Koch brothers' new group will take on poverty, educational quality

WASHINGTON — The political and policy empire controlled by billionaire industrialist Charles Koch is building a non-profit wing its leaders say will work to address deep-seated social ills and “revitalize civil society.” Its initial efforts will focus on poverty and educational quality.

The organization, known as Stand Together, is still in its start-up phase but aims to raise $15 million this year, top officials told USA TODAY in the first interview about the new organization.  Organizers described Stand Together as engaging in “venture philanthropy” aimed at “strengthening the fabric of American society.”

“The sole purpose of Stand Together is to make a real difference in real people’s lives by actually solving the problems they have,” the group’s executive director, Evan Feinberg, said.

He said the group won’t veer into policy fights but instead initially plans to focus on partnerships with private groups addressing social problems, such as gang violence and high recidivism rates.

Koch aides have worked internally for nearly a year on Stand Together, but the group will make its first public splash this week — launching its website and broadly sharing its plans as an annual winter seminar for hundreds of Koch donors opens Saturday near Palm Springs, Calif.

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In one of its first ventures, the group will team up with Bob Woodson, a prominent black conservative who trains grass-roots leaders as president and CEO of the Center for Neighborhood Enterprise. Woodson, an architect of President George W. Bush’s faith-based initiatives, has traveled with House Speaker Paul Ryan to poor neighborhoods around the country as Ryan seeks support for a new “battle plan” in the war on poverty.

The formal launch of Stand Together comes as the behemoth associated with Koch and his brother, David, increasingly sends millions of dollars to programs aimed at the poor and works to broaden its outreach beyond a core base of free-market conservatives.

Americans for Prosperity, the Kochs' long-standing, largest grass-roots arm, offers “couponing classes.” Another Koch group, the Libre Initiative, hands out free holiday turkeys to Latinos. In 2014, Charles Koch and Koch Industries contributed $25 million to the United Negro College Fund, much of it for scholarships.  Koch’s top aides have partnered with the Obama administration in a high-profile push to overhaul the criminal justice system and began an effort to roll back job-licensing laws that Koch argues unfairly exclude the poor and ex-felons from jobs and business opportunities.

The libertarian-leaning brothers, who control the nation’s second-largest private company, are best known for the massive sums they pour into American politics to boost Republicans who share their small-government views. The network aims to raise and spend nearly $900 million over a two-year period — about a third of which Charles Koch said will be directed to the 2016 elections.

The Kochs’ motives and tactics face deep skepticism from Democrats as the election draws closer. Dark Money, a book out this month from New Yorker staff writer Jane Mayer, argues that anti-regulation crusades by the Kochs and other wealthy conservatives are less about the societal well-being Koch often espouses and more about the well-being of their corporations.

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Feinberg began his role with the group last June. In a sign of the organization’s importance in the sprawling Koch realm, some of Charles Koch’s most trusted advisers are helping to steer Stand Together. Among its board members: Richard Fink, who spent decades as Koch’s top political adviser and has been described by Politico as  “Charles Koch’s brain,” and Brian Hooks, who presides over  the Charles Koch Foundation and the Charles Koch Institute.

Feinberg, 31, is a former Capitol Hill staffer who unsuccessfully waged a Tea Party-infused primary challenge against veteran Rep. Tim Murphy, R-Pa., in 2012.  He ran the Kochs' Millennial advocacy group, Generation Opportunity, which drew attention in 2013 for its viral videos of a creepy Uncle Sam giving a young woman a gynecological exam in an effort to get young people to “opt out” of Obamacare.

Koch groups spent heavily trying to undermine the health care law, in part by seeking to discourage young, healthy people from signing up and providing the financial lifeline needed to offset the expenses of the older, sicker people joining the insurance pools. Even President Obama weighed in on Generation Opportunity’s tactic, decrying it as a “cynical ad campaign” by “some of the wealthiest men in America.”

Staffers said Stand Together will be organized as a charitable group under the U.S. tax code. As such, the names of its contributors, like virtually all groups in the Koch network, do not have to be disclosed publicly. How much the Kochs personally will invest in the new group is not known. Organizations in the network rely on donations from about 450 donors to underwrite their activities. Officials with the new group said they hope to expand their budget in future years beyond the initial 2016 goal of $15 million.

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As Feinberg described the new initiative, Stand Together will blend grantmaking with infrastructure support. The group might underwrite private school scholarships to help poor kids escape struggling schools as well as provide IT, accounting and human resources support to the fledgling non-profit groups it draws into its orbit. A business owner in the network might provide jobs to ex-felons participating in one of the community-based programs that Stand Together decides to support.

It  employs five people full-time and is adding staff.

Woodson, a civil rights veteran, said he works to link “social entrepreneurs” who are successfully tackling problems such as drug addiction in poor neighborhoods with resources, such as accounting expertise from a local business or access to lower-interest bank loans.

Woodson, 78, said Koch officials first approached him more than two years ago after learning of relationship with Ryan, the GOP’s 2012 vice presidential nominee.  He said he attended the network’s summer seminars last August in Southern California to “check them out” and said he found a gathering of many low-key business people who built their own way to enormous wealth.

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“I call them grass-roots rich people,” Woodson said during a telephone interview this week. “They were not the kind of corporate elitists who boast all the time about their vacations in France.”

Woodson said he envisions receiving grants and “coaching” help from Stand Together, but no dollar-amount has been agreed upon. Instead, he said, the two groups plan to hash out the specific ways Stand Together will help individual programs tied to his organization, then build a budget for those projects.

Woodson said he finds Koch’s “philosophy and operating principles … 100% compatible with the way we help the poor.”

“All liberals talk about is protecting a failed safety net. I don’t know how having a safety net gets you out of poverty,” he said. “What makes Koch unique is that he is the only person with money that has come to us and not dictated to us what we should do but wants to help us build on what we already do.”