One of the many colourful characters one encounters in the strange world of philanthropy is the new convert who believes that he or she is creating a brand new dawn, bringing new perspectives and encountering never before known difficulties and dilemmas. In fact, of course, the new perspectives are often old and the dilemmas all too familiar. The recent discussion of the size and power of the Gates Foundation is just one example of an old and enduring issue being rediscovered as though it were peculiarly modern. Another enduring issue is the relationship between foundations and government, for which the story of the Rockefeller Foundation in Europe in the Second World War provides a wonderful case study.

Foundations probably have themselves to blame for this state of affairs – they are all too often (with a few notable exceptions) remarkably casual about their histories. A centenary publication perhaps – but those are often too sweeping to yield much in the way of learning for today.

Another problem is that foundations are usually reluctant to draw too much attention to the elephants in their rooms – keep quiet and no one will notice. One of the biggest elephants in the foundation room is the relationship of private philanthropy with government. Sadly, failure to address this issue leaves the way open for all sorts of myths, wishful thinking and ahistorical fantasy – and for potentially hugely damaging policy blind alleys.

The story of the Rockefeller Foundation in Europe in the Second World War demonstrates the complex interdependence of foundations and governments, and the opportunities, and consequent dilemmas, of doing good when need is very great but the level of economic and political stability is low. The story also illustrates how little we understand about foundations’ roles in shaping our lives – because of the way they work.

The story
During the 1930s the Rockefeller Foundation had an office in Paris from which it funded various projects in health, the humanities, and natural, medical and social sciences throughout Europe. When war was declared in 1939 most of the Paris office staff remained in France, leaving only with the fall of France to set up another office in neutral Portugal and later returning to occupied (and non-occupied) France and to Britain to work primarily on health-related issues. From Portugal the foundation continued to help ‘deposed’ scholars leave Europe. In addition to the rescue work and the work on civilian public health under war conditions in Europe, the foundation also had various programmes based in the US designed to aid Europe, including one to map cultural treasures in order that bombers might, where possible, avoid them.

In many ways the Rockefeller Foundation’s dilemmas were no different from the key dilemmas of all foundations at any time. But the drama of war also revealed some of the ‘dilemmas’ and assumptions of which most foundations at most times are unaware – the things foundations can generally ignore or take for granted but which are nevertheless crucial to their acceptance and their work.

How to spend scarce resources for the greatest good
One obvious and familiar dilemma was how to spend scarce resources for the greatest good. In the Rockefeller Foundation’s case the good had to be for ’mankind’ – not any particular nation. In 1939 it was still experiencing the devastating effects of the Depression on its income. Although still massively rich – even by today’s standards – its return on investment was the lowest in its history and it had begun dipping into its principal. Perhaps unsurprisingly, the board had begun asking questions about the costs of maintaining an office in Paris. In addition, some board and family members were beginning to consider the changing balance of intellectual and economic power: perhaps the foundation should be looking for innovative thinking in the new world of the Americas rather than the old world of Europe? And then with war came considerations of both the practicality and the sustainability of work in Europe.

How to find a unique role
Another common dilemma was how to find/define a unique role. Foundation staff spent hours discussing what useful role they could possibly play in a war zone. The one thing on which Raymone Fosdick (the president) was clear was that the foundation should not provide ‘relief’ as it had in the last war. It did not have resources to provide relief to all and relief was not its responsibility. What could it do that neither governments nor other voluntary agencies could do? The foundation’s carefully and painfully crafted answer was to keep the candle of intellectual life burning in Europe. Neither governments nor business would have resources for anything other than work directly related to war; the foundation’s role therefore was to support work and thinking ’beyond’ war. It would not only continue to support work that was not directly related to the war effort but also think and talk about things governments could not or would not – such as peace. On the surface much of the foundation’s work appeared to be directly related to the war but its logic was rooted in the future; the aim was, in a sense, to respond to the circumstances created by the war for the future benefit of mankind, whether that was ensuring that dismissed scholars could go on thinking and working or using food rationing to understand more about the relationship of nutrition and health.

How to maintain the principle of political neutrality
But within the foundation there were also dilemmas that most foundations most of the time do not have to address quite so painfully. One of these concerned its political neutrality. As in most foundations then and now, political neutrality was a fundamental principle, seen as central to the Rockefeller Foundation’s reputation, legitimacy and access. But what did ‘neutrality’ mean in practice, when the going got tough? For example, should the foundation cease funding in Germany after Hitler came to power? If it continued funding when it was clear that academics were being dismissed on political and racial grounds, was that neutrality or tacit acceptance?  But why should German scientists be penalized merely for being German? If the foundation ceased funding, was that not a political statement in itself?

Positions changed. The foundation kept its promises of funding in Germany but subtly distanced itself by engaging in no new funding. One of its rare attempts to challenge the regime resulted in Nazi officials raising the issue of racial inequality in the US; foundation officers countered with the point that this was not officially sanctioned by government. By 1939-40, after war was declared in Europe, with the US still neutral, Fosdick in New York was determined to maintain the principle of neutrality, which he saw as critical for the foundation’s legitimacy and access. At the same time, the Paris-based staff argued that it was impossible to remain neutral given what was happening: how could the foundation be neutral when its core values were being denied? Even when the US entered the war, Fosdick wanted to ensure that the foundation stayed above the political fray. When the war ended, its ‘neutrality’ was tested yet again when a programme of aid for Germany was opposed by some staff – but that is another and more complicated story.

When to be ‘unpatriotic’
Another dilemma few foundations have to face is whether and when to be ‘unpatriotic’. At the beginning of the war the US was neutral and popular opinion was against any involvement in another war in Europe. By staying in Europe the Rockefeller Foundation risked being accused of putting US neutrality at risk. But when the US entered the war the foundation faced dual pressures to be ‘patriotic’. One source of pressure was the US State Department which, among other things, asked the foundation to send a person of the State Department’s choice to work on a foundation project in Occupied France. This was refused. There was also pressure from one of the trustees, who argued that the foundation’s determination to ’carry on as usual’ (and thus its implicit refusal to contribute to projects directly related to winning the war) was unpatriotic. Unless the Allies won the war, this trustee argued, the foundation’s work would have no future.

Recognizing the foundation’s assets
Another interesting debate, possibly more common today than it was then, had to do with recognizing the foundation’s assets. Staff in Paris, faced with the prospect of operating from the US or giving up work in Europe completely, began to argue that the foundation’s assets included not merely its money but also its carefully cultivated networks, its reputation, and its ability to do and talk about things governments could not. These things, the Paris-based staff argued, might not appear on a balance sheet but if the foundation packed its bags and left Europe it would be throwing away some of its most valuable assets.

How to obtain reliable information in a world in flux
Perhaps one of the most difficult dilemmas for the foundation at this time was how to obtain reliable information and, closely related, how to work without a degree of predictability. Its ability to obtain high-quality, reliable information and to make certain assumptions about the future were things it had come to take for granted. It had excellent and extensive contacts among the leading scholars of the day in all its fields of work; it also had intelligent, well-informed, experienced staff, as well as access to politicians, embassies and journalists across Europe. But it quickly realized that its contacts were disappearing or being replaced; equally unsettling, contacts that remained might have other agenda and interests.

Even worse was the realization that even the best-informed political networks could not provide reliable information in a world in flux. One of the many disagreements between the Paris and New York based staff concerned whether European staff intelligence was more or less reliable than that of journalists from the US. Perhaps understandably, foundation staff and trustees wanted to manage the uncertainty – the inability to plan – with ‘a plan’. Without the illusion of reliable information the foundation seemed almost paralysed for a time.  

Relationships with governments
Some of the foundation’s biggest dilemmas concerned its relationships with governments. On the one hand, it worked hard at maintaining its independence – refusing to send a US government ‘stooge’ to France or to take on funding responsibilities dropped by government; on the other hand, it was brought face to face with its own powerlessness to go about its work without the support of governments. Without permissions from the relevant governments foundation staff could not travel where they pleased; in France they could not use the telephone when they pleased; the foundation could not get visas from the US State Department for its own staff and to bring in rescued scholars; it could not transfer or access its own money.

The foundation’s dependence on government became particularly apparent in its scientific work: without university buildings and laboratories largely funded by European governments, and without scientists and lab assistants trained largely at government expense, its work was severely hampered. Similarly, as the war came to an end, the foundation realized that its old model of experimenting – in public health, for example – and then handing over to government was unlikely to be viable in countries where governments might have other priorities.  

In a foundation as rich and respected as the Rockefeller Foundation, accustomed to be able to go where it wanted and buy what it wanted, and always assertively independent, realization of its dependence on government came as something of a shock to some.

Perhaps equally surprising for an endowed foundation may have been realization of its dependence on sections of public opinion for the implementation of some of its programmes. For example, one of the greatest difficulties of the programme to resettle dismissed European scholars in American universities was the resentment felt by some of the existing academic staff starved of funds all through the Depression.

These are just some of the dilemmas, and surprises, the foundation faced. The period was, of course, ‘abnormal’, but arguably it is precisely its abnormality that enables us to see some of what foundations take for granted as they go about their work under ‘normal’ conditions. Foundations may be independent but they are also heavily dependent on a functioning economic, financial, legal, social and political infrastructure supported by others. They may be financially independent but they are heavily dependent on at least an illusion of open communication and reliable knowledge, as well as a degree of social, economic and political stability. Foundations forget their dependencies at their peril.

Diana Leat is an independent philanthropy consultant. Email dianaleat@hotmail.com

For more information
A book telling the bigger story of the Rockefeller Foundation’s work in Europe during the Second World War will be available in late 2012.
The letters shown here are from the records of the Rockefeller Foundation at the Rockefeller Archive Center.