The Conservative Organizational Entrepreneur Back
In 1965, experienced conservative friends much older than I advised me there was no way to earn a living doing what I wanted to do, work full time for conservative principles. Though filled with good intentions, they were wrong.
This presentation explains how you can do what I eventually did: create an effective organization for your public policy activities. It describes your options: what kind of activity; what type of group; when to start it; how to structure it; how to staff it; how to fund it; how to help it grow. I also point out mistakes to avoid.
Business entrepreneurs make things happen. They create most of the innovations, growth and jobs in the economy.
Who makes things happen in public policy?
Some people are self-starters who occasionally act independently in politics. They write letters to the editor without being asked. They create homemade signs for candidates of their choice. They call in to talk radio programs to persuade others to support or oppose specific candidates or bills before the Congress or a state legislature. They try hard to teach their children to be good citizens. They spontaneously ask their family and their friends to vote a certain way in a coming election.
If enough people acted independently in public policy battles, they could have decisive impact. But few people are self-starters.
In politics, nothing moves unless it's pushed.
Given time, the outcome of political contests is determined by the number and effectiveness of the activists on the respective sides.
Political parties, candidates for election, legislators pushing their policy agendas and journalists with axes to grind are not the only brigades in battles over public policy. Other sources of political communications and political organization are often called "special interests," a pejorative term.
So-called "special interests" apply their resources to the public policy process and often make things happen. They come in many categories.
Organized labor gets much of its strength from compulsory union dues.
Many politically active non-profit groups on the left get their money largely from government bureaucrats in the form of grants from taxes collected from taxpayers under compulsion.
Organized crime buys some of its undoubted political clout with money derived from types of extortion like protection rackets and activities such as the fencing of stolen goods.
Almost all other politically active groups depend on voluntary contributions, the way things ought to be.
While most of us would object to compulsory funding of any political activity, no one should question the legitimacy of public policy activities funded by voluntary contributions. The right of association is guaranteed by the U.S. Constitution. Despite some government-imposed restrictions, Americans are and ought to be free to join together for political purposes and to contribute their time and resources to candidates and causes of their choice.
Far more than citizens of any other country, Americans act politically through voluntary, non-partisan private associations.
Politically influential private organizations can be liberal or conservative. They can be political action committees, lobby groups, tax-exempt educational groups, professional or trade associations or other types of groups. Some are large; most are small. Many are old; some new ones are created each year.
The Organizational Entrepreneur
Some well-established, broadly-based membership organizations change leadership frequently through periodic elections. But most politically effective groups in America today are headed by the single individuals who created them or who built them to their current levels of effectiveness. I decided some years ago to call such people organizational entrepreneurs, a useful description of an important category of activists.
Organizational entrepreneurs, unlike commercial business entrepreneurs, do not "own" the organizations they head. Most organizations active in politics are incorporated as non-profit groups. By law, ultimate management authority must reside in each group's board of directors. But even though such non-profit groups elect officers through periodic elections by the membership or by a stable board of directors, it's obvious that each is run by a single individual who calls the shots.
Reed Larson is the organizational entrepreneur of the National Right to Work Committee. Ed Feulner has that role at the Heritage Foundation, Paul Weyrich at the Free Congress Foundation, Phyllis Schlafly at Eagle Forum, etc. In each case, their organizations are a major part of their lives' work. The groups they head succeed or fail based on their leadership and, for most practical purposes, are their organizations.
In many ways, a new organizational entrepreneur is analogous to a business entrepreneur who starts a small business. Like a small business, an organization can sometimes develop into quite a big and powerful institution.
Most conservative organizations which gained real clout in the last thirty years are still operating under the same leadership. Phyllis Schlafly is the founder of the Eagle Forum. It is her organization. Reed Larson didn't found the National Right to Work Committee. But he got involved when it was relatively small and built it into a powerhouse. It became his organization.
Young conservatives should consider the option of some day becoming organizational entrepreneurs themselves.
There are possibilities now; there will be possibilities in the years to come for creating successful public policy groups.
Since I moved to the Washington, D.C. area in 1965 to be executive director of the College Republicans, I've known many of the people who have set up and built public policy-related, non-profit organizations. I've observed them and worked closely with many of them. Some fell flat on their faces. Others grew to be enormously effective.
As for myself, the principal group of which I am the organizational entrepreneur is the Leadership Institute, which I founded in 1979. I supervise it under the general management of its board of directors. In that sense, and only in that sense, it is my organization. The Institute each year now (2002) trains over 3,000 students and raises over $7 million.
Growth is not inevitable, nor is it unlimited. Any organization, no matter how well it is run, tends over time to reach a plateau. In its early years, it might achieve a considerable annual percentage of increase, growth at a rate that cannot be sustained forever.
The proliferation of successful conservative organizations is responsible for the growing strength of the conservative movement in the public policy process since the early 1970s.
Heads of existing groups often aren't happy when another group is formed to do somewhat similar work. But the creation of multiple groups under different leadership, all active for similar causes, is generally helpful for those causes. Some donors will like the approach of one group better than that of another group which is working for almost exactly the same issues. Some people will like and trust the head of one group better than they will the head of a similar group.
Multiple groups with the same or similar messages reinforce each other and make each others' activities more credible in the public policy process.
Very rarely are existing groups doing all that can be done for their causes. Often a new group brings novel, useful ideas to the policy battle; competition usually makes everyone more efficient. Creation of more groups active for a cause increases the number of donors and volunteers activated for that cause.
Issue Focus Helps Organizational Growth
Some of the most important lessons of political activity are counter-intuitive.
For example, an organizational entrepreneur should know, although most people would guess otherwise, that a new issue group narrowly focused on a cluster of related issues has more potential for growth than a group concerned about a wide variety of issues.
By the way, "single issue group" is usually not a true description. "Focused issue group" is almost always more accurate, as well as being less pejorative.
Why does an organization focused on a cluster of related issues have a greater potential for growth in number of members, number of donors and revenue than one with a wide range of policy interests?
Think about how you personally react to direct mail you receive from a politically active organization you've never contributed to before. Perhaps you've never heard of the group. You quickly screen the envelope and its contents. If you disagree with almost anything you see, you probably throw away the invitation to join the group or to contribute to it.
If I received a letter from a new group which had as its advisory committee Sen. Rand Paul, Rep. Jim Jordan and Sen. Charles Schumer, the chances are I'd suspect that group wasn't likely to do much for any conservative cause. As much as I love those two conservatives, Senator Schumer's involvement would raise a big question.
The three might have joined to raise funds for some disaster relief effort, but it's unlikely they'd have any common political agenda. If my interest that day was to affect public policy, I'd toss the letter. But a group endorsed only by Sen. Paul and Rep. Jordan, without Sen. Schumer, would surely be attractive to a greater number of conservative activists.
As with multiple politicians on a list, so with multiple political issues in an organization.
Many people are vigorously in favor of the right to work. Many keenly support the right to keep and bear arms. The National Right to Work Committee (NRTW) has 2.2 million members; the National Rifle Association (NRA) has over 4 million members. But if you created an organization that had, as its two issues, the right to work and the right to keep and bear arms, your new group wouldn't have the potential to grow as large as either NRTW or NRA.
Anyone who disagreed with your new group on either one of these issues probably would not be interested in joining.
Focus a policy group narrowly if you want to maximize its potential for growth.
There are groups which are conservative across the board, on almost every issue. Such groups can serve good purposes and can be useful in forming and coordinating coalitions and movements. But smart people have tried for many years to build mass-based groups which trumpet conservative views in every area of public policy. That doesn't work.
The American Conservative Union (ACU) was founded more than 35 years ago. I've been an ACU director for many years. It has done good work. It was intended to be a mass-based group which is conservative on everything. But it never has had a mass-based membership which is conservative on every issue. Through most of its existence, it has been small in terms of budget and in terms of number of members, as compared to some other groups which focus on a cluster of related issues.
Your Organization's Mission
If you plan one day to become an organizational entrepreneur, try to think like an inventor. Ralph Waldo Emerson said, "If a man write a better book, preach a better sermon or make a better mousetrap than his neighbor, though he builds his house in the woods, the world will beat a path to his door."
Emerson suffered from a misunderstanding which frequently misleads intellectuals. Being right, in the sense of being correct, doesn't mean you necessarily win. The success of a book, an organization or a mousetrap depends in large part on skillful marketing. But intrinsic merit certainly makes any new project more likely to succeed.
Think of an important kind of activity which should be done but is not now being done. Or a kind of activity already being done which you could do better.
When I founded the Leadership Institute in 1979, almost every other conservative educational foundation focused on issues and philosophy. That's wonderful work. I wish more of it were done. I benefit greatly from education from such foundations. The Leadership Institute does a little of such work, but education on issues and philosophy is not its primary role.
The mission of my foundation is very clear: to locate, recruit, train and place people in the public policy process. Conservatives are more successful as the number and the effectiveness of conservative activists increases across America.
Donors understand what I'm doing. They may support several foundations which specialize in issue and policy education, but they clearly see the uniqueness and the importance of the Leadership Institute.
I often give my students good books which cover issues and philosophy. I recommend many books and periodicals to them. But I focus on identifying, recruiting, training and placing people. Nobody else was doing just that. There was a market for the product of my new organization.
Think of an area of activity where more or better work should be done. Be able to express your group's mission in a short, clear statement. In marketing, this is called finding your niche.
It doesn't make much sense for you to try to start a group if there already is a nationwide organization doing a first-class job performing the same mission. It would probably make no sense at all for you to decide, "I'm going to create a rival to the National Right to Work Committee." The National Right to Work Committee does a great job of grassroots lobbying. But there are not many such examples.
You might consider a type of activity in which existing groups do things but the demand for that kind of work exceeds the supply. If existing non-profit groups aren't even close to doing all that needs to be done, you might be able to bring extra resources to the policy battle by starting a new group.
If your prospective new group's work is to be one of the main projects of your life, and it should be, make sure you have a strong and abiding interest in what it will be doing.
Consider also whether or not the problem you plan to address will remain important.
When I was a child, even grammar school students went door to door with great enthusiasm to raise money for the March of Dimes. Stopping infantile paralysis, the dreaded polio, was a hot issue because most people knew victims of that disease who died or were crippled.
When Dr. Salk and Dr. Sabin discovered vaccines which could prevent polio, the March of Dimes had a problem. A nice problem, but a problem nonetheless.
They had completed their well-known mission. Their officers decided to adopt a new mission, fighting birth defects, another good cause but one which has never captured the public imagination as did the fight against polio. However, birth defects will probably never be entirely eliminated, so they'll never have to start from scratch again with a new mission.
At a Leadership Institute school many years ago, some students working on an exercise came up with the idea of creating a new, national organization to fight the then-federally-mandated, nationwide traffic speed limit of 55 miles per hour.
I commented at the time that such a new group would attract a lot of support because millions of people, especially in the West, were outraged at the mandatory 55 miles per hour national speed limit. But I predicted that such a group wouldn't last long, because, new group or not, public outrage would force a change in the law. Not long later, the law was changed, without the help of the proposed new group.
You shouldn't create a group which won't last long if it probably can't make any difference in the course of public policy.
Should you create a local, state or national organization?
While there are exceptions, such as the growing number of effective, state-based think tanks, most successful groups built by organizational entrepreneurs are national organizations. In a big state, it can be done. Gun Owners of California was a power in California before its head, H. L. "Bill" Richardson, founded Gun Owners of America. His national group quickly grew much larger than his state organization. For most public policy purposes, it's easier to raise money nationally than within a single state.
Local and state activity is essential, but a national group can draw resources from all across America, employ competent, full-time staff and focus its major efforts in those locations where it can do the most good.
Many national groups establish state groups based largely on volunteer activists. Two merits of such state organizations: It costs less to make things happen at the state level than at the national level; a national group's staff can gain expertise in the dynamics of the political process more quickly in many state efforts than it could by working the same length of time in the relatively fewer and less varied opportunities at the federal level.
If you form a group limited to your state, be prepared for your new organization to remain a useful and cherished hobby. Seldom do state groups have enough revenue to provide a living for those who found them; they tend to remain always labors of love which can't afford efficient offices and paid officers or staff.
There's nothing wrong with strictly volunteer conservative organizations. They do much good. God bless them; may they multiply.
If you have a major donor willing and able to underwrite the major cost of a state organization, that's a different matter. That can work.
Categories of Organizations
If you decide to become an organizational entrepreneur, you have several different categories of organizations to consider, each with different functions and a different legal status. Among the principal categories are: a political action committee; a lobby, which is described in the Internal Revenue Code as a social welfare organization, a 501(c)(4) group; or a foundation, which is described as a public charity, a 501(c)(3) group.
Among foundations, there are various kinds, including:
• research foundations, which do research and publish the results
• legal defense foundations, which raise public policy issues in the courts
• political education groups, which teach people about issues and political philosophy or how to participate successfully in the public policy process
Some foundations combine two or more of these activities.
Foundations, lobbies and PACs all have their uses. Each can do things the others can't.
Foundations can take unlimited contributions, can make unlimited expenditures, can take contributions from individuals, corporations and other foundations and can provide individual and corporate donors tax deductions for their contributions. But foundations may not legally advocate for or against candidates or contribute to election campaigns, must disclose their major contributors and, except for a special category of foundation, may not carry on a substantial part of their activities attempting to influence legislation.
Lobbies can take unlimited contributions from individuals and corporations, can make unlimited expenditures to influence legislation and sometimes can keep confidential the identities of their donors. But a lobby may not contribute to candidates for public office at the federal level or in many states.
A lobby cannot provide donors with federal income tax deductions for their contributions.
A political action committee, at the federal level, may take personal contributions but not corporate contributions. The amount one PAC can accept per year per person is limited by law. And the amount one person can contribute to all federal PACs, all federal candidates and all political parties combined is limited by law. Such a PAC can contribute to federal candidates, but only in amounts limited by law. It can make unlimited independent expenditures for or against a candidate. It can spend money to influence legislation except that it may be required to pay a tax; few PACs lobby. Its donors get no tax deductions, and those who give more than $200 per year must be disclosed in periodic reports to the Federal Election Commission. State laws regarding PACs vary greatly.
An organizational entrepreneur needs a good lawyer to sort these matters out and to avoid legal problems.
You may have a friend in another group with a legal status analogous to the one you're forming, perhaps focused in another policy area. As a first step, you could go to your friend and ask for copies of that other group's organizational documents.
You must create and file articles of incorporation and file an application with the Internal Revenue Service for your chosen tax status. You may wish to apply to the U.S. Postal Service for a reduced-rate, non-profit organization mailing rate. And you may want to have these legal matters handled very quickly.
It's easier to do these things if some other group will let you review its organizational documents and the applications it filed with government agencies. Then you can edit them to suit your new organization.
In any case, you should consult a good attorney. Don't call some fine friend of yours who has just graduated from law school and say, "I want you to draw up our articles of incorporation, application for IRS tax status, etc." Get an attorney experienced in these matters. Your legal work will probably cost you less in the long run and almost certainly will be done better and more quickly.
Three attorneys whom I use frequently and who have wide experience working for conservative, non-profit groups are:
Alan Dye, Esq.
Webster, Chamberlain and Bean
1747 Pennsylvania Ave., NW
Washington, D.C. 20006
Cleta Mitchell, Esq.
Foley & Lardner, LLP
3000 K Street, NW #500
Washington, D.C. 20007
William J. Olson, Esq.
8180 Greensboro Drive, Suite 1070
McLean, VA 22102
As you describe your planned activity in your organizing documents and your applications to the I.R.S., word your intended functions broadly enough to avoid future limitations.
Several years ago I wanted to raise money through my Leadership Institute for a legal defense for a fellow who had been more than 20 years in Fidel Castro's prisons. Legal defense is a legitimate function of a 501(c)(3) group.
My lawyer reviewed our 1979 I.R.S. application. He said I'd better use some other vehicle for that legal defense effort, because our initial I.R.S. application didn't list legal defense as one of the Leadership Institute's intended functions. It hadn't occurred to me back in 1979 that I might want to do that one day.
Going beyond what you describe in your group's I.R.S. application risks your tax-exempt status.
A good attorney will make sure you don't forget to pay your annual corporate registration fee to the proper state agency and otherwise help keep you out of trouble. When in doubt, get good legal advice.
You should get professional help filling out your required I.R.S. returns and state-required reports each year. Even though yours may be a non-profit group and therefore pay no federal taxes, Uncle Sam is watching you.
Before they contribute, major donors often will require you to submit to them copies of your tax-status letter from the I.R.S. and your most recent tax return and annual audit. Major donors will feel more comfortable with an audit conducted by a major accounting firm than with an audit conducted by your brother-in-law on whose C.P.A. certification the ink is not yet dry.
Many organizational entrepreneurs started successfully with one category of organization, say, a lobby, and over the years created other, related groups such as foundations, a federal PAC and a state PAC. It isn't necessary or necessarily wise to start groups in different categories all at the same time, but it's prudent to think from the start about the possibility of eventually doing so.
Paul Weyrich, for example, runs a foundation, a lobby and a political action committee: the Free Congress Foundation; Coalitions for America; and the Free Congress PAC.
In Which Category Can You Be Most Effective?
Certainly there is room for new groups in all categories. But some types of new groups could have much more impact on the public policy process than others.
For day-to-day sheer clout, no category of group is superior to a grassroots lobby.
Any lobby can influence legislation. A grassroots lobby can systematically identify and recruit people who agree with it on policy questions, educate those people on their hot-button issues and activate them so they can be most effective.
It can survey candidates on its issues, report the survey results to its mass-based membership, and lead its members to thank candidates who are right on its issues and to communicate vigorously with candidates who are not right on its issues. Certainly it's easier to persuade candidates to adopt your position before an election than afterward.
A well-run grassroots lobby can force a politician to give them his vote or his seat. Thus, it can help make democracy work. Educated and activated voters can persuade an elected official that there's a close relationship between his legislative votes and his political survival. Politicians pay attention when their personal futures are at stake. Aroused voters can cleanse a legislature in subsequent elections.
Running an effective grassroots lobby is the supreme test of skills for an organizational entrepreneur. Few can do it well. But there's more opportunity for major new groups of this type than any other.
Conservatives in recent years have neglected political action committees. Some PACs which served conservatives well in the 1970s and early 1980s have disappeared or declined badly.
PACs can help recruit candidates and can have disproportionate impact on nomination contests. Political party committees can encourage candidates to run, but their rules usually prevent them from having much impact on who is nominated. You can't elect good candidates unless they are recruited and nominated.
It's harder to raise money for PACs than for any other category of group. But a few new, heavyweight conservative PACs could work wonders in the nomination and election process.
Mike Farris of Virginia started a conservative PAC, The Madison Project, which uses the same "bundling" process as the liberal PAC, EMILY's List. &nbs