Introduction by WILLIAM SCHAMBRA
Presentation by JOHN J. MILLER
NATALIE AMBROSE, Council on Foundations
HILLEL FRADKIN, Hudson Institute
In late 2005, the John M. Olin Foundation committed its last dime and went out of business, giving observers of philanthropy the opportunity to make a clear-headed and critical assessment of a philanthropic foundation’s work. At this panel discussion, the Bradley Center invited John J. Miller to discuss his recent book on the Olin Foundation, and asked panelists and audience members to consider the question: Did the Olin Foundation in fact change America? Bill Schambra, the discussion’s moderator, also posed the question, “Is changing America an appropriate goal for foundations?”
“In any discussion of philanthropy we must recognize the supreme importance of the donor,” began John Miller’s description of his book. From the foundation’s early days in the 1950s, John M. Olin used the foundation’s money to help the US government fight communism in Europe – he considered it his patriotic duty. In the late 1960s and early 1970s, Olin focused the foundation’s giving on the defense of the American system of free enterprise itself, primarily by funding scholars, think tanks, publications, and what Olin Foundation president William E. Simon called counterintelligentsia. In addition to Mr. Simon, three smart and energetic executive directors joined Olin in this pursuit: Frank O’Connell, Michael Joyce, and James Piereson. Miller called them “some of the conservative movement’s premier venture capitalists.”
$68 million of the foundation’s money went to the ongoing study of how laws influence economic behavior. Law and economic programs bear the Olin name at law schools at Chicago, Harvard, Stanford, Virginia, and Yale. “They have been instrumental in advancing the simple notion that legal rules have economic consequences, and that both lawmakers and judges need to consider these consequences.” Olin grants helped start the Federalist Society and the Collegiate Network, and helped frame the “end of history” vs. the “clash of civilizations” debate in foreign policy by funding both authors, Francis Fukuyama and Samuel Huntington. Olin grants also backed the work of intellectual opinion makers Allan Bloom and Dinesh D’Souza.
Miller drew eight lessons for philanthropy from the example of the Olin Foundation. The first four are the importance of clear first principles (or donor intent, one might say), strong leadership, a united board void of members of Olin’s family (with one exception), and quality staff. Lesson five is: Reinvest in success. Six: It can take a long time for an idea to have a consequence, so patience and serendipity are important. Miller’s seventh lesson is that encouraging discussion among a small but influential group of opinion leaders is more effective than engaging in large-scale campaigns of public education. “The foundation was more interested in intellectuals than elections and proceeded in the belief that elections would turn out all right if the war of ideas was waged with success.” Finally, the principle of sunsetting is a lesson for philanthropy. Olin did not want his foundation to outlive him by more than a generation, fearing the creeping liberalism that had taken over some older foundations such as the Ford Foundation. Olin also believed that later American generations would be much better able to address the problems they faced than he would be able to anticipate them. Lastly, Olin judged that an intellectual defense of capitalism needed a larger infusion of cash than just the interest on the foundation’s principal. By exhausting its principal in fifty years, “the foundation . . . had a profound impact on its time rather than a considerably slighter one for many years into an unknowable future,” Miller concluded. Miller was quick to add, however, that the soundness of Olin’s conservative ideas, not any amount of money, was the real reason for the foundation’s impact.
The Council on Foundations’ Natalie Ambrose rejected Miller’s vision of a “gift of freedom,” and described the Olin Foundation not as exemplary, but rather as typical in two ways. First, Olin’s philanthropy and the foundation itself evolved over time. Second, Olin’s giving was driven by the needs of his time, as he perceived them. Ambrose speculated that philanthropists today “could and probably do worry . . . about our current times, which, in many ways, may seem as chaotic, tumultuous, and divisive as American during the 1960s.”
Returning to Bill Schambra’s opening questions, Hillel Fradkin agreed that the Olin Foundation really did seek to change America. Fradkin, a former program officer at the Olin Foundation, offered a third description of the foundation’s work. “The work of the Olin Foundation . . . self-consciously presupposed that (James) Madison was correct. . . that at its best America is a country which proceeds on the basis of reflection.” Fradkin went on to say that John Olin is to be credited with an openness which allowed the foundation to transcend very quickly “the limits of a purely business orientation” and to broaden the debate to the question of what the public good is, what the American constitutional order is or should be, how national security should be defined, and what America’s foreign policy should be. (Fradkin seemed to indicate that the Olin Foundation learned from grantees’ experiences, particularly the Federalist Society’s broad orientation. However, he does not say this outright.)
Fradkin emphasized that Olin and the people surrounding him sought to submit their conservative ideas and reflections “to the deepest and widest public debate. . . . And the efforts of the Olin Foundation were largely designed to make such a debate possible, a debate that was not taking place in America, it was felt.” And the Olin Foundation was successful “wildly beyond their expectations, if not their hopes,” he noted in response to Bill Schambra’s question. Irrefutable evidence came in the form of the general public’s acceptance of many of the foundation’s ideas, exemplified by the passage of welfare reform in 1996 by a Republican congress and a Democratic president twelve years after Olin funded Charles Murray’s book Losing Ground. Thus, said Fradkin, the idea entertained by the Left of a trick or conspiracy is “utter nonsense.”
Both Miller and Fradkin recognize the foundation’s work with the Federalist Society as an extremely influential grant, if not the most influential of Olin’s grants. Fradkin also underscored the lesson Miller identified of reinvesting in success.
More on this panel, including the audience’s questions and panelists’ answers, can be found in the full transcript.
This event transcript was prepared from an audio recording and edited by Krista Shaffer. To request further information on this event, the transcript, or the Bradley Center, please contact Hudson Institute at (202) 974-2424 or e-mail Krista at email@example.com.