Foundations and Political Influence

Author of new book on foundations describes how Gates has used venture philanthropy, measurable goals and a close relationship with the Obama administration to influence policy, and says Gates's approach may be shifting in promising ways.

July 20, 2016

Foundations play an increasingly high-profile role in shaping education policy, none more so than the Bill & Melinda Gates Foundation. A new book by Megan Tompkins-Stange, Policy Patrons, uses interviews with more than 60 insiders, including senior staff at Gates and three other foundations, to give a better sense of how philanthropy helps drive reform efforts in K-12 and higher education.

Tomkins-Stange, an assistant professor of public policy at the University of Michigan (and @tompkinsstange on Twitter), discussed the book -- which Harvard Education Press published in June -- and her findings over email with Inside Higher Ed. An edited version of the exchange follows.

Q. Your book describes a watershed shift in the visibility and centrality of education-related philanthropy during the past two decades. What were the primary drivers of that shift?

A. The terrain of education philanthropy has changed to such an extent that it’s almost unrecognizable compared to 20 years ago, and the largest driver of that shift is the emergence of a cohort of “new” education funders, which have assumed a centrally engaged, vocal and visible role in shaping education policy. Princeton historian Stanley Katz recently noted: “This is not your grandmother’s philanthropy.”

In the late 1990s, the field of philanthropy was beginning a significant transformation, as it became populated with a new class of professionals who had expertise in business administration and management and who valued rationalized, market-based approaches to solving problems. In this context, the idea of “social entrepreneurship” -- or the application of business expertise to nonprofit organizations in order to render them more efficient and effective -- was lauded in the field as a path-breaking alternative to the status quo.

During this time period, a new group of education funders emerged that explicitly embraced the identity of “venture philanthropists.” These foundations’ benefactors had amassed their wealth in a variety of corporate fields ranging from technological innovation (e.g., Gates, Dell) to financial services and equity/venture capital (e.g., Robertson, Arnold, NewSchools Venture Fund) to industrial management (e.g., Broad, Fisher). The new foundations deliberately framed themselves as different than “traditional” philanthropy.

In contrast to their older peers, the new foundations’ grant-making processes were highly strategic, enrolling preselected grantees that were held accountable to concrete, measurable outcomes with the goal of achieving defined, discrete impact. They pursued what they called “big bets,” or risky ventures that could potentially produce large returns on their investments, and sought to scale these ventures to achieve catalytic impact. They sought to work “outside the system,” reflecting an entrepreneurial mind-set that valued disruption, rather than working with established bureaucracies. They also maintained more centralized control over their funding initiatives, forming “high-engagement” relationships with their grantees, and referring to their efforts as more “aggressive” or “muscular” in nature than their predecessors’ work in education.

As I discuss in Policy Patrons, the activist nature of the new foundations has brought philanthropic involvement in education into sharp relief. A number of the new foundations have consciously targeted their grants toward specific education agendas and partnered with like-minded foundations in order to concentrate resources to bring particular ideas to the forefront of education policy agendas.

Q. Has the Gates Foundation’s hands-on style of grant making and emphasis on measurable results been effective?

A. Yes and no. Gates’s approach represents what I term, in Policy Patrons, an “outcome-oriented” mode of philanthropic policy engagement, which focuses on achieving defined outcomes as a first-order priority of grant making -- more of an instrumental approach. One source noted that Gates marshaled its resources toward a clearly defined goal, “[doing their] damnedest to do whatever it takes to get that done.” Often, this approach entailed a hands-on management style from the foundation’s side, because in order to achieve their specified outcomes, foundations had to maintain a high degree of control over their grantees’ actions -- and to do so, held grantees accountable to concrete deliverables that are negotiated in the form of grant contracts.

One informant described Gates’s management style in the following way: “We’ll hire [grantees] the way you’d hire a contractor, and we will specify exactly what we want from them.” Similarly, a Gates informant described how the foundation took an active approach to designing and executing its strategy, rather than operating indirectly through grantees:

They’re not just willing to write checks to organizations that have a proven track record of dealing with a particular issue that’s of importance to the foundation. They’re interested in figuring out, what are all the things that we can do? What are all of the tools that we have in our toolkit that can really help us solve this damn problem? … We’ve tried downstream approaches. We want to go upstream and figure out how to stop this.

As one component of focusing on “upstream” strategies, Gates preferred working predominantly with elites and experts, who could align more quickly with their agendas and make decisions in a more agile manner than a democratic process would allow for.

While partnering with sympathetic elites enabled Gates to rapidly advance its priorities, it also limited the ultimate effectiveness. In order to move with urgency and take advantage of policy windows perceived as open, Gates did not invest in a broad-based grassroots advocacy strategy designed to convince parents, teachers and local leaders of the benefits of its preferred reforms. The passage of [the Every Student Succeeds Act] in 2015, which significantly reduced federal power in education contexts, was viewed by many education activists as a rebuke to Gates’s top-down strategy -- an indication that it won the sprint but lost the marathon, as my colleague Sarah Reckhow has described in her brilliant work.

Q. How have Gates and other, newer foundations taken a different approach to influencing policy in public education?

A. Gates and other new foundations resembled each other in terms of their core approaches to education policy influence and the underlying values that motivated them. The new foundations were driven by a “tremendous sense of urgency,” as one informant described, and foundation staff used the words “transformative,” “game changing” and “major impact” in describing their goals. Gates was a relative latecomer to its emphasis on policy influence as a central strategic lever -- it began to make more significant investments in this area after 2008, in contrast to Broad, which had viewed policy as a central priority since its founding in 1999. Once Gates overcame its initial hesitancy, however, policy influence became an “ascendant” strategy at the foundation, as one source described. Between 2005 and 2010, the proportion of Gates’s education resources allocated to policy-related initiatives more than quadrupled, and in 2009, it spent $78 million on advocacy, out of a total $373 million annual education budget. From 2010 to 2015, the foundation’s spending on advocacy represented almost 20 percent of its education budget.

The new foundations’ interest in policy reflected their assessment of the power of philanthropic dollars in the context of government. While funders could invest directly in education initiatives, their efforts might produce minimal outcomes in contrast to their dollars spent -- for example, financing research at universities or endowing professorships might eventually contribute to changing higher education systems, but these results were far off, hard to quantify and could be marginal at best. One Gates official described this change as a strategy designed to produce significant return on investment:

What a dollar worth of program buys you versus a dollar worth of advocacy if it works … the potential leverage in terms of public dollars can be enormous … [the focus on advocacy] interpenetrate[s] a lot because we want to get maximum leverage out of the program investments that we make.

Guided by this ethos, the new foundations began to become interested in more direct methods of intervening in policy, as opposed to relying on the agency of intermediaries and the production of knowledge -- an approach more characteristic of traditional philanthropy. One informant said:

I think that there was an expectation that if [the older foundations] supported the research or if they supported demonstration programs that it would just be automatically picked up by government and that information alone would sort of drive policy decisions, and that’s not just the way the world works.

Another informant agreed, noting that foundation leaders from the academy made investments in research and analysis with the expectation that “people will take more enlightened actions based on this knowledge.” In contrast, institutionalizing their priorities through policy mechanisms, and shaping how public money was spent, represented a more efficient way to achieve greater impact and scale.

The presence of living benefactors was another key variable that determined how the new foundations engaged with policy in a different way. At Gates and Broad, staff members attributed their focus on policy to the active endorsement of their benefactors. Especially at Broad, which was the most assertive policy player among the four foundations profiled in Policy Patrons, Eli Broad’s vision played a key role, as one source shared: “I think we are a little bit more willing to be on the edge of [controversial policy discussions] … just because that’s how Mr. Broad is.”

Likewise, Gates sources indicated that Bill and Melinda Gates played an instrumental role in setting the tone for the foundation’s policy engagement over time, particularly after 2009, when Gates retired as CEO at Microsoft and devoted himself to the foundation’s efforts full time. One source recalled instructions from Bill Gates himself: “What [our benefactor] would say is, ‘I want you to walk right up to that line. Don’t cross it. Don’t ever cross it, but I want to walk right up to it.’”

Q. The Gates Foundation often has shared goals and had a fairly close relationship with the Obama administration, the book says. Are there drawbacks to that relationship, which obviously seems helpful from a policy standpoint?

A. From the perspective of Gates or other outcome-oriented foundations, a closely coupled relationship with the Obama administration represented a significant win, since it contributed to their ability to shape policy at a very high level, and to take advantage of open policy windows without the related constraints of democratic mechanisms of accountability. If your goal is to quickly and efficiently institute a new policy or change an existing one, then you should be in the room with decision makers and have a seat at the table in order to make sure your preferred agenda items are valued.

However, there are drawbacks to this close relationship, which we are beginning to see in the past year. First, a perception existed that the U.S. Department of Education had deferred to Gates and other funders on several of its key hires -- many of whom came directly from Gates or its partners such as NewSchools Venture Fund -- as well as allowing the foundation to set priorities. One informant commented:

I think there is a feeling that it’s the Gates Foundation agenda that the administration has employed on the education side, and I don’t think that’s good for them. I think [it] has the appearance that they’re bringing in all these people to advocate a specific set of goals that are tied to what the Gates Foundation thinks is best … [Secretary] Arne [Duncan] made a conscious decision that Gates’s world was the way.

Even some Gates informants expressed discomfort with the extent to which the foundation had partnered with the Education Department. One Gates official commented on the appearance of collusion between Gates and the federal government:

There was this kind of … twinkle in the eye of one of our [leaders] when the Obama administration’s education policy framework [emerged] and this person said, aren’t we lucky that the Obama administration’s education agenda is so compatible with ours? And then there came the twinkle, right? You know, we wouldn’t take credit … out loud even amongst ourselves. But, you know, the twinkle.

Q. Will Gates have the same sort of longevity in its work on K-12 and higher education as have the older foundations, such as the Ford and W. K. Kellogg Foundations, or do you think it will move on sooner?

A. Gates has the potential to have great longevity in its work on both K-12 and higher education. Its recent pivot toward more purposefully aiming to be more of a “learning and listening” organization is the most important action it can take in terms of pursuing this longevity. Large-scale institutional change efforts cannot be accomplished from the top down alone; they require significant community organizing, changing of norms and beliefs, and building alliances based on mutual trust and respect, not simply the more transactional and power-ridden relationship of a funder. In short, the “soft stuff” matters in terms of executing on goals as ambitious as Gates’s in the education sector.

There’s a funny quote in Policy Patrons where a foundation official comments that Gates is too focused on an economic, instrumental framework for calculating returns on its investments and argues that Gates needs to pay more attention to “values,” quipping that “economists are not trained to do that” (my husband, an economist, begrudgingly agrees). I think the problem for Gates, as a highly outcome-oriented and technologically driven foundation, is exploring and engaging with those values in a way that feels authentic to them but also builds more empathy for the perspectives of those they work with and impact. One of Gates’s written “core values” is a mandate to be “humble and mindful,” and a decade ago, before I started this book project, I interviewed some Gates staff members for a teaching case study. One critiqued the “humble and mindful” clause, stating:

The Gates Foundation has had success at attracting ambitious, accomplished people. When you start to aggregate those people in one place, it’s almost the constitution of hubris. We chant “humble and mindful” so often that we don’t even recognize it.

My sense is that this tendency towards hubris has changed in the last several years, as Gates staff have processed some of their successes and failures in the education sector, and become more responsive to the voices of teachers, parents and community members. I think that this trajectory, if it continues and indeed becomes a core part of the culture, is extremely promising.

Q. How has public opinion changed around the role of philanthropy in education since the recession, and do you see that shift changing how Gates and others operate?

A. Public opinion on the role of private philanthropy in education has changed dramatically since 2008. When I began researching this topic more than a decade ago as a Ph.D. student at Stanford University, critical discussion around philanthropy’s role in education -- or in any field, for that matter -- was limited. In one survey, nearly 60 percent of civic leaders could not name a single foundation, and another study found that 98 percent of news media coverage on foundations was neutral or positive in tone. In 2006, Warren Buffett’s $30 billion gift to the Gates Foundation was described in the press using almost exclusively celebratory terms. This held steady for another five years or so, until about 2012. In the meantime, several of the new foundations became much more involved in policy work -- Gates, for example, was reticent to use policy influence as a central strategic lever until after President Obama was elected, and its main initiatives in this area, such as coalescing grantees and policy elites around issues such as the Common Core, began to take root in 2009.

Starting around 2012, as Gates’s role became more visible in federal education reform efforts, and more grassroots efforts began to be organized in opposition to high-stakes testing and teacher evaluation, public opinion began to shift and several high-profile philanthropic projects began to be challenged. Critiques of philanthropic involvement in policy began to emerge in the press, slowly but steadily, as Gates and other national foundations -- most notably Broad and Walton -- began to attract attention for their vocal and visible role in federal education reform. The mainstream media began to espouse views that were once considered the realm of conspiracy theory; indeed, as one more radically leaning informant reflected in the summer of 2014, “Our views are now mainstream.”

This development emerged in the context of broader economic and political concerns about inequality in American society. In 2011, one informant represented the prevalent attitude that existed with regard to critiques of philanthropic involvement in education: “I don’t know that the concentration of influence in an institution like a foundation is any better or worse than the vast accumulation of individual wealth, and I don’t see Americans looking to take that on.” By 2015, however, with the rise of Bernie Sanders and the issues surrounding income inequality taking center stage in the presidential election, the pendulum had clearly swung.

Whether or not these broader social forces will impact public opinion towards philanthropy in the future remains an open question. Over the last century, foundations have faced public scrutiny and congressional inquiry at three separate points -- in the 1910s for labor abuses by the robber barons, in the 1950s for suspicion of Communist activity and in the late 1960s for political activity around racial equality. Looking at the history, and the rising tide of criticism currently, one might reasonably think that the field may face another wave in the near future -- and would be advised to get out ahead of it by engaging more purposefully in a meaningful dialogue on the role of foundations in a liberal democracy, including how open and transparent they should be not only to their grantees and donor constituents, but to the public at large. My hope is that Policy Patrons can contribute to that conversation in the broader field of philanthropy.


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