By Michael Barker

CSR, or Corporate Social Responsibility, is a phenomenon that free-market gurus like the late Milton Friedman railed against, and that concerned non-governmental organisations often rush to embrace. Yet, both of these seemingly paradoxical reactions to CSR are arguably misinformed: they falsely take the rhetoric of CSR at face value and believe that its proponents are actually concerned with improving corporate social responsibility to the broader population, not just to their shareholders.

A more thorough analysis of CSR suggests that its main function is to artificially sustain an unsustainable capitalist world order, thereby maintaining profit in spite of increasing social irresponsibility. Thus, one of the primary purposes of CSR is to constrain the advent of social revolutions. Such practices, which are promoted by the more liberal corporate elites, serve to sustain oligarchic forms of democracy and postpone the occurrence of its more authoritarian variant, fascism. In this regard, not-for-profit corporate foundations act as one of the most important vehicles for promoting CSR.

Contrary to conservative not-for-profit corporations, which tend to join with Friedmanites in deriding CSR, their liberal counterparts correctly maintain that a world without some form of corporate social responsibility is not conducive to capitalism’s ongoing viability. Indeed, by acknowledging that massive and unregulated corporate power is potentially easily undermined by popular resistance, liberal power-brokers recognise the need to provide a controlled outlet valve for popular discontent. This enables them to prevent popular power from coalescing in a way that could challenge elite prerogatives. Thus, not-for-profit corporate foundations use the economic resources of their for-profit parent companies to help steer progressive activists into political channels that present no serious threat to the status quo. Sadly, the most problematic part of such anti-democratic strategising is that it is rarely talked about outside of elite corporate circles.

Like many other unaccountable and undemocratic organisations, not-for-profit corporations often downplay the magnitude of their influence on society. While academics are keen to point out the influence of other key hegemonic institutions, such as the mainstream media, the sway of philanthropic organisations is rarely challenged. Consequently, in most cases even critical researchers accept the benign-sounding rhetoric of philanthropic bodies and ignore, or belittle, any of their influences on democratic processes. This neglect is reflected by the fact that one of the most important books critiquing not-for-profit corporate foundations in the second half of the 20th century, titled Philanthropy and Cultural Imperialism, was published, not by political scientists, but by educational theorists. Thankfully this excellent book, out of print for many years, has just been republished by Indiana University Press.

Despite the relative silence around the influence of not-for-profit foundations, evidence has slowly accumulated to demonstrate that, contrary to popular belief, liberal foundations have profoundly shaped the contours of global civil society, actively influencing social change through a process otherwise referred to as either channelling or co-option. It is interesting to note here that, although some scholars have defended the need for foundations to shape democratic processes, they usually fail, as Joan Roelofs put it, to “probe the contradictions to both ‘free enterprise’ and democratic theory implied by the need for extra-constitutional planners.” (Foundations and Public Policy, 2003, p.5)

Thus, such powerful not-for-profit corporate funders have historically played a critical role in creating and coopting progressive individuals, social movements, and a wide array of non-governmental organisations. For instance, with regard to the US environmental movement, although the proportion of most environmental groups’ incomes derived from foundations is relatively small, such funding has a disproportionate influence on policy decisions compared to membership dues. This is because (1) foundation funding is usually tied to specific environmental projects; (2) foundation board members are often offered influential positions sitting on the boards of the organisations they aid; and (3) foundations utilise proactive grant-making, whereby experts associated with the foundations guide environmental groups to concentrate on projects identified by the foundations themselves. This infiltration of social movements by liberal foundations has been referred to as ‘philanthropic colonisation’.

By channelling resources to environmental groups with a moderate-liberal approach to social change, Daniel Faber and Deborah McCarthy suggest that liberal foundations have helped promote “the primacy of ‘professional-led’ advocacy, lobbying, and litigation over direct action and grassroots organizing, a single-issue approach to problem-solving over a multi-issue perspective, the art of political compromise and concession over more principled approaches, and the ‘neutralization’ of environmental politics in comparison to linking environmental problems to larger issues of social justice and corporate power.” (Foundations for Social Change, 2005, p.178)

The problem is not that liberal philanthropy has no positive social benefits (which it does, of course, as in sponsoring the work of many radical activists, and even a handful of socialists). The problem is that, when considered as a whole, the overarching purpose of liberal philanthropy is to sustain corporate profits and legitimise the status quo, not to promote global peace and human emancipation.

Given that the not-for-profit foundation side of CSR is not quite all it is cracked up to be, is it logical to ask if the same is true about direct, allegedly apolitical, corporate philanthropy? Unfortunately, direct corporate philanthropy, institutionalised as CSR, suffers from much the same problems, as it is regularly used to maximise corporate profits. Perhaps the most useful exposition of this argument was surmised by Gretchen Crosby Sims in her PhD study Rethinking the Political Power of American Business: The Role of Corporate Social Responsibility (2003). The central thesis of Sim’s groundbreaking analysis of the CSR practices of Fortune 500 companies is that “these activities, which have been all but overlooked by political scientists, represent an enormous, largely hidden source of political power for corporations”. Indeed, even today, almost all researchers focusing on the means by which corporations influence politics strictly delimit their analyses to studying business Political Action Committee (PAC) contributions, soft money donations and/or lobbying. Strategic political philanthropy, thinly disguised by the rhetoric of CSR, remains untalked about and, thus, the ostensibly altruistic intent of business elites remains unchallenged.

* Michael Barker is an Australian academic and writer. He has recently ‘rejected’ his PhD thesis at the Griffith University, Australia. The title of his thesis was “Mediating Social Engineering: Moving Beyond Elite Manipulation of Democracy”. For more of Barker’s work, see his blog: www.michaeljamesbarker.wordpress.com.
by Joan Roelofs

Investigations of for-profit corporations are proceeding well, but not-for-profit corporations, although part of the same problem, are mostly neglected. And these not only include foundations, but also charities, causes, non-governmental organisations and think-tanks.

Not all not-for-profit corporations are shoring up the system, but many are. And you wouldn’t know unless you looked - even progressive activists are reluctant to do this (see The Revolution Will Not Be Funded, 2007). Even such an obvious subject of interest as the foundation and corporate funding of the World Social Forum has been almost entirely ignored, despite the fact that the Funders Network on Trade and Globalization, created primarily for the WSF, includes the Ford, Rockefeller, Mott, Tides and Levi Strauss foundations (RUPE-India, 2007).

Earlier in United States history, all corporations, even charitable ones, were viewed with suspicion as they assumed powers over which government had little control (Hall, Inventing the non-profit sector, 1992). Yet the non-profit sector, which not only helps sustain capitalism and imperialism but also fend off, often in creative and benevolent ways, any threats to the power and wealth of elites, is given little attention.

One sign of these other corporations’ power is their great success in buying silence, so that journalists, scholars and even activists rarely investigate.[1] And that also includes most of the ‘alternative media’, which are themselves largely funded by such foundations.

By power I mean the ability to influence the actions of others, be they groups, individuals, institutions or nations. Thus, foundation funding has gradually changed the mission and methods of radicals and dissenters, and doomed many of those holding fast to defunding and extinction. Foundations are the soft cops, working alongside governments’ repression and violence.

One source of foundation power that amplifies the persuasion of funding is organisation. Although there are outliers, the non–profit world is networked with peak organisations such as the Independent Sector, Council on Foundations, Philanthropy Roundtable, National Committee for Responsive Philanthropy and many others. The Environmental Grantmakers Association has among its members the major liberal foundations (Ford, Rockefeller, MacArthur, Mott etc.); conservative funders (Pew, Smith Richardson, Packard, Hewlett etc.); and corporate foundations (Ben and Jerry’s and Patagonia, as well as BankAmerica, Heinz, Merck, Philip Morris and so on). Grantees and those hoping for grants read the newsletters, attend the conferences and participate in training provided by these entities, where an understanding of ‘appropriate goals and methods’ is conveyed.

Furthermore, foundations and their funded (and sometimes created) non-governmental organisations work with governments at all levels, as well as with for-profit corporations. Connections are tight, for example, between the Rockefeller and Gates foundations, pharmaceutical and agricultural chemical companies, health and food advocacy organisations and UN agencies. Similarly, many organisations work with the Lockheed Martin Corporation Foundation in supporting the NAACP, the Urban League and the Children’s Defense Fund. Thus, business corporations are not only the source of foundations’ original assets and current investment income (hedge funds are now popular) but also their primary values.

The US National Endowment for Democracy, which does overtly what the CIA once did covertly, partners with many foundations and citizen organisations in attempting to influence elections and political movements throughout the world, including the support of overthrow movements. NED also has a foreign network of cognate organisations, including the Canadian Rights and Democracy and the British Westminster Foundation for Democracy. At the local level, great influence is exerted by such organisations as the International City Managers Association and the National Municipal League, which are funded by foundations.

Here are a few examples of the influence these other corporations could exert, and these are just the chip of the tip of the iceberg.

- In Eastern Europe, following the 1975 East-West European Security agreement, known as the “Helsinki Accords”, foundations created Helsinki Watch (now Human Rights Watch), an international NGO for monitoring the agreements. The Rockefeller, Ford and Soros foundations were prominent supporters. In the 1980s, the Ford Foundation also funded the London-based East European Cultural Foundation to promote Western-style pluralism in Eastern Europe. The EECF stated that it was “created in response to requests from Central and Eastern Europe for effective assistance in maintaining cultural, intellectual and civic life in these countries and to prevent their isolation from each other and from the West.”

- Many Soros Open Society Institutes operated throughout Eastern Europe (and now all over the world) to transform university curricula, subsidise ‘civil society organisations’ and create political parties, while their economies were left to rot and provide distressed assets for Western capitalists.

- The US civil rights struggles of the 1960s prompted much ‘channelling’ activity by foundations. The Ford Foundation greatly expanded ‘public interest law’, by means of which the poor and minorities could achieve gains through litigation. Its objective was to change public policy by means of court decisions, as mass movements were potentially dangerous and current legislatures were not moving with the times. Ford also created the National Urban Coalition (NUC) to fund moderate civil rights groups and to transform the slogan “black power” into “black capitalism”. The NUC is significant because it included corporate foundations, which in the past had concentrated on community projects, business think-tanks and product-related charities. Now corporations became part of the liberal foundation network and were directly funding activists and citizen organisations. In 1968, the Martin Luther King Jr. Center for NonViolent Social Change was established in Atlanta by corporations and foundations. The result was that its programmes and presentations deradicalised King’s message.

Notes:

[1] Among the few critical works: Joan Roelofs, Foundations and Public Policy (2003); Robert Arnove (ed.) Philanthropy and Cultural Imperialism (1980, just reprinted by Indiana University Press); the works of James Petras; and David Horowitz’s series in Ramparts (1969). Earlier studies include a Congressional investigation in 1915 by the Commission on Industrial Relations (also known as the Walsh Commission), which is now available online (Google Books); and Horace Coon, Money to Burn (1938), which focuses on military contractors embedded in peace organisations.

* Joan Roelofs is Professor Emerita at Keene State College, New Hampshire, USA.