Posts Tagged ‘social security’
“Give me a place to stand, and I will move the earth”*…
It’s all about leverage… perhaps nowhere more painfully than in the philanthropic sector: so many problems; so little bandwidth!
Dick Tofel (a media advisor who was founding general manager and first employee of ProPublica, and its president from 2013 until 2021) weighs in with a “modest proposal.” It’s largely aimed at his field (public media, writ large), an altogether worthy focus; but the general principal is surely much broadly applicable…
I read a fascinating history over the recent holidays and it made me wonder about whether we ought to be fundamentally rethinking institutional philanthropy in this challenging moment. Because that philanthropy provides critical support to so much of nonprofit journalism, I think the question is worth exploring here this week.
The book is The Radical Fund: How a Band of Visionaries and a Million Dollars Upended America [here] by John Fabian Witt [here], a professor at Yale Law School. It charts the history of the American Fund for Public Service, a progressive foundation (to use our contemporary lingo) that operated in the 1920s and ‘30s, and produced some remarkable results with fairly limited resources (roughly $36 million over its entire run in current dollars).
The American Fund was rocked by conflicts between what we would now call progressives and literal Communists, and it made a few foolish grants, including some funding for Stalin-era Soviet agriculture, but it also accomplished an astonishing number of big things. It provided critical support for the NAACP, from its early anti-lynching campaign to launching the litigation program that culminated in Brown v. Board of Education, and including the earlier first moves toward salary equalization for public school teachers and desegregation of public graduate schools in the South; funded lifelines for Sidney Hillman’s industrial unionization drive that eventually produced the CIO, and for A. Philip Randolph’s pathbreaking Black union, the Brotherhood of Sleeping Car Porters; and supported the defenses of Sacco and Vanzetti, the Scopes “monkey trial” and the Scottsboro Boys.
In all, as Witt concludes, “People and movements touched by the American Fund did more for twentieth-century American liberalism than all the money of the era’s much larger and more famous foundations.”
Here’s what got me to thinking: Over well more than a decade, the American Fund spent only $67,000 (about $1.25 million today), or 3.5% of its total spending, on its own operations—the rest went to gifts and grants. This was possible because the Fund hired essentially no staff, with its work being done by its many impressive directors, including Roger Baldwin, founder of the ACLU, James Weldon Johnson, leader of the NAACP, Norman Thomas, the perennial Socialist Party presidential candidate (he got almost 900,000 votes in 1932), Freda Kirchwey of The Nation and attorney Morris Ernst. Among the giants they consulted were W.E.B. du Bois, Felix Frankfurter and Reinhold Niebuhr.
And here’s what it made me wonder: Especially in this moment of overwhelming needs across the social sector, as the federal government withdraws from so many crucial activities it had undertaken and supported for a half century, should institutional foundations recast themselves in the model of the American Fund, dispensing with their large staffs and instead restocking their boards with leaders who could directly disperse their largess?
Before you object that that’s simply impractical, you need to reckon with the fact that this is actually the operating model of most of what we call “major donors,” wealthy individuals, occasionally with family foundations, some of them making very large grants. Mackenzie Scott is the overwhelmingly largest funder of this sort, but in our own field such funders have included those who sparked Voice of San Diego, ProPublica, the Texas Tribune, the Marshall Project, CalMatters, Mississippi Today, the Flatwater Free Press, Baltimore Banner, Tulsa Flyer and others. The track record for initiatives spurred by institutional foundation funding is, well, a bit less stellar.
The costs of the current model are also much larger than you may imagine. The Ford Foundation, in 2024 alone, spent more than $212 million on its own operations, while making $840 million in grants and gifts (about 20% of the total). Nor is Ford an outlier in this respect: the MacArthur Foundation spent almost $68 million on itself, while paying out $356 million (16%) and the Knight Foundation incurred $32 million in expenses to grant and gift $148 million (18%).
I’m not complaining about these “overhead” rates as such—they are not at all unreasonable by contemporary foundation standards. (The 2024 rate for the Rockefeller Foundation, where I once worked, was 38%!) But for just these three major news funders, the aggregate cost comes to more than $300 million in one year alone. (Of course, news is just one of many things these giants fund.) That total spent on running three foundations is more than half of the rescinded federal support of public broadcasting. The difference between the American Fund’s 3.5% and the 18% median rate for Ford, MacArthur and Knight would be $250 million available for additional grants each year from these three funders alone.
I headlined this column a “modest proposal” because I do not expect it to be adopted, nor perhaps to be taken entirely literally. But I do hope it is directionally provocative. As I have said more than once with respect to public broadcasting, revolutionary changes require an extraordinary response. Essentially every objective of the major institutional foundations is under unprecedented pressure. In that setting, doing business in the usual way may no longer make sense. Looking to the American Fund suggests another path might be possible…
Repurposing overhead: “A Modest Proposal for Big Philanthropy in a Tale from the Past,” from @dicktofel.bsky.social.
For a broad history of philanthropy from the 16th century, see here.
[Image above from “Philanthropy on the Defensive,” also worth a read for a conservative take that inches toward some of the same conclusions…]
* Archimedes (brandishing his lever)
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Lest we even imagine that philanthropy can do it all, we might recall that it was on this date in 1940 that the first Social Security check– for $22.54– was issued to Ida May Fuller.
The Social Security Program had been created in 1935, with qualification for eligibility (covered earnings) beginning in 1937. So Ms. Fuller, a teacher-turned legal-secretary, had been accumulating credit for three years. She lived to 100 years old and collected a total of $22,888.
“See, all our people are businessmen. Their loyalty’s based on that.”*…
In his nifty newsletter, Benedict Evans observes…
In ‘Godfather II,’ the Cuban representative of ITT gave President Batista a solid gold telephone. In 2025, Apple’s Tim Cook gave President Trump a piece of Corning Glass on a gold plinth…
See this University of Florida piece for more background on the 1959 “gift” to Bautita and the corruption it came to symbolize. (But note that the U of F note incorretly attributes the gesture to AT&T; it was in fact from ITT.) And see Tim Cook pay Apple’s “tribute” here.
Apposite: “A UFC fight at the White House.”
Oh, and (from The Onion): “Frito-Lay CEO Gifts Trump Gold Funyun.”
* “Michael Corleone” (Al Pacino), The Godfather Part II
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As we ponder payola, we might remind ourselves that things have been– and can again be– different: on this date in 1935 President Franklin D. Roosevelt signed the Social Security Act, part of his New Deal program that created a government pension system for the retired.
By 1930, the United States was, along with Switzerland, the only modern industrial country without any national social security system. Amid the Great Depression, the physician Francis Townsend galvanized support behind a proposal to issue direct payments to older people. Responding to that movement, Roosevelt organized a committee led by Secretary of Labor Frances Perkins to develop a major social welfare program proposal. Roosevelt presented the plan in early 1935 and signed the Social Security Act into law on August 14, 1935. The Supreme Court upheld the act in two major cases decided in 1937.
The law established the Social Security program. The old-age program is funded by payroll taxes, and over the ensuing decades, it contributed to a dramatic decline in poverty among older people, and spending on Social Security became a significant part of the federal budget. The Social Security Act also established an unemployment insurance program [only a few states had poorly-funded programs at the time] administered by the states and the Aid to Dependent Children program, which provided aid to families headed by single mothers. The law was later amended by acts such as the Social Security Amendments of 1965, which established two major healthcare programs: Medicare and Medicaid.
“Bureaucracy defends the status quo long past the time when the quo has lost its status”*…
… which is one of the reasons that they’re hard to update. Kevin Baker describes a 1998 visit to the IRS Atlanta Service Center and ponders its lessons…
… the first thing you’d notice would be the wires. They ran everywhere, and the building obviously hadn’t been constructed with them in mind. As you walked down a corridor, passing carts full of paper returns and rows of “tingle tables,” you would tread over those wires on a raised metal gangway. Each work area had an off-ramp, where both the wires and people would disembark…
… The desks were covered with dot matrix paper, cartons of files, and Sperry terminals glowing a dull monochromatic glow. These computers were linked to a mainframe in another room. Magnetic tapes from that mainframe, and from mainframes all over the country, would be airlifted to National Airport in Washington DC. From there, they’d be put on trucks to a West Virginia town of about 14,000 people called Martinsburg. There, they’d be loaded into a machine, the first version of which was known colloquially—and not entirely affectionately—as the “Martinsburg Monster.” This computer amounted to something like a national nerve center for the IRS. On it programs called the Individual Master File and the Business Master File processed the country’s tax records. These programs also organized much of the work. If there were a problem at Martinsburg, work across the IRS’s offices spanning the continent could and frequently did shut down.
Despite decades of attempts to kill it, The IRS’s Individual Master File, an almost sixty-year old accumulation of government Assembly Language, lives on. Part of this strange persistence can be pegged squarely on Congress’s well-documented history of starving the IRS for funding. But another part of it is that the Individual Master File has become so completely entangled in the life of the agency that modernizing it resembles delicate surgery more than a straightforward software upgrade. Job descriptions, work processes, collective bargaining agreements, administrative law, and technical infrastructure all coalesce together and interface with it, so that a seemingly technical task requires considerable sociological, historical, legal, and political knowledge.
In 2023, as it was in the 1980s, the IRS is a cyborg bureaucracy, an entangled mass of law, hardware, software, and clerical labor. It was among the first government agencies to embrace automatic data processing and large-scale digital computing. And it used these technologies to organize work, to make decisions, and to understand itself. In important ways, the lines between the digital shadow of the agency—its artificial bureaucracy—and its physical presence became difficult if not impossible to disentangle….
Baker is launching a new Substack, devoted to exploring precisely this kind tangle– and what it might portend…
This series, called Artificial Bureaucracy, is a long-term project looking at the history of government computing in the fifty-year period between 1945-1995. I think this is a timely subject. In the past several years, promoters and critics of artificial intelligence alike have talked up the possibility that decision-making and even governance itself may soon be handed over to sophisticated AI systems. What draws together both the dreams of boosters and the nightmares of critics is a deterministic orientation towards the future of technology, a conception of technology as autonomous and somehow beyond the possibility of control.
These visions mostly ignore the fact that the computerization of governance is a project at least seventy years in the making, and that project has never been determined, in the first instance or the last, primarily by “technological” factors. Like everything in government, the hardware and software systems that make up its artificial bureaucracy were and are subject to negotiation, conflict, administrative inertia, and the individual agency of its users.
Looking at government computing can also tell us something about AI. The historian of computing, Michael Mahoney has argued that studying the history of software is the process of learning how groups of people came to put their worlds in a machine. If this is right—and I think it is—our conceptions of “artificial intelligence” have an unwarranted individualistic bias; the proper way to understand machine intelligence isn’t by analogy to individual human knowledge and decision-making, but to methods of bureaucratic knowledge and action. If it is about anything, the story of AI is the story of bureaucracy. And if the future of governance is AI, then it makes sense to know something about its past…
Is bureaucracy the future of AI? Check it out the first post in Artificial Bureaucracy, from @kevinbaker@mastodon.social.
* Laurence J. Peter
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As we size up systems, we might recall that it was on this date in 1935 that President Franklin D. Roosevelt signed the Social Security Act. A key component of Roosevelt’s New Deal domestic program, the Act created both the Social Security program and insurance against unemployment.
“All photographs are accurate. None of them is the truth.”*…
Of the 270,000 photographs commissioned by the US Farm Security Administration to document the Great Depression more than a third were “killed.” As we wrestle with the stories we’re being told, an update of an earlier post…
From his office at the Farm Security Administration (FSA) in Washington, D.C., Roy Stryker saw, time and again, the reality of the Great Depression, and the poverty and desperation gripping America’s rural communities. As head of the Information Division and manager of the FSA’s photo-documentary project, his job was to hire and brief photographers, and then select images they captured for distribution and publication. His eye helped shape the way we view the Great Depression, even today.
Professionally, Stryker was known for two things: preserving thousands of photographs from being destroyed for political reasons, and for “killing” lots of photos himself. Negatives he liked were selected to be printed. Those he didn’t—ones that didn’t fit the narrative and perspective of the FSA at the time, perhaps—were met with the business end of hole punch, which left gaping black voids in place of hog’s bellys, industrial landscapes, and the faces of farmworkers.
In 1935, the Resettlement Administration (RA) was established as part of the New Deal to provide relief, recovery, and reform to rural areas. The FSA, created in 1937, was its spiritual successor. The FSA’s duties included, but were not limited to, operating camps for victims of the Dust Bowl, setting up homestead communities, and providing education to more than 400,000 migrant families. Communicating about its efforts was also part of its mandate…
Stryker sought out photographers, among them Dorothea Lange, Gordon Parks, and Arthur Rothstein, and made their images readily available to the press. Given the lack of new photography and art being produced during the Great Depression, the photos regularly appeared in magazines such as LIFE and Look. He also had them displayed at the 1936 Democratic National Convention, the 1936 World’s Fair, the Museum of Modern Art, and other prominent venues. The publication of a series of early photographs, including Lange’s Migrant Mother, proved instrumental in pushing the federal government to provide emergency aid to migrant workers in California.
In the effort to represent the FSA and Roosevelt’s signature domestic achievement in a positive light, the chosen photos captured how the idealistic views of farm life were being tainted by poverty, and how the FSA programs were helping farmers reclaim their dignity. Common elements were decrepit housing conditions, the lack of food and clean water, and harsh work environments.
It was government propaganda, and there were certainly some within the government (both supporters and detractors) who saw it that way, and more who considered both the FSA and its photography project as communist and un-American. In a 1972 Interview, Stryker admits to having felt political pressure from the Department of Agriculture to portray the effectiveness of the New Deal. “Go to hell,” was his response. His photographers “were warned repeatedly not to manipulate their subjects in order to get more dramatic images, and their pictures were almost always printed without cropping or retouching.”
But there is a way to manipulate the story being told without altering the images themselves—the process of photo editing, of choosing which images to highlight and which to discard…
The fascinating story of one man’s (materially successful) effort to galvanize social and political opinion: “How a Hole Punch Shaped Public Perception of the Great Depression.”
See also “The Kept and the Killed.”
And for an equally-fascinating consideration of how emerging new visual technologies might similarly be used to sway sentiment, read Fred Turner‘s “The Politics of Virtual Reality.”
* Richard Avedon
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As we contemplate cuts, we might recall that it was on this date in 1940 that the first Social Security check– for $22.54– was issued to Ida May Fuller.
The Social Security Program had been created in 1935, with qualification for eligibility (covered earnings) beginning in 1937. So Ms. Fuller, a teacher-turned legal-secretary, had been accumulating credit for three years. She lived to 100 years old and collected a total of $22,888.
“The combination of economic inequality and economic segregation is deadly”*…
When we think of a social safety net, we tend to think about things like health care and environmental protection, social security, child care; lately here’s been lots of talk of Universal Basic Income. All of them are surely part of an answer. But if we want a social infrastructure that not only protects against personal and family challenges, but also creates personal and family opportunities, we need to look further– we need to look to something we might call Universal Basic Assets. The always-illuminating Rana Foroohar explains…
If American states are, as former US Supreme Court Justice Louis Brandeis once put it, the “laboratories of democracy,” then it’s worth watching closely what’s happening in California right now.
The threat of rising taxes and a “soak the rich” political atmosphere has led some wealthy Golden State residents, including a number of technology entrepreneurs, to leave for cheaper pastures such as Austin or Miami. This has, in turn, prompted worries of a larger migration that would have an impact not only on the state’s tax base, but on the growth and innovation that have made California the world’s fifth-largest economy.
It is an exceptionally fraught situation. While nobody these days has much sympathy for wealthy individuals or companies (witness the recent justified fury about the ProPublica leaks showing how little tax the wealthiest Americans pay), or really believes in trickle-down economics, the threat of tax and regulatory arbitrage by other states is real.
The good news is that California is applying some typically creative thinking to the problem. What if there was another way to harness company and citizen wealth for the benefit of all?
One such idea gaining popularity is what has been called “pre-distribution.” Unlike traditional methods of redistribution, in which the state taxes existing wealth and then uses it to bolster various projects and constituents, pre-distribution is all about harnessing capital the same way investors do, and then using the proceeds of the capital growth (which as we know far outpaces income growth) to fund the public sector…
It could help better align public and private incentives and rewards. The massive wealth accrued by leading companies is in part down to the strength of the public commons — good schools, decent infrastructure, basic research, and so on. As economists like Mariana Mazzucato frequently note, why should taxpayers pick up the bill for, say, laying high speed fibre without getting any of the commercial upside?
California Senate majority leader Robert Hertzberg, a Democrat… along with some very rich Californians like former Google chief executive Eric Schmidt and Snap founder Evan Spiegel, have proposed… something called “universal basic capital”. The idea is that seed contributions of equity from companies or philanthropists could be invested into a fund that would then be used by individual Californians for things like retirement security, healthcare and so on…
If pre-distribution works in the laboratory of California, I expect it will be adopted in some way at the federal level. The Obama administration actually tried to implement its own version of the CalSavers programme for the country as a whole, called myRA, but it failed in part because the funds were invested only in super safe low yielding Treasury bills at a time when the market as a whole was rising far faster. Even at this politically polarised moment, it’s an idea whose time may have come. Pre-distribution is supported by such unlikely bedfellows as hedge funder Ray Dalio and leftwing economist Joseph Stiglitz. Perhaps that’s because while it doesn’t fundamentally alter the market system, it does broaden share ownership: a mix of capitalism and socialism that is right for our time…
“Capital for the people — an idea whose time has come“: @RanaForoohar explains how California’s nascent experiments in Universal Basic Assets could be a model for the nation.
In thinking about national possibilities, your correspondent’s favorite rationale/approach is Cornell economic historian Louis Hyman‘s formulation (toward the end of) this post.
* “The combination of economic inequality and economic segregation is deadly. It reinforces the advantages of those at the top while exacerbating and perpetuating the disadvantages of those at the bottom. Taken together, they shape not just inequality of economic resources, but also a more permanent and dysfunctional inequality of opportunity.” – Richard Florida
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As we share and share alike, we might send grateful birthday greetings to the Electronic Frontier Foundation; it was founded by John Gilmore, John Perry Barlow, and Mitch Kapor on this date in 1990. Over the last 30 years, EFF has become the leading nonprofit defending digital privacy, free speech, and innovation.
Happy Birthday– and many more!
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