she and her husband, also a Goldman Sachs alumnus, started their own foundation.
Historically, total annual giving by women to charitable work aimed at empowering girls and women has been low. In fact, until sisters Helen LaKelly Hunt and Swanee Hunt started Women Moving Millions in 2007, few gifts of a million dollars or more had ever been given to women-led organizations. Just because women often controlled the purse strings of family philanthropy didn’t mean they gave to women’s causes.
The Hunt sisters got rich through inheritance. They are daughters of the silver tycoon H. L. Hunt, who was a well-known conservative Republican and, for a time, one of the richest men in America.
“My parents never talked about money,” Helen Hunt told me, suggesting that “the greater the wealth of the family, the greater the incentive to keep the women disempowered.” Hunt said there was the expectation “that I would marry someone who would join the family business….The Southern belle culture hadn’t caught up with second wave feminism.” In Dallas, said Hunt, “you didn’t use the terms women and money in the same sentence.”
Hunt and her sister learned how wealthy they were by reading Forbes magazine. “Suddenly I learned I had money,” she recalled. “There was all this net worth, but nobody had told me about it.” As she came of age as a young woman, Hunt also developed strong ideas about how the world might work differently—and how her wealth might be put to good use. She had spent a stint teaching in a low-income part of Dallas, where she was exposed to poverty and injustice. She came away radicalized amid the social ferment of the early 1970s.
Hunt’s journey away from her father’s politics was not uncommon for young people of inherited wealth during this time. A number of them—with names like Pillsbury, Rockefeller, and Reynolds—were drawn to activist philanthropy, putting their trust funds behind the social movements of the era. They also networked together, bonding around their experience as “class traitors” and sharing ideas about how to give money to make change. Hunt and her sister established the Hunt Alternatives Fund in 1981, which funded progressive work in various areas, including international peace and security. (Swanee Hunt would eventually become the U.S. ambassador to Austria during the Clinton administration.)
Helen was determined to use some of her money to help women in Texas, but found that most nonprofits in the state were run by men and few thought about injustice in larger structural ways. Then Hunt came across the San Francisco Women’s Foundation, one of the earliest local women’s funds in the United States. The fund was powered by a network of savvy women, many from wealthy backgrounds, and Hunt remembers crying when she read its annual report. Here, finally, was a model for the kind of philanthropy she believed in—giving by and for women, with a keen eye on how the systems of society impeded equity and fairness. “I decided that’s what I want to do with my life.”
Hunt became one of the great builders of women’s philanthropic networks. In 1985, she catalyzed the creation of the Dallas Women’s Foundation. A few years later, she helped get the New York Women’s Foundation off the ground. Also during the 1980s she helped create the Women’s Funding Network (WFN), which aimed to knit together all the different women’s funds emerging across the United States. Its first meeting, in 1985, drew leaders of twenty different funds. By 2000, the network, which by then operated globally, included ninety-four member funds and foundations, with over $200 million in assets and $30 million in annual grantmaking. It now has more than 120 members. WFN describes itself as “the largest philanthropic network in the world devoted to women and girls.” Over the years, it has sought to marshal that power for such causes as reproductive rights, equal pay, and paid family leave.
Yet for all this activity, and the emergence of so many women’s funds, Helen and Swanee Hunt found themselves disappointed in the early 2000s about the scope of giving for gender equity. They still saw a huge gap between the number of women who, like them, had access to significant resources, and how little money went to support work for women’s issues.
An eye-opening moment for Helen came while doing research on the early history of the women’s movement, before the Civil War. She came across a letter by the nineteenth-century women’s rights activist Matilda Joslyn Gage, who vented about the lack of support for such work by wealthy women—many of whom gave generously for the arts and anti-poverty efforts, but never for women’s suffrage. Thirty years into the push for women’s voting rights, the movement still had only two major donors, both of whom were men. “Where are the women?” Gage wrote. “Why aren’t women of means funding our causes?”
Hunt wondered the same thing in the early twenty-first century. Again and again, Hunt saw women’s groups get only crumbs from top female philanthropists who gave away bundles of money. Typically, the biggest gifts—six figures and up—went to arts organizations or alma maters, while much smaller sums were given for gender-related issues. The leader of one major women’s fund told her, “I can count all my million dollar donors on one hand.”
That comment stuck with Hunt. She was excited to hear that at least some women were giving at a large level, and she became fixed on the idea of rallying many more to pass the million-dollar mark in their support of women’s issues. Hunt wanted to reverse the usual formula of giving by female philanthropists, so that the opera would get the small checks for a change while these donors got serious about empowering women on a global scale.
With large initial pledges of their own, Swanee and Helen set out to “raise the bar on women’s giving” through the Women Moving Millions campaign. Their initial efforts—which came at a moment of rising awareness of the dividends that come from empowering girls and women—yielded a flurry of donations for gender equity. Alida Rockefeller Messinger kicked in a million dollars. So did Abigail Disney and Barbara Dobkin. Other money would follow.
Since 2012, WMM has built a full-fledged organization to advance its mission of catalyzing “unprecedented resources for the advancement of women and girls.” (Gifts go directly to nonprofits, not to WMM.) The group built up its staff and infrastructure to raise yet more money, putting on high-profile galas that one year featured the actress Meryl Streep (herself an active philanthropist) and the supermodel Christy Turlington Burns. By 2016, its 240 members in fourteen countries had made at least $600 million in gifts.
That’s serious money, and it stands as impressive confirmation of the Hunt sisters’ initial hypothesis: that there are huge latent resources waiting in the wings for women’s issues—if you can just find a way to activate donors.
In a world that’s awash in new wealth, this same idea is tantalizing for the leaders of any cause. Every nonprofit fundraiser dreams that their next sugar daddy—or momma, as the case may be—is out there somewhere, among the legions of zillionaires spawned by the second Gilded Age. So often, though, those dreams come to naught, since identifying and cultivating such folks is famously hard.
Which is why donor networks matter so much in twenty-first-century philanthropy. They provide a way to find and mobilize donors who might otherwise never swing behind a cause, tapping into mountains of money that are now sitting on the sidelines. This approach is an alternative to hustling for a bigger piece of a static pie of grantmaking dollars given out by known funders, all of whom have long lines outside their doors. If you want to get your cause or organization to the next level in an ultra-competitive fundraising environment, networking your way to new donors is key.
Women Moving Millions is a great case study of the potential of networks because it is tapping into one of the biggest reservoirs of latent giving capacity, wealthy women, and generating new dollars for the neglected area of gender issues.
But make no mistake: Building networks of wealthy donors is hard work. Finding members requires getting buy-in from busy people who may be quite guarded when it comes to giving away their money—or may be new to philanthropy altogether. The next step, marshalling them into a unified force that works together, isn’t much easier. People with big money often have big egos and their own strong ideas of how things should be done.
As it turns out, though, women have been quite good at working collaboratively to pool money as donors. Women have long connected through so-called giving circles to combine their money and knowledge in ways that boost their impact—as Sondra Shaw-Hardy and Martha Taylor describe in their 2010 book, Women and Philanthropy. Many of America’s early charities were the result of affluent women banding together to address social ills.
Why are women drawn to this model? Zehner offered a simple explanation: “Women like to do things together.” Helen Hunt, who these days works with her husband, Harville Hendrix, to help couples and families improve their relationships, suggested that women think about building power in more collective ways—in other words, “power with”—while men think in terms of domination, “power over.” Men are apt to like the idea of creating a new freestanding foundation named after them. Some women do, too, but others are more drawn to cooperative efforts to combine their money with that of other donors.
This can be especially true of women just coming to philanthropy. It’s easy for new funders to be intimidated by the range of choices for giving away their money. Where Women Moving Millions adds value, said Zehner, is by offering a way to “accelerate the process of getting up to speed….It’s a fast-forward.” WMM brings together women who’ve long been giving away money with those who are new to the game. “We have the students and the teachers, and we’re putting them all together.”
Vanessa Kirsch also knows a thing or two about organizing wealthy donors so that they can have a bigger impact together than they could alone. Since the late 1990s, she’s built up a Boston-based venture philanthropy group, New Profit, into a major conduit for giving to nonprofit entrepreneurs looking to make change in areas like education and public health. Much of this cash comes from philanthropists in the finance world who prefer pooling their funds with like-minded donors over going it alone with their own staffed foundations.
Kirsch describes herself as a “serial social entrepreneur.” In the early 1990s, she had co-founded Public Allies, a national service group that sought to tap the idealism of young people and that thrived in the Clinton era, becoming one of the first recipients of funds from the White House’s new AmeriCorps program. She also helped found the Women’s Information Network, which sought to empower women looking to climb upward in Democratic Party politics. Kirsch is married to Alan Khazei, who had co-founded City Year in 1988, another national service group, and later started an advocacy group, Be the Change, and twice ran for the U.S. Senate in the Massachusetts Democratic primary. Despite the couple’s partisan ties, they both embody a pragmatic idealism that defies ideological labels. The social entrepreneur movement they helped rev up in the 1990s took pains to distinguish itself from the cause-oriented mind-set of 1960s activism. The new do-gooders saw themselves as all about solving problems, regardless of established orthodoxies, and were agnostic about means. If government could get the job done, fine. If the free market could, that might be even better.
Philanthropy was among the systems that Kirsch came to believe was in need of new thinking. After years of raising money, she found herself frustrated by the traditional world of foundations. She noticed funders tended to give to achieve certain outcomes, what Kirsch calls “buy capital,” doling out short-term program grants to pursue this or that goal. It was less common for them to put up “build capital,” in the form of general support funds that help organizations grow. Meanwhile, financing for businesses tends to work in the exact opposite way: venture capital and private equity firms provide entrepreneurs chunks of capital because they know that “there’s a real need for growth capital to help organizations build their capacity to scale,” Kirsch told me.
Another problem that Kirsch saw with traditional foundations is that they tend to spread grants around too thinly, backing numerous nonprofits with modest support, as opposed to placing bigger bets on fewer groups. The result, as Kirsch saw it, was a social sector with “lots of innovations and solutions, but very few that had gotten to any significant scale.” Again, venture capital and private equity firms worked quite differently—investing in just a handful of companies and then going all out to help them succeed. The other thing about this model is how venture firms pooled money from many investors, most of whom wouldn’t be able to find winning bets if they were working alone.
Kirsch’s simple idea was to bring the venture approach to philanthropy. She aimed to swing a network of wealthy donors behind top social entrepreneurs, so they could get the same financing and support that’s the norm for business entrepreneurs. Her hunch in starting New Profit, at the height of the dotcom era of the 1990s, was that “if we bet on a few ideas and not only provided the programmatic support, but also the growth capital to scale organizations and support the social entrepreneurs, we would have some more home runs in our sector.”
New Profit wasn’t the first funding group to train its eye on helping innovative nonprofit leaders. Ashoka, founded in 1980 by Bill Drayton, also nurtured new talent, as did Echoing Green, with a fellowship program for early-stage social entrepreneurs. Kirsch saw New Profit as coming in further along in an organization’s life span, helping already established nonprofits to grow. She imagined a future in which the most effective and innovative organizations quickly found the capital to scale their winning solutions—the way that groundbreaking new companies are able to get big fast. Kirsch believed that if she helped change how funding flowed in the social sector, she could help change the world.
Kirsch thought that New Profit would be an easy sell to the many business leaders who engaged in philanthropy. Why wouldn’t they want their giving to track with strategies seen as elementary in the investing world? “To me this seemed intuitively like a good idea, that had really worked in the private sector—not only with venture capital, but with private equity.” Kirsch imagined that once New Profit hung out its shingle, donors would be beating down its door.
Things didn’t turn out that way. In fact, Kirsch faced long years of pick-and-shovel labor to build up a strong network of donors.
Before starting New Profit, Kirsch had worked for a spell with Peter Hart, the pollster. And as she got her new organization going, she asked Hart to help her understand the new philanthropists who would be so critical to her success. Hart convened a focus group in Boston of high-net-worth individuals to vet the thinking behind New Profit, with Kirsch watching from behind a one-way mirror. Many were quite intrigued by the plan and, at the end, Hart offered to put his client in touch with whoever wished to be contacted. This is how New Profit got its first major donor—Mark Nunnelly, a managing director at Bain Capital, the private equity group.
Nunnelly proved to be much more than a donor. He was a critical ally who opened doors and helped educate Kirsch on the strategies of the investment world. That advice proved crucial as New Profit curated a portfolio of grantees—mainly nonprofits working to improve education and boost economic mobility, using models that New Profit believed could be scaled to have major impact. Financing was only part of what Kirsch’s shop offered. Like private investing firms, it also offered advice and technical support to the groups it invested in, help that could be very useful to young social entrepreneurs with a strong vision but often weak management skills.
New Profit’s basic pitch to donors was similar to the pitch that professional investors make to clients: If you want to get a maximum return on your philanthropic dollars, let us do the work of identifying great investments and nurturing those bets to ensure they bear fruit.
Many of New Profit’s early donors, like Nunnelly, came from venture capital and private equity, since these people quickly grasped what Kirsch was doing. Still, Kirsch’s fantasy that donors would naturally flock to New Profit never materialized. Instead, she has spent years going to them, and estimated to me that she has pitched 1,800 people in fundraising meetings since founding New Profit in 1998.
Along the way, Kirsch has refined her appeal to stress the power of networked philanthropy. She often starts these conversations by asking prospects how happy they are about the impact they’re having with their giving. If someone is satisfied with their own efforts, Kirsch doesn’t see them as a likely donor to New Profit. Often, though, the philanthropists she meets aren’t so happy with their impact.
Many major donors travel a similar trajectory, Kirsch has noticed. They make a few big initial charitable gifts and feel good about things. But, as their giving goes on, they may feel disappointed with how their money is used and how little change they can see happening. They start to realize that having impact is harder than they thought, and get frustrated that they aren’t as effective at giving away money as they are at making it. At this point, some get curious about the mechanics of high-impact philanthropy and, among other things, may realize that they need a lot more help than they thought. One way to get that help is to work collaboratively, joining forces with like-minded donors in order to leverage their giving. This path is especially appealing to givers who don’t want to staff up their own foundation, with the hassle and overhead costs that entails.
Kirsch sees the donors attracted to this model—those “who want to join others, not start a foundation, and act differently”—as a growing and important part of a new philanthropic ecosystem.
In part, the rising appeal of networked philanthropy reflects how similar thinking has swept the business world in recent decades. There, an older model of production—in which the large hierarchical organization was king—has given way to more decentralized approaches, whereby firms focus on their core competencies and rely on partners to handle everything else. As today’s business leaders turn to giving, it makes sense that many might think differently—and more collaboratively—than philanthropists who made their fortunes in earlier eras. The fact that more major donors are giving at a large level while still in the prime of their careers, as opposed to leaving this to retirement, is another reason they might turn to an outfit like New Profit. The busier you are, the more sense it makes to let someone else ensure that you’re getting the biggest bang for your philanthropic buck.
That said, New Profit’s top donors have been anything but passive. They’ve often gotten quite involved in helping grantees with support and advice, and in 2008, two of these donors got together to give the organization a major boost in the form of eight-figure challenge grants. In one year, Kirsch raised $75 million, funds that helped catapult New Profit to a new level.
Network thinking hasn’t just powered New Profit’s fundraising model, it has also reshaped its theory of change. Initially, the group heavily stressed the role of empowered individuals in tackling society’s problems—a worldview that, to some, underscored the naiveté of a youthful social entrepreneur movement that had yet to grasp how systemic most problems really are. Over time, though, Kirsch gravitated toward a more holistic view of how change needed to happen, co-authoring an article about the need to back “system entrepreneurs,” not social entrepreneurs. “It’s not just one actor with one solution,” she told me. “It’s a set of actors that has to work in concert. The more we understand the ensemble, the better.”
Backing visionaries is still key to New Profit’s model, but now Kirsch and her team are also putting money into a broader network of organizations—including investments in public policy research and advocacy. The group’s evolution tells a broader story of how the social entrepreneur movement has grown up and gotten serious about jockeying for policy influence. Fueling that bid for greater power, in turn, has been a growing legion of like-minded donors who’ve become more collaborative and strategic.
One trend of the past decade or two is that donors of nearly all stripes are getting better organized, recognizing that there’s strength in numbers—whether they’re trying to conquer Parkinson’s disease or trying to make social change. The philanthropists behind Women Moving Millions and New Profit are examples of the latter kind of collaboration, but more examples can be found on both sides of America’s ideological divide.
Earlier, I wrote about how progressive donors like Herb Sandler and George Soros had responded to the right’s rise by building new policy and advocacy groups in the early 2000s, including the Center for American Progress and Media Matters. A network of wealthy donors, the Democracy Alliance, coalesced in 2005 to help fund and knit together a more robust progressive policy infrastructure.
This push, combined with the debacle in Iraq and a cratering economy, helped fuel the hottest burst of progressive energy in the United States since the 1960s. Democrats took control of Congress in 2006 and, a few years later, President Barack Obama, backed by a Democratic Congress, moved forward an agenda that included new taxes on the wealthy, new controls on Wall Street, and, that forever unrealized Holy Grail of liberalism, universal health insurance. Obama didn’t get everything he wanted, but he got enough to trigger a full-scale panic among wealthy conservatives, who began writing more checks, and bigger checks, to roll back liberal gains.
Many of these checks went for campaign activities aimed at returning Washington to Republican control as well as capturing statehouses. The Koch political network began taking shape in 2010, emerging over the next six years as a unique new power player in American politics—a shadow political operation even larger than the Republican National Committee itself.
The other tributary in the mighty river of conservative money took the form of philanthropic dollars, with new funds boosting groups across the right-wing universe. Some of the wealthy donors upping their giving knew exactly what they were doing, like the hedge funder Robert Mercer, a big league philanthropist who used a family foundation, run by his daughter, to pump millions of dollars in grants into a wide array of think tanks, legal groups, and leadership training efforts. But other donors didn’t have foundations, gave at a much smaller level, and didn’t quite know where to put their money. They needed help to give, and to give wisely.
This is where DonorsTrust came in, a funding group started in 1999 that fully hit its stride during the Obama years. No organization has lately done more than DonorsTrust to marshal a large and diffuse array of conservative philanthropists into an organized ideological fighting force.
As the name might suggest, donor-advised funds lie at the core of DonorsTrust. These funds allow wealthy donors to put aside tax-deductible dollars for philanthropy without the hassle of setting up a foundation. The funds are housed at a larger organization that actually makes the grants. This arrangement is an ideal way to join together lots of small donors who want to have a big impact but can’t do so alone.
Donor-advised funds were pioneered by the New York Community Trust in 1931, and for decades were mainly used by community foundations. Then, in the 1970s, an entrepreneurial activist named Drummond Pike teamed up with some of his wealthy friends to create the Tides Foundation, which used donor-advised funds to direct resources to progressive causes. In effect, Pike created a new kind of community foundation—one where the glue was a shared worldview rather than a particular place.
Over the years, Tides emerged as a key clearinghouse for liberal money backing a wide array of causes. Wealthy donors who wanted to see social change would write checks, and Pike and his veteran staff, who actually knew how to advance such change, would deploy the money through strategic grantmaking. It was a powerful model, and all the more so because donors could be anonymous. Tides had to report where its grants went, but it didn’t have to reveal its donors. Which meant, among things, that young trust fund heirs could support the kind of lefty causes that might well get them disinherited if their parents ever found out. Tides also offered mainstream foundations a way to funnel grants to hot-button causes without leaving any fingerprints. By the 1990s, it was moving tens of millions of dollars every year.
Drummond Pike’s success in organizing a shadowy phalanx of progressive donors through Tides didn’t go unnoticed on the right. And, in the late 1990s, a movement conservative, Whitney Ball, set out to create the same kind of outfit for her team.
Ball had spent her entire career inside the policy world that right-wing funders like Scaife, Olin, and the Kochs had built up starting in the 1970s—except that she worked on the philanthropic side of things. Her first major job was raising money for the Cato Institute, where she got to know many of the foundations and individuals backing libertarian causes. Her next gig was helping build up the Philanthropy Roundtable, which was founded in the late 1980s by conservative foundations who broke away from the Council on Foundations, feeling that it had been captured by liberal orthodoxy. Ball helped turn the roundtable into an important community for funders on the right. Among other things, she took charge of creating the group’s annual conference, which became a key forum for these funders to swap ideas and plot strategy.
Most foundations on the right aren’t very large; none have the resources of such liberal leviathans as Ford or Kellogg. A key reason these funders have nevertheless been so effective is because they’re good at sticking together. Starting in the 1970s, about a dozen or so conservative foundations—including Bradley, Olin, Scaife, Smith Richardson, and Searle—worked in close concert, backing the same network of organizations. (Olin closed its doors in 2005, after spending down its assets.) In turn, many other funders have joined the effort over time to support “liberty, opportunity, and personal responsibility,” which is how the Philanthropy Roundtable describes the mission of its members.
The emergence of the roundtable was a major breakthrough for conservative philanthropy, but Whitney Ball had larger ambitions. Like Drummond Pike, she knew that many donors never get around to creating foundations and operate on a smaller, more informal scale. Organize a bunch of these donors, though, and you could create a powerful force. Also like Pike, Ball recognized how important anonymity could be for certain funders, as well as their grantees—as when corporations with a direct financial stake in policy debates support a sympathetic think tank working in that area, or when donors put money behind controversial efforts to limit voting rights, restrict abortion, or discriminate against LGBT people.
DonorsTrust, which Whitney Ball founded in 1999, would channel cash in all these specific ways, and many more. It became a place where ideologically committed donors could park their philanthropic dollars and be sure the money reached the causes they cared about. In fact, ensuring that “donor intent” is honored was a key reason that Ball created DonorsTrust. The conservative precincts of philanthropy are rife with stories of how liberal heirs or professional staff hijacked foundations and disregarded the donor’s original vision—the Ford Foundation standing as the classic example. Preventing that kind of thing was (and is) a recurrent topic of conversation among members of the Philanthropy Roundtable, and one that Ball keyed into.
As she traveled the country building up her new organization, Ball stressed that any fund established at the trust would be used as intended—as the name itself, DonorsTrust, implied. “Greenpeace won’t get a dime from us,” Ball told the National Review in 2001. By contrast, she warned, conservative donors who set up foundations were taking a crapshoot with their money. In addition to DonorsTrust, Ball set up a related entity, Donors Capital Fund, which was designed to provide bigger donors with more services.
Ball’s venture was hugely successful, tapping into the river of new wealth flowing to philanthropy from the top 1 percent. In 2002, her two fledging funds received $1.4 million and distributed grants totaling $1.2 million. In 2010, as alarm grew about Obama administration policies and the existence of liberty for “future generations,” as DonorsTrust describes the stakes, $63 million went out in grants to myriad conservative groups. Just five years later, in 2015, Ball’s operation gave out $124 million in grants. By 2016, the group reported that it had, in total, distributed $784 million to over 1,500 “liberty-minded charities.”
Ball died from cancer in 2015, but not before convincing her long-time friend Lawson Bader to take over her position when she was gone. Bader was then head of the Competitiveness Enterprise Institute, one of the many policy shops pushing libertarian ideas inside the Beltway. He had raised millions in that position, and found himself again hustling for donors in his new role—trying to clear the bar that Ball had set. “Whitney Ball was a hell of a salesperson,” Bader told me.
Bader has followed the script that Ball used to draw in new clients to DonorsTrust. He stresses the fund’s ideological reliability, with its exclusive focus on backing groups that promote “liberty through limited government, responsibility, and free enterprise.” And he underscores how, once money is locked up at DonorsTrust, it can’t later be redirected by heirs or anyone else. “There are clients of ours that may love their kids,” Bader said, “but perhaps the client and the kids differ in terms of political philosophy, or institutional support.”
As Bader explained it, if a client of DonorsTrust passes away and, say, their daughter becomes the advisor to their fund, she will not have the authority to shift the money to a set of causes or organizations different from those the donor originally intended. As an added protection, all DonorsTrust funds are designed to sunset after a given period. None can exist in perpetuity, which would increase the risk that the money might someday reach causes not favored by the original donor.
Wealthy philanthropists who give through donor-advised funds are a mixed bunch. Some know where they want their money to go, and a place like DonorsTrust is simply a conduit. Others need guidance and advice. Part of Bader’s job is to serve as a matchmaker between the many groups on the right looking for money and the funders who have a stash at DonorsTrust. It’s a quietly powerful role, and a novel one for Bader after what he described as a career in nonprofits spent on “my hands and knees begging for money.”
A reason that leaders of donor-advised funds have increasing clout is that so many of today’s new donors are tough to identify and connect with. For every philanthropist who sets up a traditional foundation, complete with a website and contact information, there are many more who fly below the radar. The vast majority of America’s 90,000-plus private foundations, which together hold more than $700 billion and assets, don’t have any way for grant seekers to get in touch.
Donor-advised funds are even more secretive than foundations, in that they are housed anonymously in a larger entity. But because they are managed under one roof, by places like DonorsTrust or the Tides Foundation that have professional grantmaking staff, there is a clearer way for nonprofits to get at this money. In that sense, people like Lawson Bader are influential gatekeepers.
Bader doesn’t have the power to be any kind of field marshal, telling funders where to put their money. What he does have is a bird’s-eye view of who’s doing what in the conservative policy world—and who’s doing it well. Money from DonorsTrust flows to all the usual suspects on the right—Heritage, AEI, Cato, the Federalist Society, and the like—along with groups engaged in edgier activities. Because grants made through DonorsTrust can’t be traced back to specific donors, it’s a favored conduit for right-wing funders backing controversial causes.
Robert Bruelle, a sociologist who studied funding for work that denied climate change, found that a sizeable chunk of this money—some $78 million between 2003 and 2010—was moved anonymously through DonorsTrust and Donors Capital Fund. The amount of money going through these groups, Bruelle found, increased dramatically after ExxonMobil and Koch Industries pulled back from publicly backing policy work that questioned whether climate change was real. But he couldn’t say whether it was these donors who fueled the surge of DonorsTrust with secret donations, since the group doesn’t have to reveal who’s using its services. Its donor-advised funds are like numbered Swiss bank accounts. “We just have this great big unknown out there about where all the money is coming from,” Bruelle said.
Dark money moving through DonorsTrust has also fueled the Project on Fair Representation, the group seeking to dismantle the Voting Rights Act. And DonorsTrust has been the conduit for anonymous funding for groups sounding the alarm about Islamic threats within the United States. Some $18 million went to Clarion, a group that has been described as a leading purveyor of Islamophobia in the United States.
When she died of cancer in 2015, Whitney Ball was widely praised in conservative circles for her entrepreneurial vision. No one had ever done more to organize one of the most powerful constituencies that powers right-wing gains: wealthy philanthropists. Nor had anyone done more to help shroud their giving in secrecy.
Even as DonorsTrust hit its stride during the early Obama years, the Democracy Alliance was struggling.
The alliance had a lot of energy in its first few years, after emerging amid much fanfare in 2005. It galvanized many wealthy liberal donors, attracting scores of members, or “partners,” who got together at high-profile retreats, and channeling tens of millions of dollars to liberal groups. But after Democrats retook Congress in 2006, and then the presidency two years later, the momentum flagged. Partners, who were required to give at least $200,000 a year to groups selected by the alliance, began to drop off. And new ones weren’t joining at the same rate as before, when George W. Bush was scaring the hell out of people.
The other challenge facing the Democracy Alliance was the difficulty of managing a network made up of scores of very wealthy people. You rarely get rich by marching in lockstep with others, and the Democracy Alliance staff had a hard time telling its headstrong partners what to do—and where to put their money. The group was plagued by recurrent management problems and staff turnover. Dealing with the alliance could be maddening for progressive groups seeking funding.
But in late 2013, the Democracy Alliance finally hired a president with the gravitas to wrangle a large collection of wealthy donors. That was Gara LaMarche, a veteran foundation executive who had overseen George Soros’s U.S. giving for many years before being asked by billionaire Chuck Feeney to run The Atlantic Philanthropies. All told, LaMarche had helped give away some $3 billion in those roles. He once commented that, if you command that kind of money, surrounded by supplicants, you end up feeling a “great deal smarter, wiser, funnier, and probably handsomer” than you did before.
In his new gig, though, LaMarche was both a gatekeeper to millions and something of a supplicant himself. When you head up an outfit like DonorsTrust or the Democracy Alliance, ensuring a steady influx of funds is as much part of your job as moving that money out into the field. You’ve got to rope in new wealthy donors, and ensure that existing ones don’t drop out. LaMarche described his job to me as “a weird hybrid.” But one thing was clear: After two decades of doling out grants in record sums, LaMarche was now a fundraiser.
LaMarche soon found himself spending a lot of time on the road rustling up new partners. There was no shortage of prospects, especially in places like Manhattan, Malibu, and Marin County. The ranks of the liberal rich have grown enormously in the past two decades as more fortunes have been minted in knowledge industries where creative types, often with progressive views, can earn vast rewards. The passing down of big inheritances is also moving the upper class to the left, since heirs tend to be more liberal than their parents in what might be called “Rockefeller syndrome.”
The Democracy Alliance was not designed to be a holding pen for piles of money and act as a direct grantmaker, like DonorsTrust. Instead, its partners pay an annual membership fee, which goes to cover the alliance’s overhead costs, and then give directly to those “portfolio” organizations that the alliance recommends. This remains the model, although over time the group has established several pooled funds that allow it to make direct grants.
When the Democracy Alliance was first formed, some veteran donors didn’t see the point in joining, since they already knew where to put their money. Herb and Marion Sandler were the most notable liberal mega-givers who opted not to enlist. “We never saw the point,” Herb said. (His daughter, Susan, would later join the group’s board.)
But the organization’s advisory role was helpful for less experienced donors who needed strategic guidance—and who also liked the idea of amplifying their impact by teaming up with other funders. Just having other donors to talk with proved very appealing to some partners, much as many Giving Pledge members loved the annual retreats. “A lot of these people felt a lot more isolated than we knew,” Rob McKay, a Taco Bell heir who chaired the Democracy Alliance early on, told me. “Rich people are people, too, and actually like community….The chance to be in a room with peers, to be able to think strategically, gave a number of people the impetus to do more than they did previously.”
When LaMarche came on, he also found that the alliance’s community was a big selling point for would-be partners. The group’s retreats are unique shindigs, where philanthropists, political leaders, and top policy experts come together to plot progressive strategy. The year LaMarche started his job, the featured speakers at the alliance’s winter meeting were Senator Elizabeth Warren and Vice President Joseph Biden. That’s heady stuff if you’re a wealthy software entrepreneur who’s new to the world of politics.
The Democracy Alliance had around 90 partners when LaMarche arrived, and he quickly pumped up that number to 100. He also launched what he described as a “highly participatory process” to chart a new strategy for the group. Taken individually, the partners had an array of interests, and getting them to focus on a few priorities had been a major challenge for past directors of the group. LaMarche’s approach was to pull partners closely into the work of crafting a sharper game plan for pushing progressive change in America. If they had real buy-in, they’d embrace the Democracy Alliance’s new direction.
That strategy worked, and by late 2015, the Democracy Alliance had zeroed in on just three core issues: strengthening democracy, creating a more inclusive economy, and fighting climate change. The group also agreed to focus grants heavily in the states, where progress seemed more possible than in deadlocked Washington.
Funding in the states can be daunting for individual donors, in terms of figuring out which organizations to support across a wide and diverse playing field. On the right, the State Policy Network and DonorsTrust help funders find their way around this terrain. The Democracy Alliance now offers similar help. “It provides a vehicle for individual donors to get involved in state-level campaigns,” LaMarche said.
The alliance also offers in-depth guidance to donors on how to combine political and philanthropic contributions in ways that advance the same goals. Whether you’re drawn to building better databases of Democratic voters or funding policy reports, the DA is sure to have ideas about where to put your money.
One of LaMarche’s projects at the Democracy Alliance was to get more institutional funders involved. He cultivated foundations as members, as well as labor unions. And he worked to engage funders who weren’t ready to become partners but were open to supporting specific projects—including some new donors in Silicon Valley who were wary of associating with such a partisan group. The resulting mix of players orbiting around the Democracy Alliance created a new and unique hub that connected nearly everyone giving money for liberal causes. Two years after LaMarche took over, the alliance had over 120 partners and described itself “as the largest network of donors dedicated to building the progressive movement in the United States.” It moved as much as $60 million annually.
Rich liberals may still be in the minority in the far upper class, but there are now enough of them to constitute a powerful force in politics and policy—and they’ve become much better at sticking together.
The broader point here is that philanthropists of all kinds are getting more organized. And those pushing a policy agenda have been especially keen to team up with one another so that they can collectively wield more clout. On the one hand, donors are building overarching power networks that knit together philanthropists who broadly share the same ideological worldview. On the other, they are coming together around particular causes, as we saw with those focused on women’s issues.
Name a cause, and you can probably find an outfit that is helping donors pool their funds together to have more impact. Some intermediaries, such as NEO Philanthropy, the Proteus Fund, and the New Venture Fund, run multiple pooled funds at a time—often combining money from large donors with contributions from many smaller donors. Through its Piper Fund, for example, Proteus has long been one of the leading aggregators of philanthropic gifts to campaign finance reform. That fund has moved over $31 million in grant money since 1997. Meanwhile, another Proteus fund, the Security and Rights Collaborative, has organized donors to address hate crimes, profiling, and xenophobia.
Education reform funders are yet another group that coordinates closely and have created new mechanisms to jointly deploy money. During the early 2000s, as the push for more charter schools was gaining steam, some of the biggest funders behind this movement—including the Walton family and the Fisher family (whose fortune came from Gap stores)—came together to start the Charter School Growth Fund (CSGF), with the goal of pooling their financial muscle to increase the number of charters around the country.
After its founding in the early 2000s, CSGF emerged as a critical hub in the efforts of funders to support the growth of charter schools. Beyond Walton, the Gates Foundation backed the group, as did the Arnold Foundation, the Broad Foundation, the Michael and Susan Dell Foundation, the Charles Schwab Foundation, and others. The small board includes not just Carrie Walton Penner, a third-generation Walton, but John Fisher, a billionaire heir whose parents chose charter schools as their top cause after retiring from building the Gap.
The Charter School Growth Fund is a classic philanthropic middleman, operating at a powerful level in highly contested terrain. It’s been a place for funders to come together and plot how to increase the number of charters, helping out with financial, technical, and political support. The fund has marshalled tens of millions of dollars for over fifty charter school networks that now run over 500 schools enrolling a total of 250,000 students. In effect, it’s a network of funders that support a network of charter school networks. A venture capital approach has been key to CSGF’s model, with grants often going to entrepreneurial charter founders still at an early stage of starting schools.
Opponents of charter school funders see them as an anti-democratic cabal, channeling the fortunes of billionaires to privatize public education. The CSGF might seem to reinforce this view of shadowy power. What this group of funders is up to, though, is no different from what so many other philanthropists are doing: joining together more strategically to push a shared agenda.
Regardless of what you may think about this or that network of funders, what is striking is how much more organized private money has gotten at a time when many ordinary citizens are feeling less empowered. Some of the key civic institutions that used to amplify the views of average people have famously declined, like labor unions and political parties. Polls show that citizens have little confidence that their voices matter in civic life.
That growing public cynicism, and the apathy that comes with it, is often cited in connection with the increasing role of super PACs and mega-donors in electoral politics. There’s far less awareness of the private philanthropists who have also mobilized in new and powerful ways, but this phenomenon reaches into just as many parts of American life as the growing clout of campaign donors. And, as we’ve seen, political and philanthropic funds often operate hand in hand to sway policy outcomes.
Alexis de Tocqueville famously praised civil society as a conduit for myriad people’s voices. And while that remains so, there’s no denying the role of top philanthropists in shaping just which of these voices speak most loudly.