(Illustration by Adam McCauley)
Editor’s Note: This article covers a paper presented in June 2017 at the Stanford Center on Philanthropy and Civil Society’s fourth annual Junior Scholars Forum. The event brings together new researchers, including graduate students, postdoctoral fellows, and junior faculty, whose work covers civil society, the nonprofit sector, and philanthropy.
In 1999, Texas surprised the nation. Awash in oil money under Republican Gov. George W. Bush, it passed a groundbreaking electricity-restructuring law packed with major environmental provisions, including broad energy-efficiency goals and a focus on renewable energy.
What set the stage for such an unexpected outcome? Leah C. Stokes, an assistant professor of political science at the University of California, Santa Barbara, examined the role that one foundation played in influencing public policy around energy efficiency and renewable energy during that time.
By the early ’90s, Stokes says, “things were dark for renewable energy, because there wasn’t really federal or state support for it.” The Energy Foundation launched in 1991 to address this funding gap. With $100 million from the Rockefeller Foundation, the John D. and Catherine T. MacArthur Foundation, and the Pew Charitable Trusts, it began a 10-year effort to fund a network of nonprofits across the United States to push for pro-environmental energy policies.
“The Energy Foundation incubated a policy network of NGOs to meet up, debate ideas, figure out what states might be open at a given time to passing these policies,” Stokes says. It led to a “big blooming” of environmental measures such as renewable portfolio standards (RPS), which require state utilities to obtain a specific portion of electricity from renewables. Most US states have since adopted such standards.
How did the Energy Foundation win over deep-red Texas? It used what Stokes calls a “two-pronged approach” by funding two different types of nonprofits. It simultaneously supported an “insider” group, led by the Environmental Defense Fund (EDF), that helped to shape public policy, and an “outsider” group, represented by Public Citizen, which helped to mobilize grassroots support to exert political pressure.
At that time, the EDF was organized geographically—and not via issues, such as global warming or clean water, as they are today—and focused especially on Texas. So, they personally knew the politicians they needed to work with in order to pass their legislation. The EDF also possessed expertise on the relevant subjects. “They were professionalized, people trusted them, and they had long-term relationships,” Stokes says.
Public Citizen, by contrast, worked from the outside by targeting specific legislators to try to swing their votes. “They created petitions and sat at [natural] foods stores and showed up to legislators’ offices,” Stokes says. “They constructed a sense that [renewable energy] was an urgent issue that the public really cared about, and that this was going to be consequential for the politicians once they went up for reelection.”
“I really like the two-pronged inside/outside strategy idea,” says Thomas Lyon, the Dow Chair of Sustainable Science, Technology and Commerce at the University of Michigan, about Stokes’ analysis. “It makes a lot of sense.”
Stokes used a method called process tracing to conduct her research, determining a causal relationship between the Energy Foundation’s efforts and the significant environmental provisions in the subsequent bill, the Texas Electric Restructuring Act of 1999, that passed the legislature and was signed into law by Gov. Bush. First, Stokes documented exactly what happened via interviews and archival documents. Next, she tested and ruled out other hypotheses for the passage of the bill. Her research demonstrated that, absent the Energy Foundation’s long-term funding of the two types of NGOs, such environmentally friendly legislation in Texas would have failed.
Stokes’ research opens up broader questions about the political role of foundations. For example, do we see similar methods used by such organizations as the conservative Americans for Prosperity Foundation, funded by billionaire brothers Charles and David Koch? Because the Energy Foundation and the Americans for Prosperity Foundation are 501(c)3 organizations, they are not, strictly speaking, permitted to engage in political activity.
“We tend to have less of a positive view of these chains of foundations and policy change on the right,” she says. “I generally think what [the Energy Foundation] did is good, but you can still ask normative questions about it.”
Lyon is also struck by the political comparison: “I mostly hear about the impact of groups which promote conservative causes, so I am heartened to see that there is at least some parallel in the progressive sector.”
Leah C. Stokes, “How Foundations Can Change Policy: The Energy Foundation’s Role in Enacting Texas’ Environmental Policies,” 2017.
Read more stories by Adrienne Day.