Michael KreponThe Gift of Giving (II)

Back in my youth, before thumbs were essential for home entertainment, some of us played a board game called Chutes and Ladders, where you could zoom way up and down the board, depending on where your piece landed after rolling the dice. Arms control isn’t like that. Big gains only happen when confident, courageous, risk-taking negotiating partners appear. This happens maybe once in a lifetime. Most of the time, gains are hard won, modest, and cumulative. Meanwhile, at any moment, backsliding and losses can be immense. Winning the game of arms control, disarmament and nonproliferation, unlike Chutes and Ladders, depends on securing progressive gains and avoiding steep losses.

This constitutes, in my view, a sound strategy for philanthropy to reduce nuclear dangers: stay in the game, seize opportunities, invest in new talent and policy entrepreneurship, and lay the groundwork for another generation’s worth of progressive gains. Success in arms control, like economic recovery, requires maintaining and building infrastructure.

This strategy of success is losing adherents. Foundations that were once heavily involved in arms control – Ford, Rockefeller and Rockefeller Brothers Fund – have moved on to other hard, worthy projects. The W. Alton Jones Foundation, which once practiced outstanding grant making, fissioned and disappeared. The Big Five that remain in the United States are MacArthur, the Carnegie Corporation, Ploughshares, Hewlett, and the Nuclear Threat Initiative.

According to preliminary figures compiled by the Peace and Security Funders Group, grant support for nuclear-related programming dropped by 40 per cent between 2008 and 2010 – from $40.1 million to $21.4 million. (This decline may be somewhat overstated because of the economic downturn and the cyclical nature of grant making. The P&SFG is now working on updated data.) To complicate matters further, two of the Big Five are now operating foundations: Ploughshares has joined NTI in seeking funds for their own projects while continuing to make grants to others. This hybrid operating foundation model is relatively new to the field, coming alongside a new philanthropic wave of operating foundations that have dispensed with grant-making altogether.

I acknowledge that there’s always room for new players and new, effective models of philanthropy. Still, I’m old school: I am heavily biased (and obviously self-interested) in favor of traditional grant-making. I’m wary of the operating foundation model, despite my admiration for those who practice it.

“Operational” philanthropy is appealing because it promises greater impact as well as control. The pure operating foundation model is especially risky, because success in making money does not necessarily carry over to successful programming in civil society. The estimable Warren Buffett didn’t set up an operating foundation; instead, the Buffett Foundation has chosen to give large sums to folks who have established a track record of knowing how to spend this money wisely for causes he believes in.

All foundations, like all grantees, seek impact as well as comparative advantage. Since arms control extends over a very broad waterfront, philanthropy will always be spread thin in some issue areas. When operating foundations seek sharper focus for greater near-term impact, more acreage along the waterfront becomes uncovered, as trade-offs have to be made between the pursuit of short-term gains and investing in infrastructure. This trade-off matters, because near-term successes are invariably the result of longer-term investments. A programming focus on immediate gains is occasionally necessary, e.g., in the run-up to a treaty ratification debate, but it’s usually not a sound investment strategy. Hard problems worthy of philanthropy are also worthy of long-term investments.

The more hybrid foundations become operators, the greater the risk they face of having less money available for grant making. To avoid this dilemma, they can ramp up fund raising. Fund raising campaigns, whether by operating foundations or NGOs, are based on increased threats, unusual opportunities, and a track record of accomplishment. Immodest claims of quick successes – whether by funders or NGOs — risk the loss of credibility because accomplishments (like threats) have many antecedents and complex causality.

Another reason for the operating foundation model is perceived weaknesses in the NGO community. NGOs certainly have weaknesses, but in grant-making, as in parenting, taking over usually doesn’t build strengths; instead, it reinforces weaknesses. Policy entrepreneurship, by definition, requires innovation, but in philanthropy, unlike business, it’s not easy to be an innovator when you’re an operator. Another problem when funders become operators is that the programming of their NGO grant recipients can be more easily dismissed as doing the bidding of a high-profile funder.

I grant that there are good arguments for the operating foundation model, especially for programming in parts of the world that have limited NGO infrastructure. In the arms-control field, NTI has proven that a hybrid operating foundation can establish comparative advantage and make valuable contributions. NTI began, as most operating foundation start-ups do, by leaning on existing NGO infrastructure for programming achievements. Now NTI competes with these NGOs for foundation support.

I also grant validity to the argument that money is not a finite resource, and that this pot can grow with more aggressive fund raising by operating foundations as well as NGOs. In all likelihood, however, operating foundations will do better than NGOs in the quest for funds, making win-win outcomes illusive.

My bottom line from these two posts is that philanthropy to promote arms control, disarmament, and nonproliferation has been uncommonly successful. And yet, the basis for continued success is far from assured.

[See part I of this post. -Ed.]


  1. Ara Barsamian (History)

    It is a shame that we still have to “beg” for money.

    With about 22,000 nuclear weapons around in 2012, mostly in USA and Russia, we are in the “ostrich head burried in the sand” mode until we have the misfortune to have one stolen and detonated in an urban setting.

    Then after a lot of finger-pointing and recrimination a la 9/11, money will be found to be serious about control efforts.

    We need in the non-proliferation community to make a stronger case to the public and “shame” governments in providing more financial resources to tackle the problem, and by that, I don’t mean giving money to ineffective governmental bureaucracies a la NNSA, Rosatom, etc. but to educational organizations and non-profits. A track record is not a prerquisite, in fact, we need new and fresh ideas and approaches, not the same, old, tired way of looking at this monumental problem.

  2. Kevin (History)

    …nor is begging for money sustainable over the long term for many who begin their careers beholden to the likes of Alton Jones and the rest (regrettably).

  3. mm (History)

    Two thoughts: 1) For those working in the vineyard but not sharing the “proliferation is all nukes all the time” mindset that dominates the community (analysts and foundations alike), the situation is even more dire. CW has never been an interest. After a relatively short period in the late 1990s-early 2000s when it was the “flavor of the month” (and, yes, although foundations often see themselves as on the cutting edge, they are as subject to intellectual fads as the rest of us),even those foundations you mention as still in the game don’t support BW work anymore either.
    2) Beyond wanting to be operational themselves, foundations have lost sight of their critical contribution to early post-WWII strategic studies in the US, especially related to nuclear weapons, i.e, promoting the “intellectual infrastructure” (concepts, constructs, language around which an analytical community could form) that promoted better understanding of a novel challenge in a new strategic environment. In many cases today, we don’t seem to agree on what it is we’re talking about, or using the same language to engage.

    • krepon (History)

      Sadly true: to my knowledge, none of the Big 5 do CW and BW. Hard to believe. Space policy is joined at the hip to nuclear policy, and this programming area is only covered targentially thru BMD.

  4. Andreas Persbo (History)

    Dear Michael,

    Thanks for another good post. It was very thought provoking, although I think its appeal to the broader ACW readership is rather limited.

    We at VERTIC have largely abandoned the model of coming up with great ideas and having them rejected by the foundations. Instead, we’re seeking collaborative ways of working with our funders (which are mostly governmental at this stage). It requires more thinking, and more work to safeguard our independence and objectivity, but has proven to be very rewarding, and fun.

    It is sad, however, that many of our most innovative and daring projects (the UK-Norway Initiative, and our National Implementation Measures Programme comes to mind) have not been primarily funded by charitable organizations. (I say primarily since NIM did get some seed money from MacArthur back in the days, and our final report from the UKNi was funded by the Carnegie Corporation – but the sums were very small). Both initiatives were innovative in their early days – but the interest from the Foundations was rather lukewarm.

    All NGOs need some form of open-ended programmatic support to enable it to grow, breath and try out new concepts and approaches. As you said, it’s about making tangential gains and then defend captured ground as well as you can. This is a long game. But such funding is now rare for smaller-sized NGOs such as VERTIC. (I note that big organizations still get big grants – usually the usual suspects – but I also suspect their outgoings are rather larger than ours).

    We have a wonderful relationship with the UK-based Joseph Rowntree Charitable Trust. They actually seek to stay out of the spotlight as much as they can, and are true investors in people – nurturing the next generation of arms controllers as well as trying (to the best of their rather limited abilities) to retain expertise already in the system. We used to have a similar relationship with Ford. But the JRCT is a rare gem in a rather limited field of funders. And while they’re generous, they’re not rich. They’re now a small (but nevertheless critically important) part of our annual budget.

    This is not to say that we don’t enjoy working with governments. We do, a lot, and our track record in National Implementation and disarmament verification speaks for itself. We have many funders to thank for that. The UK FCO, US State Department, the Global Partnership, the Dutch, Swiss, Swedish and above all Norwegian MFAs to mention a few. But what we do there is working together to reach a commonly shared objective. It’s rewarding work, and you see change happen. However, governmental grants are not charitable in the sense you describe here.

    Then again, the charitable – no strings – model is perhaps atrophying. It would be a great shame if it died completely. That would change the environment, and by extension the debate, completely.

    • krepon (History)

      Thanks, Andreas.
      I realize the charitable foundation scene in the UK is especially tough — and that the pull-back of US foundations has compounded the dilemmas you describe.
      Like VERTIC, Stimson has also decided to rely more on government funding from the US and elsewhere — although we put a percentage cap on this. As you say, government funding has potential downsides, and requires vigilence.
      The alternative to not seeking government funding at a time of foundation retrenchment is shrinking your programming. When I was running Stimson, I came to the conclusion that your programming budget is never steady-state; it’s either growing or declining. And growing is better than shrinking.

    • Andreas Persbo (History)

      Dear Michael, I completely agree with you. Growth is one way for us to keep innovating and maintain our edge. Growth also changes the internal dynamics of the organisation, it becomes more optimistic and more daring. We’re the lucky ones in the UK. So far, we’re doing well. But I know that some of our sister organisations are feeling pain – and that’s sad. The UK risks loosing a lot of valuable capacity and expertise unless there is a change sometime soon.

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