The Alex C. Walker Educational and Charitable Foundation’s mission is to investigate the causes of economic imbalances, seek market-based solutions, protect the free enterprise system, investigate the effect of the financial system in fostering a sustainable economy, and inform the public of the results.
The trustees are guided by the principle of maximizing individual freedom. Nobel Prize winning economist Vernon Smith's work in experimental economics supports the view that individuals should be as free as possible to make their own tradeoffs. Says Smith "Whether we're talking about politics or economics, or even social interactions, the best systems maximize the freedom of the individual, subject to the constraint of others in the system.
Traditional Economics
Alex Walker had a strong philosophy of free enterprise. He believed this system was responsible for the outstanding position of the United States in the family of nations. At the time Alex established the Foundation, the world was divided between two competing economic systems. With the triumph of capitalism over communism, the US economy has become increasingly integrated into the global economy. Responding to this change, the trustees seek to address economic imbalances that may affect the United States within the context of the global economy.
The Foundation applies a proactive approach to grantmaking following the example set by venture capitalists. Funding is budgeted each year to make way for new projects. The trustees monitor initiatives they have invested in by making site visits and forming partnerships with cooperating organizations. The Foundation stays involved long enough to see promising projects produce results. One of our early successes was funding research in the emerging field of experimental economics, which led to a 2002 Nobel Prize for pioneering work by Vernon Smith.
Support of free enterprise is assumed by some to be synonymous with laissez faire economic philosophy - implying that government regulations should be drastically reduced across the board. The trustees hold a more nuanced view that regulations have to be examined on a case-by-case basis. For example, some regulations promote free markets by requiring companies to be accountable to their shareholders. Other regulations hinder market competition by creating special-interest benefits. The Foundation seeks projects that improve market accountability and economic efficiency.
Ecological Economics
Responding to an increasing number of grant applications on the topic, the Foundation began investigating changes to the environment as an emerging cause of economic imbalances. As chronicled in the section on the History of the Foundation in the industrial city of Pittsburgh, economic activity can result in environmental damage, which unless corrected, constrains future prosperity. The kinds of environmental problems faced by Pittsburgh at the end of World War II have now become commonplace and larger in scale. In response, the trustees have developed an expertise in the field and are funding an increasing number of solution-oriented grants in ecological economics.
Learn how Alex Walker's hometown revived its economy through a pioneering clean up effort, and how this experience helped define the Walker Foundation's goals.
Air and Water Crisis in Pittsburgh
Economists have long recognized the failure of markets to adequately address certain problems. As the world’s growing population creates ever more demands on the services of nature, markets are increasingly blamed for environmental harm. However, markets create wealth that can be applied to addressing environmental degradation. The trustees view this imbalance as being one of the greatest challenges of our generation.
Rather than constrain markets through restraints on trade or command-and-control regulation, the trustees seek to fund development of innovative market-based solutions. "Market-based instruments are regulations that encourage behavior through market signals rather than through explicit directives regarding pollution control levies or methods."
1 Recognizing that ecosystems provide clean air, clean water, climate regulation and other essential services of nature, for which there is no substitute, it is essential for our economic well-being and the future of our children that market activity is sustainable.
One of the purposes of the Foundation is to promote a sustainable economy through a sound national accounting system. A growing number of economists recognize that the current system does not account for ecosystem services, also known as nature's services. Some examples of these services are climate moderation, provision of clean water through the hydrological cycle, detoxification and decomposition of wastes, and provision of seafood. Generally these services are taken for granted. Just as markets provide an abundance of manufactured goods through the principle of supply and demand, the pricing of ecosystem services has the potential to avoid scarcity and maintain a healthy economy.
The Foundation has funded a number of innovative and diverse approaches that develop the concept of ecosystem valuation and which are producing good, promising results. Readers are invited to explore our
grant reports to see the broader range of projects we’ve funded and how they fit with our mission.
Following are three examples from our ecosystem valuation initiative:
Our longest running project charged for ecosystem services that were previously free. "Implementing Ecosystem Valuation as a Global Conservation and Economic Development Strategy" was a cooperative project with the Nature Conservancy that established user fees that pay for scientific monitoring and development of visitation plans at key preserve systems and World Heritage sites. The project began by developing entrance fees paid by ecotourists to better support improved facilities and better management at under-funded parks and preserves. A second way to value and support ecosystems is through water fees. Watersheds within protected ares are the source of rivers supplying drinking water to many towns and cities. However, many protected areas are protected in name only, and water supplies are becoming degraded due to deforestation and development. Rather than install expensive filtration plants, a number of communities have discovered it is cheaper and more effective to protect watersheds that are the source of their water. Walker Foundation funding has helped the Conservancy develop, test and implement a plan that incorporates financing watershed conservation and protection through water trust funds capitalized by user fees and private contributions. These strategies are preserving freshwater for people while simultaneously conserving critical habitat
Another service of nature is the provision of seafood. Our program on "Rights-Based Fisheries" began as a unique, foundation-sponsored partnership of market, environmental, and public policy organizations sharing a common goal of promoting sustainable management by developing fishing rights that reward better stewardship. The program worked with fishermen to apply proven rights-based strategies such as individual fishing quotas, catch shares, and harvest cooperatives. The Foundation considers this grant initiative to have been a major success as rights-based fisheries have multiplied, and independent studies have shown that “Catch Shares Can Prevent Fisheries Collapse.” 2 Read about the Walker Foundation's market-based initiative to restore fisheries in Philanthropy Magazine.
The third example is a current grant initiative resulting from the fisheries project. After achieving success in reforming a group of demonstration fisheries, the Foundation observed that recovery of overfished stocks was still slow. One of the reasons is habitat destruction. The Foundation offered support to the Mount Dessert Island Marine Laboratory, in Maine, to expand an effort to restore eel grass beds damaged by dredging for muscles. The beds previously served as nurseries for many species of fin fish and invertebrates. Success with the project has led the Foundation to partner with the Georgia Aquarium, Coral Reef Restoration Foundation and others to restore dying coral reefs in South Florida. The project is focused on developing a payment for ecosystem service program to provide sustainable funding for reef restoration.
All of these projects create market mechanisms in the form of feedback loops or systems of checks and balances. Highly evolved natural systems, such as rainforests and coral reefs function in much the same way through feedback mechanisms that cycle nutrients, and other scarce resources. These natural systems have evolved to moderate rapid change in the local environment. Our goal is to learn from the science of ecology and develop economic systems that are sustainable and robust.
In summary, the Foundation seeks market approaches for addressing economic imbalances and protecting our environment.
1Market-based Environmental Policies, Robert N Stavins, Chapter 3
2 Science, Costello, Gaines & Lynham 19 September 2008: Vol. 321 no. 5896 pp. 1678-1681
