Who Rules America?  By G. William Domhoff, University of California at Santa Cruz

Power in America

The Power Elite and Their Challengers: The Role of Nonprofits in American Social Conflict

by G. William Domhoff

NOTE: This is a reprint of a journal article with the following citation:

Domhoff, G. William. 2009. "The Power Elite and Their Challengers: The Role of Nonprofits in American Social Conflict." American Behavioral Scientist 52:955-973.

Drawing on findings in the literature on power structure research, this article argues that many of the biggest and most important nonprofit organizations are central components in the ongoing conflict between the corporate community and the power elite on the one side and the liberal-labor coalition and progressive social movements on the other. The article overviews five case studies to demonstrate the role of various types of nonprofits in specific policy conflicts.

The literature on the fast-growing nonprofit sector increasingly recognizes that the sector is a diverse and complex one in which many nonprofit organizations have links to the private and/or state sectors. In this article I want to reinforce the tendency to look at the differences among nonprofits by drawing on a wide range of studies in the field of power structure research to show that some of the biggest and most important nonprofits are in fact combatants in the ongoing conflicts between a corporate-based power elite and its two main challengers, the liberal-labor coalition and progressive social movements.

More specifically, it is my claim that an intertwined social upper class and corporate community, working through a leadership group I call the power elite, are far and away the dominant power factor in the United States, as most directly evidenced by their disproportionate amount of wealth and income; by their predominant role in financing moderate and conservative political candidates in both political parties; by their overrepresentation in key positions in the executive branch of the federal government in both Democratic and Republican administrations; and by their lobbying victories in the decision-making arenas of the federal government on a wide range of issues of direct concern to them (see Domhoff, 2006, for a summary of evidence developed by a large number of researchers). Members of the power elite, who speak for the upper class and the corporate community, work through nonprofit policy-planning and opinion-influencing networks as well as the Republican Party and centrist groups in the Democratic Party.

However, dominance by the social upper class/corporate community does not go uncontested by their liberal-labor and social movement opponents, whose most impressive successes include the creation of the industrial union movement in the 1930s and the push by the civil rights movement for landmark legislation in the 1960s. The liberal-labor coalition operates primarily within the electoral arena as one part to the Democratic Party, whereas the progressive social movements use a wide variety of disruptive practices, including boycotts, demonstrations, and various forms of strategic nonviolence, to force the corporate community and its affiliated nonprofit organizations to address their concerns.

After briefly summarizing the longstanding literature on power structures, which is often overlooked by those who study the nonprofit sector, I highlight five recent case studies to show the relevance of class-based organizational networks for understanding the role of many nonprofit organizations. In the process, I suggest that some corporate-related nonprofit networks serve to mediate and ameliorate conflict with corporate opponents, whereas nonprofits started by members of social movements become one key organizational base for challenges to corporate dominance. Adding further complexity to the picture, I show that there are ultraconservative members of the corporate community who help finance nonprofit right-wing organizations that try to overturn any gains that are made by liberal-labor and progressive activists during times of upheaval.

From the Upper Class to the Power Elite

Studies of shared private school experiences, overlapping social club memberships, participation in exclusive retreats, and home ownership in high-status vacation areas established long ago that there is a small nationwide social upper class -- less than 1% of the overall population -- in the United States (Baltzell, 1958, 1964; Domhoff, 1970, 1974). Several of the most revealing of the studies that make this point focus on the social institutions and activities of women of the upper class, who direct many of the nonprofit voluntary and cultural associations that have as one primary goal trying to keep government involvement in American life at a minimum (Daniels, 1988; Kendall, 2002; Ostrander, 1984). Generally speaking, the rituals and retreats of the upper class, including the highly ritualized nature of debutante balls, demonstrate social cohesion and class consciousness through respect for traditions and the insistence upon proper conduct (Ostrander, 1980).

Another set of studies looks at the relationships among corporations, as examined most readily and objectively through an analysis of "interlocking" directorships, leading to the conclusion that the largest corporations are closely enough related to be considered a "corporate community" (e.g., Barnes & Ritter, 2001; Mariolis, 1975; Mizruchi, 1982; Sonquist & Koenig, 1975). Common stock ownership by wealthy families, along with shared bankers, accountants, and corporate lawyers, also contribute to this corporate cohesion (e.g., Burch, 1972; Dunn, 1980; Mintz & Schwartz, 1985). Still other studies reveal there is an overlap between the directors of the interlocked corporations and membership in the interconnected social institutions that constitute the upper class, which demonstrates that the corporate community and social upper class are by and large two sides of the same coin (see Domhoff, 2006, for summaries of this research). In terms of the critical issue of how the social upper class/corporate community is able to organize in order to influence government, the upshot of these studies is that social cohesion facilitates political and policy cohesion when members of the upper class and corporate executives gather in more formal settings; however, it needs to be emphasized that sustained policy discussions rarely if ever happen in social settings.

Building on the studies of the upper class and corporate community, detailed tracings of the linkages among individuals, institutions, financial donations, and policy proposals demonstrate the existence of a nonprofit, nonpartisan policy-planning network -- made up of dozens of foundations, think tanks, and policy-discussion groups -- that is financed and directed by corporate leaders. This network strives to formulate policies concerning the general interests of the corporate community, that is, those issues that go beyond the narrow interest in tax breaks, subsidies, and regulatory relief that are handled by specific corporations and trade associations through special-interest lobbying. By contrast, the policy-planning network focuses on policy makers in the White House, relevant Congressional committees, and the high-status newspapers and opinion magazines published in New York and Washington (e.g., Burris, 1992; Colwell, 1980, 1993; Domhoff, 1979; Moore, Sobieraj, Whitt, Mayorova, & Beaulieu, 2002; Salzman & Domhoff, 1983; Useem, 1984). It is important to note that this network has overlapping centrist (moderate conservative) and rightist (ultraconservative) cliques within it.

Historically, the most important foundations in the network were the Rockefeller Foundation, Carnegie Corporation, and Ford Foundation, but they have been joined by a host of others in the past three decades. Sixteen corporate foundations are now among the top 100 in terms of annual donations; Table 1 presents the names of these corporate foundations and the amount of their donations for 2003-2004. In addition, in some cities, such as Cleveland, community foundations controlled by corporate leaders have played a major role in shaping local policies for decades (Tittle, 1992).

Table 1. Corporate Foundations Among Top 100 Donors in 2003 and 2004
RankFoundation NameAmount Donated
41Ford Motor$77.5M
42Bank of America$76.5M
60JP MorganChase$56.9M
66General Electric$50.9M
73AT&T (formerly SBC)$48.2M
74Wells Fargo$46.4M
75Fannie Mae$45.8M
85General Motors$40.1M
Note: The Gates Family Foundation, based on Microsoft wealth, gave $28.8 billion and the Ford Foundation gave $10.7 billion in the same time period, ranking No. 1 and No. 2 in donations. Source: The Foundation Index 2006 (New York: The Foundation Center, 2006, p. x).

Think tanks are best exemplified by one of the earliest, The Brookings Institution, founded in 1929, which has steered right and left of center in its long history, and by the American Enterprise Institute, which came into prominence in the 1970s as an ultraconservative counter to the government-oriented solutions to social problems that emerged in the 1960s (Peschek, 1987). The key policy-discussion groups, which bring together corporate leaders, experts from think tanks and universities, journalists, and current and former government employees for sustained consideration of specific issues, include the Council on Foreign Relations, the Committee for Economic Development, and the Conference Board (e.g., Burris, 1992; Moore et al., 2002; Salzman & Domhoff, 1983). Those corporate leaders who are members of policy-discussion groups are more likely to be tapped for government service than other corporate leaders, suggesting that such groups are a proving grounds as well as an educational forum (e.g., Domhoff, 1998, chap. 7; Useem, 1980)

Drawing on archival work by historians, social scientists have traced the efforts of these organizations from their creation by the corporate moderates and social reformers of the Progressive Era into the modern era, showing that they often arise in the aftermath of one or another domestic or foreign policy crisis (e.g., Domhoff, 1970, chap. 5 and 6; Eakins, 1966; Slaughter & Silva, 1980; Weinstein, 1968). They have examined the internal workings of some of these organizations, such as the Carnegie Corporation and Resources for the Future (Alpert & Markusen, 1980; Darknell, 1975, 1980), and shown how a local-level policy network arose in the Progressive Era to influence city and county governments that were being challenged by Democratic Party political machines and local chapters of the Socialist Party (Domhoff, 1978, chap. 4; Roberts, 1994). They have traced the rise of the revitalized right wing of the policy planning network beginning in the 1970s (e.g., Allen, 1992; Burris, 1992; Colwell, 1993).

The discovery of a general policy-planning network with many nested networks within it makes it possible to explain how most of the major new government initiatives of the 20th century were developed, everything from workmen's compensation to foreign policy to trade policy to agricultural policy to social security to arts policy, and even labor policy to a surprising extent, along with the creation of such government agencies as the Federal Reserve Bank, Federal Trade Commission, Office of Management and Budget, and National Recovery Administration (e.g., Domhoff, 1970, chap. 5 and 6; Domhoff, 1990, 1996; Kahn, 1997; Levine, 1988; Livingston, 1986; Weinstein, 1968; Whitt, 1987).

The policy-planning network is complemented by a corporate-dominated network that attempts to influence public opinion on specific issues and reinforce a general antigovernment ideology. Often drawing on rationales and statements developed within the policy-planning network, this network has a mixture of for-profit and nonprofit organizations within it, with large public relations firms and the public affairs departments of major corporations at its core (Himmelstein, 1997). This core then uses grants from both corporate and family-founded foundations to finance a wide range of nonprofit opinion-influencing associations that have educational institutions, charitable groups, middle-class voluntary associations, and the mass media as their primary target audiences (Domhoff, 2002). Recent examples of nonprofit organizations in this network include the Advertising Council, the National Council for Economic Education, the Foreign Policy Association, and the Committee for the Present Danger, but there are dozens more, including many ultraconservative ones that will be mentioned later in the article.

In discussing the opinion-influencing network, the emphasis has to be on its "attempts" to influence public opinion, not on its successes, because there is ample evidence that the American public makes up its own mind on most issues and often holds to opinions that are more liberal than those of the power elite, especially on economic issues (Page, 2002; Page & Shapiro, 1992). In addition, no amount of patriotic rhetoric from the opinion-influencing network and its media pundits can maintain support for wars when the number of military casualties begins to rise (Mueller, 1973, 2005). To the degree that the network is successful on specific issues, it is through creating a multitude of opinions or spreading doubt about what seem to be sensible proposals. It thereby muddies the waters and provides an element of confusion before everyone's attention turns to the next crisis. It also launches strong personal attacks on those who stray too far outside the corporate consensus, thereby making everyone aware that there are costs to dissent (Stauber & Rampton, 1995).

To the extent that the opinion-influencing process has a major or long-term impact, it is through the financial donations that the corporate public relations departments, public relations firms, and foundations make to nonprofit opinioninfluencing organizations, charitable associations, and national-level voluntary associations, which often include upper class women and corporate executives on their board of directors. Financial support and board membership tend to reinforce the apolitical tendencies often present in such organizations. To provide an example of how foundations support educational organizations within the opinion-influencing network, Table 2 lists the donations in 2003 and 2004 to the National Council for Economic Education, which has an elaborate and longstanding program to shape curriculums for the teaching of economics in public schools, with a special focus on teacher training programs in state colleges and universities.

Table 2. Donations to the National Council for Economic Education in 2003 and 2004
FoundationAmount Donated
Bank of America$1,000,000
Goldman Sachs$330,000
International Paper$120,000
Murphy Foundation$60,000
Spencer Foundation$40,000
Wells Fargo$25,000
Ford Motor$20,000
Walton Family Foundation$15,000
American Express$15,000
General Mills$10,000
Kirby Foundation$10,000
Source: Compiled from Foundation Grants Index on CD-ROM 6.0 (New York: The Foundation Center, 2006).

The organizations that constitute the corporate community and its affiliated nonprofit networks provide the institutional underpinnings for the leadership group that looks out for the overlapping interests of the upper class and the corporate community. These leaders are collectively called the "power elite." They are either members of the upper class who have taken on leadership roles in the corporate community or the nonprofit network, or they are high-level employees in corporations and corporateconnected nonprofit organizations. More formally, the power elite are the people who serve as directors or trustees in profit and nonprofit institutions controlled by the corporate community through stock ownership, financial support, or a predominant role on the board of directors. This definition includes the top-level employees who are asked to join the boards of the organizations that employ them. It has proven useful for research purposes in tracing corporate involvement in voluntary associations, the media, political parties, and government (Domhoff, 2006, pp. 103-104). The concept of a power elite is also useful because it makes it possible to combine class and organizational insights into a single theoretical framework, with boards of directors providing the main formal setting in which class and organizational imperatives are discussed and integrated (e.g., DiTomaso, 1980; Ostrander, 1987).

Now that the institutional base for the power elite has been introduced, it is time to look briefly at five specific cases showing how nonprofit groups directed and/or funded by the extended corporate community become involved in social conflict. The first three concern corporate centrists working with restive population groups and social movement challengers in an attempt to mediate conflict. The remaining two show how ultraconservatives within the power elite mobilize to delay legislation or help Christian conservatives in their conflicts with liberals over social issues.

These five case studies exemplify the general way in which social conflicts usually, but not always, play out in the United States. If the moderate conservatives favor accommodation in the face of social unrest, they push for a program developed in centrist foundations, think tanks, and policy-discussion groups, or even modify a plan advocated by liberals. However, the alliance of moderate conservatives with the liberal-labor coalition on some issues does not mean that the ultraconservatives are easily defeated. Because of their great strength historically through the conservative voting bloc in Congress, consisting of a majority of Southern Democrats and a majority of Northern Republicans, and now through the Republican Party, they are often able to delay or modify any proposals that require Congressional approval. If the moderate conservatives do not wish to see any change, which is often the case when the challengers seem weak, they stand aside while their ultraconservative counterparts block policy proposals suggested by liberals or labor. There have been only a few occasions when a united power elite and the conservative voting bloc could not block liberal-labor policy proposals through an outright majority, maneuvering within key congressional committees, or resorting to a filibuster (Domhoff, 2006, chap. 7, for details and references related to the exceptions).

Corporate Moderates and Their Challengers

The most typical image of the upper class and corporate community is one of hidebound conservatism that resists any changes that are sought by aggrieved groups, which means that the adoption of new moderate policies is taken as evidence that the power elite is not very powerful. In fact, with the important exception of the liberal-labor coalition's longstanding desire to create a strong labor union movement, moderate conservatives within the power elite usually have taken a more accommodative stance when they are faced with challenges that could lead to serious discord or major disruption. This process often begins with foundation grants to one or more advocacy organizations that speak for the potentially disruptive groups (e.g., Jenkins & Halcli, 1999). To demonstrate this point in a general way, Table 3 presents the grants that foundations made in 2003 or 2004 to several advocacy organizations focused on racial, ethnic, or gender issues.

Table 3. Foundation Donations to Advocacy Organizations in 2003 and 2004
Category/OrganizationNo. of
No. of
African American
   Urban League134282$15,461,742
   Children's Defense Fund3142$4,935,297
   National Council for Negro Women55$575,000
   National Council of La Raza3144$12,179,694
   Planned Parenthood172314$35,106,492
   Ms. Foundation1623$2,230,000
TOTAL  $79,299,284
Note: NAACP = National Association for the Advancement of Colored People; MALDEF = Mexican American Legal Defense and Education Fund. Source: Compiled from Foundation Grants Index on CD-ROM 6.0 (New York: The Foundation Center, 2006).

The grants provided to these organizations had different patterns in terms of the foundations involved. For example, Planned Parenthood and its affiliates, with the largest amount of donations, received virtually all of its support from a wide range of family and community foundations, often in large grants of $100,000 or more, with just three family foundations (Hewlett, Packard, and Buffett) providing 51.6% of the total funds through multiple grants ranging from $10,000 to $4.7 million. On the other hand, the Urban League, the second largest recipient, received most of its donations from a few dozen corporate foundations, mostly in grants of $100,000 or less, with major banks and telephone companies leading the way.

Working With Mexican American Groups

Turning to the first specific case, Marquez (2003) has shown just how important foundations are to advocacy groups through a study of four Mexican American organizations: the National Council of La Raza, the Southwest Voter Registration Education Project, the Mexican American Legal Defense and Educational Fund, and the Texas Industrial Areas Foundation network, all of which developed during the turmoil of the 1960s. His analysis of their income statements to the Internal Revenue Service over the 10-year period from 1991 to 2000 shows that most of them receive virtually all of their money from a handful of foundations, led by the Ford Foundation, the Rockefeller Foundation, and the Mott Foundation. He also presents evidence that Ford Foundation officers see these top-down organizations as a moderating influence (Marquez, 1993). In fact, the Ford Foundation played a role in creating the National Council of La Raza and the Mexican American Legal Defense Fund.

The absence of any local or membership fundraising in the case of the Industrial Areas Foundation network in Texas, which was inspired by Saul Alinsky, is especially striking because Alinsky emphasized that outside funding should be used only at the outset of an organizing effort to ensure that the grassroots groups are controlled by their local volunteer leadership. With only two or three exceptions out of seven cities where the project operates, most of their funding came from large foundations and local business, and none had a majority of its funding from neighborhood members. The funding for these organizations increased greatly when they set up an Interfaith Education Fund that became a major conduit for foundations. In effect, organizers paid by foundations run the Industrial Areas Foundation affiliates in Texas, even though they are nominally controlled by local volunteer leadership (Marquez, 2003).

Dealing With Inner-City Turmoil

Something very similar developed in response to the disruption and rioting in major urban areas in the 1960s, when the Ford Foundation financed a wide range of community-oriented organizations, some of them local, some of them national-level umbrella groups. Once again, as with the Mexican American groups, there is considerable evidence that the Ford Foundation saw these organizations as a way to deal with tensions caused by the combination of urban renewal, which displaced tens of thousand of people from their neighborhoods, and the massive urban migration of African Americans from the rural South (Domhoff, 2005; Fish, 1973; Fisher, 1994; O'Connor, 1999). Table 4 provides a sample of Ford Foundation grants to selected community-oriented groups in 2003.

Table 4. Ford Foundation Grants to Inner-City Advocacy and Training Groups in 2003
OrganizationCityAmount Donated
Center for Community ChangeWashington$1,665,000
National Community Development InstituteOakland$400,000
Local Initiatives Support CorporationNew York$300,000
National Congress for Community Economic DevelopmentWashington$250,000
National Community Reinvestment CoalitionWashington$200,000
National Training and Information CenterChicago$200,000
Community Renewal SocietyChicago$140,000
TOTAL $3,155,000
Source: Compiled from The Foundation Grants Index on CD-ROM 3.0 (New York: The Foundation Center, 2004).

Nonprofit organizations called Community Development Corporations (CDCs) grew to be the most important of these Ford-sponsored organizations; by the 1990s hundreds of CDCs were providing the lion's share of new and rehabilitated housing for inner-city residents, along with help for small businesses (Guthrie & McQuarrie, 2005; Peirce & Steinbach, 1987). As one former Ford Foundation official later explained, the Ford-financed programs that led to the War on Poverty were an "adjunct to government that concentrated on social service programs," whereas the CDCs are "a proxy for local government, concentrating much more on economic development and on residential and commercial building and renewal, a distinction of considerable significance" (Magat, 1979, p. 123). In other words, the new initiative was an attempt to create a nonprofit organizational structure for improving conditions in the inner city that was relatively independent of government.

However, the CDCs did not do as well during the late 1960s and 1970s as foundation executives hoped they might because they needed far more money than what a handful of foundations could provide, which led to the creation of a Local Initiatives Support Corporation to raise money for CDCs in many different cities. This "financial intermediary" is the nonprofit equivalent of a for-profit financial investment company. In this case, however, it also provides grants and technical assistance as well as making investments and loans. It was launched in 1979 with $4.5 million from the Ford Foundation and another $4.8 million from six corporate sponsors. It was joined 3 years later by a somewhat similar nonprofit financial intermediary, the Enterprise Foundation, founded by a major real estate developer (Peirce & Steinbach, 1987). Ford then added its support to the Enterprise Foundation, giving it just over $9 million between 1982 and 1991 (Liou & Stroh, 1998).

Adapting to the Reagan Administration's large cutbacks in spending for cities during the early 1980s, the Ford Foundation next developed a Community Development Partnership Strategy, which called for the pooling of resources from the private sector, foundations, government agencies, and institutions to support efforts to revitalize neighborhoods. While the foundation was developing its partnership plan, its allies in the inner-city network, including the Local Initiatives Support Corporation and the Enterprise Foundation, lobbied for a major tax break that finally opened the floodgates for the CDCs. As one account noted, "Politically, the intermediaries claim no small role in winning new tax credits for low-income housing in the 1986 Tax Reform Act" (Peirce & Steinbach, 1987, p. 74). Called the Low Income Housing Tax Credit, this tax loophole was soon used by wealthy individuals and corporations to fund new and rehabilitated housing by CDCs.

This tax-based plan for coping with problems in the inner city was far more acceptable to ultraconservatives in the power elite than earlier Ford Foundation initiatives. They were pleased because tax breaks reduce the direct role of the federal government and encourage initiatives by the private sector. Moderate conservatives were satisfied with the compromise because they could deliver needed resources to the inner city and at the same time minimize a direct role by local government agencies. In effect, there was now the potential for a private government of nonprofit organizations controlled by the foundations and corporations, with CDCs at the center. This kind of arrangement also had the advantage of being less expensive because nonprofits pay their employees lower wages than do city governments.

The success of this new arrangement is demonstrated by the fact that in 2003 the Local Initiatives Support Corporation received 169 foundation grants, ranging from $10,000 to more than $3 million, for overhead expenses. These grants are over and beyond what is provided by corporations to build housing. The top nine donors, a mix of moderate, conservative, community, and corporate foundations, are listed in Table 5. Even more foundation grants, 328, directly supported the CDCs' staff and office space.

Table 5. Top Nine Donors to the Local Initiatives Support Corporation in 2003
OrganizationAmount Donated
1. Kansas City Community Foundation$3,292,050
2. Fannie Mae$3,000,000
3. McKnight Foundation$2,100,000
4. McGregor Fund$1,500,000
5. Walton Family Foundation$925,000
6. Freddie Mac$750,000
7. JPMorgan Chase$750,000
8. Annie E. Casey Foundation$700,000
9. Citigroup$500,000
Source: Compiled from The Foundation Grants Index on CD-ROM 3.0 (New York: The Foundation Center, 2004).

A similar picture emerges for the funding of auxiliary nonprofit charitable organizations focused on the inner city. In 2003, for example, the United Way received 3,076 foundation donations, 53 of which were for $1 million or more. The Lilly Endowment, created by the original owners of Eli Lilly and Company, topped the list with a donation of $24.3 million. (The company foundation gave another $5.2 million.) The other foundations that gave $5 million or more to United Way were all directly controlled by corporations -- Bank of America ($20.7 million), UPS ($9.6 million), Ford Motor ($9.3 million), J. P. MorganChase ($5.8 million), and Kellogg ($5.1 million). Catholic Charities, very active in inner cities, received 141 grants in 2003, including a donation of $1.6 million from the Irvine Foundation to the Catholic Charities of Santa Clara, California. The Gates Foundation gave $400,000 to Catholic Charities in the state of Washington.

These findings support the claim that corporations and foundations have built a parallel government of nonprofit organizations in the inner city that funds local activists who want to help low-income people but at the same time makes further social change very difficult because activists and the staffs of community organizations walk a tightrope between organizing for social change and delivering social services (Shaw, 1999, chap. 5; Stoecker, 1997). They not only see a large number of clients in immediate need of help and spend many hours coordinating demonstrations and other direct actions -- they also have to find time to ensure that their organizations continue to exist by applying for yearly foundation and governmental grants that often have strings attached and that may be denied if they are perceived as overly confrontational in bringing pressure to bear on businesses or government agencies (Funicello, 1993). However, absent large-scale grassroots movements for social change in the inner city, combined with middle-class or grassroots financial support that would free them from foundation grants, there seems to be little more that they can do.

Grappling With Environmentalists

Building on a postwar concern with overpopulation in the Third World and a potential scarcity of the natural resources needed to maintain the American economy, the Ford Foundation, later joined by many other foundations, played a major role in creating the organizational infrastructure that led to the environmental movement, a movement that became far more activist and anticorporate than the corporate moderates who financed these efforts originally anticipated (e.g., Piotrow, 1973; Robinson, 1993). However, the corporate moderates bent with the wind and supported new organizations such as the Natural Resources Defense Council and the Environmental Defense Fund (now simply Environmental Defense), as well as more moderate and longstanding conservationist organizations (Gonzalez, 2001; Mitchell, 1991).

The way in which foundations operate in the environmental arena is most recently demonstrated in a detailed case study of how a group of foundations in the Environmental Grantmakers Association helped to create a set of forest certification policies, which are agreements between corporations and environmental activists on methods of logging and reforestation that lead to sustainable forests. They did so in order to defuse the confrontation between rapacious lumber companies on the one side and imaginative environmental activists on the other, who were determined to stop clear-cutting in order to save forests, especially rainforests (Bartley, 2007). After several years of boycotts and protests that did not meet with great success, but proved that the activists would not go away, meetings among foresters, foundation officials, and activists led to the idea that a new organization could be created that would certify that a timber company was using sustainable and environmentally sound harvesting methods. Out of these meetings, the MacArthur, Ford, and Rockefeller Brothers foundations financed the effort in 1993 that created the Sustainable Forestry Funders network. These three, along with the Surdna and Pew foundations, provided 98.7% of all funds toward the forest certification program between 1993 and 1998; they were then joined by four other foundations over the next few years (Bartley, 2007).

The network of organizations created by these foundations, by now including activist nonprofit environmental groups, such as the Rainforest Action Network and the Rainforest Alliance, has generated a nongovernmental and market-oriented solution to the conflict, although much work needs to be done to convince more timber companies to accept the plan (e.g., Goodman & Finn, 2007). On one hand, the forest certification agreements do not involve any government agencies. On the other, the agreements are enforced through compacts among major retailers of lumber, such as Home Depot, which stipulate that they will only sell lumber or wood products from certified forests. As Bartley (2007) stresses, this market-oriented solution undercuts the legitimacy of general boycotts but at the same time leaves room for activists to stage disruptive protests and targeted boycotts in order to bring reluctant lumber companies into compliance with the new standards. In effect, the moderate foundations are willing to work with highly confrontational and disruptive activist organizations, and even to fund them, as long as they accept the certification-based market solution and focus their attention on making sure that the moderate solution is adhered to by ultraconservative corporations.

Ultraconservatives in the Nonprofit Network

By no means do all corporations and foundations take an accommodative stance on all issues and conflicts that arise. As noted earlier in this article, there is an ultraconservative wing within the policy-planning network that usually opposes attempts to strike bargains with activists. Although ultraconservative foundations and think tanks often kept a low profile during the 1960s or were pushed to the side by the centrists as they tried to deal with both the civil rights and antiwar movements while supporting the war in Vietnam, they began to take a more assertive stance once disruption in the inner city and the Vietnam War ended. They then took advantage of the turn to the Republican Party by those white Americans who resented the changes brought about by the civil rights, feminist, environmental, and gay-rights movements. Joining with the new Christian right and longstanding middle-class rightists, the corporate ultraconservatives worked to create a stable political coalition that would advocate market-oriented, antigovernment solutions to the new economic problems that arose in the 1970s and at the same time attempt to roll back the gains made by the liberal social movements (see Domhoff, 2007, for a more detailed discussion of this right turn, which included many previously moderate corporate leaders; see also Himmelstein, 1990; Perlstein, 2001).

Creating Doubt About Global Warming

The way in which major corporations use nonprofit think tanks and advocacy groups to delay or water down new policy initiatives they do not like is most recently demonstrated in the case of ExxonMobil's reaction to calls for legislation to slow global warming. (In focusing on ExxonMobil, I am not claiming that it alone stopped legislation relating to climate change but I am simply suggesting that an excellent case study by natural scientists at the Union of Concerned Scientists provides a revealing window into a much bigger network that involves many corporations and ultraconservative nonprofit organizations.) Between 1998 and 2005, ExxonMobil donated $16 million to a mixture of think tanks and opinion-influencing organizations with the expressed goal -- stated in memos that were leaked to media outlets -- of creating doubt about the emerging consensus on the role of fossil fuels in bringing about global warming (see Table 6 for a partial list of these organizations and the amount of funding they received). Many of the smaller organizations funded by ExxonMobil have overlapping boards of directors and staff members, and they all hire the same few contrarian scientists and free-market economists -- who usually have little or no training or expertise on climate change -- to write their reports and appear in forums arranged by the nonprofit groups. Staffers and consultants from these groups also testify before Congress and work as lower level appointees in government agencies, thanks to ExxonMobil's access to the White House and Congress through campaign donations and a large lobbying presence (Union of Concerned Scientists, 2007).

Table 6. A Partial List Of Organizations Funded By ExxonMobil From 1998 To 2005 That Opposed Legislation Dealing With Global Warming
OrganizationAmount Received
American Council for Capital Formation$1,604,523
American Council on Science and Health$125,000
American Legislative Exchange Council$1,111,700
Annapolis Center for Science-Based Public Policy$763,500
Atlas Economic Research Foundation$680,000
Center for the Study of Carbon Dioxide and Global Change$90,000
Citizens for a Sound Economy Educational Foundation$380,250
Committee for a Constructive Tomorrow$472,000
Competitive Enterprise Institute$2,005,000
Foundation for Research on Economics and the Environment$210,000
Frontiers of Freedom Institute$1,002,000
George C. Marshall Institute$630,000
Heartland Institute$561,500
Heritage Foundation$460,000
Hoover Institution on War, Revolution, and Peace$295,000
Institute for Energy Research$177,000
International Policy Network$295,000
Media Research Center$150,000
National Center for Policy Analysis$420,900
National Center for Public Policy Research$280,000
National Environmental Policy Institute$75,000
Pacific Research Institute for Public Policy$355,000
Adapted from Smoke, Mirrors & Hot Air, 2007, pp 31-32.

Campaigning for Marriage and Responsible Fatherhood

The way in which the ultraconservative wings of the policy-planning and opinion- influencing networks try to undo liberal successes is nicely demonstrated in a careful study of how several think tanks and public relations groups link their dislike for gender equality, abortion, greater sexual freedom, and gay rights with economic issues such as poverty and welfare spending. They do so by claiming that childhood poverty and youth violence are caused by an alleged decline of family values and responsible fatherhood, not by low incomes, unemployment, lack of childcare and parental leave for working parents, and continuing discrimination against people of color (Coltrane, 2001). One result in the late 1990s was the rise of a "marriage movement" and a National Fatherhood Initiative created by organizations such as the Institute for American Values, the Family Research Council, Focus on the Family, the Heritage Foundation, and the Hudson Institute.

These initiatives were financed in part by the same handful of foundations that support right-wing think tanks that concentrate on economic issues (see Krehely, House, & Kernan, 2004, Tables 3 and 7, for the 25 largest conservative foundations and their 25 largest recipients in 2001). For example, "the Bradley Foundation gave $870,000 to the National Fatherhood Initiative (1994-1999), $664,000 to the Institute for American Values (1991-1999), over $4 million to the Hudson Institute (1987-1999), and over $10 million (1986-1999) to the Heritage Foundation," and the Scaife Family Foundation "provided $990,000 to the National Fatherhood Initiative (1994-2000), $580,000 to the Institute for American Values (1991-2000), $100,000 to Marriage Savers (199-2000), and along with a closely related family foundation, the Sarah Scaife Foundation, over $1 million to the Hudson Institute (1991-1999) and over $11 million to the Heritage Foundation (1986-1999)" (Coltrane, 2001, p. 413). However, a large portion of the marriage and responsible fatherhood money also came from several smaller foundations created by the highly religious multimillionaire owners of privately held corporations, such as the DeVos family, owners of Amway, and the Prince family, owners of the Prince Corporation, a manufacturer of interior parts for automobiles. These foundations focus almost exclusively on conservative Christian causes (see Russell, 2005, for a detailed financial study of 37 foundations that gave $168 million to approximately 150 evangelical nonprofit organizations between 1999 and 2002).


Nonprofit organizations such as the NAACP and the National Council of La Raza have played a role in expanding democratic participation and individual opportunity for African Americans and Mexican Americans. Community Development Corporations do build some affordable housing for displaced low-income people in the inner city. Women have made gains through organizations such as Planned Parenthood and the Ms. Foundation that receive grants from centrist foundations. The environmentalists who challenged the timber companies that were destroying the rainforests did achieve some successes.

However, there are limits to what challengers can achieve in terms of greater democratic participation and individual opportunity when they are beholden to a corporate- financed network of nonprofit organizations concerned with maintaining the current class structure and the huge privilege it delivers to the wealthy few. And even while the insurgent groups were making these limited gains, they were going backward in terms of economic equality, and they now face a relentless attempt by the ultraconservative wing of the nonprofit network to restore more hierarchy and deference in the name of traditional values. Until the liberal-labor coalition and the nonelectoral social movements can generate the compromises and new strategies that would make it possible to them to reach a larger number of people, and thereby develop greater political power, those who oppose corporate dominance in the name of greater democratic participation and economic equality will continue to be at a disadvantage in their dealings with the large armada of nonprofit organizations that are directed or financed by members of the power elite.


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