Uncategorized · September 16, 2021 0

A lesson from the Open Society Foundations

Marty Levine

September 15, 2021

One of the very good guys teaches us how broken the philanthropic system is.

I open the web page of the Open Society Foundations (OSF), George Soros’ $20 billion charitable enterprise,  and I smile. They are giving away large sums of money “to build vibrant and inclusive democracies whose governments are accountable to their citizens… we are the world’s largest private funder of independent groups working for justice, democratic governance, and human rights. We provide thousands of grants every year…”  The list of organizations Opens Society funds is almost endless, a veritable who’s who of NGO’s, local and worldwide, working to build an equitable world where the lives of those who are marginalized are not left out in the cold. Their grants budget exceeded $800 million in 2020.

I applaud where Mr. Soros has targeted his philanthropy. His issues and concerns are well aligned with my own politics.

But I do wish how Mr. Soros did his philanthropic work, this very good work, was different. I wish that he structured his philanthropy closer to his democratic vision, making decisions in a manner that was accountable to the communities it has tried to empower.

Last spring the Foundations announced a plan to reorganize how they worked and how they focused their giving. The changes will result in, according to comments Foundation President Mark Malloch-Brown shared with The Chronicle of Philanthropy, “ the foundation…offering more multiyear grants. And as more money is directed internationally, the central offices of the foundation will streamline its 50 grant-making entities and concentrate on larger dollar “big bets,” which will be decided at a later date…the foundation plans to eliminate or absorb into other grant-making programs its freestanding efforts, such as those that provide scholarships to students in countries with limited academic freedom and grants designed to protect refugees and migrant workers from exploitation”

My concern is not that OSF is changing. Organizations can become stale. Adapting to changing conditions is a sign of life and vibrance. My problem is not that change is hard, has consequences, and that it can hurt.

My concern is about how OSF made its decisions and who they feel they are accountable to.

Unfortunately, they appear to believe and behave no differently than Bill Gates, Charles Koch, and other mega-philanthropists. They appear to believe that this is their money and that they can do anything they choose to do with it. They appear to believe that, despite their donations and their foundation’s enjoying sizeable public support via the US Tax Code, they have no public accountability for their decisions. They appear to believe that what is good for governments worldwide does not apply to them.

The decision to restructure, redirect funding, and lay off more than 200 employees emerged from a process that appears to be heavily top-down rather than bottom-up.  Board and Senior staff saw the forces of authoritarianism resurging despite OSF’s efforts and questioned how they should respond. “The foundation’s previous president, Patrick Gaspard, said that the process began three years ago at a meeting in London. In attendance were the global board, senior staff, and George and Alex Soros. Mr. Gaspard said that he asked them whether the foundation would look the same if it were being founded right then rather than a quarter-century earlier. The answer was no. “

Taking this concern public, engaging those they funded, and the communities they worked to lift up in struggling with this question would be messy and hard to do. But democracy itself is messy. So, they did not.  Rather than trusting their own advice, they appeared more comfortable turning to consultants like the Bridgespan Group to help them respond to the changing world that challenged them.

It’s their Foundation and their money and they are only accountable to themselves.

Those most impacted by the changes are left to sort out their own futures. NGO’s which have depended on OSF grants may find themselves struggling to find sources to replace the funding they will lose. According to the New York Times, “the Legal Action Center, which works on criminal justice and drug policy reform and received $350,000 a year from the foundation, about 5 percent of the center’s overall budget…’It’s very hard to find that funding in the areas that we work in because there are so few philanthropies that support it,’ said Paul N. Samuels, the center’s president…’Losing one of the pillars of the philanthropic world’s support would really be a major loss, which we’re very hopeful would not happen…’”

OSF, perhaps more humanely than others, is responding with the generosity of the wealthy. Organizations that face termination of funding were provided grants to cushion the blow and work through a transition. Employees were offered termination packages to help them move on.  Noblesse Oblige at its finest.

The bottom line, and the glaring problem, is that even the most progressive of philanthropists, one who has done more than any other to support democratic, equitable societies, does not feel a personal obligation to live by his own vision. It’s his money and his organization to do with as he sees fit. His son who is the OSF’s deputy chair and his father’s heir-apparent, Alex Soros, told the New York Times “My father has chosen his direction for the board, and I just need to say off the bat, I work for him, he’s my boss…And this organization is founded and maintained on the money he made, and his vision and the ideas he holds true.”

When even an organization like OSF sees itself as accountable only to its own judgment, sees itself as a privately held organization, we know we have a problem. The public has invested heavily in encouraging its citizens to give their money away but gets only what they wish to give in return. There is no expectation or obligation to engage outside their board room to ensure that their interests and priorities are reflected in the work they do and where their money is spent.

The public whose interest all nonprofits are chartered needs more than a passive role in guiding them forward. When the Open Society Foundations consider strategic change, the public cannot be left out. The commitments they have made to grant recipients and those who those recipients serve cannot be broken without a determination that this is in the public’s interest and not just the Donor, the Board or the consultants hired to guide them.

We know how bad an investment our current philanthropic regimen is when even organizations like OSF find little need to be more than one person’s prerogatives.