Ford Foundation pours millions into net neutrality to guarantee billion-dollar investments
GOOD TIMES: Ford Foundation president Darren Walker introduces former Secretary of State Hillary Rodham Clinton during a talk at the Philanthropy New York’s annual meeting.
By Josh Peterson and Yaël Ossowski | Watchdog.org
WASHINGTON, D.C. — In addition to major telecommunications firms aiming to influence the public debate on net neutrality, there’s the Ford Foundation, the second-largest private foundation in the world.
“If you are a foundation for justice in the world, and you don’t understand that the Internet is going to be a major battleground in this century, and you’re not engaged in that fight and supporting people who are concerned about access and security, you’re going to be left out of one of the most important justice issues of the day,” Foundation President Darren Walker told the Council on Foreign Relations this summer. “And so we have to be involved in that issue, because our mission compels us to.”
So it’s no surprise that the Ford Foundation has poured millions of dollars into progressive groups calling for an ambitious net neutrality plan, one in which the Federal Communications Commission will regulate broadband providers as public utilities, restricting providers from blocking or slowing some online traffic.
But the Ford Foundation is hardly a merely benevolent social justice organization. It stands to earn millions of dollars in profits from a nearly billion-dollar investment portfolio that includes companies that would profit from net neutrality regulations.
HEY, BIG SPENDER: The Ford Foundation has dropped over $46 million on groups dedicated to supporting net neutrality regulations, which could in turn help its nearly billion-dollar portfolio of companies which stand to profit.
Ford Foundation did not grant Watchdog.org’s request for comment. But documents show that Ford Foundation’s high-profile investments include Google, one of the largest corporations in the world. Ford’s investments in prominent Silicon Valley venture capitalist firms Sequoia Capital and Kleiner Perkins Caufield & Beyers in the late 1990s helped spawn Google, Amazon and eBay, and gave the foundation heavy positions in company stock.
Ford scored big in 2007 when Google purchased YouTube from Sequoia Capital for $1.65 billion. The foundation reported to the Securities and Exchange Commission it received nearly 100,000 shares in YouTube as part of the deal, estimated to have been valued at the time at more than $100 million, according to The NonProfit Times.
In 2012, the Ford Foundation reported to the Internal Revenue Service it purchased over $3 million shares of Google company stock. It also owns $5 million of stock in Microsoft Corp., another company set to benefit heavily from net neutrality, and another $5 million in Oracle, one of the largest software companies in Silicon Valley.
Ford’s stake in Google and Microsoft, along with an average $2 million invested in more than 480 companies, are what allowed the foundation to net more than $402 million in 2012 based on stock investments alone.
Reflecting on the Ford Foundation’s investments and its huge portfolio dedicated to technology stocks that stand to gain from FCC regulations, it’s no surprise it channels a significant amount of money to rally for net neutrality.
Between 2007-2014, the Ford Foundation dropped $46 million in support of pro-net neutrality organizations, including Free Press, Public Knowledge, New America Foundation, Fight for the Future, Center for Media Justice, Media Matters for America, the Proteus Fund, and Color of Change, according to Ford’s public grant database.
That would put the Ford Foundation’s contribution to the net neutrality lobbying effort not far behind that of all major telecommunications firms combined, according to the Sunlight Foundation.
Free Press, one of the most active organizations supporting net neutrality regulations, devotes much of its public presence lobbying for the policy. It organized a rally last Thursday outside FCC headquarters and regularly lambasts FCC chairman Tom Wheeler for “putting the needs of Internet users before the greed of AT&T, Comcast and Verizon.”
It receives close to 60 percent of its funding from the Ford Foundation, according to forms filed with the IRS in 2013.
The influence of the Ford Foundation in the public net neutrality debate was best revealed in a letter addressed to the FCC in July 2014, urging “strong, enforceable and sustainable open Internet rules”.
The letter was signed by more than 40 individual nonprofit organizations and groups, which collectively have received upwards to $39 million from the Ford Foundation since 2007. Once the foundation’s donations to pro-net neutrality groups such as Citizen Engagement Lab and Color of Change are added to the tally, the number jumps to $46 million.
ADVOCATE: Free Press has dedicated most of its efforts to lobbying for a net neutrality plan, aided by a huge amount of funding from the Ford Foundation.
The National Consumer Law Center, a signatory to the letter, has received $4.8 million in grants from Ford since 2007.
The tax-exempt status of these groups allows them to provide “education” on issues, but restricts them from lobbying public officials for particular legislative or policy outcomes.
Ford’s influence on net neutrality policy also extends to within the FCC itself.
Gigi Sohn, a former program specialist for the Ford Foundation’s Media, Arts and Culture unit, for example,serves as Wheeler’s special counsel for external affairs.
During her time at Ford between May 1999 and January 2001, according to her biography, Sohn “oversaw grantmaking in the Foundation’s media policy and technology portfolio, and advised the Foundation on the future direction of the portfolio.”
She left Ford to found Public Knowledge, a beneficiary of the program she once led, where she stayed until she joined Wheeler’s staff in 2013. Jenny Toomey, the former head of the pro-net neutrality organization and Ford-recipient, the Future of Music Coalition, took on Sohn’s role at Ford in 2007.
Ford’s relationship with Google Inc. and other Internet giants. includes much more than monetary investments.
Ford trustee Robert Kaplan, a Harvard Business School professor and former vice chairman of The Goldman Sachs Group, serves as chairman of a little known committee called the Investment Advisory Committee at Google Inc.
Google’s assistant treasurer, Tony Altobelli, reports that the committee, which —according to public information listed on Altobelli’s LinkedIn profile — consists of “seasoned high level executives with deep and broad experiences in the investment industry.”
Altobelli presents and reports to the IAC, which he created after he joined the company in 2007, “on a quarterly basis, the Company’s investment portfolio strategy and performance results.”
Sir Tim Berners-Lee, the inventor of the World Wide Web, also is a Ford trustee, and his own nonprofit, the World Wide Web Foundation, also has been a beneficiary of Ford’s financial support since 2011.