One bedrock of any organization’s functions is finance, since without this fundamental little is possible. With an organization as well known, powerful, prestigious, and with as many wealthy members as the CFR, it would seem obvious that financing would be easy, but this has not always been true. During the early years of our neoliberal era, the Council’s leadership had to struggle to some extent to achieve its ambitious goals. As the 1981 Annual Report put it:
… a casual observer might easily regard the Council as one of those fortunate organizations whose tradition, selected membership and leadership in its field would seem to guarantee that, somehow, the resources required to carry on its work will always be available. Unfortunately, that is not the case. It is true that, while never as wealthy or well-endowed an organization as many believe, the Council was able to operate comfortably for many years thanks to a number of sizable, multi-year awards from major foundations, awards which directly supported the core program. However, changes in foundations’ grant-making priorities over the past decade resulted in the phasing out of those unrestricted awards during the mid- and late 1970s. As a result, while continuing to seek foundation grants for special projects, the Council has been forced to seek other sources of support to maintain and strengthen its basic programs because income from dues and endowment currently provides less than half of the core budget.[i]
To begin to solve this problem, the CFR had to both economize and seek new funding sources, especially during the 1976 to 1991 years. Fund-raising focused on three major types of support during these and subsequent years: increasing the number and amounts contributed by individual members and institutions that they influenced, such as family foundations; increasing the income from the corporate membership program; and building the CFR’s endowment up to a level where investment income could both offset the loss of foundation funds and allow the organization to grow. While carrying out this plan, the Council’s leaders always distinguished between its “core” program (the studies/think tank program, Foreign Affairs magazine, and meetings with national and world leaders), and “special” programs (such as the 1980s Project and International Affairs Fellowships), with the latter receiving a measure of continued foundation support.
During the 1970s, the transitional program got underway with “bridging money,” short- term funds to bridge the several year gap between the expiring longer term foundation grants and the time when the new, internally generated Council income would begin to come on stream. Toward this end, the Ford Foundation, the Rockefeller Brothers Fund, and the Lilly Endowment supplied $1.1 million in bridging funds during this key transition period.[ii] These foundations received their funds mainly from capitalist class families involved in the auto industry, oil and banking and pharmaceuticals respectively.
Funds from Individual Members
Increasing member donations was a major emphasis of the Council during this period. During 1978 there was a systematic effort to actively press CFR members to contribute, with John Macomber, chair of Celanese Corporation, heading up the effort, with Stephen Stamas, a vice president of Exxon, as his second in command. They were able to increase the number of donors to over one-quarter of the membership by 1980.[iii] Fourteen members were listed as “Patrons” in the 1980 Annual Report, each giving at the $5,000 or above level.[iv] Four (Burden, Copeland, Lord, and Rockefeller), were closely connected to the “Old Plutocracy,” the greatest U.S. fortunes of the nineteenth Century. Three more (Dillon, Gutfreud, and Model) were leading finance capitalists. One (McColough) combined industry and finance. One was a CFR employee, one was a top media person, one was connected to the oil industry, one to big pharma, one was a finance capital connected foundation and one led another leading ruling class think tank. The full list is:
William A.M. Burden: He married into the Vanderbilt family, whose wealth goes back to this nineteenth century transportation fortune.
Lammount Du Pont Copeland: His mother was a DuPont, a member of this old wealth family, and he was president of the DuPont Co. in the 1960s.
Lois Pattison de Menil: She was related to Conrad Schlumberger, the wealthy founder of the oil field services company.
Douglas Dillon: Discussed in chapter one of Wall Street’s Think Tank, he was vice chair of the CFR 1976-1978.
Hedley Donovan: Editor-in-chief of Time Magazine
George S. Franklin: Executive Director of the CFR 1953-1971, he was also David Rockefeller’s college roommate. His connection with the Rockefeller family later deepened with his marriage to one of David Rockefeller’s cousins.
John H. Gutfreund: CEO of Salomon Brothers investment bank, Business Week called him the “King of Wall Street” in 1985.
Caryl P. Haskins: President of Carnegie Institution
Oswald Lord: A businessman and author, he married Mary Pillsbury, the granddaughter of the founder of the Pillsbury Co. Their son, Winston Lord, a protege of Henry A. Kissinger, was president of the CFR 1977-1985
C. Peter McColough: A founder and CEO of Xerox Corp., he served on the board of directors of Bank of N.Y., Citigroup and other corporations. He served on the CFR Board of Directors.
Leo Model: Investment broker, Chair of Bache, Model Roland International, a director of J. Rothschild, International Investments, Dreyfus International Investments, and Hartford Insurance Co.
The Overbrook Foundation (Arthur and Frank Altschul): Overbrook is the Altschul family foundation. Frank Altschul was a senior partner in the investment bank Lazard Freres and the first president of General American Investors. He was vice president of the CFR 1951-1971. His nephew, John Robert Lehman, was managing director of Lehman Brothers
Edmund T. Pratt: He was chair and CEO of Pfizer Co.
David Rockefeller: Discussed in detail in chapter one of Wall Street’s Think Tank.
Over the next several years, fifteen new large over $5,000-a-year donors were added to the rolls. Many of the same people listed above, David Rockefeller being especially notable, donated at least this amount every year. This group of new large donors during the early and mid-1980s was an almost equal mix of finance and industrial capitalists, together with a lawyer involved in the International Labor Organization. These donors were:
Eli Jacobs: After attending Phillips Andover, an upper class prep school, and Yale, he joined the Wall Street investment bank White Weld & Co. Later he became a venture capitalist and served in the Reagan Administration.
Harold F. Linder: Was an investment banker with Loab, Rhoades & Co., then President of General American Investors. He later served in the State Department and was U.S. Ambassador to Canada.[v]
Arthur Altschul: The son of Frank Altschul, who served as the CFR’s vice president and secretary for many years, was the Chair of General American Investors, and a Goldman Sachs Partner.
Herbert Salzman: Was a Yale graduate who later became president of Standard Bag Co. He went into federal government service in 1966.[vi]
Marvin Davis: Was chairman of Davis Petroleum, an oil exploratory company.
Leonard K. Firestone: President of Firestone Tire and Rubber Co. A “staunch Republican,” he supported CFR member Nelson Rockefeller’s 1964 Presidential campaign.
H.J. Heinz II: Grandson of the founder of the H.J. Heinz Co., became the CEO of this company. The Heinz fortune has a number of connections to the CFR. For example, Teresa Heinz married John F. Kerry. Both of them, as well as other close relatives are members of the CFR.
Harry Oppenheimer: Chair of Anglo-American Co. and DeBeers, was one of the world’s richest men.
Edmund Littlefield: Grandson of a founder of Utah Construction Co. (later Utah International) he headed the company in the 1960s. In 1976-77 Utah Construction merged with General Electric and Littlefield became a billionaire. He was also a director of General Electric, Bechtel Investment, Chrysler, Del Monte, Hewlett-Packard, and Wells Fargo Bank.
Peter G. Peterson: Discussed in chapter one of Wall Street’s Think Tank.
Harvey and Jean Picker: Harvey was the son of the founder of Picker X-ray, which was later acquired by General Electric. His wife Jean worked with him in the business. He later became a dean at Columbia University.[vii]
Sanford D. Greenberg: Was chair and CEO of Chatfield Dean, a securities trading firm.
Lee B. Thomas, Jr.: Was the founder of Vermont America Co., a manufacturer of power tools. [viii]
Roger E. Birk: Was chair and CEO of Merrill Lynch & Co., a financial advisory and wealth management firm.
David A. Morse: Graduated from Harvard Law School and eventually became the Director-General of the International Labor Organization.[ix]
Although these were the leading donors, the annual giving program of the Council successfully encouraged more and more rank and file CFR members to give to the organization. This was in addition to substantial yearly dues. The percentage of members donating extra money to the CFR in a given year stood at only 21.6 percent for the 1978-79 year, jumping to above 40 percent in 1981-82. The percentage increased to over 50 percent in 1983-84, then stayed at between 46.5 percent and 53.2 percent from 1984-85 to 1990-91.[x] More fragmentary information available for later years indicates that rates of annual giving by the membership continued at a high level, the 2006 figure was 41 percent of the members for example, who gave over $5 million to the Council during that year.[xi]
In addition to these generous donations of the above listed people during the 1977-1986 years, another source of financing that allowed the CFR to manage the crisis created by the decline in foundation funding was the Corporation Service Program, in which corporations paid large sums each year to be corporate members of the Council and receive benefits. This aspect of the CFR is covered in chapter two of Wall Street’s Think Tank.
The final key source of CFR funding since 1976 is also the most important, the Council’s endowment, amounting to over $376 million in 2013.[xii] There were four key phases in the effort to accumulate a large enough endowment to assure the successful continuation of CFR activities. The first was the $10 million endowment drive of 1973-1983; the second was the $14.5 million drive of 1984-1988; a third began in 1992 and had a goal of $25 million. The fourth and most recent was a $100 million (later revised to $120 million), endowment drive from 2005-2008. The first of these capital campaigns was apparently undersubscribed, while the last three were oversubscribed, reflecting the wealth pouring into the coffers of the richest Americans as financialization, neoliberal corporate globalization and resulting gross inequality fully took hold at home and abroad.
First proposed in 1973, the $10 million drive had only reached $5.3 million by the end of 1977, when it got a matching gift of $500,000 from the Rockefeller Brothers Fund.[xiii] Early in 1978 Board Chair David Rockefeller reported that Steven Stamas of Exxon, CFR Vice Chair Douglas Dillon of Dillon Read, and CFR Director and Treasurer Gabriel Hauge, the CEO of Manufacturers Hanover Trust, had agreed to join him in organizing and overseeing the push to reach the goal of $10 million.[xiv] The going was slow, however, and the total pledged was only $7.5 million by mid-1982, with even less actually in hand.[xv] At this point in time, as fundraising lagged, the total market value of CFR’s endowment was less than $15 million.[xvi] The failure to reach its fundraising goals led first to a feasibility study by the consulting firm of Brakeley, John Price Jones Inc., then to a redoubling of efforts so that the CFR would maintain its “leadership position,” as reported in the 1983 Annual Report:
… the recommendations by the consultants were for the Council and its Board of Directors to develop a long-range mission statement as a method of (1) documenting the direction to be taken by the Council in the future, with specific emphasis on areas that need growth; (2) clarifying the perceptions of the Council held by many influential members; and (3) engaging our top leaders in the task of securing major and endowment gifts for the permanent support of core activities … The synergism resulting from the modest expansion in these programs would keep the Council, its members and publications at the forefront of foreign affairs … it is clear that if the Council is to maintain its leadership position as a forum for the debate and study of international affairs, it must increase the funds available to it.[xvii]
The 1984 Annual Report announced a new, five-year, $14.5 million endowment drive, “The Campaign for the Council.” CFR Director C. Peter McColough of Xerox Corporation was put in charge with Rockefeller and Dillon as co-chairs. This fund drive had better results, with $14.3 million in hand by 1988.[xviii] Large donations included $2 million from CEO Thomas J. Watson Jr. and Helen Watson Buckner of IBM and $750,000 from the Xerox Foundation in honor of McColough, its retiring chair.[xix] By 1991 this campaign was oversubscribed, with $15.4 million received.[xx] Large capitalist class foundations also played an important part in funding the CFR during these years, with, for example, the Pew Charitable Trusts granting $1.5 million over three years and the Ford Foundation contributing $872,900.[xxi]
A third effort, the “75th Anniversary Capital Campaign,” began in 1992 with a goal of raising $25 million. Chairman Peter Peterson headed this campaign, with Rockefeller and Dillon again honorary co-chairs. Fundraising was much more successful than earlier efforts, with two-thirds of the $25 million already in hand or pledged by the summer of 1993.[xxii] This $15 million came from a small group of foundations and finance capitalists. These included David Rockefeller and Peter G. Peterson, the Ford and Hauser Foundations (Rita Hauser was a Wall Street lawyer), the Dillon Fund, two individuals connected with the international investment management firm of Arnhold and S. Bleichroeder, The Starr Foundation (closely connected to Maurice R. Greenberg and the American International Group), banker and corporate director Karen N. Horn, the Kenneth and Evelen Lipper Foundation (Kenneth Lipper was a partner with Lehman Brothers and Salomon Brothers, then ran a hedge fund, Lipper & Co.), and the Malcom Hewitt Wiener Foundation (associated with Comminvest and Shareinvest, investment management companies).[xxiii] This group was almost entirely from the finance sector of the capitalist class, with only the Ford and Hauser Foundations as exceptions.
The fourth and most recent attempt to expand the CFR’s endowment reached a peak in the 2005-2008 years with the “Campaign for the Council,” a fundraising initiative that would “… provide the resources for the Council to significantly increase the scope of its work and influence.”[xxiv] Board Chair Peter G. Peterson and Development Committee Chair Richard E. Salomon were co-chairs. The goal was $100 million, later increased to $120 million, to be used to expand both the studies/think tank program and CFR activities in Washington D.C., where a mansion at 1777 F Street NW was purchased in 2007 to house staff and provide state-of-the-art meeting space. The “Campaign for the Council” funding campaign was extraordinarily successful. The 2007 Annual Report provides a list of those who had donated by the end of June, 2007. Ranges rather than exact amounts are given. David Rockefeller again was the leading donor, at “$25 million and above.”[xxv] Rockefeller’s donation was closely followed by that of Peter G. Peterson (Blackstone) who gave between $20 and $24.9 million, and the Starr Foundation (whose Chairman was Maurice R. Greenberg), which donated between $10-and 19.9 million. Council director David M. Rubenstein, a leader of The Carlyle Group, gave between $5 and 9.9 million,[xxvi] and nineteen individuals, couples, foundations and one corporation—British Petroleum—gave between $1 and 4.9 million. Individuals whose careers were spent as finance capitalists made up this small group of wealthy capitalists, who collectively donated multiple millions to the CFR in the 2005-2007 years.
The CFR’s success in financing its activities, programs, and physical plant during these years is indicated by the fact that its annual operating revenue went up over seventeen times, from only $3.9 million in 1976 to $68.5 million in 2012.[xxvii]
The overall picture of the financing of the CFR during the 1976-2014 era, is one where financial capitalists (bankers and shadow bankers), reinforced by old monied families, and some monopoly industrialists provided the money needed to allow the organization to grow and prosper. The CFR Annual Report for 2014 lists the assets of the organization, a 501c3 nonprofit, tax exempt corporation at $491.9 million, including an investment portfolio of $369.2 million.[xxviii]
All Citations from the CFR Annual Reports
[i] CFR 1981:109.
[ii] CFR 1978:93.
[iii] CFR 1980:101.
[iv] CFR 1980:101.
[v] CFR 1981: 111.
[vi] CFR 1981:124.
[vii] CFR 1983:131.
[viii] CFR 1984:119.
[ix] CFR 1986:123.
[x] CFR 1991:126.
[xi] CFR 2006:56.
[xii] CFR 2013:84.
[xiii] CFR 1977:89-90
[xiv] CFR 1978: 94-95.
[xv] CFR 1982:123.
[xvi] CFR 1983:149-151.
[xvii] CFR 1983:130-131.
[xviii] CFR 1988:133.
[xix] CFR 1988:133.
[xx] CFR 1991:127.
[xxi] CFR 1991:128.
[xxii] CFR 1993:127.
[xxiii] CFR 1993: 127.
[xxiv] CFR 2007:70.
[xxv] CFR 2007:71.
[xxvi] CFR 2007:71
[xxvii] CFR 1976:100; CFR 2012:76.
28 CFR 2014:87