Foundation Capitalism
Power and Influence Disguised as Philanthropy
How do you give away a billion dollars?
It is really quite easy. Just take a wagon full of C-notes to a neighborhood in need. In just a few hours, you’ll do a lot of good.
Or … you can set up a foundation in your name, lay out a strategy, exert political influence, and in twenty years, commit to giving away two billion dollars. You’ll be celebrated as good.
In this so-called late-stage capitalist world, influence is now being spread via foundations that manage their funds not from a philanthropic / charitable objective, but rather to get a return on investment, wield political pressure and impose some billionaire’s quirky worldview on a society in need.
In a recent article I coined the term: “foundation capitalism” where industrial capitalism is rejected by a very loud, activist civil society supported by foundations who use capitalist techniques to exert their influence on traditional power structures (governments, courts, media, the academe and NGOs).
Foundations should no longer be considered as charitable enterprises. That is merely a front with a few limited annual donations to keep up the pretense. If capitalism is depicted as opportunism to expand capital, influence and power, then foundations are today’s main exploitative force. Largely unregulated, non-transparent and tax deductible, the very idea of a foundation, what it is and how it functions in society, is changing dramatically.
Shifts in Foundations
Foundations today are a long way away from the philanthropy of the 1920s industrialists – the Fords, Carnegies, Rockefellers – who worked hard over long careers, built business empires and chose to share their wealth to make the world better. This wealth, generated from that great economic expansion, is still being used today to support the arts, aid the underprivileged and advance research.
But in the last generation (just 25 years), we have experienced four equivalent waves of unthinkable wealth creation. But unlike the 1920s; these young tech billionaires were not very industrial, did not really work hard over long careers and, in their inexperience, did not really know what to do with their money. From the thirty-year-old billionaires coming out of the creation of the Internet to the Web 2.0 social media app gurus, and from the crypto-currency savants to the AI futurists, an unimaginable wealth has been created in a very short period of time.
Prodded by the “Giving Pledge”, foundations are sprouting up like weeds in an organic vegetable patch, and given the inexperience and the disinterest of the newly minted billionaires, they are attracting a rather salacious crowd of bottom-feeders to help them in their journey to become philanthropists. And these opportunists are creating a network of organizations to use these billions for their own political objectives.
A Series of Firebreak Investigations
The Firebreak is launching a series of articles on how these opportunists in the shadows of the foundations are using these wealth honeypots to push their political objectives of destroying Western capitalism, industry and global trade. They are coordinating funding with influential actors to attain their goals.
Behind every NGO campaign today is some foundation’s donor-advised fund, often working in tandem with other interested parties (from law firms to journalists to academic consultants).
Foundations are funding large media groups like The Guardian or the Associated Press and deciding what should be considered as news.
This series will also look at how foundations are working with policymakers (international and domestic) to further their objectives and influence.
It will look at how these groups are funding research institutions that then feed reports into their activist networks to sway public opinion.
Foundations are also coordinating with tort law firms, to the point where they are actually funding them to continue to file useless lawsuits against fossil fuel companies.
First and foremost, the perception of ‘what a foundation actually is’ needs to be assessed. Foundations are no longer centers of virtue doing saintly work for the disadvantaged. While there are still civil society groups, networks of service clubs and local relief organizations doing good work, the real money is being diverted into professionally managed, corporate-style institutions that are more like hedge funds. There is a class of foundation managers who are business-savvy, power-driven and, quite frankly, ruthless in their management skills and political ambitions. They would easily climb up any corporate ladders if they had not first realized the increased opportunities they have as foundation directors.
And these nerdy tech billionaires have left them alone with unrestricted access to their pots of gold. While it is becoming the scam of the century, institutions have still not realized the effect that unleashing unlimited capital on cunning opportunists and activists has had on power structures, governments, media and the public. This has become a new form of capitalist power via foundations – foundation capitalism.
To begin this series, see a simulation of how tech bubble foundations are built, exploited and developed into capitalist ventures.
This series will examine the components that are becoming important parts of foundation capitalism, including:
the foundation consultancies managing dormant or shadow funds;
the political influence and policy pressure from foundation networks;
the management fees involved in donor-advised funds;
the networks of NGOs, media groups, academics and lawyers feeding from the foundation troughs; and
the exploitation by certain foundations using access to capital to attract young, idealists.
What this series won’t cover is the hypocrisy in how these anti-capitalists have set up a foundation capitalism structure that is more exploiting, opportunistic and destructive than any corporate capitalism since the 1870s.