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Amidst the multiple ingenious forms of philanthropy in this country, who would have ever thought that the Central Intelligence Agency had its own philanthropic arm? The CIA isn’t alone. Other federal agencies have created or spurred the creation of philanthropic offshoots that serve as mechanisms for accessing private, charitable capital. They function a little like the private foundation arms of public or state universities. Some public universities claim to be hamstrung by their dependence on state government appropriations and oversight, unable to compete with private universities for charitable donations, so they have created 501(c)(3) philanthropic arms to raise money for programs and activities that supplement what the universities can do with their public funds—for example, funding new programs or supplementing the salaries of university execs or, often, football coaches. The fact that they are 501(c)(3)s makes their fundraising less than fully transparent, leading to tugs of war between the universities and state legislators and the press, both of which are interested in which donors are paying for what. Several federal government agencies, from the CDC and the FDA to NASA and the CIA, are employing a similar strategy—one that we suspect many people are not aware of and one which raises several interesting questions about the role of private philanthropic dollars supporting U.S. government programs.

The CDC’s Foundation

The National Foundation for the Centers for Disease Control & Prevention, commonly referred to as the CDC foundation, provides additional capital to recognized national and international health issues that have broad recognition and support, but require additional private capital to make significant progress. It would seem like the CDC benefits quite directly from the Foundation’s ability to target resources to specific high priority CDC program initiatives. The Foundation’s latest Form 990 indicates that its total revenues plunged from $57.6 million in FY2009 to just less than $23 million in FY2010. It appears that the CDC Foundation was hardly immune to the philanthropic recession that hit the nation’s nonprofits between 2009 and 2010.  Nonetheless, it still managed to spend resources on initiatives such as the Bloomberg Initiative to Reduce Tobacco Use ($7.3 million in FY2010), the Meta-Leadership Summits for Preparedness ($1.7 million), and a program of disease surveillance and response in Cameroon, the Democratic Republic of the Congo, and the Central African Republic ($2.8 million).

Major foundation sources for the CDC Foundation included the Bloomberg Family Foundation ($10.2 million in 2009), the Doris Duke Charitable Foundation ($5.8 million between 2005 and 2010), the Robert Wood Johnson Foundation ($24.2 million from 2004 to 2011), as well as seven-figure grant totals from the Woodruff Foundation, the Marcus Foundation, the John S. and James L. Knight Foundation, the Ellison Medical Foundation and the Avon Foundation for Women. Not unexpectedly, the Foundation has also received $28.1 million between 2003 and 2010 from the Bill & Melinda Gates Foundation. In fact, part of the Bloomberg money is targeted for specific collaboration with Gates. Gates has also granted another $10.5 million to the CDC directly, $8.6 million of which came in 2009 and 2010—unconstrained by questions surrounding providing direct funding to a government agency.

The CIA’s Foundation

The Central Intelligence Agency’s foundation, In-Q-Tel, serves as a venture capital tool to promote technology development for the CIA, functioning in a way that a government agency might not be able to do. By matching private investors and research institutes, In-Q-Tel provides unique private sector to private sector support for technologies that can presumably be delivered or sold to the CIA. According to its 2010 Form 990, In-Q-Tel “identifies and partners with companies to help deliver solutions to the Central Intelligence Agency and the broader U.S. intelligence community (IC) to further their missions.” There is nothing like In-Q-Tel in the nonprofit sector, and its history, in its own words, is worth reading.

Unlike the CDC Foundation, In-Q-Tel’s revenues grew from $50.4 million in the year ending in March of 2009 to $56.4 million in 2010. That sum helps pay for hefty salaries—over $800,000 in salary and benefits for the CEO and over $700,000 for the EVP and “managing partner.” Annual trustee compensation at In-Q-Tel is typically between $35,000 and $37,500 for board members (except for Jami Miscik, the president of Kissinger Associates, who took only $17,500).

In its Form 990, In-Q-Tel makes it clear that it does not disclose its financials to the public, so where does the oversight of In-Q-Tel come from? The 990 states that “IQT receives regular oversight from the CIA and other client agencies, who keep Congress informed of the company’s activities.” Of course, the activities of the CIA don’t get the public, transparent scrutiny accorded to other agencies. On the other hand, rather than funding the CIA, it seems that In-Q-Tel is, in a way, a venture capital firm for the CIA’s unique technology needs. According to the 990, “IQT’s strategic investment model gives it the agility—often lacking within traditional government contracting approaches—to find nurture (sic) entrepreneurs and companies that can provide a supply chain of innovation which enables the IC to benefit from technology advances.” IQT claims to have “cultivated a network of more than 200 venture capital firms” and leveraged $1.5 billion to support technology development for the CIA.

 

These are just two of the many government agency foundations already in existence. There are many more. The United States Space Foundation, for example, supports the National Aeronautics and Space Administration (NASA) with a mission of advancing “space-related endeavors to inspire, enable, and propel humanity.” And if Sen. Daniel Inouye (D-Hawaii) can attract support for his proposal, a new government agency foundation may soon be born.

 

Is a Foundation for FEMA Next?

 

On March 15, 2012, Inouye introduced legislation to create a nonprofit foundation for the Federal Emergency Management Administration (FEMA). The bill, S. 2022, would establish the Preparedness and Resilience Foundation, a private, nonfederal, nongovernmental, nonprofit entity