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.]