Trouble at the Ben & Jerry’s Foundation

Just a couple of days after Unilever, the corporate parent of Ben & Jerry’s Ice Cream, finessed a solution to reverse the end of sales in the West Bank of Israel, which sparked a massive protest and threats of a boycott, another embarrassing situation has arisen out of the troubled brand. Alana Goodman reports in the Washington Free Beacon:

The Ben & Jerry’s Foundation steered more than $100,000 to a charity run by its own president, in the second case of a sitting board member’s nonprofit group benefiting from the foundation’s grants.

Social Ventures Inc., a charity run by Ben & Jerry’s board member Jeff Furman, raked in around $118,000 from the Ben & Jerry’s Foundation between 2016 and 2020, according to financial disclosure records.

During this time, Furman served as president of the Ben & Jerry’s Foundation from 2018 to 2020 and as treasurer in 2016 and 2017. He was also a member of Ben & Jerry’s corporate board and in-house counsel for more than 30 years, according to the foundation’s website.

It's a big no-no in the eyes of the IRS for people involved in managing a foundation to engage in self-dealing, defined by the IRS as the "transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a private foundation." 

Furman’s own charity receiving substantial funding from B&JF (one quarter of Social Ventures’ revenue in 2020) certainly has the appearance of self-dealing. And it is not the only such instance at the Foundation:

Last year, the National Legal and Policy Center filed a complaint with the IRS over the Ben & Jerry’s Foundation’s grants to a different nonprofit group run by another director at the foundation, Anuradha Mittal.

Mittal has been a trustee on the Ben & Jerry’s Foundation board since 2012 and also serves on the independent company board. During this time, the Ben & Jerry’s Foundation gave $195,000 to the Oakland Institute, an anti-Israel nonprofit group run by Mittal that has published columns in support of Hezbollah and Hamas.

But it starts to get incestuous:

Mittal and Furman appear to have a close working relationship. Furman serves on the board of Mittal’s Oakland Institute, and he recruited her to the board of Ben & Jerry’s, according to the New York Post.

So, two charities run by board members of the B&JF have received substantial grants from it, and the two directors work together outside of the B&JF. Needless to say, both Social Ventures and The Oakland Institute are devoted to left wing causes.

While unsavory in appearance, such problems of self-dealing are a constant danger for foundations which, especially once their founders leave active management, have little accountability to outsiders, other than to the IRS. Most foundation boards are self-perpetuating, meaning that the board itself picks replacements when directors leave. Quite often this ends up with left wingers capturing foundations, owing to the left’s dominance of most organs of education, media and nonprofits.

Such self-perpetuating boards of directors at foundations are an open invitation to abuse. Once the original donor and his (occasionally her) cohort leave the board as time passes, it becomes very difficult to maintain a focus on the original goals and all too easy to favor grantees with special claims on the allegiance of board members.

This is especially true at foundations that are not in the public eye. It is structural (or systemic in the current jargon) owing to the lack of mechanisms to restrain the natural effect of self interest on board members’ decisions. Foundations should not be immortal. They should be forced to spend the assets given them within a fixed period (20 years seems about right) and shut down. That’s the ONLY way to solve this structural problem.

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