Laboratories of Government: Private Foundations in Modern American Political History

John David Blew, Purdue University

Abstract

Throughout the twentieth-century private foundations played a central––but often overlooked––role in the policy-making process. Born in debates over the first income tax, Congress initially rejected the creation of tax-exempt institutions funded by a single individual. State legislatures proved less hesitant and created an incongruent system of defining and regulating private foundations. After the postwar economic boom, the number of foundations had grown to such a point that in 1961 even the IRS could not say how many foundations existed nor make definitive statements on their activities. A decade of investigation revealed that foundations were among the nation’s largest shareholders of publicly traded companies raising new questions as to the influence of foundations over the economy and corporate leaders' use of foundations to avoid taxation. In 1969, a diverse coalition of legislators, regulators, and foundation leaders worked to pass the Tax Reform Act of 1969, which forced foundations to be more transparent about their expenditures and holdings, set limits on family involvement on foundation boards, and limited the amount of shares foundations could hold of a single company. This new tax policy led to the professionalization of private foundations as a sector as the new regulations required foundations to act more like their for-profit counterparts in organization, transparency, and accountability.And yet, foundation-produced reports, oral histories, and material from presidential and congressional archives all reveal how these measures inadvertently increased the influence of foundations on public policy. By showing compliance with the new regulations, historically wealthy white business leaders gained an outsized role in shaping the boundaries of policy debates as presidential administrations increasingly relied on private foundations to supply public goods. Lawmakers depended on policy briefs and studies funded by foundation grants as they crafted legislation, congressional offices and presidential administrations filled their staffs with foundation employees, and foundation leaders entered the public fray as pundits in the 24-hour news cycle. This project explores the widespread influence of private foundations throughout contentious policy debates over energy, education, and health care that dominated the last third of the twentieth century and reveals how foundations became key institutions channeling capital and individual goals into the implementation of state power and reshaped the policymaking process.

Degree

Ph.D.

Advisors

Brownell, Purdue University.

Subject Area

Organizational behavior|Political science

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