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The Short-Sighted Raid on the Ford Foundation

By Thomas Bray

The Ford Foundation is one of those organizations that conservatives love to hate - and not without reason. Scratch the bank account of a liberal activist cause, and chances are good you'll find a big fat deposit from the Ford Foundation.

But an investigation announced recently by Michigan Attorney General Mike Cox, a Republican, has even some conservatives concerned. Cox says he is focusing on governance and potential conflicts of interest, but his real beef appears to be the foundation's meager record of giving to its "native" state in recent years. Cox clearly sees the foundation's $11.6 billion in assets as a juicy target in an election year in a down-at-the-heels state.

In recent days a pair of state representatives, one Democratic and one Republican, has piled on with a bill that would, in the absence of a clear statement of donor intent, require philanthropic organizations to spend more than half their money inside "the geographic location where the grantors originally established the trust." Moreover, the grants would have to be made to the same "types of recipients" favored by the "original trustees."

The Ford family itself is partly to blame. The Ford Foundation, established by Edsel Ford in 1936 and funded with stock from Henry Ford, had a temptingly vague statement of donor intent: "To further the public welfare." Most of the money went to such pet Ford projects as the Henry Ford Hospital in Detroit and the Henry Ford Museum in Dearborn.

Then in the 1950s the late Henry Ford II, reacting to criticism that the foundation was being used as a family slush fund, appointed a blue-ribbon committee to refine the mission. The committee recommended that a majority of the seats on the board go to outsiders and that the foundation focus on five broad subject areas, including "world peace," "economic well-being" and education.

It wasn't long before liberal activists, who take naturally to spending other people's money, were in control and the money was going practically everywhere but Michigan. Ford himself complained about "foreign aid" at a time when Detroit was experiencing a devastating riot. Ultimately he resigned from the board in 1976.

"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," he noted acidly. "It is hard to discern recognition of this fact in anything the Foundation does."

But the Ford experience is an argument for donors to be more careful about setting up their philanthropic organizations, not for government to take control whenever there is a dispute. (Disclosure: for many years I have been a trustee of the Earhart Foundation in Ann Arbor, which makes modest grants to scholars and scholarly organizations.) "There is a right way and wrong way to respect donor intent," says Adam Meyerson, head of The Philanthropy Roundtable, a Washington organization that offers counsel to philanthropists. "This is the wrong way."

The role of the states, says Meyerson, should chiefly be confined to making sure that existing laws against self-dealing and the like are enforced, intruding only when donor intent is "clearly violated."

There is another reason that forcing the Ford Foundation to spend more money in Michigan could be a bad idea, though. While the Henry Ford Hospital and Henry Ford Museum are worthy organizations that could doubtless use the help, a high proportion of the Ford Foundation's grants continue to reflect a left-wing agenda.

One of the foundation's few grants in Michigan lately, for example, has been to fund defenders of racial preferences - including $600,000 to the University of Michigan at a time when the university was spending lavishly on lawyers to defend its undergraduate quota system. Elsewhere, Ford grants have been used for radical experiments in education, to foster the command-and-control environmentalism that has made life difficult for the car companies, and, as Henry Ford II complained, to undermine democratic capitalism itself.

The last thing Detroit, or Michigan, needs is more such social engineering. What state officials should be focusing on is lowering barriers to economic growth and wealth accumulation of the sort that will generate the Ford Foundations of the future - foundations that hopefully will be more wisely managed. State laws and investigations aimed at micro-managing private foundations are mainly likely to ensure that those philanthropists go elsewhere.

Tom Bray writes columns for The Detroit News and Email:

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