Chronicle of Philanthropy
Trade protests are prompting a review of grant-making policies
By STEPHEN G. GREENE
As the crowds of activists who descended on Washington last week made clear, financial institutions like the World Bank and International Monetary Fund face increasingly vociferous challenges to their structures and practices.
When tens of thousands of demonstrators clogged the streets of Seattle last fall to protest international trade agreements, many Americans were taken by surprise.
Few observers had predicted that the arcane rules governing global market transactions would have generated so large and diverse an assemblage of critics: union workers, environmental activists, farmers, college students, nuns and clerics, human-rights workers, and ordinary citizens from across the country and around the world.
Fewer still understood that the weeklong demonstration -- far from a spontaneous outburst by a motley band of naysayers and quixotic dreamers -- was part of a methodical campaign undertaken during the past decade by a handful of charities engaged in policy analysis and grassroots organizing -- and financed by a small number of grant makers.
Ever since the "Battle in Seattle" last fall, however, a growing number of foundations, large and small, are taking an interest in reevaluating their grant making, in light of the concerns raised by protesters about the system of global trade and its effects on societies everywhere.
More than 70 foundations have expressed interest in a new group formed to raise awareness among grant makers about the relevance of those issues to philanthropy. Last month's conference of the National Network of Grantmakers drew some 350 participants to Boston to discuss why philanthropies should care about globalization. And some foundation officials are collaborating with each other, and with colleagues in other countries, in new programs that reflect a newly emerging global perspective.
The global trade system was intended to lead to greater prosperity everywhere by lowering international-trade barriers, making cross-border transactions more uniform and predictable. Its proponents say free trade -- as outlined by the General Agreement on Tariffs and Trade (GATT, established in 1948) and by the World Trade Organization (W.T.O., created in 1995), as well as by pacts between regional trading partners -- promises to "lift all boats" by improving living standards worldwide.
International trade and the accompanying globalization of the market has benefited many people around the world in countless ways, the argument goes, providing better jobs, improved crops, advances in health care, and greater access to more consumer goods and services.
But a growing chorus of critics contends that globalization has primarily lifted the yachts and swamped many of the rowboats, widening the gap between rich and poor and eroding the political power of ordinary citizens and democratic governments to govern their own affairs. The W.T.O. serves primarily to meet the needs of powerful transnational corporations, the critics argue, pointing to what they see as serious adverse effects of trade liberalization in agriculture, environmental protection, food safety, human rights, labor standards, and public health.
They contend that trade treaties have forced nations into a "race to the bottom" in terms of labor and environmental standards, disproportionately harming the world's poorest and weakest citizens, who have no voice in determining how such agreements are negotiated.
The World Trade Organization, which deliberates in closed sessions, can require the governments of its 135 member countries to nullify any social or environmental standards, including national laws, that are deemed to infringe upon free trade, or else risk large financial penalties. In a single stroke, the organization's critics declare, it can reverse victories that have taken many years to achieve. International treaties and domestic laws in areas as varied as child labor and climate change can be challenged under W.T.O. rules as being unfair restrictions on free trade.
"Foundations are beginning to realize that whatever issues they're involved with are intricately connected to globalization policies," says Jerry Mander, program director at the Foundation for Deep Ecology, in San Francisco, and president of the International Forum on Globalization, a think tank that opposes economic globalization. "Every foundation, whether it's environmentally or socially oriented, ought to be putting this on their front burner. And once it's on the front burner, I don't see how they could take it off."
A handful of grant makers besides Mr. Mander have focused on the issue for years. Roxanne Turnage, executive director of the C. S. Fund, in Freestone, Calif., says her eyes were opened at a briefing she attended nearly a decade ago. "I came away blown away by the idea that this thing called GATT had a potential to undermine everything all the rest of our grantees had worked for two decades to achieve," she recalls.
The C.S. Fund and the Foundation for Deep Ecology were among the first grant makers to support the work of principal groups that have long been involved with issues of globalization, including the Institute for Agriculture and Trade Policy, in Minneapolis, and Public Citizen, in Washington, which participated in the briefing that Ms. Turnage attended.
"Many funders have been working on these issues for years," says John Harvey, associate director of Grassroots International, in Boston, which supports groups in Brazil, Eritrea, Haiti, Mexico, and elsewhere. "Primarily since Seattle, a new vocabulary has emerged, and a new desire to understand the structural basis for what's taking place."
Grant makers vary widely in their approach to globalization. Some focus on the policy end, underwriting research papers and conferences or helping to publicize the issue more widely. Others assist with grassroots activists' efforts to mobilize broader support, travel to other countries, and reassess local activities in light of what's happening around the globe.
While many grant makers believe that the regulations and institutions that govern the global economy should be changed, there is no consensus about what should be done. At one end are critics like Mr. Mander -- co-editor of the book The Case Against the Global Economy -- who says the system is "based upon an export-oriented model of economic development that is going to destroy the earth," and should be dismantled.
But others hold far different views. "Everyone has criticisms of the W.T.O., but we need to find ways to reform it, not just blow it up," says Michael Northrop, a program officer at the Rockefeller Brothers Fund, in New York. He and many others favor overhauling global institutions, but primarily to make them less secretive and more democratic in their deliberations, and to draft agreements that take effects on the environment and society more into account.
To help foundations sort through such issues, several dozen grant makers, who met last fall during the Seattle protests, agreed to form the Funders Network on Trade and Globalization, to promote awareness among foundations of the relevance of such issues to their grant making.
The network, which is operated from the offices of the Environmental Grantmakers Association, in New York, is holding briefings for foundation staff officers to discuss globalization issues. The first briefing was held in New York in February; additional briefings are scheduled for April 26, in Chicago, and May 8, in San Francisco.
"Everyone has an abstract idea that globalization is something they should be concerned about, but many of them don't have a clear way of thinking through what its various aspects are, which can lead to hasty conclusions," says Carolyn Deere, the network's coordinator.
The funders' network plans to put up a World Wide Web site and is preparing a briefing book for grant makers that it hopes to publish in July. The book will summarize the varied roles that foundations see themselves playing in the debate over globalization and trade.
In addition, three grant makers -- the French American Charitable Trust, the Solidago Foundation, and the Unitarian Universalist Veatch Program at Shelter Rock -- have jointly commissioned a national survey of officials of their grantees and other non-profit groups to determine what efforts are already under way in terms of globalization issues, and what other projects or approaches might be useful as well. The three foundations will use the findings to guide their grant making.
"It's going to take a long time to turn this around," says Deborah Holder, a program officer at Veatch. "It's a big challenge for grant makers. But there doesn't seem to be any way our limited dollars will ever compensate for the gaps we see in all our communities. So it's in our best interests to look at systemic causes."
Some foundations seek primarily to expand participation in discussions about changing the way the World Trade Organization operates, to include groups of people who are now excluded from participating in its decision making.
"Civil society does need to have a place at the table," says William S. White, president of the Charles Stewart Mott Foundation, in Flint, Mich. "As a foundation, we don't necessarily have our own politically correct idea about what we should be doing -- but we will say, Make sure the citizens of your country have good information, access to your parliament, and the other tools they need to make good decisions."
About 45 percent of the $7-million that Mott spends each year on international-trade issues goes to groups based outside the United States, says Ed Miller, a program officer. "For us, globalization isn't just one thing," he says. Rather, it includes the cross-border flows of private and government capital and the lending policies of institutions like the World Bank and the International Monetary Fund, along with international trade agreements.
Mott's view, he says, is that "globalization is happening, but the rules through which it is implemented can be defined in ways so that the environment, workers' rights, and social concerns can be protected."
Many foundation officials point out that one way to help secure such protections is to make grants to local groups dealing with issues that result from the globalization of trade.
Ann Bastian, director of the Phoenix Fund for Workers and Communities, in New York, cites the efforts of U.S. groups hoping to clean up rivers and bays polluted by the many maquiladoras, the Mexican factories near the U.S. border that assemble goods for U.S. companies but pay lower wages and operate with fewer restrictions than they would in the United States.
"You can spend a lifetime trying to clean up the New River in California," Ms. Bastian says, "but if you don't deal with the maquiladora that's dumping upstream in Mexico, you'll never solve the problem."
The Phoenix Fund is a collaboration of grant makers that wants to help low-wage workers organize to improve the lives of their families and communities. The fund expects to spend more than $325,000 this year on organizing and linking workers and building the resources of organizations in the United States and Mexico that work on labor and human-rights issues.
Supporters of the Phoenix Fund say the best way to protect U.S. jobs and labor standards against the "race to the bottom" created by global competition is to improve wages and working conditions in other countries where corporations are thinking of moving.
Closer to home, adopting a global outlook can affect how organizations operate within individual neighborhoods. "We need to help activists understand that environmental victories here can have negative consequences elsewhere," says Marjorie Fine, executive director of the Veatch program."If pollution ends up in someone else's river, we haven't solved the problem, we've just moved it." When U.S. corporations are stymied in their plans to build toxic-waste incinerators in the United States, for example, they sometimes turn to countries with weaker environmental regulations or less-organized opposition.
Overseas collaborations among activists have resulted in some significant successes for critics of the global trading system. In Philadelphia, the Bread and Roses Community Fund has supported efforts of the local chapter of the AIDS organization ACT-UP to lift trade restrictions that prevent generic versions of AIDS medicines from being produced and sold in developing countries. Pharmaceutical companies had refused to grant the licenses needed to permit generic versions of their drugs to be distributed, even in countries where the companies had no market because so few people could afford to buy the brand-name versions.
ACT-UP played a key role in a coalition of health, environmental, consumer, and human-rights organizations that forged links with their counterparts in South Africa and elsewhere, and successfully lobbied the White House to secure a change in that policy last fall. The $7,000 donated by Bread and Roses to the effort was money well spent, says Christie Balka, the fund's executive director. "This relatively small grant had an enormous impact, far beyond what we could have imagined at the beginning of the process."
Many foundations, while flush with earnings from the global marketplace, face challenges that can make grant making for globalization issues problematic.
"This issue is difficult, because much of it either is or feels very critical of corporations or even of capitalism," says Christine Roessler, managing director of the French American Charitable Trust, in San Francisco. "So it's very tricky how you present this work to boards," which often include corporate executives.
Indeed, notes Mr. Mander, of the Foundation for Deep Ecology, "one of the things that has restricted some foundations from doing this is that you can scarcely get involved and not talk about the role of global corporations."
But many grant makers point out that what they seek is fair trade, rather than no trade, and that their goal is not to destroy corporations but to ensure that the global economic system is set up to benefit the world's entire population, and that everyone affected by trade agreements has a voice in how they are structured.
Participants at last month's meeting of the National Network of Grantmakers discussed globalization and international trade for four days. Maude Barlow, who chairs a public-interest charity called the Council of Canadians, described what she says are social imbalances.
"The W.T.O. has become the most dominant institution on earth," she declared, because it can force governments to abandon policies that conflict with its provisions that exalt unfettered trade.
But citizens around the world are mobilizing to oppose the more pernicious aspects of global trade, she said. "We're building the most powerful civil-society movement that has ever existed. This is the new politics of the 21st century.":
