Corporate Philanthropy: An introduction

Funding foundations often serve as the velvet glove of state repression against social justice movements. Through thinly disguised programmes and schemes, they utilise activists’ need for money to channel their energy into projects that pose no serious threat to the status quo.

What is corporate philanthropy?

Modern philanthropy is usually associated with funding foundations. According to the Foundation Center, a foundation is "a non-governmental entity that is established as a nonprofit corporation or a charitable trust, with a principal purpose of making grants to unrelated organizations, institutions, or individuals for scientific, educational, cultural, religious, or other charitable purposes." [1]

Within this broad definition, the Foundation Center distinguishes between two types of foundations: private and public, though the lines between the two could sometimes be blurred. The main difference between the two types is that private foundations derive most of their funds from one source, whether an individual, a family or a business. A 'public' foundation, on the other hand, normally receives its assets from multiple sources, which may include private foundations, individuals, government agencies and so on. In fact, public foundations are obliged to – or at least pretend to - seek money from diverse sources in order to retain their 'public' status.

In any case, what concerns us more here is the first type, as private foundations are often linked to big multinational corporations. Classic examples include the Ford Foundation, the non-profit arm of Ford Motor Company; the Rockefeller Foundation, an offhsoot of the Rockefeller industrial empire, which included Standard Oil; and so on. The category would also include charitable funding by big corporations (BankAmerica, Philip Morris, Shell, etc.) as part of their so-called Corporate Social Responsibility (CSR) programmes.

Legal definitions of private foundations, such as those given by revenue and tax authorities, especially in the US, are usually based on their exclusion from other criteria (church, public service, educational establishment, etc.). In other words, a private foundation is a non-profit organisation that does not meet any of these other, clearly defined categories. [2] The term 'foundation' is not generally used in English law and has no precise meaning. Instead, the concept of 'charitable trust' is commonly used. [3]

Why, then, would a project concerned with corporate rule dedicate a section for non-profits and philanthropy? Well, partly because the power of foundations in influencing and channelling socio-political change has often been downplayed by academic and researchers, while many of those who admit their influence consider it to be 'a good thing.' While most critical research on corporate power has focused on for-profit corporations, few progressive studies have interrogated their philanthropic counterparts. Furthermore, as Joan Roelofs, Michael Barker and others have repeatedly noted [4], the few that have investigated the influence of philanthropy on the processes of social change have tended to overemphasise the power of conservative foundations (Pew, Smith Richardson, Packard, Hewlett etc.), while downplaying the impact of the liberal foundations (Ford, Rockefeller, MacArthur, Mott, etc.). By examining the various structures and programmes that make up the corporate philanthropic world, as well as the backgrounds and political links of the people involved with foundations and charitable trusts, we hope this section will shed another light on the undemocratic power that corporations exert on society and politics.

Who are the corporate philanthropists?

What do they do, how?

Why?

A good thing?

Co-option or channelling?

Is there a way out?

Notes

[1] http://foundationcenter.org/getstarted/faqs/html/foundfun.html.

[2] http://www.sourcewatch.org/index.php?title=Foundations_and_Funders#Defin....

[3] Hudson, Alastair, Equity and Trusts, 6th ed. (London: Routledge-Cavendish, 2009).

[4] See, for example, http://www.corporate-rule.co.uk/drupal/node/76 and http://www.corporate-rule.co.uk/drupal/node/77.