REECE COMMITTEE REPORT
ON TAX-EXEMPT FOUNDATIONS
Published December 20, 1954, the Reece Committee Report on Tax-Exempt Foundations was widely publicized as a bomb- :>r su
shell. FACTS FORUM NEWS for November, 1954, had anticipated some of this effect in printing speeches in Congress of aetioi
Committee Chairman Carroll Reece and Ranking Minority Member Wayne L. Hays, who have been severely critical of each
other. Following are excerpts from: (1) formal findings of the Committee, (2) supplemental statement by Chairman Reece.
(3) views of the Minority, (41 a sample of facts presented in the Report.
From the Report, pp. 16-18
The Committee finds as follows:
* * * * »
The power of the individual large
foundation is enormous. It can exercise
various forms of patronage which carry
with them elements of thought control.
It can exert immense influence on educational institutions, upon the educational processes, and upon educators. It
is capable of invisible coercion through
the power of its purse. It can materially
predetermine the development of social
and political concepts and courses of
action through the process of granting
and withholding foundation awards
upon a selective basis, and by designing and promulgating projects which
propel researchers in selected directions.
It can play a powerful part in the lie-
termination of academic opinion, and,
through this thought leadership, materially influence public opinion.
This power to influence national policy is amplified tremendously when
foundations act in concert. There is such
a concentration of foundation power in
the I nited States, operating in the social sciences and education. Il consists
basically of a group of major foundations, representing a gigantic aggregate
of capital and income. There' is no conclusive evidence that this interlock, this
concentration of power, having some- of
the characteristics of an intellectual e artel, came into being as the result of an
over-all, conscious plan. Nevertheless, it
exists. It operates in part through certain intermediary organizations supported by the foundations. It has ramifications in almost every phase of research and education, in communications and even in government. Such a
concentration <>f power is highly undesirable, whether the net resull of its
operations is benign or not.
Because' foundation funds arc public
funds, the trustees of these organizations must conscientiously exercise the
highest degree of fiduciary responsibility. Under the system of operation
common to most large foundations this
fiduciary responsibility has been largely
*S3d Congress. 2d Session, line si Hi poKT
IV o. 2681.
ways, first, n
trustees have all
abdicated, and in two
fact if not in theory, th"
loo frequently passed scelelv upon general plans ami left the detailed administration of donations (and the consequent selection of projects and grantees i
—Wide World Kholo
Rep. B. Carroll Reece, (R-Tenn.)
to professional emplovees. Second,
these irustc-c-s have all ton often delegated much of their authority and [unction to intermediary organizations.
A professional class ol administrators
cef foundation funds has emerged, intent
upeeii creating and maintaining personal prestige- and independence "I action, and upon preserving ii- |"esiiicm
ami emoluments. This informal "guild"
has already fallen into many of the vices
of a bureaucratic system, involving vasl
opportunities for selective patronage,
preference and privilege. Il lias already
come to exercise a very extensive, practical control over most research in the
social sciences, much of out educational process, and a good part of government administration in ilu-se and related fields. The aggregate thought-
control power of llii- foundation and
foundation-supported bureaucracy can
hardly be exaggerated. \ system lias
thus arisen (without ils significance l»"-
ing realized by foundation trustees)
which gives enormous power to a n-la-
lively small group of individuals, *°l"i<
ing al their virtual command. In
in public- trust funds. Il is a -l '"' .
which is antithetical to American P0'1'.1
The far-reaching power of the'
foundations and of the- interloc
influenced the press, the radio, am .f
tin- government that il has bc'1"^rust
Iremely difficult for objective ''''"
of foundation practices to gel in'0
channels without having first bed1.1!1""
ii.iic-il. slanted, discredited, and at£ror
the pressure against Congressiofi]
vestigation has been almost incfl
\s indicated by their arrogance '"I""1/
idic-uled. Nothing short of an '"J aJ
leied Congressional investigation ,
ing v\iih this committee, the major
dations and their associated intenj
ary organizations have intrenched
sc-Im-s behind a totality of powel
presumes to place them beyond
criticism and attack.
Research in the social sciences
a key pari in the evolution of °,
cie-lv. Such research is now
wholly in ihe conlrol of tin- P''"'('^orei
mployees of the large fuiindati'1" „ t
their obedient satellites. Kvcn the vni
sums allotted ley the Federal ""mpo
ment fur social se-ience research *n\e
come into the virtual control ° eese;
professional group. >f t
This power team has pr"'"'' '.';|
great exee-ss eel empirical resear<*lnt<
contrasted with theoretical n-' " a
has promoted what has been '"".'.r,m
irresponsible "fact finding mani-'- M
Inn- that a balanced empirical apl
is essential to sound investigati0 \ [
ii is equally true that if il is "" ' '
cienthe balanced and much-el "1
e ■ i e ■ e e -iW ^ *'
theoretical approach, il lc.nl- ' .
.. e e e e I' '" '
Irequently In what has be-"
"sc-ie-ntisin" in fake si'ic-iie-e
endangering our ~cn ic-i> upon (
quenl genera] acceptance as "si''''
fad. Il is ncil the part of Cong
dictate methods of research)
alertness by foundation trustees
dangers of supporting unbal
unscientific research is clearly '"'
Associated with the excessive !
of the empirical method, the <'ntl i^i;
FACTS FORUM NEWS, Janua<4