Foundations Gone Rogue: Ford Foundation and Beyond

Editor note: The wealth of free-market capitalism creates a robust civil society, where nonprofits and foundations can support the causes of their choosing, many of which might not be viable otherwise. The problem is where philanthropy goes political against the the free society and human betterment. Jane Shaw Stroup takes a look at good money going in negative directions, even violating original intent.

You’ve probably heard that Henry Ford II resigned from the board of the Ford Foundation because it had veered far away from its donor’s intent.  In his 1976 resignation letter, Ford (grandson of Ford Sr.) wrote:

In effect, the foundation is a creature of capitalism—a statement that, I’m sure, would be shocking to many professional staff people in the field of philanthropy. It is hard to discern recognition of this fact in anything the. foundation does. It is even more difficult to find an understanding of this in many of the institutions, particularly the universities, that are the beneficiaries of the foundation’s grant programs.”[1]

What had the foundation been doing? Essentially it had gone rogue.

True, the elder Ford had been eccentric and viciously antisemitic, but he changed the world with his autos, he paid workers well, and he hired disabled veterans, the elderly, and the handicapped. He revived a Detroit suburb, Inkster, during the Great Depression by hiring many of its largely black population, paying them $6 a day even if he only had routine chores for them. He started the Henry Ford Hospital in Detroit.

By 1976, the foundation had become the largest charitable foundation in the world, and was leaning toward  Democratic Party politics. One of its projects supported the Democratic Party by funding a voter registration drive in Cleveland to elect a Democratic mayor, Carl Stokes. Another gave money to the staff of Robert Kennedy after his assassination—even though former staff members such as Frank Mankiewicz and Peter Edelman were lawyers earning up to $500,000 a year.

Henry Ford II asked McGeorge Bundy (Ford’s president) to support the Henry Ford Hospital. Bundy refused. Only when Henry Ford II’s wife, Cristina, interceded with Robert McNamara, a prominent trustee, did McBundy agree to a one-time $100 million donation in 1973. That appears to be the foundation’s last gift to the hospital. In 2024, the hospital started on a funding campaign and the Ford Foundation is nowhere in sight.

Finally, in 1974, the foundation authorized a 530-page report on energy by S. David Freeman (later the head of the government-owned Tennessee Valley Authority).[2] The report set energy conservation as “a matter of highest national priority.”[3] It elevated government planning and control over the oil and auto industries. It proposed appliance energy efficiency standards, mortgage subsidies  for people who bought homes that met the standards, pushed for car miles-per-gallon standards, and promoted pollution taxes. (Our sluggish dishwashers are an example of what this report led to.)

The Freeman report also mused that “a political decision must be made: to restrain windfall profits by price controls; to tax some of them away and spend the proceeds in ways that will benefit the poor; or to do nothing.“[4]

By the way, you won’t read about Henry Ford II’s disaffection in the history page on the Ford Foundation’s website.[5] However, the New YorkTimes  published portions of his resignation letter, including the quotes above.

Other Foundations Went Rogue, Too

The Ford Foundation was not alone. Others that turned against their creators include the Rockefeller Foundation, the Pew Foundation, the MacArthur Foundation, the Packard Foundation, the Robertson Foundation, the Buck Foundation, and the Barnes Foundation.

We have this full picture because one person brought the examples together. He was the late Martin Morse Wooster, who studied philanthropic organizations for years for the Capital Research Center. Wooster died in 2022 in a hit-and-run accident, but he left rich histories of American foundations in a book that went through four editions.

The final edition (published in 2017) is called How Great Philanthropists Failed and You Can Succeed in Protecting Your Legacy. [6] As the title indicates, Wooster not only identified the ways the founders of these organizations lost control but advised wealthy readers who might be contemplating a foundation how to avoid their predecessors’ mistakes. And he showed all potential donors, small or large, the pitfalls that almost inevitably occur over time.

Let’s look at a few other examples of foundations that went astray:

• The MacArthur Foundation is famed for its mostly left-wing “genius awards” (ten on the left for every one on the right, wrote Wooster). Who would have thought that it was built on the money of a capitalist who turned around a bankrupt insurance company in the Depression, making it a great success, partly by hiring handicapped workers and discounting rates? John MacArthur then grew his fortune by developing land in New York and Florida. He was a giant proponent of private enterprise and, as Wooster says, “pugnacious.” MacArthur opposed the  planners who wanted to block his land developments in Florida (“they think alligators are more important than people’”) and he refused to give money to politicians.[7]
• Who would have thought that the Pew Charitable Trust, created by the money from Howard Pew, an entrepreneur in the oil industry (founder of Sun Oil or Sunoco), would abandon its origins? The Pew Trust has supported a plethora of social causes, among them  “environmentalists who favored restrictions on oil drilling in the Alaskan wilderness,” Wooster observed. [8] Surely, Howard Pew would have been stunned.

These are just a couple of examples. But Wooster’s book is not only about foundations that ended up disparaging the capitalistic sources of their money. It’s about donor intent.

Barnes Foundation: A Sad Tale

One of the most disturbing illustrations of foiling the intent of the donor is the Barnes Foundation. Albert C. Barnes was a  leftist liberal who supported the New Republic and the earlier Masses magazine. An entrepreneurial  genius  in the medical field, over the years he built one of the world’s most outstanding collections of modern art. But he wanted students of art, not the public, to see it—and especially not members of the art establishment. When he exhibited  his early collection in 1923, art critics called the works “trash” and the “creations of a disintegrating mind” (not Barnes’ mind; rather, the works of artists like Chaim Soutine). Today the Barnes collection is worth about $25 billion.

To make a long story  short, the Philadelphia art establishment had its revenge after Barnes died in 1951. Using court cases and public pressure, the establishment eventually forced the foundation to leave its home location, a small suburb of  Philadelphia, and house the artwork in a public Philadelphia museum. The story is complicated, but you can get an idea of the course of things by the name of a documentary about Barnes’ experience, “The Art of the Steal”. The movie, on  Youtube,  is unforgettable.

Not every foundation has turned on its creator, and Wooster praises those that didn’t. He goes on to argue that there are two ways a wealthy philanthropist can prevent such takeovers:

• Spend your money as effectively as possible while you are alive.
  • Set a sunset date for your foundation.

There’s much more to this book, of course, and much more to the entire issue of donor intent. But this is my start.

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Notes

[1] “Excerpts from Henry Ford Letter, “New York Times, January 12, 1977.

[2] Energy Policy Project of the Ford Foundation, A Time to Choose: America’s Energy Future (Cambridge, MA : Ballinger Publishing. 1976). S. David Freeman was the lead author.

[3] Energy Policy Project, 329.

[4] Energy Policy Project, 8.

[5] Ford Foundation, “Our Origins.

[6] Martin Morse Wooster, How Great Philanthropists Failed and You Can Succeed in Protecting Your Legacy (Washington, D.C.: Capital Research Center, 2017).

[7] Wooster,  63.

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