Denying Care: How Comparative Effectiveness Research Really Works

by Peter J. Pitts

If knowledge is power, then what are we to make of various proposals to fund federal research on the comparative effectiveness of different medical treatments? Surely we want those purchasing health care to have the best available information about what works and what doesn’t, right?

The problem is that the U.S. government, through its various health care programs, is also a buyer of health care. Like any buyer, it has a budget. However, the government’s budgeters have a different calculus than do ordinary consumers. Ordinary consumers are open to considering the value offered by new products and adjusting their spending accordingly. Government budget writers, guided by political considerations, are apt to frown on new medical treatments, procedures, drugs, and devices as being too costly—even if they are, in fact, effective.

This conflict is an artifact of the U.S. system of third-party payment for health care. Thus, it should come as no surprise that proposals by President Obama and various members of Congress to expand the role of government in health care come accompanied by proposals to expand comparative effectiveness research. Those proposals, nevertheless, are cause for concern. As Peter Pitts (below) and Helen Evans explain in their respective articles, government assessment of health technologies is inevitably a tool for governments to limit their health care expenditures by denying treatments to patients. If knowledge is power, then patients and taxpayers need to understand how comparative effectiveness re-search can be used to serve the government’s budget imperatives rather than their own welfare. —Editor

 

TODAY, HEALTH TECHNOLOGY ASSESSMENT is a short-term, short-sighted, politically driven policy that results in one-size-fits-all medicine. While it may provide transitory savings in the short-term, current strategies result in a lower quality of care, which results in higher health care costs over time.

Comparing Cost Effectiveness

The United Kingdom’s National Institute for Health and Clinical Excellence (NICE) has issued cost effectiveness decisions for many new medicines. More often than not, after a one- to three-year period of review after a drug has received market approval, the institute has recommended against using the drug because it is not cost effective compared to existing treatments. That is why policy folks in the United Kingdom instead of using “NICE” prefer “NASTY,” for “not available, so treat yourself.”

The drugs the institute has rejected or rationed include Gleevec, a drug that targets a specific pathway that causes stomach cancer. In 2001, Gleevec became frontline therapy for stomach cancer in the United States. To the outrage of most cancer specialists, the institute took three years to decide that it would use Gleevec as a last resort, in a limited dose. It took Gleevec away from patients who have some tumor sites that are responding to treatment and some tumor sites that are not.

The institute has also recommended against paying for Herceptin to treat metastatic breast cancer, as well as other drugs used to treat osteoporosis, Alzheimer’s, and multiple sclerosis based on comparative effectiveness reviews. Similarly, independent review agencies in Australia, New Zealand, and Canada have done the same.

The institute did not regard any new drugs as clinically less effective then older drugs. Rather, officials judged them to be, relative to their cost, not worth paying for given the additional benefit the drugs provided. The benchmark used in each case was something called a “quality of life year” or a year of life free of disease or infirmity.

Sir Michael Rawlins, chairman of NICE, told the British House of Commons that comparative effectiveness, a means of health technology assessment, is not based on empirical research: “There is no empirical research anywhere in the world, it is really based on the collective judgment of the health economists we have approached across the country,” he said. “It is elusive.”

The problem is that health technology assessment, as it is currently designed, places into conflict the budgeting dilemmas of governments elected for relatively short periods of time with the ever-lengthening life spans of their electorates.

$50,000 Per Year of Life 

In every analysis described, health systems assumed an additional quality of life year was worth about $50,000, the average price of a fully loaded Land Rover. Because most new medicines are targeted therapies that are tested first in critically ill patients, it will be almost impossible to demonstrate significant improvement in well-being or life expectancy for any new medication. The United States Medicare Payment Advisory Commission (MedPAC), the independent federal body established to advise Congress on issues affecting Medicare, never mentions a number, but invokes efficiency enough times to make the point that comparative effectiveness is a tool for controlling costs, not improving the lives of people. Indeed, it notes that “increasing the capacity to examine the comparative effectiveness of health care services” will lead to “[increased] federal administrative spending relative to current law.” That would mean more price controls and government interference in medicine.

It happens that MedPAC and America’s Health Insurance Plans favor large randomized clinical trials to compare older drugs sponsored in part by government agencies and private companies. Randomized trials tend to ignore differences in clinical outcomes due to side effects or genetic variations. So whether you analyze them together or individually, researchers will almost always find no difference in the effect of medicines, a result that is biased in favor of older, cheaper drugs.

Proponents point to two troubling examples. For instance, the Department of Veterans Affairs (VA), along with the National Institute of Mental Health (NIMH), conducted a study comparing older and cheaper drugs for schizophrenia to newer ones. Patients with chronic schizophrenia were assigned to treatment with perphenazine, olanzapine, risperidone, quetiapine, or ziprasidone for up to 18 months.

The first thing NIMH and the VA did was exclude people who froze up and went numb from the older drugs, a common reaction that led to the development of second-generation medicines in the first place. Then the study only compared how well each patient did on each drug. Even then, the researchers assigned their own value to the reasons patients switched, substituting their preferences for those of patients and patient groups. Even though most patients wound up staying on newer drugs for longer periods of time—because of side effects that the study devalued—the researchers claimed that the older drugs were cost-effective.

A Judgment Controversy

Another example of the kind of research proponents of comparative effectiveness swoon over is the Antihypertensive and Lipid-Lowering Treatment to Prevent Heart Attack Trial. That was a five-year, 42,000-patient trial that studied the comparative effectiveness of first-generation blood pres-sure drugs (diuretics) against second-generation medicines in reducing heart attacks. Patients were allowed to switch to a combination of drugs only if they failed on the older medicine first.

The authors of the study concluded that diuretics were cheaper and as effective in reducing death from all forms of heart failure, if not heart attacks, and were therefore cost-effective. But like the trial conclusion in the study that compared drugs to treat schizophrenia, this judgment was not without controversy. As Michael Weber, one of the members of the steering committee overseeing the trial noted, the favorable assessment of the older drugs was driven largely by the fact that African-American patients suffer 40 percent more deaths from stroke because they do not respond well to ACE inhibitors. This fact was well known even before the trial, yet those overseeing the trial still allowed African-American patients to receive a treatment that left them with a higher risk of death.

Even though other research shows that white patients respond at least as well on ACE inhibitors as on diuretics, the VA now has a program where it pays doctors to prescribe blood pressure medications according to guidelines that emerged from the trial.

As currently organized, comparative effectiveness will be used to increase government control over the practice of medicine and expand price controls. It will turn patients into cost centers, not the center of efforts to prevent disease and extend life. Using a combination of cutting-edge in-formation technology and genetic tests, doctors can do a better job than any cost-benefit agency to ensure that their patients get the right treatment at the right time. Many new drugs, including top-selling cancer drugs such as Tarceva and Avastin, have associated genetic tests either on the market or in clinical development that will allow doctors to provide individuals with personalized medicine. New drugs for asthma, depression, HIV, and blood pressure will have similar tests.

Personalized medicine gives doctors and patients control over health care decisions while comparative effectiveness, as it is now defined, will increase government control over the choices doctors and patients make in the future. The battle over the value of medicine and who decides what is valuable will determine who controls health care in America over the next decade.

A health technology assessment model for the 21st century should reflect and measure individual response to treatment based on the combination of genetic, clinical, and demographic factors that indicate what keep people healthy, improve their health, and prevent disease. A rapidly aging society demands a new health care paradigm capable of providing for its needs in the 21st century. Equality of care must be matched with quality of care.

In an era of personalized medicine, one-size-fits-all treatments and reimbursement strategies are dangerously outdated. We are early in this debate, but at least we can all agree that this is not, and must not be, exclusively a debate about saving money. The debate must be about patient care.


Mr. Pitts is President and co-founder of the Center for Medicine in the Public Interest and Senior Vice President, Director for Global Health Affairs for Manning Selvage & Lee. From 2002 to 2004, Mr. Pitts was FDA’s Associate Commissioner for External Relations, serving as senior communications and policy adviser to the Commissioner. This article is excerpted from his article, “‘Comparative Effectiveness’: Government’s Way to Convert Patients into Cost Centers?” published by the Washington Legal Foundation, February 13, 2009.

Denying Care in Britain

by Helen Evans

FOR THE BRITISH GOVERNMENT, the practice of health technology assessment facilitates rationing by delay. It is a tool that aims to ensure that expensive new technologies are initially provided only in hospitals that have the technical capacity to evaluate them. While the National Health Service Research and Development Health Technology Assessment Programme is funded by the Department of Health and, according to its criteria, researches the costs, effectiveness, and impact of health technologies, the Medicines and Healthcare Products Regulatory Agency ensures that drugs and devices are safe.

In 1999, the government went a step further and set up the National Institute of Health and Clinical Excellence (NICE). At its heart is the Centre for Health Technology Evaluation that issues formal guidance on the use of new and existing medicines based on rigid and proscriptive “economic” and clinical formulas. With the NHS obliged to adhere to NICE’s pronouncements, criticism of NICE has been ceaseless, particularly from various patient organizations.

NICE is a controversial body. It has tried repeatedly to stop breast cancer patients from receiving the powerful breakthrough drug Herceptin and patients with Alzheimer’s disease from receiving the drug Aricept. The criteria by which this agency makes its decisions have been kept largely secret from the public. As is inevitable with any nationalized health care system, life-extending medicines such as those to treat renal cancers are refused on the grounds of limited resources and the need to make decisions based not on genuine market economics but on an artificial assessment of the benefit that may be gained by the patient and society “as a whole.”

In 2001, NICE deliberately restricted state-insured sufferers of multiple sclerosis from receiving the innovative medicine Beta Interferon. Claiming that its relatively high price jeopardized the efficacy of the NHS, NICE told patients with the more severe forms of the disease that they would have to go on suffering in the name of politically defined equity.

In more recent years, patients with painful and debilitating forms of rheumatoid arthritis have been informed by NICE that in many instances they will not be allowed to receive a sequential range of medicines that have often been proved to be of significant benefit. Instead, the institute decreed that “people will be prevented from trying a second anti-TNF treatment if the first does not work for their condition.”

Similarly, in August 2008, patients with kidney cancer continued to be denied effective treatments designed to prolong their lives, often by months or even a few years. The calculations used by NICE have been systematically disputed by clinical experts who are more concerned with patient welfare than with vote-seeking, but the institute has also come under fire for not involving doctors who are active on the front line of medicine. “With Sutent, for instance,” noted cancer specialist John Wagstaff, “there was just one oncologist on the panel.”

In January 2009, patients with osteoporosis also fell foul of NICE. The institute declared that only a small minority of patients with this debilitating disease would receive the medicine Protelos, and even they would receive it only as an extreme last resort. While clinicians and osteoporosis support groups have pointed out that more than 70,000 hip fractures result in 13,000 premature deaths in the United Kingdom each year and that these otherwise avoidable episodes needlessly cost the NHS billions of pounds, not only are patients being denied necessary treatments, but taxpayers’ money is wasted.

Indeed, according to its annual reports and accounts, NICE is now spending more money on communicating its decisions than would be spent if it allowed patients access to many of the medicines it is so busy denying them. The money that the institute now spends on public relations campaigns “could have paid for 5,000 Alzheimer’s sufferers to get £2.50-a-day drugs for a year,” according to The Daily Mail.

Devoid of a market and the language of price, this top-down system ironically ignores many of the societal costs associated with failure to treat severe illness, such as illness-related unemployment. Moreover, the fact that preventing access to more costly medicines may save money in the short term overlooks the costs for the future. If older medicines lead to more rapid deterioration of a condition, the effect could be a more ex-pensive hospital or nursing home episode later.


Mrs. Evans is the Director of Nurses for Reform and a Health Fellow with the Adam Smith Institute of London, England. This article is excerpted and adapted from her longer article, “Comparative Effectiveness in Health Care Reform: Lessons from Abroad,” published by The Heritage Foundation on February 4, 2009.

Dan Peters: The Good Works of American Philanthropy

DAN PETERS IS THE PRESIDENT of the Lovett & Ruth Peters Foundation, a foundation devoted to education reform. He is also a member of the board at the Philanthropy Roundtable, where he helped create the Alliance for Charitable Reform to defend freedom in the philanthropic sector. ACR has been very much engaged in the past year or so, as various activist organizations have mounted an effort to redirect foundation grantmaking to their favored causes. In particular, the Greenlining Institute has pushed for legislation in California to require foundations to report the racial composition of their boards and staff and to report the number of grants and the percentage of grant dollars going to minority-led charities. The California Assembly did in fact pass such a bill, but it was withdrawn from further consideration after the 10 largest California foundations committed to increase their focus on minority initiatives. Similar pushes are being made in other states. Meanwhile, the National Committee for Responsive Philanthropy has proposed a variety of benchmarks for foundations and suggested that the U.S. Congress may want to incorporate those benchmarks into new regulations. Recently, The Insider talked with Mr. Peters about what these various agendas mean for philanthropy. He also shared his thoughts on education reform, what really makes good philanthropy work, and his heroes.

The Insider: Your parents, Lovett and Ruth Peters, made a big contribution to the world of education reform, didn’t they? How did they get involved in philanthropy?

Dan Peters: My parents are an extraordinary couple—and they’d be the first to say how blessed they are to have lived in this country where they could pursue their dreams. Neither one was wealthy, but thanks to the generosity of others my dad received a scholarship to Andover and Yale, where he graduated Phi Beta Kappa. Thanks to a superb education and a lot of hard work, he made quite a bit of money in the energy business.

Almost 25 years ago, he said: “I am going to give up the money-making side of things and focus on the charitable and education side of things.” He felt blessed by all that he had. He also felt that our educational system was not educating kids and that low-income kids were getting clobbered by the status quo. He wanted to do something about it, so he did two things. He started up the Pioneer Institute in Boston to change the intellectual climate in Massachusetts, especially in education.

And then he and my mom also set up the Lovett and Ruth Peters Foundation to focus on reforming and improving K-12 education in the United States. Both my parents had received wonderful educations, and they wanted every child in America to have the same opportunity they had had.

TI: What do you make of the push in various states for legislation requiring foundations to report how many minorities they employ and how much of their grant dollars go to minority-led charities and so forth?

DP: I think the question we need to answer is: “What problem are we trying to solve here?” Americans are a generous people. Today we give away more than $300 billion per year. That’s 10 times what we all spend on professional sports!

All too often we use the wrong measurements in the non-profit world. For ex-ample, in the world of K-12 education, the measurement is not the input side—how much we are spending in education. The question ought to be: “What are the results we’re get-ting for it?”

High school graduation rates are essentially unchanged in this country since 1960. They’re about 70 percent. Can you think of any other part of society, with the exception of government programs, where people are getting the same results they did almost 50 years ago?

TI: Sounds like the status quo isn’t working. How would you fix it?

DP: There’s a great quote of Sir Isaac Newton. He said: “If I have seen further than others, it is by standing upon the shoulders of giants.” What a great comment. If you look at some of the remarkable work that has been done in education in this country by philanthropists—to me, there’s the roadmap. The giants are out there. We just need to follow their lead. One of my heroes is Julius Rosenwald, of Sears & Roebuck fame. This was a remarkable guy who was responsible for building more than 5,000 schools in the South—not exclusively but primarily for blacks—using all the key things that make philanthropy successful. He didn’t walk into town and say: “I’m going to build you folks a new school.” He made them part of the effort, so they had to contribute and thus had ownership in it. They had incredible pride.

That guy’s a hero, but we’ve got modern heroes as well. Don Fisher, of Gap fame, created the KIPP brand. Don is one of my heroes. Don would be the first to tell you he surrounded himself with wonderful people, starting with Michael Feinberg and Dave Levin, who started up the two KIPP schools in Houston and New York. The KIPP schools are a phenomenally successful effort, and Don Fisher was the guy who allowed them to expand. Everybody knows the KIPP brand these days. That’s thanks to Don. Don is an example of a philanthropist who’s made a tremendous difference.

I’m proud to say that the Lovett & Ruth Peters Foundation has been heavily involved in giving kids trapped in demonstrably failing public schools access to EdChoice scholarships. This year, we’ve got almost 3,000 kids in the greater Cincinnati area who are voting with their feet to leave a failing public school and go to a school of their choice.

This year, almost 40 percent of all the kids in the Catholic inner-city schools are in the EdChoice scholarship program. The Catholic inner-city schools are expanding in Cincinnati because of these EdChoice scholarships, whereas in most parts of the country, Catholic inner-city schools are closing their doors. I’m not trying to push Catholic schools, per se, although I think they are doing an excellent job of educating these kids.

TI: What’s at stake in this battle between the diversity push and the efforts to preserve philanthropic freedom?

DP: The focus needs to be on allowing the charitable and philanthropic sector to do the kind of work that it has historically done well. I think most people feel that philanthropy is far more efficient, far more focused, far more creative than the government mindset of just handing out money. Good philanthropy says: Let’s don’t give people fish, let’s teach them how to fish. Let’s help them become self-sufficient so they can improve their own lot in life and maintain their own dignity. There’s not a lot of dignity in just saying, “Here, here’s a check.”

So I think good philanthropy has built into it the consideration of how we help people improve their lives. That’s why Julius Rosenwald’s philanthropy had such an impact. There was a guy with a vision to meet a huge unmet need: We need more schools for low-income blacks trapped in the South. So Rosenwald had a real focus to address that, and then in doing it, he didn’t walk in saying: “I’m footing the bill; it’s all on me.” He said: “You guys need to be a part of it.”

And indeed they were. Sharecroppers even set aside plots of land called the Rosenwald patch where the cotton was sold to help pay for the Rosenwald school. It was a magnificent effort. It’s the same thing Habitat for Humanity does. People are part of the effort; it’s not just somebody coming in and then walking away.

If you look at the successes of American philanthropy, it is rather impressive. It’s really a wonderful story: in no particular order, education reform, schools for blacks in the segregated South, AIDs research, the Polio vaccine, public libraries, even the white lines on highways. These are not Left/Right kind of issues. These are things that have made us better, and I’m glad there was not a U.S. Department of Philanthropy to regulate this effort. Can you imagine that?

Here’s an example of creativity. In 2007, Dick Farmer of the Farmer Family Foundation was reading in the paper about the need for a mobile health unit for veterans. Dick has always had a big heart for veterans. He is a former Marine. So the following day, he took the idea to the foundation’s board. They made a decision right there: We’re going to do this. $313,000. Done.

The van is now going around this area for people who are unable to get to the hospital and to the veterans administration. This van will give them physicals, dental exams, and help with referrals to the appropriate VA facility. The veterans can get walkers; they can get wheelchairs. The van is one of only six such units in the VA system. The guy reads the article, and the following day he says: “Let’s do it.” Can you imagine a stratified bureaucracy making that kind of decision? No wonder Americans celebrate the creativity, flexibility, and generosity of American philanthropy, and that’s what’s at stake in this battle.

TI: What do you think of this argument that the tax exemption for charities amounts to tax revenue forgone, and therefore more government over-sight is justified?

DP: Government has got to be clear on the rules. Historically, the premise was this: In return for receiving a tax exemption to go into the charitable arena, one had to spend the money on the charities and activities for which it was intended and one could not enrich himself or his friends in the process. So the need for oversight is very much appropriate and very much necessary.

But I think there is confusion here. We are not receiving subsidies. The exemption is obviously designed to encourage greater charitable activity in the same way that those of us who have IRAs and 401(k)s receive a tax exemption—it’s an encouragement to save for our retirement and for the future, but that does not mean the government owns your IRA.

TI: The National Committee for Responsive Philanthropy (NCRP) has issued a report, “Philanthropy at Its Best,” that proposes a number of benchmarks for foundations, including that 25 percent of grant dollars should be directed toward community organizing activism. Isn’t it fair to say that what that group wants is to redirect funds toward groups that share their leftwing political views?

DP: What’s interesting in all this is how nonpartisan the response from charities and foundations has been. I don’t see this as a Left/Right debate. I see this as a good philanthropy versus poor philanthropy discussion.

I don’t know what NCRP truly thinks in private, but my guess is they’ve been disappointed by the response, because when you go down the checklist of influential philanthropic associations, their silence or their opposition to a number of the ideas has been rather compelling. Paul Brest, president of the Hewlett Foundation, has been eloquent with his concerns, and Paul’s not labeled a conservative.

The list goes on. The Council of Foundations—nobody has ever accused that of being a conservative organization—has had opposition to the report. The Association of Small Foundations has come out against a lot of the things in the report. The Independent Sector has not endorsed this report.

TI: What do you want people to understand about how good philanthropy works?

DP: Two comments jump into my mind: One is Martin Luther King’s “the fiery urgency of now.” Philanthropists think: “We got a problem now; let’s work to solve it.” And the other is Thomas Jefferson’s “One man with courage is often a majority.” Julius Rosenwald was one committed man; he said: “Let’s do it.” Dick Farmer said: “Let’s do it.” Don Fisher said: “Let’s do it.” It wasn’t: “Well I got to get a commit-tee; I got to get approval from the government.” There’s a whole different theme here. Those are priceless descriptors of what good philanthropy looks like.

The Vision Thing: What Makes Conservative Philanthropy Work

by William Schambra

WERE YOU TO BELIEVE THE COMMENTATORS, conservative philanthropy has been astonishingly effective, almost invincible. So it’s no surprise that it has given rise to a mi-nor industry in books on the topic. I suppose we should be flattered. But the books unhappily tend to bear titles like Justice for Sale; Buying a Movement: Right-Wing Foundations and American Politics; Axis of Ideology: Conservative Foundations and Public Policy; Who Is Downsizing the American Dream?; and No Mercy: How Conservative Think Tanks and Foundations Changed America’s Social Agenda.

As the titles suggest, the authors of these books are not crazy about the ends of conservative grantmaking. But they do tend to admire our means—the technology of our grantmaking, divorcing it as much as possible from the unpleasant purposes to which it’s put. That’s sort of like turning to Benito Mussolini, the fascist who famously made the Italian trains run on time, to give you some tips on railroad management techniques.

But there’s nothing magical or mysterious about the way conservative foundations go about their grantmaking. Here’s the National Committee for Responsive Philanthropy’s list of our allegedly fail-proof techniques. Conservative foundations are effective because:

  • They focus grants on a “small number of grantees … all working toward a common goal”;
  • they frequently make grants for general operations, rather than for specific projects, thus permitting grantees flexibility while avoiding heavy-handed foundation scrutiny;
  • they are in it “for the long haul,” often renewing grants to the same groups for many years;
  • they fund efforts that affect all stages of policymaking, including agenda-setting, public mobilization, media coverage, and regulatory and legal challenges; and
  • their staff and boards share with their grantees an “organic alignment and cohesion” so deep as not to require “deliberate coordination.”

Tying all these together, notes NCRP’s Sally Covington, conservative foundations “bring a clarity of vision and strong political intentions” to their grantmaking. Or, as NCRP’s then-executive director Rick Cohen noted at a March 2004 Hudson Institute event, “the grantmaking of these [conservative] foundations adds up to a concerted theme, a concerted strategy.”

As I say, there’s no magical technique here that wouldn’t be familiar to any campaign organizer. But I don’t think you can fully understand the means we use until you understand the purpose or goal they serve. For having a powerful sense of purpose—a unified, coherent, overarching vision or theme—is indeed at the heart of conservative philanthropy.

What is that vision or theme? It isn’t, as some suggest, the perpetuation of a racist and imperialist plutocracy. It is, rather, an attempt to understand and preserve the American regime of liberal democracy, in the face of powerful intellectual forces that have pulled us away from that commitment.

This requires an effort to return to the principles of the Declaration of Independence and its doctrine of unalienable and equal rights to life, liberty, and the pursuit of happiness. It requires as well a return to the principles of the American Constitution, whose institutions were intended to secure individual rights while ensuring the consent of the governed.

To be sure, a free market economic system, a strong national defense, and a limited government are pieces of this vision. But the preservation of liberal democracy re-quires so much more. It depends as well on a range of cultural attitudes and moral and religious virtues that flow from and help reinforce liberal democracy. These include personal responsibility, diligence, honesty, moderation, generosity, tolerance, and reverence.

Those attitudes and beliefs are cultivated within small, local communities—communities like neighborhood groups, religious organizations, and ethnic, fraternal and voluntary associations of all sorts. There individuals learn to exercise rights and meet obligations, sustained and shaped by friends and neighbors.

There they learn to transcend simple individualism by forging a sense of community membership, belonging, and moral solidarity.

As Alexis de Tocqueville argued in his magisterial Democracy in America, these local groups are the critical schools of citizenship within which Americans learn the skills of self-government, upon which the entire edifice of liberal democracy rests.

In the conservative view, America has gotten away from these bedrock principles.

About a century ago, the modern progressive movement came to view individual rights and local communities as backward, parochial, and irrational. They only gummed up the works of the smoothly humming machinery of public affairs, crafted according to the new sciences of society.

Those sciences taught us how to organize and engineer human affairs in a rational, objective, coherent fashion, reaching beyond the weltering confusion of partial, local interests toward a unified public interest. But such progress required the transfer of authority from local communities to the hands of professional elites trained in the new sciences of society.

The first large American foundations—Carnegie, Rockefeller, and Russell Sage—were enthusiastic supporters of this view. So their early grantmaking focused on reforming and rationalizing the elite leadership professions of American public life—medicine, law, education, and public administration.

They also established research universities and policy institutions like Brookings and the National Bureau of Economic Research. They would provide the nonpartisan, objective research necessary to expand scientific management of public affairs by rationalized, centralized social service bureaucracies.

Today, the progressive vision dominates American elite politics and culture. Sprawling social service and educational professions, well-endowed universities, and vast government agencies have been built around this idea of a coherently and scientifically administered national community, replacing the incoherent and chaotic collection of local communities.

Occasionally, the arrogance of the progressive vision becomes a bit too apparent, its edicts and mandates too abusive, its attitude toward guns and God too visible.

Then, the America of local communities, individual rights, and personal responsibility—the America of Wasilla, Alaska—may strike back. But even in times when conservatives control the top elected positions, beneath the surface, the progressive elites maintain their quiet hold on public policy.

Conservative philanthropy understands itself to be engaged in an attempt to scrape away decades of misguided social engineering inflicted on America by its elites. The objective is to restore the original view of constitutional liberal democracy buried beneath a lot of very bad progressive remodeling.

That means that it must fight a pitched political battle against bureaucracies manned by well-entrenched professionals in an attempt to restore the regime of individual rights and local community.

This is how the Bradley Foundation in Milwaukee, where I worked for a while, viewed its grantmaking in the two areas where it seems to have had some lasting effect.

In welfare reform, the foundation aimed to re-invigorate the welfare state’s seemingly passive, helpless clients, restoring them from dependence on social service providers to their full status as self-governing citizens.

Its education voucher program likewise intends to shift control of schooling away from the failed bureaucratic behemoths of public education and back to parents, neighborhoods, and voluntary associations.

Both of these battles were waged in the face of massive counterattacks by the teachers’ unions, the social service bureaucracy, the state universities, and the media elite—to say nothing of hostile national foundations many times the size of Bradley.

Only now that you’ve learned a bit more about the purposes of conservative philanthropy—its why—can you understand its tactics or techniques—its how.

Conservative philanthropy may think big, but it must “act small.” It may have a grand ultimate objective in mind, but it formulates its immediate tactics understanding that it is pitted against some of the strongest intellectual currents and establishments of our time.

It does not believe for a minute that it is the all-conquering behemoth depicted in the progressive literature. It knows, rather, that it is a tiny, beleaguered minority within the national elites, a ragtag, outgunned guerilla unit harassing the flanks of a vastly superior establishment, a David versus a Goliath.

So it must necessarily remain humble and realistic in its immediate goals. Most of the time, it understands, it is not going to make visible, substantial, or conspicuous progress in this struggle—and certainly not over the short term.

Indeed, the best it may be able to do is only modestly to retard some of the trends it regards as harmful, only modestly to boost some of the trends it regards as beneficent.

Even those opportunities will be few and far between. They can be found only by an acute, thoughtful, and ever-vigilant awareness of trends, institutions, and actors across the full range of politics, economics, and the culture.

Those opportunities will often be encountered in the unlikeliest of places. Somewhere deep within the liberal elite, a tiny movement of internal protest against one of its worst tendencies may be astir.

Although that protest may remain solidly liberal in all other aspects, nonetheless, its dissidence helps highlight a tension or contradiction within liberalism.

It may slow down just a bit, perhaps even just for a moment, its relentless growth.

The wise conservative philanthropy, through diligent scanning of the intellectual horizon, will be aware of that movement and will quietly do what it can to encourage it, though it be otherwise considerably at variance with doctrinaire conservatism.

This self-understanding by conservative philanthropy explains why it must take a long and flexible view in its grantmaking. It understands there are only a limited number of organizations with the commitments, attitudes, and skills necessary to sustain the conservative vision under such trying circumstances.

When it finds them, it often provides them with general operating support, be-cause any intellectual guerilla struggle must remain supple, agile, and adaptive, not strapped into a cumbersome and detailed contract for a specific, pre-ordained project.

Conservative philanthropy tends to support its groups over the long haul—to renew support year after year—because for this cause, the long haul is all there is.

It’s highly unlikely that tangible results can be produced year-to-year or that substantial, short-term benchmarks or goals can be met, much less calibrated along an elaborate system of metrics and measurable outcome. So why bother with that farce in the first place?

Indeed, in general, conservative foundations tend not to share the immense fascination of their mainstream counterparts with multiplying, fine-tuning, and elaborating the procedural niceties of making, measuring, and monitoring grants.

All that fuss is time taken away from the vastly more important and complex task of attempting to spot, in the sprawling hinterlands of public policy, the rare and obscure opportunity to make a difference for the cause.

It’s no accident, then, that conservative program officers are almost always trained in the liberal arts traditionally understood, with their grand vistas of politics, history, and diplomacy. The technical intricacies of double-bottom-line grantmaking? Not so much.

It should also be clear by now why conservative foundations don’t talk a great deal about another preferred approach among mainstream foundations, namely, promoting social change through partnering and leveraging and collaborations and consortiums.

The bureaucratic institutions currently in charge of failed social systems, staffed by hundreds of thousands of professionals, lavishly funded with billions in public funds, will never be reformed by a few pathetic grants that seek to “bring everyone to the table to agree on change,” as the saying goes.

Oh, they’ll be happy to come to the table, but only if they can be sure they can quietly siphon off the grant money toward the same failed bureaucratic formulas.

Conservative philanthropy, by contrast, isn’t hesitant to take on frontally—rather than to try to bribe—the status quo. But this means that conservative philanthropies can-not be in the business to bedeck their hallways with humanitarian-of-the-year plaques. The people who give those awards are typically the ones with the most powerful stake in preserving the status quo.

Effective conservative grantmakers must resign themselves to sustained abuse from the opinion Elites. If you doubt this, just compare Google results for, say, the Gates Foundation and the Bradley Foundation. We’re invariably treated as hopelessly reaction-ary and mean-spirited opponents of human progress. This is not grantmaking for the faint of heart or uncertain of purpose.

Now, say what you will about conservative philanthropy’s self-conception—its self-image as an embattled, beleaguered guerilla movement struggling to restore liberal democracy in the face of massive, entrenched elites. Call it exaggerated, misguided, apocalyptic, or paranoid.

But I think you would have to admit that this worldview of unremitting political struggle keeps conservatives on their toes—hungry, flexible, and opportunistic. There is no time for complacency or self-satisfaction when the goal is so substantial and distant, the opposition so substantial and immediate.

I think this helps explain why so many mainstream foundations don’t feel any sense of urgency about funding advocacy efforts. They continue to operate as if things haven’t changed that much since the early 20th century, when they were at the helm of a new and powerful social science establishment and could steer it at will with their grants.

They still view public life as a complex technical puzzle to be analyzed and solved piecemeal by social science experts, designing and evaluating specific projects, making concrete, incremental progress easily assessed by measurable outcomes.

Thus they continue with narrowly focused, short-term, project-based grantmaking, dispensed with an attitude of unrealistic and arrogant expectation.

And given the role foundations played in the upbuilding of the powerful institutions of progressive policy, it’s perhaps understandable that they still think they can single-handedly rally them to pursue change with high-minded calls for partnerings and collaboration.

There is no awareness that foundations have become bit players on the policy scene, providing but a pittance of funding for, and enjoying but a fraction of influence over, the professional elites they once did so much to establish.

There is no awareness that these putative partners for change are in fact the entrenched guardians of the status quo.

There is no galvanizing sense of political struggle, because for the mainstream foundations there is no struggle.

Comfortably ensconced in the high-rises of elite society, they go through a sad, self-deceptive charade, pledging grand, daring root-cause solutions, while in fact funding the same old constricted, timorous efforts to fine-tune the derelict approaches of the past.

Meanwhile, they make ever more onerous and exasperating the procedural hurdles required to win even the smallest and most short-term of grants. This is a smug, complacent, self-satisfied kind of philanthropy, with no appetite or aptitude for the sort of political struggle waged by the conservative foundations.

Now I should provide a handy checklist of tips for doing advocacy, based on conservative philanthropy. But I can’t do that.

As I have explained, the tactics of that philanthropy flow from a specific and en-compassing view of American political life, of our liberal democratic regime, and of progressivism’s departure from it.

Anyone can imitate the specific tactics that have been discussed so widely. But that doesn’t provide the impetus or energy required to pursue those tactics with any vigor. For conservatives, that impetus comes from our broader sense of an enduring struggle to restore the Founders’ regime.

This means we have a large and demanding purpose, along with the realization that its achievement is a long way off, requiring unrelenting combat with some of the most powerful elites in American politics and culture.

This kind of grantmaking requires a high tolerance for criticism and abuse; for failures and reversals; for small, immeasurable, delayed indications of progress that may in fact be nothing more than slowing down an unfavorable trend, of which there will be many.

But behind the long, twilight struggle there is, as Cohen and Covington note, a unified, coherent, overarching vision or theme—the sense that this is not only an important goal, but indeed the most important goal for friends of liberal democracy—which finally makes it all worthwhile.

I will make this one simple suggestion to you, if you wish to get into advocacy: Don’t assume there’s any magic in getting the tactics right.

Find yourself instead an overarching vision of America, one reflecting its better angels, which will ultimately make the hard work and the hard knocks worthwhile.


Mr. Schambra is the director of Hudson Institute’s Bradley Center for Philanthropy and Civic Renewal. This article is adapted from remarks given by Mr. Schambra at the Colorado Association of Foundations Workshop on Advocacy, September 12, 2008.

How to Embrace the Internet as a Sustainable Source of Revenue

by David All

IN THE LAST PRESIDENTIAL RACE, we saw Republican Ron Paul break single-day fundraising records by hauling in more than $6 million on December 17, 2007. That feat was termed a “money bomb.” Similarly impressive, Democratic candidate Barack Obama opted out of public financing because he could call on more than 2 million low-dollar donors who consistently dug into their pocketbooks for their credit cards to give to his cause. Obama ended up raising over $750 million during the campaign.

In both cases, the Internet played a central role in helping candidates reach new heights in fundraising.

Indeed, as more Americans turn to the Internet to do everything—from online banking to shopping to supporting causes—nonprofits would be wise to immediately em-brace the Internet as a sustainable source of revenue. By doing so, they would ensure their continuity, longevity, and relevance in the modern world. Ignoring the Internet would result in a diminished ability to make an impact and a slow decline in support.

For the past few years, organizations willing to truly embrace the Internet have seen a welcome spike in online giving. In fact, according to a study released by The Chronicle of Philanthropy, “Online giving to the nation’s largest charities continued its steep ascent in 2006. … Electronic gifts to the 187 organizations that provided figures for 2005 and 2006 grew by 37 percent, from $880.7 million to $1.2 billion. Online gifts grew by more than 50 percent at 85 organizations. Of those, 34 saw Internet gifts more than double.”

So how can nonprofits effectively embrace the Internet to garner online support?

Know Your Online Role

First and foremost, nonprofits need to understand the valuable role they play in the lives of their members and supporters. Nonprofits focus like a laser on a niche—specific issues that someone somewhere cares about. The nonprofit has a focus, a message, and a cause. By and large, supporters of a nonprofit want very little in return for their support. They give because they believe in the organization’s ability to affect the cause.

To that end, nonprofits should communicate with their supporters on a regular basis to keep supporters reminded of why they signed on to support the cause in the first place. The two primary ways that online supporters choose to get communications is through a Web site and by e-mail.

An Authentic Web Site Matters

So let’s consider your Web site, the first face of your organization. As op-posed to simply being a static, glossy online flyer, your Web site should be dynamic, authentic, and current. It needs to be a friendly environment that encourages folks to sup-port and participate in the cause. Show people the good work you’re doing and talk about it on a blog or through a video. Challenge your online activists to participate in competitions by sending in videos or short essays discussing why they support the cause. To someone who stumbles upon your Web site, user-generated content means that real people actually care about the cause, too. To current supporters and members, it means that they’re a part of something much larger than themselves and it gives them a reason to check the Web site on a regular basis.

The content on your Web site should engage your audience and make them want to learn more about the cause. Provide snack-sized entry points to help users easily understand the breadth of your organization and give them a chance to click a link to find out more about their area of interest.

Build the E-mail List Today for Tomorrow

Nonprofits have long understood the importance of building and maintaining data lists for telemarketing and direct mail efforts. However, too often organizations discount the value of an e-mail address because they don’t know how to get the information or what to do with it when they have it.

Obviously, your Web site should be equipped to capture e-mail addresses for supporters volunteering it. Every single page on your Web site needs to provide a place for a potential supporter to sign up for your e-mail list. Links passed around among friends via e-mail—with a “check this out” note—may not always take the person to your homepage but rather to a report or blog post. If there is an opportunity to sign up for your e-mail list on every page, people will sign up.

Beyond your Web site, you should build micro-sites to run on specific, hot but-ton issues like online petitions to help build support. You can send links to these sites to your current e-mail list or invest resources into online marketing to drive eyeballs of potential supporters to sign up for the cause.

Manage Your E-mail List

Nonprofits should not abuse an e-mail list by sending valueless e-mails. A wise marketer once said, “Only send an e-mail if you have something important to say.” The general rule of thumb is to send one e-mail per week that is concise and reminds us-ers with a light touch of the good work being accomplished for the cause. It doesn’t have to be lengthy—if bullet points get your activities across, then everyone from a busy executive to a hometown teacher will appreciate your brevity.

Modern e-mail delivery systems provide senders a huge amount of tracking in-formation after an e-mail is sent. You can often find out such valuable information as which users opened your e-mail, clicked on a link, or forwarded the e-mail on to their friends. Compare those lists to who gave you an online donation and segment the lists accordingly. In other words, the person who opened your e-mail, forwarded it to five friends, clicked on a link, and made an online donation is a key supporter or “power user.” That person should receive special, personal notes from the organization on a frequent basis. They want to hear from you often, and you need to fulfill that expectation.

Kick-Start Your Online Fundraising

1. Consider your site as what it really is now—the first face people might see of your organization. Is it a destination you’d want to stay at? Does it need a face-lift? Is there a place where users can make themselves accessible to you (an e-mail capture, a sign-up space, and advocacy opportunity)?

2. Create a special site or section of your Web site for donors that provides them with special, regularly updated content, with personal messaging and an easy way to donate.

3. Focus on the goals and essential message that got the donors in the door initially. Ideas are still key to “money bombs.”

4. Consider online advertising as a kick-start if online outreach hasn’t been a priority. Initially, take advantage of search engines by buying your organization’s name as a set of search terms; doing so betters your online credibility.

Don’t Ignore the Internet

No matter what you do, don’t ignore the most flexible, viable medium for interacting with people and developing a proven potential donor base. Nonprofits are the push behind ideas, and if you win hearts and minds online, you’ll win donor dollars online and offline.


Mr. All is the President of David All Group LLC (http://davidallgroup.com), the nation’s first conservative Web 2.0 agency. In October, he was named one of the “Top 10 Changing the World of Internet and Politics” at the World e-democracy Forum in Paris, France.

 
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