The Ford Foundation was, for much of its history, the largest foundation in the United States. As of December 2014, it had become the second-largest behind the Bill and Melinda Gates Foundation, possessing assets of $12.5 billion. The foundation has been a major force in American culture and, because of its size, has given a great deal of money to left-wing and center-left organizations since its founding.
More than any other foundation, the Ford Foundation in the 1960s created the notion of the action-oriented foundation dedicated to addressing major social problems. “When the Ford Foundation flowered into an activist, ‘socially conscious’ philanthropy in the 1960s,” notes Manhattan Institute fellow Heather Mac Donald, “it sparked the key revolution in the foundation worldview: the idea that foundations were to improve the lot of mankind not by building lasting institutions but by challenging existing ones.”
In 2016, the Ford Foundation announced that it was undergoing a dramatic reorganization. It announced that its grantmaking would be in seven areas: civic engagement and government, free expression and creativity, equitable development, gender, racial, and ethnic justice, inclusive economies, Internet freedom, and youth opportunity and learning.
The Ford Foundation was created in January 1936 as a response to the Revenue Act of 1935, which imposed estate taxes of 70 percent on estates of over $50 million. Because the Ford Motor Company was a family-held business, in which Henry Ford and his son Edsel held, between them, 96.9 percent of Ford stock, it was particularly vulnerable to high estate taxes, which could force the family to sell Ford Motor shares to retain family control. In 1935, Sen. Arthur Vandenberg (R-Michigan), said, “There need be no speculation as to what will happen to the great Ford industrial enterprise under this proposed tax confiscation. It will be driven into diversified ownership, which can come only through enormous stock sales to the public.”
The Ford Foundation was created to preserve family control of Ford Motor. The car company’s shares were divided into two classes: non-voting Class A stock, which amounted to 95 percent of all stock, and voting Class B stock, which accounted for the remaining five percent. The Class A stock would be willed to the Ford Foundation, while the Class B stock would be retained by the Ford family to ensure family control of Ford Motor Company.
The foundation stayed small until after Henry Ford’s death in 1947, after which, by the term of Ford’s will, the foundation was endowed with hundreds of millions in Ford stock.
Henry Ford, according to historian William Greenleaf, donated $37.6 million to charity during his lifetime, with his favorite causes being Greenfield Village and the Henry Ford Museum in Dearborn, Michigan and the Henry Ford Hospital (now the Henry Ford Health System) in Detroit. But in 1948, while Henry Ford’s will was still in probate, his grandson Henry Ford II signed a document stating that the Ford family would exercise no more influence on the foundation than any other board member would. In 1952 Henry Ford II told the Cox Committee, a House committee investigating foundations, that this decision was made because “this trust was so large that our family should not have control of it.”
Henry Ford II regretted this decision for the rest of his life. He was chairman of the board of the Ford Foundation from 1948-1956, and a trustee until 1977, when he resigned over the foundation’s anti-capitalist drift. “In effect, the foundation is a creature of capitalism,” Ford wrote in his resignation letter, a statement that, I’m sure, would be shocking to many professional staff people in the field of philanthropy…I’m just suggesting to the trustees and the staff that the system that makes the foundation possible is very much worth preserving.”
The Ford Foundation, freed from any restrictions on how its vast wealth should be spent, has gone through several phases in its spending. In 1956, after sales of Ford Motor stock added $550 million to its endowment, the foundation awarded $198 million to private hospitals, $90 million to private medical schools, and $260 million to private liberal arts colleges to raise faculty salaries. “The purpose of the huge giveaway was unabashedly political,” note historians Leonard Silk and Mark Silk. “The hospital grants were deliberately arranged so that there would be some Ford money flowing into every Congressional district.”
Activism and the Bundy Era
The Ford Foundation became more activist beginning in the late 1950s. The trend accelerated during the tenure of former Kennedy and Johnson administration National Security Advisor McGeorge Bundy, who served as Ford Foundation president between 1966 and 1979.
The Gray Areas Program (1959-1965)
Seeking to reduce poverty in what Ford Foundation program officer and future Johnson administration official Paul Ylvisaker called the “gray area” between central business district and suburb, the Ford Foundation funded inner city poverty-fighting programs from 1960 onwards. A review of Gray Areas programs by Peter Marria and Martin Rein commissioned by Ford and published in 1973 found that most were modestly successful, although Ford’s programs in Philadelphia never got off the ground and the ones in New York directly subsidized militancy against landlords and other businesses. The program’s lasting result, however, was in inspiring the Johnson administration’s War On Poverty, with Ford Foundation program officers frequently consulting with Johnson administration planners on programs that could be devised. In Maximum Feasible Misunderstanding, the late U.S. Senator Daniel Patrick Moynihan (D-N.Y.) credits the Gray Areas program with being the intellectual inspiration for the Job Corps, Head Start, and Volunteers in Service to America (now part of AmeriCorps).
Ford frequently collaborated with the Rockefeller Foundation, both in funding population-control programs and in lobbying for more money on population control after these programs were taken over by national and international agencies from 1965 onwards. The best estimates are that Ford spent $150 million on birth control programs between 1958-1983, with funding peaking at $25 million in 1969.
Ford money created the “public interest” law movement, with tens of millions going to organizations supporting minorities (such as the Mexican American Legal Defense and Education Fund or MALDEF) as well as environmental legal groups such as the Environmental Defense Fund and Earthjustice. Cato Institute fellow Walter Olson refers to Ford as “the Johnny Appleseed of litigation liberalism” and notes that funding activist lawyers has been a key theme of Ford’s grantmaking for decades.
Ford grants in 1967-68 of $334,000 encouraged the Ocean Hill-Brownsville school district in New York City and two other districts to implement “community control,” where parents in the district were given more power over local schools. Unfortunately, the mostly African-American parents in Ocean Hill-Brownsville wanted the power to fire members of the United Federation of Teachers, who were mostly white. Every time the parents’ council tried to “fire” teachers, the teachers struck, the third time for five weeks. Ultimately, in November 1968, Mayor John Lindsay (R, later D) abolished the parental councils. But the result was that UFT president Albert Shanker, who became president of the American Federation of Teachers, was an implacable foe of school choice for the next 30 years.
After the Patman Committee
The “community control” debacle and other political excesses led to an investigation of Ford and other foundations by an investigative committee of the House of Representatives in February 1969 led by Rep. Wright Patman (D-Texas). The Senate (but not the House) passed a bill calling for an elimination of most of the ability of foundations to fund political activity as well as a 40-year term limit on foundations. Washington Post reporters Laurence Stern and Richard Harwood noted that under the Senate’s proposal, “perhaps 70 percent of Ford’s present activities in the field of ‘national affairs’ and ‘social development’ would be outlawed, leaving the foundation little to do with its wealth but hand it out to symphony orchestras, Community Chests, and Ivy League colleges.”
The Tax Reform Act of 1969 ultimately imposed a payout requirement on foundations and some restrictions on foundation support of political activity. Responding to the changes, the Ford Foundation shifted from funding large-scale welfare reform programs to smaller ones. It was a leading advocate of “individual development accounts,” which encourage low-income households to save by matching funds saved by families below a given income threshold. Ford intended to use this program as a pilot scheme for a universal, government-funded child allowance.
Activities Since the Mid-1990s
As conservative organizations began to win victories restricting the application of affirmative action programs, the Ford Foundation invested heavily in efforts to defend them. Among its grantees were the Regents of the University of Michigan, the Mexican American Legal Defense Education Fund, and the NAACP Legal and Defense Fund. These grantees used Ford funds (including some grants of over $5 million) to successfully block efforts to check the growth of affirmative action in Michigan and other states, hold many conferences where activists could network with each other, and conduct campaigns against nominees of the George W. Bush administration to district and circuit courts. One Ford-opposed nominee was William H. Pryor Jr., widely reported to be one of President Donald Trump’s finalists for the Supreme Court vacancy ultimately filled by Justice Neil Gorsuch.
Internationally, the Ford Foundation’s largest effort at the turn of the century was the International Fellowships Program, which received $420 million in Ford Foundation money between 2001 and 2013, when it ceased operations.
Ford also supported the World Conference Against Racism, providing grants for several organizations to attend this conference. The conference, held in Durban, South Africa in August and September 2001, is best known for a debate over a clause that equated Zionism with racism. Although this clause was ultimately removed from the final declaration, both the American and the Israeli governments formally withdrew their delegations. Conservative commentator George Will referred to the conference as “a United Nations orgy of hate directed at Israel and the U.S.”
The Ford Foundation continued its grants to abortion rights groups, with substantial grants given in the 2000-04 period to Catholics for a Free Choice (now Catholics for Choice), the International Planned Parenthood Federation, and the International Women’s Health Coalition.
Decline Under Ubinas
In 2007, Luis A. Ubinas became Ford Foundation president. Ubinas, formerly a consultant with McKinsey and Company, was best known for offering buyouts to 30 percent of the foundation’s staff after the foundation’s endowment plunged from $12 billion in 2007 to $9.5 billion in 2010. He resigned in 2013, with his six-year tenure the shortest of any Ford Foundation president since the 1950s.
“He didn’t exercise the muscle that someone at Ford might have,” Georgetown University Public Policy Institute senior fellow Pablo Eisenberg told the Chronicle of Philanthropy. “One wondered what his vision of philanthropy and of activism was.”
New Leadership and Expansion
Ubinas’s successor, Darren Walker, came to Ford as its tenth president in 2013 with a very clear vision of what he wanted the Ford Foundation to become. Walker’s resume includes time as a trader at UBS, a program office and president of the Abyssinian Development Corporation, which promotes development in Harlem; a program officer at the Rockefeller Foundation; and a Ford Foundation vice president.
Walker’s first task was to reach out to the city of Detroit. In 2013, the foundation announced that it would donate $125 million over 15 years to bolster the city’s pension fund as the lead donor with other foundations, including the Kresge, Charles Stewart Mott, and Knight foundations. This money, matched by the state of Michigan, ultimately amounted to over $800 million. In return, the city agreed to turn over the Detroit Institute of Arts to a nonprofit and not sell any of the art.
“Our money was made in Detroit,” Walker told Quicken Loans billionaire Dan Gilbert in a 2016 interview at the Detroit Institute of Arts. “We owe this city. It wasn’t a hard decision.”
Hudson Institute fellow William Schambra warned in a 2014 Chronicle of Philanthropy opinion piece that the deal could set a dangerous precedent. “Some of America’s leading foundations are now deeply engaged in Detroit politics, ‘giving’ and ‘taking’ like any municipal power broker,” Schambra wrote, “meeting requests they never before would have considered, and making demands they never would have dared. Although they deny they are setting precedents, they clearly are. They may live to regret them.”
The foundation continued to fund some of its long-time donors. The foundation devoted tens of millions of dollars to organizations supporting President Barack Obama’s choice for Supreme Court, Judge Merrick Garland, after the death of Justice Antonin Scalia. These groups included the Leadership Conference on Civil and Human Rights (which had received over $11 million in Ford Foundation grants since 2000), Alliance for Justice (with over $4 million in Ford grants) and People for the American Way.
In 2015, the foundation announced a radical re-orientation to focus towards ways of reducing inequality. The foundation declared that it would focus its grantmaking on seven areas, including civic engagement, Internet freedom, and inclusive economics. Walker wrote that “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.”
As part of this refocus, the Ford Foundation announced in 2016 that it would lead a six-year effort to raise $100 million for the Movement for Black Lives, an organization designed to receive grants for groups involved in the Black Lives Matter movement. Allies of the Ford Foundation in this effort are the foundations associated with liberal billionaire George Soros, the NoVo Foundation, and the Hill-Snowden Foundation.
Former hedge-fund manager Andy Kessler commented in the Wall Street Journal that the six new areas of Ford Foundation giving that “none are productive, none drive profits and none will achieve the huge leaps in public welfare that Henry Ford pulled off long ago,” when he enabled millions of Americans to buy and drive cars for the first time. “If the Ford or Clinton foundations really wanted to help society, they’d work on lowering barriers to business formation and cutting the regulatory chains that inhibit productive hiring in the U.S. and globally,” Kessler wrote. “But what fun is that? Better to boast about reducing inequality, public welfare be damned.”