Feature 04.26.2023 15 minutes

New Koch


A foundation veers left.

After the founder of a large foundation dies, his heirs often transform it. Compare industrial tycoon Henry Ford to the Ford Foundation, which rejects “the model of capitalism we have today.” But it is uniquely odd that Charles Koch’s enterprises have moved so far left while the donor remains alive. Billions of dollars are at stake.

Many current and former donor partners, grantees, and staff agree: “Old Koch” was about economic freedom and the core values that sustain a free society, but “New Koch” downplays or hides those values in order to appeal to the contemporary Left. Old Koch focused on getting government out of the way so that civil society could flourish. New Koch has largely skipped that step and moved on to “social entrepreneurship.”

Those outside the ideological network in which Koch is a major player (known as the “liberty movement”) should understand a few things. First, “Koch” means not just the Charles Koch Foundation (CKF) but the large family of organizations and projects that are run by or strongly influenced by Stand Together, the umbrella Koch organization. These include core programs such as the Koch Associate Program (KAP), organizations launched by Koch with varying degrees of independence like Americans for Prosperity (AFP), and well-funded Koch-adjacent organizations like the Institute for Humane Studies. Koch Industries’ annual revenue easily tops $100 billion.

In what follows, I show Koch’s leftward shift in rhetoric, ideology, politics, and philanthropy. The changes are dramatic and arresting.

Second, it gives me no pleasure to relate this situation. I am writing for the many who wish they could add their names. I am speaking up now, because if I don’t, we risk seeing billions of dollars work against what used to be Mr. Koch’s own noble principles.

Much of my evidence comes from public documents. Some key information comes from current or former insiders, reaching from board members to senior and mid-level staff. Some comes from current or former grantees or donor partners.

Not one of these current or former employees could be taken as disgruntled in the traditional sense—eager to avenge an adverse action or a slight taken personally. Neither am I, having worked at Koch before the shift. It was a great place to work. Most of my colleagues were rockstars across the whole five years I was there. It was Koch’s golden age. I left only to become a U.S. Department of Education appointee under Secretary Betsy DeVos.

My sources have dedicated significant time and effort, with success, to the classic Koch mission of human flourishing via economic freedom. When Koch lost that focus, it was no longer a home for them. The respectful thing was to challenge the inconsistencies and then, when that failed, to take the hint and leave (not all have left yet).

My nonpublic sources, of whom there are many, self-censor for a variety of reasons: they still work at Koch or elsewhere in the movement, their organizations or publications get Koch grants, they are still connected with Koch-adjacent partners, they fear the public eye, they prefer to stay positive, or they are too senior in their existing jobs.

I publish these findings out of concern. I want the best for Charles and his longtime mission. There is still time for New Koch to become American Freedom Koch once again.

The New Rhetoric

Koch’s rhetorical shift is easy to document. These changes evidently are designed to go down better with the values of Koch’s new partners on the ideological Left. They likely represent a true change in values and priorities, not merely a new outreach strategy.

One recent change sums it up. “Market-Based Management” (MBM) has been redesignated “Principle Based Management.” Koch Industries made this change to its business philosophy publicly between June and July of 2022, although some sources say it had been planned for a few years. KAP, an education program for early-career professionals, similarly changed its website sometime since last November.

MBM, Koch’s core management philosophy, was always based on principle, especially the principle that a firm should be run something like a free market, where value creation is rewarded and individual initiative is respected.

“Principle Based Management,” though it may signal a new emphasis on principle, really reflects the implementation of new principles to replace the old. And it appears that the “market” concept is now almost entirely absent from Koch’s self-understanding.

A key inflection point was in 2019 at internal staff and all-staff meetings. At that point, Koch had announced a rebrand called “Stand Together”—a name that evokes leftist “solidarity” over individualism. At the meeting, as one mid-level manager recalls, a senior leader announced that terms such as “liberty,” “freedom,” and “constitution” would be downplayed in public communications because those terms “alienate key audiences.”

Mr. Koch had called “capitalism” an incorrect term for his interests at least as early as 2016, but Stand Together and CKF have gone farther. “Economic freedom”—once the primary motivator of hundreds of millions of dollars of investment—is nowhere on the Stand Together Foundation’s website. The term is nowhere to be found in Stand Together’s Twitter history except in the context of women finding “true economic freedom,” and it is virtually absent from Stand Together’s website.

CKF last tweeted about “economic freedom” in August of 2021. “Economic freedom” and “free enterprise” are absent from CKF’s 2022 partner impactstatement. Don’t say freedom when you can say “bottom-up solutions.”

Mr. Koch’s 2020 book, Believe in People, had been largely completed in Old Koch style when it went through a complete rewrite. The earlier version was like his previous books, which had merged practical and intellectual wisdom to focus on what Old Koch called MBM and principled entrepreneurship. The new version became pablum: “What would it mean to truly believe in people?”

True enough, “Principled Entrepreneurship” remains a philanthropic focus area. But giving to formerly key partners in this area has diminished substantially or been cut off entirely. Meanwhile, Wichita-based Youth Entrepreneurs now does business under the name Empowered.

KAP now explains that it “equips associates with the tools, mindsets, and community to succeed as social entrepreneurs—individuals excited to find new and better ways to break barriers and eliminate injustice.” All parties involved can understand that “breaking barriers” and “eliminating injustice” are leftist buzzwords that signal openness to Critical Race Theory while flying under the radar of well-meaning but inattentive “compassionate conservatives.” As a result of KAP’s rhetorical changes, liberty-movement organizations can no longer presume that KAP alumni are ideologically aligned.

The mission of the Koch-adjacent Institute for Humane Studies (IHS), in 2011, wasto develop intellectuals to be able to “change the climate of opinion to one more congenial to the principles and practice of freedom.” Today, IHS works on “connecting and supporting” intellectuals who are “driving progress in critical conversations shaping the 21st century.”

Koch’s close partner, The Libre Initiative, used to promote itself as advancing “the principles and values of a free and open society…informing the U.S. Hispanic community about the benefits of a constitutionally limited government, property rights, rule of law, sound money supply and free enterprise.” By July of 2021, however, Libre had pivoted to explore “the solutions that create the freedom and opportunity people need to discover and develop their potential…quality education for our children, affordable health care for our families, a strong economy with good jobs, safer communities, and more.”

The main exception is close Koch partner Concerned Veterans for America, which has not changed its well-wrought mission. Libre does maintain a reasonably Old Koch statement on free markets. And some values, such as respect for individual autonomy, have not changed.

But group identity plays a much larger role today than ever. If Koch groups really still promote economic freedom, most of them are not clearly saying so.

Progressive Partners

In 2020, Stand Together tweeted that it “isn’t just an advocate for social justice.” Indeed, the Stand Together Foundation’s 2020 impact report has a section on “racial justice.” This new focus on race isn’t just a 2020 anomaly from the chaotic days of looting and arson. The changes have stuck.

Many investments across the board in economic liberty have been reduced or cut off, while Koch giving for social entrepreneurship has skyrocketed. The publicdisclosures do not do justice to this situation, since they fail to reflect coordinated giving from donor partners—including DonorsTrust and various individuals.

The proof is in Stand Together’s new range of partners, starting with “300+ Community-based groups tackling the root causes of poverty.” The politically correct Koch terms here are “economic progress” and “economic opportunity.”

Granted, down at the bottom of the page, Stand Together admits that policy victories include deregulation, cutting taxes, and freeing workers from occupational licenses. Stand Together calls these “pro-progress,” perhaps to stave off critiques that Koch is just promoting so-called “unbridled capitalism.”

Old Koch was not afraid to take a minority position that was correct on principle. It used to be a mark of disdain to say that a weak ally had painted its rear end white to run with the other antelopes. One source used this Old Koch trope to argue that New Koch was no longer so bold. Two other sources note that photos of Mr. Koch himself in the Arlington, VA office have largely disappeared.

Others note that Koch has brought on many people who are not interested in economic freedom and its benefits but in social justice and the various illiberal principles that usually travel with the term. In turn, they have made investments that would be unrecognizable as Old Koch priorities.

Take the Koch-adjacent IHS and Mercatus Center. IHS still claims to be “rooted in the classical liberal tradition.” But its program list shows that this isn’t your grandfather’s IHS. In March 2023, IHS began a new discussion group on “Race and Contemporary Political Life.” Participants discuss the problem of “the lack of a common language of or approach to racialized discourse,” “the discriminatory impacts of new technologies,” the “future of equity,” Noel Ignatiev’s argument that “Treason to Whiteness is Loyalty to Humanity,” and other works that appear to be rooted in Critical Race Theory far more than any ground of classical liberalism.

One of the latest IHS faculty fellows wrote in 2020 that unlike liberty-minded economist Thomas Sowell, “I believe we can harness [market] forces…to create a more equitable world,” especially when it comes to race and gender.

As for Mercatus, I have zero concern about most of the George Mason University faculty who engage with it. The Mercatus Center remains committed to “market-oriented ideas” and academic independence. But the faculty do not necessarily reflect leadership or programming. Some participants and leaders have expressed concern that Mercatus programs have become diluted by mixing leftist ideas and participants into the programming. And a new Mercatus board member wrote in March 2022, “My view is basically that nuclear war is worth risking for some things, (but) that’s a hard position to hold if you think the extinction of humanity is so bad that avoiding it trumps everything else.”

Count me against the extinction of humanity.

In the area of free speech, leadership took the edge off of defending “offensive” yet protected speech to focus on peace and harmony but compromised on peace as well as free speech. Stand Together condemned the Charlottesville violence in 2017 (as almost everyone else did), but it began to partner with leftist groups, and not just for criminal justice reform. The new partnerships, unfortunately, meant not condemning the 2020 race and “antifascist” riots, which would have alienated Koch’s new, progressive partners.

Meanwhile, in 2020, Koch’s Americans for Prosperity Foundation (AFPF) sought communications about or from private individuals to the U.S. Department of Commerce through an open records request. Apparently, these targets had registered concern about how social media companies were censoring speech. AFPF was on the other side.

Weaponizing FOIA to interfere with the First Amendment right of petition betrays a putative commitment to free speech. It’s wrong when the U.S. Department of Justice does it, and AFPF was wrong, too.

In fairness, the political arm of Americans for Prosperity (AFP), as a grassroots organization, is not an entirely top-down enterprise. Some of AFP’s national leaders and state chapters maintain a strong focus on liberty. Yet former AFP chair Frayda Levy reports that New Koch organizations became quite bureaucratic in order to avoid embarrassment or provocation to the Left. New Jersey AFP directors, for example, “had to fight to get approval of even the most meaningless press releases and/or testimony,” and most statements were “written more to assure no one could find anything offensive than to promote any policy.”

Another former senior AFP official agrees that under Old Koch, AFP state directors used to run their own state-level strategies “without corporate interference,” and AFP’s board had independent experience and wealth outside of Koch. This independence has reduced significantly in recent years.

The concern here is not that Old Koch was “conservative” before moving Left but that it was centrist or purple before turning blue. Even so, it is telling that Mr. Koch repudiated many of his earlier political partners, as others have described. Mr. Koch and donor partners dropped more than $400 million trying to elect the hapless Mitt Romney in 2012—an embarrassment that’s been hard to shake. I am reliably informed that after the death of David Koch in 2019, the vast majority of Koch giving to the Republican Governors Association ended abruptly. Koch stayed out of the 2020 presidential election.

After bleeding off too many former donor partners, however, Koch recently got back into the Republican game. Koch also made some strategic hires and developed at least one group in order to win back some conservative hearts, minds, and dollars.

One way to sum up: Around 2015, Koch began justifying its work with partners on the Left (including Democrats) by citing Frederick Douglass’s great line, “I would unite with anybody to do right and with nobody to do wrong.” For several years, the “anybody” needing justification were progressives such as Van Jones. Today, though, I suspect Koch uses Douglass to justify to left-wing partners why Koch still gets along with Republicans and free marketers.

Why Did This Happen?

Koch’s donor partners have noticed the shift. The past few years have seen significant churn in the donor network who attend the periodic Koch gatherings. Some stalwarts love the “touchy-feely” changes. But others have become alienated and left for different, trustworthy networks. For better advice on coordinating their philanthropy, some have turned to The Philanthropy Roundtable, which now wears its conservative colors more brightly than ever.

Still other philanthropists and board members of Koch organizations remain in the network, but they cannot help asking: What caused these changes? Has Mr. Koch really transformed his thinking, and not just his strategy, to contradict billions of dollars’ worth of earlier philanthropy focused on a free society?

How much of the change is genuinely Mr. Koch’s rather than a function of those who are effectively in charge of his philanthropy? Where does “New Koch” end and Koch himself begin? How much of the change is about relationships with family members or preparation for the inevitably different values of his heirs?

The New York Times recently shed some light on this topic, featuring one of Mr. Koch’s children. It was not a friendly piece. It appears to confirm that a strong motivation for Koch’s shift is to be liked by the progressive elite. Though the piece highlighted differences between the generations, it served as one more reminder that Mr. Koch will never be anything other than a bogeyman to the Left, no matter how much he changes his rhetoric and giving.

Indeed, the Left hated, and generally still hates, Mr. Koch for his great success. It hates him for two main reasons. First, he has been wildly successful in generating wealth by providing superior value to customers, which anti-free market groups hate and see as an obstacle to their dystopian equity agenda.

Second, Mr. Koch facilitated great success in getting government out of the way, particularly in the United States, so that entrepreneurs and innovators could help society flourish and help bring the next billion people out of extreme poverty. Socialists and Communists hate it when the private sector and markets, as they inevitably do, outperform government control.

All of that hate takes a toll. It’s much easier to hang out with cool lefties and display one’s feathers around lefty issues that classical liberals can tolerate without alienating social justice warriors.

It’s much easier to stop talking so much about economic freedom and the problems of government interference in a free society, which draws critics from our cultural, corporate, and political elite, and to start talking about Believing in People.

Of course, it’s not wrong to support dynamic leaders who are transforming their communities for the better. A lot of the new partners are doing great work. In higher education, moreover, it might be right to substantially refocus on innovation while starving most of Koch’s traditional academic partners out of a broken system. Creative destruction is probably what postsecondary education needs most.

But compromising core values to keep friends on the Left is an enterprise-level mistake. Adapting to the Left’s mistaken view of how to enable human flourishing is antithetical both to liberty and to flourishing. Ceding liberty to one’s declared enemies is a clear error.

The Left has responded, predictably: Thanks for coming halfway to our side, but we still hate you. We’ll keep writing articles saying that Mr. Koch and his minions are irredeemably evil conservatives. The journalists who still write about Koch as the libertarian bogeyman (even worse, the ones who still write “Koch Brothers” years after David Koch left this world) have a lot of catching up to do.

You’ll never be good enough for us, the Left says; keep moving Left.

And like so many other foundations, unless something changes very soon, Koch will.

The current situation is unfortunate. Mr. Koch’s core views about the “science of liberty” have been largely correct, grounded in his reading and thinking across several disciplines, while his critics have been largely wrong. It is a mistake to let them laugh among themselves that they have successfully turned Charles Koch.

The American Mind presents a range of perspectives. Views are writers’ own and do not necessarily represent those of The Claremont Institute.

The American Mind is a publication of the Claremont Institute, a non-profit 501(c)(3) organization, dedicated to restoring the principles of the American Founding to their rightful, preeminent authority in our national life. Interested in supporting our work? Gifts to the Claremont Institute are tax-deductible.

Also in this feature

to the newsletter