the heritage foundation 2010 annual report Staff at the Heritage Foundation PRESIDENT’S OFFICE Margaret Thatcher Legal Center Mark Kelly Brian Byrne Samuel Walker Edwin Feulner Center for Freedom Todd Gaziano Michael Leland Jadon Ephraim Nathaniel Ward Derrick Morgan Nile Gardiner Robert Alt Teri Ruddy Michele Palmer Kathleen Rowan Ted R. Bromund Christine Carletta Michael Smith Special Events Our Mission Robert Steele Steven Groves Elizabeth Garvey Lectures and Ryan Townsend Ann Bula Missy Stephens Sally McNamara Jessica Kline Seminars Matthew Bagnoli To formulate and promote conservative public Kenneth Sheffer Erica Munkwitz Charles Stimson John Hilboldt Online Brittany Balmer Brett Schaefer Hans von Spakovsky Adam Brickley Communications Ann Beckwith policies based on the principles of free enterprise, EXECUTIVE VICE Brian Walsh Andrew Parks Timothy McGovern Janine Brown PRESIDENT’S OFFICE DOMESTIC AND Jeph Christoff Dria Graham Phillip Truluck ECONOMIC POLICY Simon Center for Young Leaders Program Martha Galante Cameron Moss limited government, individual freedom, traditional Jean Barry David Addington American Studies James Lawruk Heather Sexton Jack Ruddy Matthew Spalding John O’Keefe Personnel Doug Ernst Amanda Valauri Center for Data David Azzerad Steve Sharman American values and a strong national defense. Wesley Dyck Lauren Volpe Analysis Anna Leutheuser Maria Sousa Matthew Adkins William Beach Julia Shaw FINANCE AND Roger Spurzem Kristine Bramsen Robert Book Ashley Varndell OPERATIONS COMMUNICATIONS Board of Trustees Honorary Chairman and Trustee Emeritus Karen Cook Karen Campbell Ted Schelenski Mike Gonzalez Christopher Marcel Patrick Fleenor Research Editors Joanne White DEVELOPMENT Georgianna Nutt Thomas A. Saunders III, Chairman David R. Brown, M.D. Becky Turco Rea Hederman Richard Odermatt John Von Kannon Lynette Wilhelm David Kreutzer John Fleming Accounting John Fogarty Broadcast Services Christie Grennes Richard M. Scaife, Vice Chairman John Ligon James Kidd Vern McHargue Matthew Streit Robert Hartsook Honorary Trustees CENTER FOR David Muhlhausen William Poole Keith Capp Audrey Jones Michelle Lancto J. Frederic Rench, Secretary POLICY INNOVATION Guinevere Nell Jon Rodeback James Gabele Judy Mayka Kathryn Davis Bernard Lomas Stuart Butler Jason Richwine Karina Rollins Alyson Miller Sarah Mills Robert E. Russell Jr. Meg Allen The Hon. Frank Shakespeare Bob Moffi t James Sherk Sandra Noone Israel Ortega Pamela Ouzts Patrick Tyrell DISTINGUISHED Michele Pecora Hannah Sternberg Douglas F. Allison Paul Winfree FELLOWS Mark Schreiber Major Gifts Patron of The Heritage Foundation DAVIS INSTITUTE Elaine Chao Edward Sharrer Nick Reid FOR INTERNATIONAL Center for Media Larry P. Arnn, Ph.D. The Right Honourable The Baroness Thatcher, Center for Health Lee Edwards Anthony Campau and Public Policy STUDIES Policy Studies Ernest Istook Jessica Dean LG, PC, OM, FRS Kim Holmes Administration Robert Bluey The Hon. Belden H. Bell Nina Owcharenko John Shadegg Eric Korsvall Rebecca Eddy de Tina Korbe Alexis Hurter Brian Blase Jim Talent Broekert Midge Decter Jan Smith Lisa Castellana Margot Crouch Anna Hui Brandon Culp Steven DeBuhr Senior Management Ed Haislmaier JB Horton Editorial Services Edwin J. Feulner, Ph.D. Allison Center Katie Smith Emily Dunham James Weidman Edwin J. Feulner, Ph.D., President Kathryn Nix Jason Snead Kevin Germany DeEtte Chatterton Jones for Foreign Policy Sandy Mikilia Paul Gallagher Studies Tina Wei Dorothy Hodo Marguerite Higgins Steve Forbes Phillip N. Truluck, Executive Vice President John Fleming and Kenneth McIntyre Domestic Policy & Jay Rinehart James Carafano Ebony Hunter Kenneth McIntyre DeVos Center on LEADERSHIP Leah Sammons Robert J. Herbold Michaela Bendikova Antonio Machenguer Rachael Slobodien David Addington, Vice President Religion and Civil FOR AMERICA Doug Stamps Peter Brookes Society Maria Mendoza David Weinberger Graphics: OPERATIONS Marvin Moon Jeffrey Trimbath Todd W. Herrick Stuart M. Butler, Ph.D., Distinguished Fellow Yvette Campos Jennifer Marshall Genevieve Wood David Parker Ariel Cohen Kiki Bradley Christine Cheatum Albert Potts Heritage Legacy Strategic Jerry Hume Becky Norton Dunlop, Vice President Helle Dale Lindsey Burke Freida Warren Society Communications Mackenzie Eaglen Collette Caprara Rory Cooper Kay Coles James John P. Fogarty, Vice President Owen Graham Creative Services Michael Barvick Chuck Donovan Melissa Bluey Anna DeJarnette Mike Brownfi eld Jena McNeill Christine Kim Business Support Michael G. Franc, Vice President Elizabeth Brewer Services Roxana Laing Conn Carroll The Hon. J. William Middendorf II James Phillips Diane Mannina Spencer Anderson Ralph Buglass Renault King Lori McNicoll Isabel Isidro Michael M. Gonzalez, Vice President Morgan Roach Leslie Merkle Doug Sampson George Adams Brandon Stewart Abby Moffat Erin Sedlacek Ryan Messmore Renzo Boyd Membership Todd Thurman Kim R. Holmes, Ph.D., Vice President Baker Spring Robert Rector Nersi Nazari, Ph.D. Strategic Marketing Berdie Carter Programs & Grant Raymond Walser Rachel Sheffi eld Keesha Bullock Edwin Meese III, Reagan Fellow Jessica Zuckerman Amy Hart Development HERITAGE ACTION Cover Photo: Joe Brichacek Robert Pennington Roe Institute for Annette Keymist Carsten Walter FOR AMERICA Ted E. Schelenski, Vice President Asian Studies Center Emily Rein Deonte Starr Erin Bender Michael Needham Economic Policy Joshua Shepherd William E. Simon, Jr. Walter Lohman Gabriel Conger Timothy Chapman Michael A. Spiller, Vice President Studies Steven Weyrich Dean Cheng GOVERNMENT Sarah Ferguson Jessica Anderson Brian Tracy Alison Fraser John Von Kannon, Vice President and Senior Counselor Lisa Curtis Curtis Dubay Strategic Operations RELATIONS Christine Fogarty Tripp Baird Nicholas Hamisevicz Jessica Greer Dustin Carmack Phillip N. Truluck J.D. Foster Brian Blake Michael Franc Genevieve Wood, Vice President Elizabeth Hamrick James Gattuso Heath Hall Brian Darling Estefania Holler Frank Carni Bruce Klingner Emily Goff Laura Trueman Laurie Craney Kristen Hoopes Danielle Doane Barb Van Andel-Gaby Graphics, Inc. Chroma Bernard Lomas, Counselor Derek Scissors David John Jessica LaHousse James Dean Michelle Jehring Daniel Holler Katherine Kraft Marion G. Wells Robert E. Russell Jr., Counselor Nicholas Zahn Nick Loris Samir Kapadia Erin Kanoy Brian Riedl EXTERNAL Landon Zinda Anne Judge Leo Knepper Printing: Center for Jack Spencer RELATIONS Richard McAdams Maggie Piggott International Trade Ronald Utt Becky Norton Dunlop INFORMATION Eve Newell Russ Vought and Economics Bethany Murphy As a nonprofi t 501(c)3 organization, we rely on the fi nancial contributions of the general public: individuals, foundations and Robert Gordon TECHNOLOGY Nathanael Yellis Terr y Miller CENTER FOR LEGAL Mary Larson Michael Spiller Candace Porter Daniel Ziegler corporations. We accept no government funds and perform no contract work. We welcome your support. Charlotte Espinoza AND JUDICAL Amanda Reinecker Anthony Kim STUDIES Coalition Relations Information Systems Joseph Shattan Fred Flerlage Fred The Heritage Foundation ■ 214 Massachusetts Avenue N.E. ■ Washington, D.C. 20002 ■ (202) 546-4400 ■ heritage.org Bryan Riley Edwin Meese III Bridgett Wagner Mark Harris Aaron Thompson (List current as of James Roberts Stephanie Bortner Alexander Adrianson Kibreab Berhe Mecca Turner Feb. 1, 2011) Design: THE HERITAGE FOUNDATION 2010 ANNUAL REPORT

Building an America where Freedom, Opportunity, Prosperity, and Civil Society Flourish THE HERITAGE FOUNDATION

“A Time for Choosing” Historians may welwelll chcharacterizearacterize 2010 as just thatthat. Photo: iStock Photo Message from the Chairman Meanwhile, the U.S. economy the White House gutted our missile de- and the President continued to hemorrhage jobs, making fense program, then negotiated a deeply a mockery of White House claims that fl awed nuclear arms treaty with Russia. hroughout the year, Washing- its $800 billion “stimulus” had “created These choices left the American ton’s liberals made choices that or saved” nearly 2 million jobs in 2009. people fuming… and brewing tea. Tdumbfounded most Americans. By mid-2010, the Bureau of Labor Surveys found up to 85 percent said First there was a monstrous 2,000-page Statistics reported that the ranks of the the country was on the wrong track; 58 health “reform” bill. In poll after poll, jobless had swelled by more than 2.2 percent supported repeal of ObamaCare; the people registered their disapproval. million since January. three-fourths said the stimulus spend- Yet House Speaker Nancy Pelosi insisted But Washington’s liberals were ing was money wasted. If the Left could on passing it. Her through-the-looking- working overtime: imposing the largest- make choices that affected their lives, so glass logic: “We have to pass the bill, so ever increase in costly regulations, piling could they. that you can fi nd out what is in it.” up unprecedented debt (to $14 trillion Anchored on the bedrock principle She rammed the bill through the total, with $1 trillion of that racked up of constitutionally limited government, House without a single Republican in just the last nine months of 2010) and the Tea Party movement spread like vote. As Main Street Americans choked plumping for job-killing tax hikes that wildfi re. TeaPartyPatriots.org listed on Washington’s blatant power grab, could only make the sick economy sicker. more than 2,800 Tea Party organizations the liberal commentariat exulted. On the global scene, the Admin- across America by year’s end. ObamaCare created “a huge structural istration “engaged” our enemies while The nation was choosing sides. It change in the relationship between hectoring longtime friends. All the was the elite political class vs. Middle the public, the economy, and the while, our defenses continued to wear Americans, and the latter were deter- government,” crowed journalist William out faster than they were being replaced, mined to choose a better course for their Saletan. Unfortunately, he was right. much less modernized. Unperturbed, country. In November, “We, the People”

2010 ANNUAL REPORT ■ 1 THE HERITAGE FOUNDATION

trounced “We, your Betters”—casting out Tea Party supporters recognized In January, we helped hammer out liberals not just from Congress, but in Heritage as that rarest of all Washing- The Mount Vernon Statement, a mani- even greater numbers from statehouses ton institutions: a principled force festo reaffi rming “a Constitutional and state legislatures. It was the greatest that fought daily to uphold the ideals conservatism [that] unites all con- political rout in at least seven decades. of our nation’s founders. Congress servatives through the natural fusion It was also a magnifi cent victory for might forsake them. Political parties provided by American principles.” The conservative values, and a magnifi cent might turn like weather vanes. But unifying statement, written under the year for The Heritage Foundation. In Heritage could be counted on to stay leadership of Heritage’s Ronald Reagan 2010, Americans concerned about our the course. Heritage had faithfully de- Fellow Edwin Meese, was signed by a nation’s future enrolled as Heritage sup- fended America’s founding principles bevy of leaders representing all wings porters at a record pace. Our member- and traditional values for 37 years. We of the conservative movement. ship grew from 580,000 to 710,000, a 22 weren’t about to go wobbly in this time A grassroots movement needs insti- percent increase. for choosing. tutional support, and Heritage provided plenty of intellectual ammunition to the legions seeking to restore constitutional government. We Still Hold These Truths: Rediscovering Our Principles, Reclaim- ing Our Future, written by Heritage’s James L. Buckley received Matthew Spalding, became a bestseller. A Heritage’s highest honor, trove of insight and inspiration, it served the Clare Boothe Luce as a lodestar for the Tea Parties. Award, at the December Our annual Henry Salvatori Prize President’s Club meeting. for American Citizenship went not to an A former U.S. Senator, individual, but to the movement. The State Department prize money allowed us to supply “First offi cial and federal judge, Principles Field Kits”—boxes of Heri- Buckley shaped policy tage’s pocket Constitutions, fact sheets, in all three branches of monographs and books—to 350 Tea government for 40 years. Party leaders across the nation. Photo: Chas Geer 2 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

Photo: Frasierphoto.com In August, we issued a policy through traditional media. Heritage The Heritage Foundation Board of Trustees blueprint for getting America back on commentaries generated more than (from left): Midge Decter; Robert J. Herbold; track. Solutions for America presented 1,400 clips from major print publica- Meg Allen; Robert Pennington; Brian Tracy; 128 specifi c policy prescriptions tions, and our experts gave more than Richard M. Scaife, Vice Chairman; David across 23 issue areas. It became an 2,750 radio and 1,000 TV interviews. R. Brown, Trustee Emeritus; Abby Moffat; invaluable primer for Tea Party lead- Our Lectures & Seminars team pro- Nersi Nazari; Douglas F. Allison; Thomas A. ers and conservative candidates across duced 186 public events, and our Exter- Saunders III, Chairman; Edwin J. Feulner; the nation. nal Relations team carried the Heritage Jerry Hume; Phillip N. Truluck; J. Frederic Immediately after the election, we message to more than 60 conferences Rench, Secretary; Barb Van Andel-Gaby; issued a fi ve-point “Get to Work” list for and seminars outside the Beltway. Larry P. Arnn; J. William Middendorf II; lawmakers: On Capitol Hill, Heritage experts Kay Coles James; Belden Bell; Todd W. ■ Stop the Obama tax hikes testifi ed at 28 House and Senate hear- Herrick; Marion G. Wells; Steve Forbes. (Not ■ Freeze and cut spending ings and conducted more than 800 pictured: William E. Simon, Jr.) ■ Repeal ObamaCare ■ Protect America Philanthropists Helen ■ Get control of government. and Richard DeVos The fi rst item was accomplished in (center) received the the lame-duck session, leaving the new Clare Boothe Luce Award Congress with four to go. at the April Leadership Our strength, reach and effective- Conference. Heritage ness grew along with our membership. President Edwin Feulner Contributions reached a new high: (left) and Chairman nearly $73 million. Subscriptions to Thomas Saunders Morning Bell, our daily online newslet- honored the couple ter, rose to 162,000 subscribers; our Face- for their unwavering book friends numbered nearly 300,000, commitment to “keeping and our Twitter following tripled over family, faith, and civic the course of the year. virtue at the heart of We also spread our message widely American life.” Photo: Michelle McMinn

2010 ANNUAL REPORT ■ 3 THE HERITAGE FOUNDATION Photo: David Hills Photography

Heritage Senior Management: (standing, briefi ngs for lawmakers and their staffs. the land. Michael Needham, a former from left) Phillip N. Truluck, Executive Vice We also wrote more than 580 policy Heritage Chief of Staff, is CEO. President; John Von Kannon, Vice President Backgrounders, Executive Memos, ■ We created libertad.org, a new and Senior Counselor; Edwin J. Feulner, WebMemos, Legal Memos and Special website that presents Heritage President; Becky Norton Dunlop, Vice Reports. Lawmakers asked our Center Foundation research, analysis and President; Edwin Meese III, Reagan Fellow; for Data Analysis to analyze, privately, commentary in Spanish. Michael G. Franc, Vice President; Genevieve the economic consequences of 64 draft ■ We transformed our Center for Wood, Vice President; John Fogarty, Vice legislative proposals, and, as always, Media and Public Policy into a hub President; Michael Spiller, Vice President; Heritage delivered. of investigative journalism. Led Ted E. Schelenski, Vice President; Michael M. During the midterm election cam- by Robert Bluey, the Center now Gonzalez, Vice President; Stuart M. Butler, paign, our Government Relations team produces print, broadcast and digi- Distinguished Fellow; (seated, from left) Kim briefed 141 candidates. After the election, tal media exposés of government R. Holmes, Vice President; David Addington, we welcomed 40 of the winners to our malfeasance and abuse of power. Vice President. (Not pictured: Robert E. New Members Orientation workshop. ■ We formed the Center for Policy Russell Jr., Counselor.) (Harvard’s orientation attracted only 24.) Innovation, a new division charged with designing the next generation Transitions of breakthrough policy ideas. It’s Heritage took four unprecedented steps headed by Stuart Butler, the man to remain at the forefront of infl uential who came up with the idea. organizations in Washington: Director of our domestic policy ■ We created a sister organization — shop since 1982, Butler remained on Heritage Action for America — to Heritage’s Senior Management Team, put political pressure on Congress to while David Addington joined as adopt Heritage solutions as the law of our new Vice President of Domestic

4 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

and Economic Policy. A veteran of Honors for Heritage in 2010 Washington policy debates, Addington most recently had served as Chief of Washingtonian maga- Staff and Counsel to Vice President zine named Heritage Dick Cheney. President Edwin Feulner In the following pages, you can one of “45 Who Shaped read about many major initiatives—and Washington” over the successes—of the last year. None of last 45 years. them would have been possible without In the UK, Feulner the generous support of our members. also made the Daily We’ll conclude this message by Telegraph’s short list of thanking you for that support and “The Most Infl uential U.S. by reaffi rming our commitment to Conservatives.” justify your trust in us every day in The American As- Photo: Chas Geer President Edwin Feulner, “most infl uential” 2011. The Heritage Foundation has sociation of Political Con- (Daily Telegraph). fl ourished because we are wholly sultants gave Heritage committed to advancing practical its “Best Facebook Page” award, and Politics magazine honored our “No policy solutions anchored in im- Energy Tax” Facebook application as both “Most Innovative Product of the mutable conservative principles. This Year” and “Best Use of Social Networking Technology.” will not change. We pledge to remain fully accountable to you, our mem- bers, for all that we do. In that spirit we offer you this report. Sincerely,

Domestic Policy Studies Director Jennifer Marshall, “power player”

Photo: Chas Geer (National Journal).

National Journal named Jennifer Marshall, Director of Domestic Policy

Studies, one of “20 Power Players” for her role in driving the national Photo: Frasierphoto.com debate on education policy. Distinguished Fellow Jim Talent also won the “power player” designation from National Journal for his work on defense policy. And Congress tabbed Thomas A. Saunders III, Chairman him to serve on the Quadrennial Defense Review Independent Panel.

Distinguished Fellow Jim Photo: Frasierphoto.com Talent, “power player”

(National Journal). Photo: Chas Geer Edwin J. Feulner, President

2010 ANNUAL REPORT ■ 5 THE HERITAGE FOUNDATION

Fighting for First Principles First Principles What sparked and fueled the Tea Party movement was a sense of alarm: alarm at how fast government was growing, spending our nation into ruinous debt, and intruding ever more deeply into our personal lives. Millions rallied to Tea Party events, vowing to take America back.

Rep. Paul Ryan, R-Wis. (left), and Center for American Studies Director Matthew Spalding continue a “break time” discussion at Heritage’s policy retreat for conservative members of Congress, held Jan. 14-16 at Monticello.

neering liberals began asking, Reclaiming Our Future, the 2009 book For those who couldn’t wait “Back to what?” as though it were by CAS Director Matthew Spalding, for the next publication, CAS also Sthe ultimate Gotcha! question. became a national bestseller and a Tea launched a weekly e-newsletter, “New The answer from the Tea Parties Party favorite. Common Sense: First Principles was philosophically solid and disarm- Heritage followed up with “The Today.” In less than eight months, ingly simple: back to the principles of Patriot’s Guide: What You Can Do to the e-newsletter boasted more than America’s founding; back to the idea Restore Liberty in America,” a how-to 6,500 subscribers. that the Constitution was written to pamphlet encouraging activism in In the spring, Mary Jo Thielen and enumerate and thereby limit the pow- light of fi rst principles and policy Ryan Gotsch of the Omaha Com- ers of government; back to the idea knowledge. We also distributed the munity Committee formed a We Still that, as Ronald Reagan often noted, we four-millionth copy of our pocket- Hold These Truths study group. This are a people with a government and sized Constitution. led Heritage to develop a Leader’s Guide not the other way around. Additionally, CAS continued its and other materials to support small Heritage’s B. Kenneth Simon series of monographs on fi rst principles group discussions that explore fi rst Center for American Studies (CAS) and launched a new pamphlet series— principles in depth. Over 4,000 Leader’s supplied intellectual ammunition to “Understanding America”—that focuses Guides have been sold for the purpose those fi ghting to restore America to on the important role America plays of starting reading groups around her fi rst principles. We Still Hold These in shaping the world we live in and the the nation. Heritage also developed a Truths: Rediscovering Our Principles, world our children will inherit. We Still Hold These Truths DVD that

6 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

Rep. Allen West, R-Fla., (foreground) and 39 other newly elected members of Congress participated in Heritage’s “fresh- man orientation” workshop, Nov. 19-21 in Washington, D.C. The sessions dispensed policy information as well as practical advice, such as how to staff a congressional offi ce. Photos: Chas Geer debuted to broad acclaim on Constitu- 80 leaders representing all stripes of Billie Tucker of First Coast Tea Party in tion Day at the Value Voters Summit. It conservatism, the document recom- Jacksonville, Fla., was one of three leaders was subsequently featured at the State mitted the established conservative accepting the 2010 Henry Salvatori Prize Policy Network’s Annual Meeting and movement to a “Constitutional for American Citizenship on behalf of the numerous Tea Party conferences. conservatism based on fi rst principles” nationwide grassroots movement. The Working to strengthen the next as the “framework for a consistent and $25,000 prize fi nanced “First Principles generation of conservative leaders, our meaningful policy agenda.” By year’s Field Kits” containing pocket editions of First Principles Team and Heritage’s end, the list of signatories had swollen the Constitution and Declaration, as well Young Leaders Program co-hosted to more than 45,000. as books and monographs on founding a “First Principles & Public Policy In August, as Americans pondered principles, to 350 Tea Party organizations Forum” for interns in the nation’s their electoral choices, Heritage issued throughout the country. capital, and sponsored fi rst principles Solutions for America, a comprehensive seminars on several college campuses. policy guidebook presenting 128 Of course, Heritage didn’t forget specifi c recommendations on how about the longtime faithful of the Congress can address our nation’s most conservative movement. In January, pressing problems while remaining true Ed Feulner coordinated the drafting to America’s founding principles. and release of The Mount Vernon Meanwhile, Heritage experts began Statement. Signed initially by over working with the Congressional 10th

2010 ANNUAL REPORT ■ 7 THE HERITAGE FOUNDATION

Surrounded by Heritage interns, Dr. Lee Edwards, our Distinguished Fellow in Conservative Thought, fi elds questions about William F. Buckley following a luncheon seminar on the conservative movement. The 2010 biography of Buckley is Edwards’ 20th book. Photos: Chas Geer

Amendment Task Force to craft a new Preserving the Sacred Fire of Liberty federalism agenda. This renewed focus America was founded on the idea of on federalism proved timely, if not freedom—an unprecedented develop- downright prescient, when voters in ment in the tide of history November awarded 680 state legislative that is both blessing seats to the GOP, giving state legislatures and obligation. For, as the most conservative—hence, federalist- George Washington fi rst friendly—cast since the 1920s. recognized, the “preser- When the voters had spoken on vation of the sacred fi re Nov. 2, Heritage immediately issued of liberty” depends on the a legislative checklist for the new American people. Congress. The to-do list was short, but What are the implications absolutely vital: of that? That’s the topic of ■ Freeze and cut spending Heritage’s Understanding ■ Repeal ObamaCare America series. These book- ■ Stop the Obama tax hikes lets explore how the U.S. com- ■ Protect America mitment to the universal truths of human equality ■ Get control of government. and the right to self-government—as proclaimed in Conservative leaders on the Hill the Declaration of Independence—requires a vigi- embraced that list. Indeed, they didn’t lant defense of the cause of liberty, both at home wait until 2011 to get cracking. In the and abroad. lame-duck session, conservative nego- tiators stopped the Obama tax hikes cold—at least for two years. The new House quickly adopted another Heritage recommendation: a rule requiring a citation of con- stitutional authority for every bill introduced. In December, CAS began issuing “Constitutional Guidance for Lawmakers” to inform the decisions of the new Congress.

8 ■ 2010 ANNUAL REPORTORT THE HERITAGE FOUNDATION

Reining in Rampant Government Enterprise & Free Markets Faced with severe problems in fi nancial markets and the overall economy, “progressives” sought to paper them over with greenbacks, regulations, and debt. In the ensuing debate over “stimulus” spending, Heritage experts offered constructive criticism that caught the nation’s attention. Photo: Chas Geer

rian Riedl, our Grover Hermann 2011 Budget Contradicts Focus on Job Sen. Judd Gregg, R-N.H., outlines key points Fellow in Federal Budgetary Af- Creation.” It, too, was posted in full by of his sweeping tax reform bill, co-sponsored Bfairs, emerged as one of the most The Wall Street Journal. by Sen. Ron Wyden, D-Ore., (left) at a infl uential critics of federal “stimulus” As always, Heritage offered a March 16 public seminar in Heritage’s initiatives. His analysis of why the stimu- better way to spark economic recovery. Allison Auditorium. lus failed attracted tens of thousands of Rejecting failed Keynesian nostrums, readers on heritage.org and an even larger we developed a “no-cost stimulus” plan. audience when The Wall Street Journal It gained national attention when Rep. posted it on its website. Opinion leaders Peter Roskam, R-Ill., raised the idea at a from syndicated columnist George Will televised retreat with President Obama. to (now) House Budget Chairman Paul Rather than reform federal policies Ryan, R-Wis., soon picked up his argu- that helped trigger the fi nancial crisis, ments, and scores of newspapers carried congressional liberals pressed to impose Riedl’s commentaries explaining why the even more ill-considered regulations on stimulus approach was doomed to fail. fi nancial institutions. Heritage aggres- Senior Policy Analyst Curtis Dubay’s sively argued that the alleged reforms of WebMemo showed how “Obama’s the Dodd-Frank bill would only worsen

2010 ANNUAL REPORT ■ 9 THE HERITAGE FOUNDATION

“When the National Commission on Fiscal Responsibility and Reform issued its long-awaited report on how to remedy the structural defi cit, Heritage was quick to applaud the effort, but just as quick to note that it missed the boat.” problems in the fi nancial sector and To paper over America’s crum- to abandon their cars in favor of mass might even end up creating a permanent bling infrastructure, President Obama transit and to leave roomy, suburban bailout program. proposed a national infrastructure houses for Hobbit-sized homes or— Although the bill ultimately bank. Herbert and Joyce Morgan Fellow better yet—high-rise dwellings in cities. passed, several of its more egregious Ronald Utt noted that the same scheme Utt blew the whistle on the initiative. provisions—such as the $50 billion had already failed in South Carolina and Working with analysts from a variety of bailout fund—were forced out. More explained why a bigger, federal version conservative and libertarian think tanks, encouraging, the watered-down version would fare no better. In the end, the Heritage presented a unifi ed front in that passed remained deeply unpopular ill-conceived idea died. opposition to such policies. with the American public, especially President Obama also proposed Heritage also prepared cogent given that it left Fannie Mae and Freddie using a transportation bill to modify analyses that helped blunt the Admin- Mac—major players in the housing human behavior according to the tastes istration’s drive toward so-called net meltdown—untouched. Consequently, of liberal elites. The proposed “livability” neutrality — an Internet regulatory this is fertile ground for future action. program would “incentivize” Americans scheme that would restrict freedom of speech and spin out miles of red tape. Most importantly, we revealed the “big picture” problem of over-regula- tion in two key studies of “Red Tape Rising.” The fi rst documented how fast federal regulations had multiplied and Sen. John Thune, their cumulative costs. “Regulatory R-S.D., delivers taxes do not appear on any balance his Aug. 4 lecture, sheet, yet cost Americans about $1 “Changing trillion every year,” it noted. The study Washington Starts attracted major media coverage, in- with Changing cluding stories in The New York Times How Congress and National Public Radio. Does Business,” to The second study focused on regu- a packed Lehrman lations imposed in the fi rst year of the Auditorium. Photos: Chas Geer Obama Administration. Its conclusion: That year saw the greatest increase in regulatory burdens in U.S. history—43 major new regulations that will cost the economy more than $26 billion. Heritage experts exposed the ever- expanding Leviathan as a self-enriching beast. Senior Policy Analyst James Sherk found that federal workers are Distinguished Fellow Ernest compensated 30 to 40 percent more than Istook, a longtime member comparable workers in the private sector. of the House Appropriations Compensating civil servants at market Committee, explains the rates, he noted, would save taxpayers $47 procedures—and pitfalls—of billion annually. Senior Analyst Jason the appropriations process at Richwine reached a similar conclusion our orientation workshop for using different methods. Unions howled new members. in protest as Heritage made these fi nd-

10 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

ings common knowledge with columns appearing in dozens of papers including USA Today and The Wall Street Journal. Throughout the year, Heritage re- peated a core fi nancial truth: Our fi scal problems stem from too much govern- ment spending, not too little taxation. Heritage Vice When the Republican Party thumped President David its collective chest for promising to cut Addington and spending by $100 billion, Brian Riedl Distinguished Fellow upped the ante, delivering a list of $343 Elaine Chao discuss billion in available cuts. ways to restrain When the National Commission on government growth Fiscal Responsibility and Reform issued at our retreat for new members of Congress. its long-awaited report on how to remedy Photos: Chas Geer the structural defi cit, Heritage was quick to applaud the effort, but just as quick to note that it missed the boat. The com- mision’s mistake: It offered a tax-heavy solution to a spending problem. “Overall, the commission would raise taxes by $3.3 trillion in the fi rst At the January retreat for decade, yet reduce Social Security and conservative members, Harry health spending (the source of nearly all C. Alford, President and CEO long-term defi cits) by just $442 billion,” of the National Black Chamber Riedl noted. The commission’s report of Commerce, explains how disappeared from the public debate excessive federal regulation and within days. taxes punish entrepreneurs.

Red Tape Rising: Cost of New Regulations Reaches Record High In Billions of Dollars by Fiscal Year, Adjusted for Inflation $30 $26.5 Independent $25 agencies $20.0 $20

$15.4 $14.7 $15

$10

$5

1981 $0 1985 1990 1995 2000 2005 2010

–$5

Sources: Figures for 1981–2009: U.S. Offi ce of Management and Budget; fi gures for 2010: Heritage Foundation calculations based on agency reports.

2010 ANNUAL REPORT ■ 11 THE HERITAGE FOUNDATION

Cutting Government Down to Size Photo: Chas Geer Entitlements ollster Scott Rasmussen fi nds At an April event, Sen. Jim DeMint, that three of every four “Main- R-S.C. (left), and Rep. Tom Price, R-Ga., Most Americans think the P stream” voters (78 percent) say discuss fi ndings of Heritage’s latest Index they want fewer government services of Dependence on Government and how federal government is too big, and lower taxes. increasing reliance on federal assistance too intrusive, and too costly. That puts them at odds with undercuts the family and the republic. Yes, they want government to what Rasmussen calls the “Political work more effi ciently. But they Class”—70 percent of whom say they president’s budget, with its call for also think government is simply want more government services and unprecedented levels of spending, was higher taxes. far more ruinous than fi rst appeared. trying to do too much. This disagreement over the size Grover Hermann Fellow Brian Riedl and scope of government is funda- exposed how the CBO’s budget baseline mental. If America is truly a self- report understated the 10-year defi cit governing nation, then the will of the by $7 trillion. Using a more realistic American people cannot continue to baseline, Riedl showed that the proposed be overridden by an elite political class. budget would add $16.3 trillion in new Government must tax and spend less. debt between 2009 and 2020. That became the central demand These were astounding revelations. of the Tea Party revolution. And Rush Limbaugh read Riedl’s report throughout the year, Heritage ampli- on the air, and it quickly became the fi ed the theme that’s anathema to topic of numerous nationally syndi- Washington’s elites: Ever-escalating cated radio shows. Riedl appeared on federal spending is a cause, not a cure, C-SPAN’s “Washington Journal,” taking for what ails the American economy. phone calls from concerned taxpayers We began by warning that the across America and explaining the need

12 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

for budget process reform and how Congress should go about it. Big Spending, Not Tax Relief, Drives Budget Defi cit Liberals mounted an effort to The White House and some in Congress continue to blame federal increase tax revenues by imposing a budget defi cits on the 2001 and 2003 tax cuts. But even if lawmakers value-added tax. The VAT appeals to made those cuts permanent, revenues still would surpass the historical big-spending politicians because it re- average by the end of the decade. mains almost completely hidden from So the rising defi cits to come are entirely the result of an equal rise consumers, yet can generate oceans of in government spending. Surging spending — not declining revenues revenue — and “progressives” crave — is the problem. oceans of revenue for bailouts, stimuli and other doomed-to-fail initiatives. Spending, Revenues as Percentage of GDP, by Fiscal Year Heritage worked diligently to 30% educate Hill staff and the general public about the dangers of a VAT. As a measure 26.5% of the value placed on Heritage research, SPENDING one of our Capitol Hill briefi ngs at- 25% tracted a standing-room-only crowd of Averages, staff from the Senate Finance and Budget 1960–2009

Committees and Hill reporters. Spending: 20.3% Soon afterward, Sen. John McCain, 20% R-Ariz., offered a Sense of the Senate 18.2% Revenues: Resolution fi nding that a VAT would 18.0% be harmful to the nation. In introduc- ing the resolution, McCain quoted J.D. Foster, Heritage’s Norman B. Ture 15% REVENUE Senior Fellow in the Economics of Fiscal Policy. The resolution carried by an overwhelming 85-13 majority. While the VAT is not the way to re- 10% form our Byzantine tax code, reform is in- 1960 1970 1980 1990 2000 2010 2020 projected deed needed. One major problem: Fewer Source: Heritage Foundation calculations based on Congressional Budget Offi ce data. and fewer Americans are paying federal

Brian Riedl, Heritage’s Grover Hermann Fellow in Budgetary Affairs, outlines policies to spark investment and economic growth without spending tax

Photo: Chas Geer revenues.

2010 ANNUAL REPORT ■ 13 THE HERITAGE FOUNDATION

income taxes, while more and more are reaping federal benefi ts. Nearly half of all households now pay zero income taxes. This trend, which has persisted for years, is transforming America into a nation of takers rather than producers. Worse, it leaves more and more people trapped in a state of dependence on government to provide them with the basics: food, shelter, healthcare, and more. Our Center for Data Analysis (CDA), under the direction of William Beach, has documented this disturb- ing development in Heritage’s annual Index of Dependence on Government. The 2010 edition, released in October, showed that dependence in 2009 in- creased 13.6 percent over the previous year, bringing the Index to an all-time Photo: Chas Geer high. Additional research on this topic Alison Fraser, director of our Roe Institute for Economic Policy Studies, discusses defi cit reduction by Curtis Dubay, Heritage’s Senior options with Bill Flores, R-Texas, (left) and James Lankford, R-Okla., between sessions at the Tax Policy Analyst, earned a banner workshop for new members of Congress. headline on the Drudge Report and a lead editorial in USA Today. As the end of the year approached On the Air, Everywhere and the recession continued, liberals Heritage experts offered conservative solutions—and critiqued big- continued to push for massive tax spending, government-centric policies—in more than 1,000 television hikes—income taxes, capital gains and nearly 2,800 radio appearances in 2010. taxes, dividend taxes, and more—to hit taxpayers on Jan. 1, 2011. Heritage produced detailed research showing exactly why such hikes were the last thing our struggling economy needed. The special CDA report, “Obama Tax Hikes: The Economic and Fiscal Effects,” documented how raising taxes on those earning above $250,000 would take jobs and income from all Americans at precisely the time when David John, Senior Research Fellow Alison Fraser, Director, Roe Institute we need policies that stimulate job creation. Most valuable for lawmakers, the report presented job and income loss by state and congressional district, allowing members to see clearly how raising taxes in a recession would hurt their constituents. After the elections, a chastened lame-duck Congress returned and ultimately voted down the higher tax rates... at least for the next two years. J.D. Foster, Ture Senior Fellow Curtis Dubay (right), Senior Policy Analyst Score one for Mainstream voters. It’s a beginning.

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intentioned, law-abiding citizens can fi nd themselves in court facing Protecting Individual criminal charges. That’s the case laid out in One Freedom under Law Nation Under Arrest, a compelling book edited by Heritage’s Paul Rosenzweig Rule of Law onsider Lindsay Brown, a high- and Brian Walsh. Released in April, the school senior. She was jailed book presents real-life stories to docu- Individual freedom requires the C for having a butter knife in ment “how crazy laws, rogue prosecu- rule of law. But the rule of law her car. Or Cortez Curtis, a 13-year-old tors, and activist judges threaten your arrested for bringing a calculator that liberty.” John Stossel of FOX News drew also assumes reasonableness contained tools (including a tiny knife heavily from the book in preparing an on the part of those who blade) to school. Or 12-year-old Ansche in-depth report on the problem. His write and enforce our laws. Hedgepeth, handcuffed and detained for program featured interviews with Walsh Increasingly, our jurisprudence eating one french fry on the D.C. subway. and several of the people cited in the book whose lives took a nightmarish is losing sight of a key tenet of Or 61-year-old Kay Leibrand, booked for letting her hedges grow too tall. turn upon the whims of overzealous reasonable law—that to merit The federal government has now bureaucrats, prosecutors, and judges. a criminal conviction, one must declared so many things to be criminal, Walsh followed the book with a have intended to commit a it can’t even say how many crimes are special report, “Without Intent: How criminal act. on its books. Yet Congress continues to Congress Is Eroding the Criminal legislate, on average, more than 50 new Intent Requirement in Federal Law,” federal “crimes” each year. co-authored by Tiffany Joslyn of the But that’s only the beginning. National Association of Criminal Increasingly, federal regulations carry Defense Lawyers. The report, which criminal penalties. Now, even well- generated more than 300 media stories, Photo: Associated Press Robert Alt, Deputy Director of Heritage’s Center for Legal and Judicial Studies, voices concerns about the record of U.S. Supreme Court nominee Elena Kagan before the Senate Judiciary Committee. Edward Whalen (right), President of the Ethics and Public Policy Center, also testifi ed at the July 1 hearing.

2010 ANNUAL REPORT ■ 15 THE HERITAGE FOUNDATION

found that 60 percent of new nonvio- lent offenses lack an adequate criminal- intent requirement. The bipartisan duo of Reps. Bobby Scott, D-Va., and Louie Gohmert, R-Texas, highlighted the report at a Capitol Hill press confer- ence and held a House hearing devoted exclusively to over-criminalization. Walsh testifi ed at that hearing. Another problem drawing the attention of our Legal Center was the At an Oct. 6 public ObamaCare provision requiring indi- lecture, former U.S. viduals to buy health insurance. Center Attorney General Director Todd Gaziano, in concert with Richard Thornburgh Georgetown University Professor Randy explains how the Barnett and private attorney Nathaniel trend toward “over- Stewart, wrote an infl uential Legal criminalization” Memorandum, “Why the Personal unjustifi ably expands Mandate to Buy Health Insurance Is federal powers and Unprecedented and Unconstitutional.” jeopardizes our We followed up with an event featuring constitutional system. Sen. Orrin Hatch, R-Utah, and UCLA Photo: Spencer Anderson

Distinguished Fellow Edwin Meese speaks at a Nov.10 dinner at the Supreme Court marking the 25th anniversary of his historic speech on “original intent” to the American Bar Association. That speech, delivered while Meese served as President Reagan’s Attorney General, launched the

revival of constitutionalism. Photo: Chas Geer

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Professor Eugene Volokh. In a Senate fl oor speech on the same issue, Hatch entered Heritage legal research into the Congressional Record in support of his position. Sen. John Ensign, R-Nev., followed suit—twice—in support of two constitutional points of order. The Legal Center also was deeply engaged in the debate concerning Elena Kagan’s nomination to the United States Supreme Court. We hosted a six-event Supreme Court series on the topic. And Center Deputy Director Robert Alt was among the select few asked to testify at Kagan’s confi rmation hearing. His testi- mony, the infl uential political blog Power Line reported, “shredded” the claims of

one of the Democrats’ star witnesses. Photo: Chas Geer To focus attention on the Constitu- Citing rigorous studies on criminal recidivism, Senior Policy Analyst David Muhlhausen tion’s preeminent place in the American (foreground) questions the effectiveness of the Second Chance Act in July 21 testimony before the system of government, we initiated the Senate Judiciary Committee. ongoing Preserve the Constitution lecture series. The premier lecture was delivered Senior Legal Research by Chief Judge Frank Easterbrook of Fellow Brian Walsh the Seventh Circuit Court of Appeals (right) testifi es at the Nov. 10 Originalism Symposium before the House and Dinner. It commemorated the 25th Subcommittee on anniversary of the Great Debate on Crime, Terrorism, Originalism inaugurated by Attorney and Homeland General Edwin Meese. Supreme Court Security. With him Justice Samuel Alito hosted the gala, are two victims of which included seven circuit judges, over-criminalization: two former attorneys general, and one racing legend Bobby former solicitor general among the Unser (left) and distinguished guests. Miami businessman Abner Schoenwetter. Eight other series events included Photo: David Hills a discussion of judicial elections with former Michigan Supreme Court Justice Clifford Taylor, a critique of ObamaCare by Rep. Tom Price, R-Ga., a review of the Arizona im- migration lawsuit, and an address on over-criminalization by former U.S. Attorney General Dick Thornburgh. Series speakers were gratifi ed when the House of Representatives subsequently opened its 2011 session with an unprecedented reading of the Consti- Judge A. Raymond Randolph of the tution—a much-needed reminder of U.S. Court of Appeals for the District the federal government’s responsibili- of Columbia delivers Heritage’s ties, the source of its authority, and the annual Joseph Story Lecture, Oct. 20. limits on its power. His topic: “The Guantanamo Mess.” Photo: Spencer Anderson

2010 ANNUAL REPORT ■ 17 THE HERITAGE FOUNDATION

program. Now the TSA, not the airlines, handles cross- checking of passenger lists with no-fl y lists, something Heritage had long advocated. Had the program been in place fi ve months earlier, the Times Square bomber would have been nabbed before actu- ally boarding the plane. Defense for the Future Anti-terrorism wasn’t the only area of national security where Heritage enjoyed policy success. In late 2009, Congress adopted Heritage’s recommendation to establish an independent commission to review the Pentagon’s Quadrennial Defense Review. In 2010, Providing for a Strong Distinguished Fellow Jim Talent was named a com- National Defense missioner. And Heritage

Photo: iStock Photo Research Fellow for National Security Studies Mackenzie ithin days of the botched Eaglen served as one the panel’s three Protect America bombing, senior federal staff members. offi cials asked to meet with The commission’s fi nal report Christmas Day 2009: Despite W Heritage analysts to discuss better ways validated many Heritage criticisms of elaborate airport security, a to thwart such plots. National secu- the Administration’s long-term defense Muslim extremist smuggles rity experts James Carafano and Jena plans and echoed key Heritage recom- plastic explosives aboard a McNeill advised them to restructure the mendations for more robust military Federal Air Marshal Service, as well as modernization. The infl uential report plane in Amsterdam and very the Visa Security Offi cer program. Their was especially well-received by the nearly detonates them over proposals were quickly adopted. Armed Services Committees. Detroit. Meanwhile, Congress scheduled To help nurture a better under- hearings on the Christmas bombing standing of the need for modernization, attempt. McNeill‘s WebMemo, “Six Ques- Eaglen followed up by building a coali- tions for Terror Plot Hearings,” educated tion dedicated to educating the public members on the core issues prior to the about the need to reinvest in America’s hearings. Numerous briefi ngs by McNeill military. The coalition’s fi rst fruit was and Senior Legal Fellow Charles Stimson “Peace Doesn’t Keep Itself,” an Oct. 4 followed. Ultimately, Congress embraced Wall Street Journal column penned by their recommendations, reauthoriz- American Enterprise Institute President ing key investigative powers and tools Arthur Brooks, Foreign Policy Initiative provided under the Patriot Act. Director William Kristol and Heritage Heritage logged another homeland President Ed Feulner. This was followed security “win” in November, when the by a coalition briefi ng on Capitol Hill Transportation Security Administra- attended by more than 100 congressional tion implemented the “Secure Flight” staff and journalists.

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Missile Defense missile defense. Unconvinced, Heritage New START: Throughout 2010, Heritage fought to insisted the Administration disclose all Advantage, Russia keep the Administration from abandon- side agreements made by negotiators. The START nuclear arms treaty will ing plans for an effective missile defense. Senators soon called for the same. The require greater U.S. reductions than It started with a briefi ng for senators Administration’s refusal to honor those Russian. about the record of Philip Coyle, a requests brought ratifi cation in the Warheads Here are current U.S. would need to staunch missile defense critic nominated Senate Foreign Relations Committee to a drop 265 warheads, arsenals and Russia only 189. to a top oversight position in the Pen- screeching halt. But only temporarily. 1,815 tagon. Members of the upper chamber Ultimately, the Senate caved new levels 1,739 outlined balked at the dubious nomination and under a combination of political START: in the treaty. 1,550 put it on indefi nite hold. Ultimately, arm-twisting, White House funding President Obama gave Coyle a recess ap- promises, and the desire to get home Delivery/Launch pointment as Associate Director for Na- for Christmas. On Dec. 22, the lame- U.S. would have to cut 151 vehicles, tional Security and International Affairs duck Senate approved the treaty. Russia could add 134. at the White House Offi ce of Science and There was one bit of good news on 851 Technology Policy. The maneuver only the treaty front, however. For two years, START: 700 hardened Senate opposition, though. F.M. Kirby Research Fellow Baker Spring 566 The appointment expired at year’s end, and Margaret Thatcher Senior Research and Coyle was gone. Fellow Ted R. Bromund had written of Heritage’s battle against ratifi cation the substantive mutual advantages to be of Obama’s nuclear arms reduction pact gained from defense trade cooperation with Russia did not end so happily. The treaties with the United Kingdom and U.S. RUSSIA U.S. RUSSIA Source: Heritage Foundation research. New START Treaty had many fl aws, from Australia. Negotiated under the previ- anemic verifi cation provisions to lopsided ous Administration, the pacts would Certainly, Heritage’s message was arms cuts favoring Moscow. But the worst facilitate “jointness” in military fi eld being heard in the highest circles. When feature may well be its preamble linking operations and let defense contractors Defense Secretary Robert Gates later reduction of offensive weapons to limita- from all parties collaborate in develop- announced his effi ciency reform initiative, tions on our missile defenses. ing cutting-edge military technology. he convened a small, private meeting to The Russians claimed that link- In September, the Senate unanimously discuss his plans and solicit advice. Ea- age was ironclad, while the Obama ratifi ed both treaties. glen was one of 12 defense policy analysts Administration insisted the treaty invited to participate in that meeting. placed no meaningful restriction on The State of the U.S. Militaryy

Heritageiddi produced a unique chart book, “The State of the U.S. Military,” to help Congress understand trends in defense Photo: Chas Geer spending and their disturbing Lisa Curtis, Senior Research Fellow in our Asian Studies Center, recommended making military aid ramifi cations. to Pakistan contingent on how successfully it fought terrorists. Congress enacted that idea in 2010.

2010 ANNUAL REPORT ■ 19 THE HERITAGE FOUNDATION

families with young children, from businesses to taxpayers. The “Impact Working to of ObamaCare on Doctors” paper sparked a Wall Street Journal editorial. Reform Health Care ObamaCare’s requirement that individuals buy health insurance raised the Right Way constitutional questions. Our Center for Legal and Judicial Studies issued a hile lawmakers hadn’t read foundational Legal Memorandum, “Why Health Care the bill, Heritage did. That’s the Personal Mandate to Buy Health In- Passage of the Patient W why Ed Feulner, on the day surance Is Unprecedented and Unconsti- after passage, penned a column calling tutional.” It was cited repeatedly during Protection and Affordable for repeal. Round Two of the effort to Senate fl oor debate and entered into the Care Act (aka ObamaCare) bring America the health care reform Congressional Record, twice—once by was the watershed moment it needs had begun, and the fi rst order Sen. Orrin Hatch, R-Utah, and again by of 2010—in terms of both of business was to bury the disaster Sen. John Ensign, R-Nev.—to support two constitutional points of order. policy and politics. Blithely dubbed ObamaCare. As it had for months beforehand, Our Legal Center experts also pro- ignoring widespread our Center for Health Policy Studies vided advice and counsel to state offi cials public opposition—and produced a steady stream of analysis challenging the legislation in the courts. the bellwether election and commentary exposing the law’s Meanwhile, our health policy analysts gave of Sen. Scott Brown in damaging provisions, building a case state legislators guidance on how to fi ght for repeal, and laying an intellectual back against ObamaCare with far more Massachusetts—House foundation for getting health reform promising—and far less costly—market- Speaker Nancy Pelosi right. One popular product was based health reforms. Said Utah Speaker rammed through the massive “Side Effects,” a web-based feature of the House Doug Clark, “The research 2,000+ page bill heralding a documenting the unintended conse- and technical assistance you provide has, quences of this ill-designed legislation without question, been invaluable to us government takeover of the as they arose. throughout this process.” nation’s health care system. We also published a series of In addition to providing “invalu- nine “impact” papers delineating how able” assistance to lawmakers, Heritage ObamaCare would adversely affect took an unprecedented step: In April various audiences, from seniors to 2010 we launched Heritage Action for

Senior Fellow Robert Moffi t discusses responsible health reform initiatives at a March 18 seminar featuring Rep. John Shadegg, R-Ariz., and Grace-Marie Turner, President of the

Galen Institute. Photo: Chas Geer

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Heritage produced a series of videos documenting adverse “side effects” of ObamaCare. Dr. Martha Boone of Atlanta, small businessman Larry Patterson of Dallas, and Virginia Attorney General Ken Cuccinelli are among those featured.

America. A grassroots advocacy orga- nization, Heritage Action is able to do what The Heritage Foundation cannot: actively press Congress to 1) enact our policy recommendations into law and 2) overturn bad policy decisions. One of Heritage Action’s fi rst priorities: total repeal of ObamaCare. Liberal predictions that Americans would “get over” their antipathy to a federal takeover of the health care system proved way off the mark. With Heritage and Heritage Action continuously high- lighting new costs, fl aws, and inadequa- cies in the law, public opposition only hardened. November 2010 polling showed that a majority of voters were casting their ballots against the Obama agenda in gen- eral and health care reform in particular; 58 percent favored repeal of ObamaCare.

The stage was set for 2011. Photo: Chas Geer

Nina Owcharenko, Director of Heritage’s If You Like Your Health Care, Of the 17.2 million who no longer will have their Can You Really Keep It? employer-sponsored health plans under ObamaCare... Center for Health Policy Studies, President Obama promised 1 million outlines market- will become health care reform would not uninsured. based solutions affect those who already have for health reform coverage. But one independent 3.7 million will end up in at our November study shows more than 17 million Medicaid. orientation workshop people will be forced out of for new members of 3.9 million employer-sponsored health care will end up in a Congress. plans. That’s more than one out government exchange of every 10. without subsidies. 8.6 million will end up in a government exchange Source: The Lewin Group with subsidies.

2010 ANNUAL REPORT ■ 21 THE HERITAGE FOUNDATION

Saving Students from Failed Education Systems

he not-so-sweet deal: States Education could compete for $4.35 billion in education grants; in exchange “Race to the Top,” the T they had to agree to adopt national administration’s signature education standards and tests. Just education initiative, might one more attempt to get state and local better have been called offi cials to hand the reins of education policy over to bureaucrats in D.C. “Washington Knows Best.” Heritage responded with multiple doses of common sense. Jennifer Marshall, Director of Domestic Policy Studies, and Education Analyst Lindsey Burke co-authored “Why National Standards Won’t Fix American Education.” This powerful paper explained how national standards and tests “fail to address the fundamental misalignment of power and incentives in WebMemos, Burke debunked the com- public education today.” National Journal mon notion that more federal spending later named Marshall one of “20 Power will fi x whatever ails our schools. One Players” for her success in driving the of those memos, “Stimulating the national debate on education policy. Status Quo,” showed how the Education In “Creating a Crisis,” a series of four Department had squandered nearly $100

School Choice Helping Florida’s Minorities Narrow Educational Achievement Gap In 1998, black and NAEP Scores for 4th-Grade Reading Hispanic students BLACK HISPANIC in the U.S. lagged 240 240 White White far behind whites (National) (National) 230 230 in fourth-grade 229 229 Hispanic reading scores. (Florida) 223 While that trend 220 220 Black largely continues (Florida) 211 today, Florida 210 210 minorities have 204 204 200 200 Hispanic made signifi cant Black (National) (National) strides toward 190 190 narrowing the gap.

180 180 1998 2002 2003 2005 2007 2009 1998 2002 2003 2005 2007 2009

Source: National Assessment of Educational Progress, The Nation’s Report Card.

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At the May President’s Club meeting, Virginia Walden Ford (right), Executive Director of D.C. Parents for School Choice, describes the success of an education voucher program for children in Washington’s low-performing schools. Also on the panel: Heritage Director of Domestic Policy Jennifer Marshall (left) and Opportunity Scholarship student Ronald Holassie. Photo: Chas Geer Photo: CBS Outdoor billion in “stimulus” funding in less than with the dismal 49 percent rate among “Let Me Rise!” a Heritage-sponsored public a year… without even seeking, much less D.C. public school students. The study information campaign supporting the D.C. achieving, any useful reform. renewed interest in reviving the program Opportunity Scholarship program, placed ads Naturally, Heritage had a far more in 2011, with newly minted House on 225 city buses. The campaign featured eight promising approach to recommend: Speaker John Boehner poised to lead the of 1,700 low-income children helped by the state-based education reforms that charge for reinstatement. education voucher program. empower parents to choose the best possible education for their children. In “A Smarter Path to a ‘Race to the Top’,” for example, we urged that states be allowed to cut through the red tape associated with No Child Left Behind and send education resources where they’re most needed. In promoting parental empower- ment, Heritage continued to champion parental choice in education, especially the District of Columbia’s own Oppor- tunity Scholarship Program. Congres- sional liberals blocked new students from entering the program in 2010, but Heritage issued a study showing what

a huge boon it had been to thousands Photo: Chas Geer of students. Those who used their Texas Gov. Rick Perry, a strong proponent of school choice, fi elds questions alongside Heritage vouchers to attend private schools had Vice President Becky Norton Dunlop. Perry came to Heritage to discuss “Fed Up!”—his book a 91 percent graduation rate, compared condemning Washington’s encroachment in state and local policymaking.

2010 ANNUAL REPORT ■ 23 THE HERITAGE FOUNDATION

Promoting Economic Freedom and American Sovereignty

American Leadership special push to reinstate economic talks between the United States and Taiwan, In our global economy, the fortunes of nations and individuals are suspended since 2007. On Sept. 30, both increasingly entwined. That’s one reason Heritage encourages nations announced the long-stalled U.S.-Taiwan Trade and Investment the expansion of economic freedom—a prerequisite for Framework Agreement would resume. prosperity and human liberty—throughout the world. Protecting Our Sovereign or more than a decade, Heritage cally free” nations. The massive bailouts, Rights and The Wall Street Journal have increases in regulations on businesses, On March 30, Ambassador John Bolton, Fpartnered to produce the Index of and unprecedented stimulus spending former U.S. Permanent Representative Economic Freedom. The 2010 Index, our combined to drive America’s economy to the United Nations, delivered the 16th edition, analyzed economic freedom into the category of only “mostly free.” inaugural Jesse Helms Lecture, “Protect- in 183 countries and brought bad news: Despite this depressing news, Heri- ing National Sovereignty in the Age of The global advance toward greater eco- tage continued to teach the virtues of free Obama.” Throughout the year, experts nomic freedom had stalled. enterprise, free trade, and free people. In in our Douglas and Sarah Allison Center Worse, the United States lost addition to lecture tours that circled the for Foreign Policy Studies did just that, ground. For the fi rst time in Index world, we sponsored conferences in Latin keeping a wary eye on encroachments history, the U.S. could no longer be America, Europe, and East Asia. from international organizations. ranked among the world’s “economi- Our Asian Studies Center made a For example, Brett Schaefer, our Jay Kingham Fellow in International Regulatory Affairs, closely monitored the Review Conference of the Inter- national Criminal Court. His daily reports from Kampala were featured on National Review Online and cited by State Department offi cials. Similarly, Steven Groves, our Bernard and Barbara Lomas Fellow, was an offi cial observer at the U.N. global warming conference in Copenhagen. His on-scene reports supplemented the research papers posted on Heritage’s “Copenhagen Consequences,” the only conservative website dedicated to the conference. The site drew heavy traffi c. Better yet, the conference wound up being a major setback for proponents of new international energy controls. Finally, Margaret Thatcher Senior Research Fellow Ted R. Bromund published a series of papers exposing

Photos: Chas Geer sovereignty threats arising from con- At a Jan. 20 National Press Club news conference, (from left) Heritage Vice President Kim ventional arms treaties advanced by the Holmes, CDA Director William Beach, and CITE Policy Analyst Anthony Kim brief reporters on United Nations and the Organization of America’s slide in the Index of Economic Freedom. American States.

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Senior Research Fellow Robert Rector summarized the economic Fighting for Families and side of the issue this way: “Marriage remains America’s strongest anti-poverty Economic Independence weapon, yet it continues to decline. As husbands disappear from the home, poverty and welfare dependence will Family & Religion increase, and children and parents will In 1960, about 6 percent of suffer as a result. Current government policies either ignore or undermine children were born outside marriage. This needs to change.” marriage. In 2011, that In July, Rector published a study number had skyrocketed to documenting the failure of the 45-year- 40 percent. old War on Poverty. The percentage of people living in poverty remains essen- hat’s one reason our DeVos tially unchanged, despite 71 federal relief Center on Religion and Civil programs and means-tested benefi ts that TSociety devoted so much of 2010 will cost taxpayers more than $10 trillion to marriage — defending the institution over the next 10 years. itself and also publicizing its remarkable Rector called for a fundamental power to prevent and remedy many of rethinking of federal strategy and our nation’s social problems. outlined a more effective and affordable The year opened with marriage approach that included: under assault in two separate court Senior Research Fellow Robert Rector recom- ■ Making committed marriage a cases. Perry v. Schwarzenegger chal- mends sweeping welfare reforms at a Jan. 20 centerpiece of welfare policy, and lenged California’s voter-approved briefi ng on Capitol Hill. eliminating the “marriage penalty” constitutional amendment defi ning inherent in many current programs; marriage as between one man and of societal benefi ts—from improved ■ Capping aggregate spending on one woman. Visiting Fellow Thomas educational outcomes for children in these welfare programs; Messner’s “The Price of Proposition 8” intact families to reduced likelihood ■ Treating a portion of aid to able- provided nearly the entire text of an of juvenile crime, pregnancy, and drug bodied adults as a loan to be repaid amicus brief fi led by the Institute for use—derived from marriage. rather than a free gift. Marriage and Public Policy. Messner’s paper also informed numerous editorials and articles on the Better Living through Free Markets case, including a Jan. 11 New York Times column by Ronald Reagan Fellow Edwin Heritage marketed several educational product lines promoting free- Meese III. When the trial court struck market policies as the best way to preserve human dignity and build down Prop 8 in August, Meese wrote a strong, family-friendly communities. Washington Post column arguing that the ■ The Economy Hits Home, a series of six booklets, breaks down key ruling was “too extreme to stand,” and economic issues and explores how they affect family life. praising the court of appeals for staying ■ Indivisible, a collection of essays by prominent social and economic the trial court’s order. conservatives—each writing on the other’s topic—shows the In Gill v. Offi ce of Personnel connectedness and coherence of conservative principles. Management, a federal judge in ■ Seek Social Justice, including a six-lesson DVD and small-group Massachusetts ruled the Defense of study guide, helps young evangelicals understand poverty, social Marriage Act, passed by Congress in breakdown and what to do about them. 1996, was unconstitutional, asserting By year’s end, more than 15,000 Economy Hits Home booklets, 7,800 that it had no “rational relationship Seek Social Justice workbooks and 5,300 DVDs were in circulation. A to a legitimate government interest.” partnership with LifeWay promises even wider distribution of Seek Social Heritage research forcefully rebutted Justice in 2011. that notion, demonstrating a wide range

2010 ANNUAL REPORT ■ 25 THE HERITAGE FOUNDATION

Encouraging Eco-

and Econ-friendly Photo: Hannah Sternberg Energy Production Energy & Environment Throughout 2010, Heritage fueled challenges to ruinous legislative proposals drafted to fi ght global warming. efi nitive research from our Cen- went nowhere. By Novem- ter for Data Analysis revealed ber, even President Obama Dthat the Waxman-Markey backed away, declaring, cap-and-trade bill—the House proposal “Cap-and-trade was just one to tax carbon emissions—would reduce way of skinning the cat.” GDP by $9.9 trillion, cost 2.5 million Unfortunately, there are other Research Fellow Jack Spencer outlines a free- jobs… and lower average temperatures ways to inflate costs, discourage market solution for nuclear waste management by a mere fraction of a degree over the innovation, and crash the economy in Aug. 30 testimony for the Blue Ribbon next century. in the name of environmental Commission on America’s Nuclear Future. Momentum for a cap-and-trade protection. One way is to impose an measure vanished, as Heritage publi- unworkable Renewable Electricity plans to begin hearings on the cized the facts. (Technorati, an Internet Standard, an idea floated midyear proposal were quietly shelved. search engine that indexes some 113 by the green lobby. Heritage deflated There are, of course, practical million blogs, rated Heritage’s The this trial balloon with another CDA ways to address America’s very real Foundry among the top fi ve “green” analysis documenting its onerous energy problems. One of them it is to blogs.) A watered-down version barely economic consequences. Once it modernize and expand nuclear power passed the House. A Senate initiative made the rounds on Capitol Hill, production—without federal subsidies or other government assistance. Yet the Obama Administration Wind and Solar Generate…Even Higher Electric Bills proved no friend to nuclear power Al Gore calls on America to forsake coal and generate generation. It tried to scuttle the Yucca all electricity from renewable energy sources by 2018. Mountain waste storage project—a Those urging Congress to mandate a nationwide $718 move we promptly denounced. Our renewable electricity standard are less quick to do the vigorous defense of the plan paid off inconvenient math: Homeowners’ electric bills would in June, when the Atomic Safety and double or triple, if Gore got his way, because Licensing Board — using an argument of costly wind and solar technology. $504 fi rst advanced in a Feb. 23 WebMemo by Average Monthly Heritage Research Fellow Jack Spencer— Electricity Bill for a $404 rejected the attempt to halt the project. Family of Four, by Exclusive Energy $340 Spencer also supplied a silver lining Source for the otherwise egregious climate change bill offered by Sen. John Kerry $189 (D-Mass.) and Joe Lieberman (I-Conn.). The bill’s section on nuclear power lifted, almost verbatim, Spencer’s proposal for reforming regulation of the nuclear industry. Its inclusion in the lead Senate Coal Onshore Offshore Solar Solar bill signaled that Heritage recommenda- Wind Wind Thermal Photovoltaic tions would be part of the new “baseline” Source: Heritage Foundation calculations using data from U.S. Energy Information Administration. for nuclear legislation in 2011.

26 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

The Named Fellows Innovative Policies, of Heritage Distinguished Fellows In 2010, Heritage donors fund- ed 12 fellowships to promote con- On Aug. 27, Stuart M. Butler— centrated study of issues vital to the leader of Heritage’s domestic restoring constitutional principles: policy research team for nearly Marilyn and Fred Guardabassi 30 years—became Director Fellow in Media and Public Policy Studies of our new Center for Policy Kenneth McIntyre Innovation (CPI)…and our newest Distinguished Fellow. Grover M. Hermann Fellow in Federal Budgetary Affairs utler’s latest brainstorm, CPI is Brian M. Riedl focused on devising breakthrough Bstrategies to solve seemingly intrac- Photo: David Hills Chung Ju-Yung Fellow for table problems. “Think of us as the ‘iPod Stuart Butler Policy Studies division’ of Heritage,” he says. “Our task: to develop radically innovative solutions Peter Brookes based on time-tested, conservative principles.” Jay Kingham Fellow in And he’s not thinking small. “One of our fi rst projects is to fi gure out how to break International Regulatory Affairs the congressional paralysis on dealing with the nation’s long-term fi scal crisis,” Butler Brett D. Schaefer says. He’s assembling a “virtual think tank” of political scientists, game theorists and policy experts to devise strategies and legislative procedures to break the impasse. F.M. Kirby Research Fellow in National Security Policy Baker Spring Heritage Fellows—Distinguished Leadership Bernard and Barbara Lomas in the Battle of Ideas Fellow Home to scores of the nation’s top policy experts, Heritage honors Steven Groves six as Distinguished Fellows. In addition to Stuart Butler, those whose profound scholarship, range of experience, and height of achievement Herbert and Joyce Morgan have merited recognition are: Senior Research Fellow Elaine Chao—A former Secretary of the U.S. Department of Labor, Ronald D. Utt, Ph.D. President and CEO of United Way of America and Peace Corps Director, Ronald Reagan Distinguished Ms. Chao now concentrates on trade, job creation, and workforce issues. Fellow in Public Policy Lee Edwards—The leading historian of the conservative movement, Edwin Meese III Dr. Edwards published his 20th book in 2010, as well as two installments of Heritage’s First Principles series. He also chairs the Victims of William E. Simon Fellow in Communism Memorial Foundation. Religion and a Free Society Ryan Messmore Ernest Istook—A 25-year veteran of elective offi ce, Istook served 14 years in the U.S. House of Representatives. Intimately familiar with the appropria- Margaret Thatcher Senior tions process, Istook focuses primarily on budget and spending issues. Research Fellow Edwin Meese III—The former U.S. Attorney General and Counselor to Ted R. Bromund, Ph.D. President Reagan, Mr. Meese is our Ronald Reagan Distinguished Fellow Norman B. Ture Senior Fellow in in Public Policy. An elder statesman in the conservative movement, he the Economics of Fiscal Policy also chairs our Center for Legal and Judicial Studies. J.D. Foster, Ph.D. Jim Talent—A veteran of both the House and Senate Armed Services Com- mittees, Talent remains a dogged proponent of military preparedness. Last Jay Van Andel Senior Analyst year his former Hill colleagues selected him to serve on the independent in Trade Policy panel reviewing the Pentagon’s Quadrennial Defense Review. Bryan Riley

2010 ANNUAL REPORT ■ 27 THE HERITAGE FOUNDATION

so did our member-led activities. We proudly launched two new Community Growing the Ranks of the Committees in North Carolina and Seattle, Wash. Overall, more than 15,000 Conservative Movement people attended beyond-the-Beltway Heritage has always been the most broadly supported think tank Heritage events in 2010. And our President’s Club meeting in December in America. But never have so many joined the Heritage family. drew a record crowd of 1,100. Featured e began 2010 with 582,000 We launched this independent speakers included Newt Gingrich, Fred members. We closed with grassroots advocacy organization in April. Barnes, Virginia Attorney General Ken an astonishing 710,000, a Its mission: to press lawmakers to adopt Cuccinelli, and Sen. Jim DeMint, R-S.C. W In keeping with our commitment 22 percent increase that carries us ever Heritage policy solutions. Thanks to your closer to our goal of 1 million mem- fi nancial support, totaling $3 million in to cultivate the next generation of bers by 2017. just nine months, Heritage Action, under conservative leaders, Heritage reached Members old and new were the leadership of CEO Michael Needham, out to younger conservatives through generous in their support, contribut- was able to push successfully for extension our Young President’s Club, open to ing almost $73 million to Heritage—a of the Bush tax cuts and to give advocates those on the sunny side of 40. YPC record high. But that wasn’t all. They of ObamaCare and the New START welcomed nearly 700 new members, also contributed handsomely to Treaty the fi ght of their lives. bringing total YPC membership to Heritage Action for America. As Heritage membership expanded, over 1,600. Our internship program provided graduate-level training—and real-world policy experience—to 177 Thank You for Your Leadership young people. Our Young Leaders The Heritage Foundation is thrilled that more than 864,000 donors have Program traveled to 16 states, briefi ng supported the Leadership for America campaign. Between the launch of more than 50 collegiate groups on the campaign in January 2007 and the end of 2010, we have received gifts, conservative principles. pledges and commitments totaling more than $362,191,000. Our “virtual” connections reached We’d like to take this opportunity to especially thank those donors who record numbers of people as well: ■ have made particularly generous contributions and commitments totaling We redesigned our main website, $1 million or more, including: heritage.org, to give visitors faster and easier access to our products. Allegheny Foundation Earl and Ruth Hyde The result: more than 6.8 million Douglas and Sarah Allison Mr. and Mrs. Jerome Johnson Mr. and Mrs. Robert R. Aune Claude R. Lambe Charitable Foundation unique visitors for the year and more Cloyce K. and Barbara J. Avey James P. and Danielle M. Lister than 2 million page views monthly. Constance Schiffl in Blum Mr. and Mrs. Robert Mair ■ Morning Bell, our daily wake-up Mr. and Mrs. Wayne F. Brady James McAlister and Melisha Parker e-mail for conservatives, rang up David and Patricia Caldwell Mr. and Mrs. Barry W. Moore 162,000 subscribers, an increase of The CHEAR Foundation Samuel Roberts Noble Foundation, Inc. more than 10 percent. Mr. and Mrs. David L. Coffey Joseph Prestele ■ Shelby Cullom Davis Foundation Mr. and Mrs. John H. Rumpel More than 400,000 people now The Richard and Helen DeVos Foundation Mr. and Mrs. Thomas A. Saunders III receive Member Briefi ng, our Mr. and Mrs. Rick Gaby Mr. Richard M. Scaife twice-weekly e-newsletter tracking Dr. Melvin D. Garbin and Mrs. Gail Sarah Scaife Foundation Heritage’s impact on policy debates. Monaloy Garbin in honor of Dr. and Mr. and Mrs. Mark Selko ■ In the world’s most popular social Mrs. Morris Monaloy Greg Sheehan John D. Gottlick Dr. Jeffrey B. Shellan medium, Facebook, Heritage’s Mr. and Mrs. William Grewcock Estate of Lenore J. Stein list of “friends” reached nearly Norman G. and Phyllis M. Gunther Joseph D. Sullivan 300,000—more than either politi- John C. Hagan III, M.D. Mr. and Mrs. Brian S. Tracy cal party or major media outlets Mr. and Mrs. John R. Haesler Dr. and Mrs. Leo G. Watson such as The Washington Post and Henry E. Haller, Jr. Lillian S. Wells Foundation USA Today. Howard Charitable Foundation Mrs. Marion G. Wells Hanwha Group ■ Our Twitter following tripled, to Six members have asked to remain anonymous. 95,000. We’re thankful that we’ve been

28 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION Photo: Chas Geer President Edwin Feulner fl anked by our spring 2010 interns and staff of our Young Leaders Program. able to reach so many more Ameri- may be sure that The Heritage Foun- ship offi ce at (800) 546-2843. We cans, and that so many have chosen dation will remain true to those ideals welcome the chance to give you a to become Heritage members. We as we develop and promote effective tour of our offi ces and to thank you know that you have joined because of policy solutions for America. personally for helping make Heritage our shared commitment to this great And, if you plan to visit Wash- the leading conservative organization nation’s founding principles, and you ington,on, please call our member-member in America.

Local Member Meetings Heritage launched two new Community Committees in 2010—in North Carolina and Seattle—bringing the total number of formal committees to 14. And members were able to attend fascinating lectures and panel discussions in even more areas, thanks to volunteer hosts throughout the land. In 2010, Heritage arranged local and regional member eventstss in 25 locations beyond Washington, D.C. Notable speakers at these gatherings included Karll Rove, Steve Forbes, John Stossel, Steve Moore, Rep. PPaulaul Ryan, R-Wis., and Minnesota Gov. Tim Pawlenty. ★ Atlanta ★ Denver ★ NNaplesl ★ SanSF Francisco ★ SaintS iLi LouisL ★ Austin ★ Des Moines ★ Nashville Bay Area ★ Tucson ★ Bay Harbor ★ Essex ★ New York City ★ Seattle ★ West Palm Beach ★ Cambridge ★ Greensboro ★ Omaha ★ Southeast ★ Washington, D.C. ★ Chicago ★ Kalispell ★ Raleigh/Durham/ Michigan ★ Colorado Springs ★ Minneapolis/ Chapel Hill ★ Southern ★ Dallas/Fort Worth St. Paul California

2010 ANNUAL REPORT ■ 29 THE HERITAGE FOUNDATION

Heritage Legacy Society The Heritage Foundation thanks the following Heritage Legacy Society members who made commitments in 2010. We are grateful for their leadership in creating a better America and leaving a legacy for freedom for future generations. The Heritage Legacy Society, whose members have made commitments through their estate or other planned gifts, is co-chaired by Rae and Belden Bell of Marshall, Va., and Marion Wells of Ft. Lauderdale, Fla.

Ms. Betty A. Anderlik Mr. and Mrs. George W. Helling Mr. and Mrs. Thomas E. Petika Mr. Daniel R. Shawe Ms. Jean Andrews Ms. Joyce E. Hodge Mr. George O. Pfaff Ms. Arlene Siegler-Robinson Mr. Donald J. Angell Mr. and Mrs. Fred Holy Mr. Alexander Pinter Ms. Joyce W. Sihler Mr. and Mrs. Robert R. Aune Mr. Norman R. Homan Mr. and Mrs. James Plute Mr. and Mrs. Charles Smith Ramon D. Baker, M.D. Mr. Edward H. Hoppe III Mr. Alan Pratt and Mrs. Helen Clark Mr. Stanley Smith Mr. Augustus C. Barnett, IV Dr. Roy C. House Mr. Edward M. Preston Mr. Robert S. Spears Mr. Jerry J. Batchelder Mr. Charles M. Hunter Ms. Ashley V. Proctor Mr. Paul Syska Mr. Phillip E. Beane Ms. May E. January Mr. and Mrs. Robert C. Puff Jr. Dr. Mirian H. Taddei Mr. and Mrs. William G. Becker, Jr. Mr. Arnold H. Johnson Mr. and Mrs. J. Rex Reddick Mr. R. J. Taylor Mrs. Elsie D. Bickford Mr. Lawrence Johnson Mr. Anthony J. Reilly, Jr. Mr. and Mrs. Delvin Tingwall Mr. Perry W. Bilyeu Mr. Lenard Johnston Miss Monte Richardson Miss Ana Cecilia Vargas Mr. Stanley B. Boertje Mr. Philip E. Keenly Mrs. Anni Roberts Ms. Rosita Victoria Mr. and Mrs. David A. Boots Mr. and Mrs. Thomas L. Kempner Ms. Imogene Ross Mr. Curt Von Wooster Mr. Charles W. Bower Mr. and Mrs. Frank J. Kinn Mrs. Marie Ruhland Mr. and Mrs. Dwight A. Wagner Mr. and Mrs. David V. Burgett Mr. George M. Kuhns Mr. and Mrs. John H. Rumpel Mr. Gordon Robert Ward Mrs. Orpha B. Cade Mr. and Mrs. Michael W. Lathers Mrs. Nancy P. Rush Mr. Stephen E. Watkins Mr. and Mrs. Kevin Canada Dr. and Mrs. James T. Leslie Mr. Eugene V. Sagnella Mr. and Mrs. Marvin E. Wicher Mr. and Mrs. William Casale Miss Brenda Levy Mr. Chad Schaefer Mr. and Mrs. Stephen H. Winchell Miss Juliana Hui-Hsien Cheng Mr. and Mrs. Thomas A. Linehan Mr. and Mrs. Jacob W. Scheeres Mr. B. H. Wooldridge Mr. and Mrs. Herbert Christopher Mr. Thomas F. Linnen Mr. and Mrs. Gregory Schei Mr. John W. York Mr. and Mrs. David L. Coffey Ms. Nancy J. Lobaugh Mr. and Mrs. Howard Schultz Mr. and Mrs. Edward S. Young Mr. and Mrs. Charles F. Cook Dr. and Mrs. Bernard T. Lomas Mr. and Mrs. Drake A Seeley Twenty-three Heritage Legacy Society Mr. and Mrs. E. Thomas Coopat, Jr. Mr. James Lumsden Mr. and Mrs. Mark Selko members wish to remain anonymous. Mr. and Mrs. John H. Corson Mr. and Mrs. Charles G. MacGregor Mr. James H. Craft Ms. Carol A. Manning Mr. Terry Cricksman Mr. and Mrs. Gilbert Y. Marchand With gratitude, we honor the memory of those Heritage Legacy Society Mr. and Mrs. Gene J. D’Agostino Mr. and Mrs. Jay Matternes members whose gifts we received in 2010: Mr. Tom Daniel Mr. Bruce C. Mayer Mr. Robert W. Albach Mr. Hugh P. King Mr. and Mrs. Harold R. Dombrowski Mr. James McAlister and Mrs. Mrs. Lenore C. Anderson Mr. and Mrs. Donald G. Lamp Ms. Nancy Lew Durbin Melisha Parker Mr. and Mrs. Lyle H. Baker Mr. James MacKinnon James H. Eldredge, M.D. Charles O. McCormick III M.D. Mr. T.F.A. Bibby Mr. Lewis E. MacNaughton Mrs. Jeanne H. Fallier Mr. Richard G. McDanolds Mr. Henry K. Brodersen Mr. Raymond E. McGowan Mrs. Verna Florov Ms. Shari McGinnis Ms. Eldred F. Brown John D. Milburn III, M.D. Mr. and Mrs. Frank Fucci Mrs. Wilma McQueen Mr. John M. Brown Mr. and Mrs. Gerald Pearsall Dr. and Mrs. Thomas Gallaugher Mrs. Naomi N. Merchant Ms. J. Doreen Chadbourne Mr. and Mrs. Lester Reines Dr. Melvin D. Garbin and Mrs. Gail Ms. Mary F. Miles Mrs. Erma Christensen Mr. Judson C. Rhode Monaloy Garbin in honor of Dr. Mrs. Dae Miller Mrs. L. Gracia Christensen Mrs. Helen R. Richman and Mrs. Morris Monaloy Mr. Donald Moeller Miss Patricia Dickerman Mrs. Ruth M. Rodine Mr. Michael E. Giobbe Jr. Ms. Marilyn Mooney Mr. John A. Evert, Jr. Mr. and Mrs. John R. Siekert Mrs. Leah S. Glickfi eld Mr. and Mrs. Barry W. Moore Mr. Peter E. Farrell Mrs. Billie R. Slotnick Mr. William S. Gray III Mr. and Mrs. Henry M. Moore Mr. and Mrs. James W. Frevert Mr. Lawrence Milbourn Smith Ms. LaShawta M. Groves Mrs. Marie E. Murwane Mr. James W. Gerard II Mr. and Mrs. Theodore H. Smyth Mr. Tom Guntly Mr. Bradley W. Nicholson Mr. Werner Gubelin Mr. Robert A. Staton Mr. John R. Hacklander Mr. C. Richard Nissley Ms. Doris Hales Mr. and Mrs. Charles B. Stevenson Mr. and Mrs. John R. Haesler Mr. Chris Nyhus Mr. C. E. Hannum Mr. Stanton H. Telander Mr. and Mrs. F. D. Halladay Mr. Gary Oaks Mr. John Morgan Harris Mrs. Mary Elizabeth Cox Townsend Mr. Henry Harbert Mr. Stephen Palmer Mr. Paul Hertenstein Mr. and Mrs. Ben G. Triplett Mr. and Mrs. Harry D. Harper Mrs. Patricia Patton-LoGiudice Mr. Carl Holler Mr. Leland Triplett Mr. William Hashem Jr. Mr. Robert Payne Mr. William H. Horrell, Jr. Mr. Wilfred L. Was Mr. and Mrs. John B. Hebard Mr. Lawrence H. Peterson Mr. William G. Kauders Mrs. Barbara Wells

30 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

2010 Financial Statements STATEMENT OF FINANCIAL POSITION* STATEMENT OF ACTIVITIES* As of December 31, 2010 Year ended December 31, 2010

ASSETS: OPERATING REVENUE

Cash & cash equivalents $ 4,890,432 Contributions: Receivables 11,100,305 Individuals $ 55,771,180 Prepayments & other assets 1,310,709 Foundations 12,145,565 Total current assets 17,301,446 Corporations 3,401,899 Total operating contributions 71,318,644

Investments 121,302,195 Investment withdrawal 7,725,000 Receivables, net 5,292,728 Program revenue 474,069 Plant, property & equipment, net 50,935,812 Rental & other income 2,160,162 Other assets 438,474 Total other operating income 10,359,231 Total long-term assets 177,969,209

TOTAL OPERATING REVENUE 81,677,875 TOTAL ASSETS $ 195,270,655 LIABILITIES & NET ASSETS: OPERATING EXPENSES Accounts payable & accrued expenses $ 9,172,852 Program expense: Notes payable 193,333 Research 28,116,528 Total current liabilities 9,366,185 Education 20,927,227 Media & government relations 11,938,882 Total program expense 60,982,637 Notes payable 5,179,035 Deferred obligations & planned gifts 16,795,518 Fundraising 16,436,836 Total long-term liabilities 21,974,553 Management & general 2,958,778 Total administrative expense 19,395,614 TOTAL LIABILITIES 31,340,738 TOTAL OPERATING EXPENSES 80,378,251 Unrestricted net assets: NET GAIN FROM OPERATIONS 1,299,624 Board designated 98,279,052 Undesignated 45,124,979 NON-OPERATING ACTIVITIES Temporarily restricted net assets 19,225,886 Contributions & temporarily restricted changes 1,894,188 Permanently restricted net assets 1,300,000 Investment gain 12,266,535 Total net assets 163,929,917 Investment withdrawal ( 7,725,000)

TOTAL NON-OPERATING ACTIVITIES 6,435,723 TOTAL LIABILITIES & NET ASSETS $ 195,270,655 INCREASE IN NET ASSETS 7,735,347

NET ASSETS-Beginning of year 156,194,570 NET ASSETS-End of year $ 163,929,917 2010 Operating Revenue 2010 Operating Expense

Program Fundraising Revenue 20% & Other Income 13% Contributions Programs Management 87% 76% & General 4%

*Preliminary results. Final audited fi nancial statements will be available on or after July 31, 2011. 2010 ANNUAL REPORT ■ 31 THE HERITAGE FOUNDATION

2010 Heritage Foundation Founders* Chairman’s Circle Founders Gleason Family Foundation Mr. and Mrs. Robert V. Pennington Allegheny Foundation Aequus Institute Mr. and Mrs. Jerry Grossman The Robert S. & Star Pepper Mr. and Mrs. David L. Coffey Mr. and Mrs. Douglas F. Allison Mr. and Mrs. John B. Hebard Foundation, Inc. The Richard and Helen DeVos Amway The Grover Hermann Mr. and Mrs. Dick J. Randall Foundation Mr. and Mrs. William L. Amos, Jr. Foundation Mrs. Anni Roberts Howard Charitable Foundation Ms. Betty A. Anderlik Mr. and Mrs. William J. Hume The Roe Foundation Mr. Richard M. Scaife The Armstrong Foundation Mr. and Mrs. Michael L. Keiser Searle Freedom Trust Barney Family Foundation F.M. Kirby Foundation, Inc. B.K. Simon Family Charitable Trustee’s Circle The Lynde and Harry Bradley Dr. and Mrs. James T. Leslie Foundation The CHEAR Foundation Foundation Mr. and Mrs. George L. Mayer William E. Simon Foundation Mr. and Mrs. Rick Gaby Mr. and Mrs. Jack E. Caveney Microsoft Corporation Mr. Larry H. Smead Hanwha Group Mr. and Mrs. Thomas W. Colbert, Sr. Mr. and Mrs. Robert S. Miller Gordon V. and Helen C. Smith Claude R. Lambe Charitable Mr. and Mrs. Leo W. Cook Mr. and Mrs. Henry M. Moore Foundation Foundation Adolph Coors Foundation The Morgan Family Trust Sorenson Legacy Foundation Mr. and Mrs. Thomas A. Saunders III The Deramus Foundation M. J. Murdock Charitable Trust Mr. Richard E. Uihlein Sarah Scaife Foundation Donahue Family Foundation, Inc. Mr. and Mrs. Joe P. Murphy Mr. G. Greeley Wells Lillian S. Wells Foundation Mr. and Mrs. William S. Edgerly The Frederick and Julia Nonneman Mrs. Marion G. Wells Mr. and Mrs. L. J. Futchik Foundation Mr. James A. West, Sr. Mr. John W. Galbraith Ten Founders have asked to remain anonymous.

Mr. and Mrs. Charles G. MacGregor Associates 2010 Heritage Foundation Associates* Mario Family Foundation Mr. and Mrs. George Anderson Mr. and Mrs. Thomas L. McGrath Ms. Jean Andrews Mr. and Mrs. Brian S. Tracy Premier Associates Mr. Greg McNece Mr. Donald J. Angell United Parcel Service Banbury Fund Joel T. and Carol S. Miltenberger Apex Foundation Mr. R. B. Zinser Mr. John N. Bathurst Mr. and Mrs. Michael T. Monahan Mr. Jeffrey B. Armour The Boeing Company The Morris Foundation Mr. Lewis Arnold Mr. and Mrs. J. Bayard Boyle, Jr. Executive Associates Mr. L. C. Neely, Jr. Mr. and Mrs. Caesar A. Arredondo Mr. Paul Boyle Mr. and Mrs. Edward M Ackerman Mr. C. Richard Nissley Mr. and Mrs. James J. Ascher Mr. and Mrs. Aubrey Chernick Mr. and Mrs. Charles H. Adler Orscheln Management Company Assurant Health Foundation The William H. Donner Altria Client Services Mr. and Mrs. James A. Patterson Richard F. Aster Jr. Foundation Foundation, Inc. Dr. and Mrs. Clifford S. Asness Lovett & Ruth Peters Foundation Mr. and Mrs. Paul M. Bagnoli ExxonMobil Mr. and Mrs. Robert R. Aune Mr. Russell D. Phelon Mr. and Mrs. J. Edward Banning Gardner Grout Foundation The AWC Family Foundation PhRMA Mr. Peter Barrett Mr. and Mrs. F.D. Halladay Helen W. Bell Charitable Foundation Mr. and Mrs. Gary L. Pilgrim Mr. Art Barter Mr. and Mrs. John Nils Hanson H.N. and Frances C. Berger Mr. and Mrs. James Plute Mr. and Mrs. A. J. Bartoletto William Randolph Hearst Foundation Foundation Mr. Aaron B. Powers Mr. and Mrs. Ron Baukol Hertog Foundation Mr. Robert J. Bishop Mr. and Mrs. Allen Questrom Mr. and Mrs. George Beck Mr. and Mrs. J. Robert Johnston Linse Bock Foundation Mr. and Mrs. Stanford Rothschild Bell Charitable Foundation Mr. and Ms. Michael Jude William H. Bowen Educational Mrs. Nancy P. Rush Mr. George F. Bennett Mr. and Mrs. Harry P. Keegan III Charitable Trust Satter Foundation Benwood Foundation Mr. and Mrs. Robert H. Kellen Challenge Foundation Mr. Henry E. Schnell Mr. Al Bergold Mr. Mark Kolokotrones The Crail Foundation Mr. William C. Shanley III Mr. Robert J. Bertch Mr. Leonard Litwin Donner Canadian Foundation Strong Foundation Trust Bialkin Family Foundation, Inc. Ms. Nancy J. Lobaugh James H. Eldredge, M.D. Sunmark Foundation Mr. Robert J. Boehlke The Maclellan Foundation Inc. Mr. Robert G. Engman Mr. and Mrs. Gary L. Swenson Mr. Charles W. Bower Mr. and Mrs. Robert W. Mair Dr. and Mrs. David L. Erickson The Sidney A. Swensrud Foundation Mr. Mike Boylan Mr. C. Phillip McWane Fairchild-Martindale Foundation The Thompson Foundation Mr. and Mrs. Bruce H. Branyan Capt. Randolph “Rocco” McLaughlin, Mr. and Mrs. Gregory W. Fazakerley Mr. Hall W. Thompson Ambassador Stephen F. Brauer USAF Mr. and Ms. Tracy Fu Mr. and Mrs. Ronald Trzcinski Mr. and Mrs. Theodore Brickman Northrop Grumman Corporation Mr. and Mrs. J. Patrick Gavaghan Mr. Robert J. Ulrich Briggs & Stratton Corporation Dian Graves Owen Foundation Mr. Michael E. Giobbe, Jr. Mr. and Mrs. Jeff P. Van Dyke Foundation, Inc. Charles Maxfi eld and Gloria F. Parrish Mr. and Mrs. Robert M. Gordon Mr. Michael Vennetti Mr. Bart J. Broadman Foundation Mr. and Mrs. Jerome Green Mr. and Mrs. Ralph Vennetti Ms. Gretchen Brooks The Dr. P. Phillips Foundation Mr. and Mrs. George W. Helling Mr. and Mrs. Wallace E. Volwiler Ms. Susan Brown John William Pope Foundation Mr. Charles H. Hoefl ich Count and Countess Ferdinand von Mrs. Carole B. Brown Mrs. Spelman Prentice Mr. and Mrs. Loren Jahn Galen Mr. and Mrs. Craig R. Brown Reynolds American The JM Foundation Wachs Family Foundation Mr. and Mrs. George R. Brown Hamilton Roddis Foundation The Karol Fund Mr. Richard Wells Mr. and Mrs. John Bruning Mr. Eugene H. Roos Mr. Ben Kleinpeter Mr. Donald M. Wilkinson Mr. Daniel W. Bunn Arthur N. Rupe Foundation Vernon Krieble Foundation Dr. and Mrs. Charles J. Willey Mr. John E. Burns Saliba Family Charitable Foundation The Fred A. Lennon Charitable Trust Mr. Keith C. Wold, Jr. Mrs. Harriet K. Burnstein Stiles Nicholson Foundation Lockheed Martin Corp. Mr. and Mrs. Donald H. Young The Babcock and Wilcox Company Stuart Family Foundation Mr. Cameron Sutton Ms. Polly T. Taplin * NOTE: Some listings on these pages refl ect combined contributions to both The Heritage Foundation and John Templeton Foundation Heritage Action for America.

32 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

Mr. and Mrs. David W. Caldwell Mr. and Mrs. Garnet A. Giles Mr. and Mrs. Edward A. Lozick Mrs. Elizabeth P. Rosenfeld Ms. Lynn Caldwell Mr. and Mrs. J. Robert Gillette, Sr. Mrs. Marie G. MacGregor Mr. and Mrs. John B. Rothenberger Mr. Mark A. Caldwell, Sr. Mrs. Anita Ginn Mr. Geoffrey Magistrate Joyce and Donald Rumsfeld Ms. Gillian N. Callaghan Mr. and Mrs. Tony Godfrey Mr. and Mrs. Gregg Mamikunian Foundation Mr. James J. Callan Pierre F. and Enid Goodrich Mr. Armas C. Markkula, Jr. The Ryan Family Foundation Mr. and Mrs. Bailey F. Campbell Foundation Mr. L. C. Martin, Jr. Mr. Jerome D. Ryan Mr. and Mrs. Stuart Campbell Mr. John M. Gordon Mr. Charles N. Mathewson Mr. Charles H. Sanford and Ms. Linda Dr. G. L. Carter, Jr. Ph.D. Mr. Thomas S. Gordon Mr. and Mrs. Ralph P. Mayer A. Elliott Mrs. Beverly T. Carter Mr. and Mrs. Leo G. Graham Mr. Greg McEachern Mr. and Mrs. Robert H. Schwarzmann Mr. and Mrs. Ronald L. Carter The Albert M. and Lyda M. Green Philip M. McKenna Foundation, Inc. Mr. and Mrs. Donald R. Scifres Castleman Family Foundation Foundation Mr. and Mrs. Philip McKinney Mr. Greg Sheehan Mr. James F. Causley, Jr. Mr. and Mrs. Terry Wayne Green Mr. Jim McManus Louis and Nellie Sieg Fund The Chisholm Foundation Mr. and Mrs. Curt Grina Dr. and Mrs. John R. McNair, Jr. Ms. Joyce W. Sihler Ms. Gladys Choate, OFM Mr. Michael Henry Guetz Mrs. Patricia K. McPherson Mr. Willis B. Skillman Dr. and Mrs. Armeane M. Choksi Mr. Daniel L. Guild Mr. Hal A. McVey Mr. John J. Smith Mr. Arthur Cinader Mr. and Mrs. Ronald L. Haberkorn Mrs. Naomi N. Merchant Mr. and Mrs. Henry Smogolski Mr. Robert A. Clack Henry E. Haller, Jr. Foundation Mr. and Mrs. Edward Michener Mr. and Mrs. Charles E. Spahr The George E. Coleman Jr. Foundation The Hamill Foundation Mrs. Dae Miller Mr. R. Scott Spriggs Mr. James A. Collins Mr. John S. Hamilton Mr. and Mrs. Ted Millice Mr. and Mrs. Ken Stinson Comcast Corporation Mr. and Mrs. Harold E. Hamilton Gerrish H. Milliken Foundation Mr. Lyle J. Stucki Mr. and Mrs. George Conrades Dr. and Mrs. Robert E. Hannay Mr. and Mrs. George Keith Mitchell, Jr. Mr. Joe Chat Sumner III Mr. and Mrs. Robert A. Cook The Harry B. & Jane H. Brock Mr. Donald Moeller Mr. and Mrs. Kermit S. Sutton Corporate Press Foundation Mr. Christopher S. Moody, Sr. Dr. Mirian H. Taddei Mr. Gary Coughlan Mr. and Mrs. William K. Hatcher Mr. Sam Moore Mr. and Mrs. Chris J. Taylor Mr. George W. Cowan Mr. and Ms. John S. Hayde Mr. and Mrs. Joseph J. Morrow The Ruth and Vernon Taylor Mr. and Mrs. Gilbert C. Cox, Jr. Mr. and Mrs. Jerry L. Hayden Mortgage Insurance Companies of Foundation Mr. Michael F. Cronin Mr. and Mrs. Ron J. Hazlett America Tejon Exploration Company Mr. and Mrs. Sam G. Croom, Jr. C. J. Heilig Foundation Mr. James F. Mrazek Mr. and Mrs. Jerry J. Tepper Mrs. Gay Cummings The Herbold Foundation Mr. Ronald H. Muhlenkamp Mr. and Mrs. Ronald Tesarik Mr. and Ms. Joseph Czyzyk Ms. Margaret M. Hill Murrill Foundation, Inc. Mr. and Mrs. Mike Thom Dabah Children Charitable Mr. and Mrs. John L. Hillhouse, Jr. MyWireless.org Mr. Michael D. Thompson Foundation, Inc. Mr. and Mrs. Edson P. Holland The Negaunee Foundation Mrs. Lisa J. Thompson-Smith Mr. and Mrs. Jason S. Damron Mr. and Mrs. Lawrence P. Holleran Mr. and Mrs. Peter C. Newell Mr. and Mrs. Larry Timmerman John R. and M. Margrite Davis Mr. and Mrs. Kent L. Holtgrewe Mr. Van A. Nguyen Mr. and Mrs. Ralph L. Toon Foundation Mr. and Mrs. Fred Holy Mr. and Mrs. Bruce S. Nicholas Mrs. Erma Jean Tracy Mr. and Mrs. Paul L. Davis, Jr. Mr. Gary D. Hoover Mr. and Mrs. Todd S. Nicholson Triad Foundation Inc. Mrs. Dorothy E. De Ganahl Mr. Robert E. Hord, Jr. Mr. and Mrs. David W. Niemiec Mr. J. Robert Tullis Mr. Frederick Joseph DeLong III Mr. Michael B. Howard Dr. John Nolte, MD Mr. Michael S. Turner Daniel and Pamella DeVos Foundation Mr. and Mrs. Don N. Howell Mr. and Mrs. David Oates Mr. and Mrs. Keith G. Twiggs The Dick and Betsy DeVos Foundation Mr. B. Wayne Hughes, Sr. Mr. and Mrs. Herman J. Obermayer Steve & Cindy Van Andel Foundation Gladys M. Dickson Charitable Trust The Huston Foundation Lucille V. O’Brien Foundation Mr. John K. Vanier II Mr. and Mrs. Edward Dillon Mr. Paul J. Isaac Mr. Arnold Ochs Mr. and Mrs. Paul B. Venuto Dodge Jones Foundation John E. and Sue M. Jackson Charitable Mr. Ralph Ochsman Mr. James R. Voss DonorsTrust Trust Mr. and Mrs. Robert C. Odle, Jr. Dr. and Mrs. Bill Wagner Mrs. Joyce H. Doty Mr. Arnold H. Johnson Mr. and Mrs. Roderick Odom Mr. and Mrs. George P. Wagner, Jr. Herbert H. and Barbara C. Dow Mr. Lawrence Johnson Mr. John O’Donnell Mr. William L. Waldock, Jr. Foundation Ms. Rebecca L. Julian Mr. and Mrs. James J. O’Neill Mr. W. Brian Walsh Mr. and Mrs. Robert W. Drinkward Kantner Foundation, Inc. Mr. San W. Orr, Jr. Ms. Ardis Walters Mr. Kenneth D. Duggin Mrs. Barbara D. Kasler Mr. and Mrs. Darryle L. Owens Mr. and Mrs. Pedro E. Wasmer Earhart Foundation Mr. Cary Katz Dr. and Mrs. K. Nicholas Pandelidis Mr. Charles Reynolds Watkins Mr. and Mrs. Robert J. Eaton Mr. Joseph Keelty Mrs. C. N. Papadopoulos Mr. Stephen E. Watkins Mr. and Mrs. Douglas C. Edman Dr. and Mrs. Michael F. Kelley Mr. and Mrs. Douglas Parsons Katharine Audrey Webb Foundation Mrs. Patty A. Edwards Mr. and Mrs. Thomas L. Kempner Mr. and Mrs. Ben M. Patterson, Jr. Mr. Dean K. Webster El Pomar Foundation (Colorado only) Kickapoo Springs Foundation Mr. and Mrs. Gene Perkins Mr. Robert M. Weekley Mr. Robert W. Ellis Walter & Olivia Kiebach Charitable Mr. and Mrs. Henry Perry Mr. David Wehrly Mr. and Mrs. George T. Elmore Foundation Trust Mrs. Phyllis Peters The Weiler Foundation Mr. and Mrs. Marshall Evans Mr. and Mrs. Broadus H. King, Jr. Mr. and Mrs. Donald C. Peterson Mr. and Mrs. Ronald B. Weinel Evenstad Family Foundation Mr. David A. King Pfi zer Inc. Mr. and Mrs. John D. Weiss Mr. and Mrs. Robert J. Fales King’s Stores Fund Physician Hospitals of America Mr. Stephen D. Weiss Mr. and Mrs. Mauro Fancelli Mr. Donald H. Kirkland Mr. and Mrs. Guido M. Pichini Mr. Thomas C. Weller Mr. B. E. Faulkner Mr. and Mrs. True H. Knowles The Honorable Jayne H. Plank Mr. Ernie R. West Dr. and Mrs. Edwin J. Feulner Mr. and Mrs. Vincent Kolber Mrs. Loretta Poindexter Samuel L. Westerman Foundation Mrs. Sara B. Fleming Mr. and Mrs. Kevin S. Kookogey Mr. and Mrs. Allen B. Porter Ms. Adrienne A. Price and Mr. Gene William Howard Flowers, Jr. Mr. Frank W. Kozel Mr. Jack Purcell Wexler Foundation, Inc. Legett Foundation Mr. Vincent Mark Rafanelli Mr. and Mrs. Paul H. Wick Mr. John C. Foxley The Lehrman Institute Ray Foundation William Penn Foundation Mr. and Mrs. Philip M. Friedmann LeMans Corporation Mr. and Mrs. Christopher M. Reid Mr. and Mrs. James Wintersteen Mr. Stanley E. Fulton Mr. Edward C. Levy, Jr. Mr. and Mrs. Charles D. Reite Mr. Frank E. Witt Mr. J. James Gallagher Mr. and Mrs. Harold Levy The Grace Jones Richardson Trust The Woodford Foundation Mr. Larry Garatoni Mr. and Mrs. John P. Lewis Mr. Lunsford Richardson, Jr. Mr. Richard B. Wright The Garber Family Foundation Mr. and Mrs. Ed D. Ligon, Jr. Mr. Robert E. Richardson Mr. and Mrs. Edward S. Young Mr. Robert W. Garthwait, Sr. Mr. Robert D. Lindner The Rising Phoenix Foundation, Inc. Mr. and Mrs. Thomas R. Zucker Mr. Richard Geary Dr. and Mrs. Bernard T. Lomas Mrs. Lisenne Rockefeller Rollin M. Gerstacker Foundation Dr. Herbert Longenecker and Mrs. Mr. and Mrs. W. E. Romaine Forty-seven Associates have asked to GFC Foundation Katherine Butler Mr. Sheldon Rose remain anonymous.

2010 ANNUAL REPORT ■ 33 THE HERITAGE FOUNDATION

Honoring Donor Intent When donating to a nonprofi t, you expect that organization to use your contribution in keeping with its stated mission. You also expect it to observe any restrictions you place on your gift. Unfortunately, nonprofi t organizations have been known to break faith with their mission and their donors. At The Heritage Foundation, we regard your support as a trust. We hold ourselves strictly accountable to you, and we pledge always to respect your philanthropic intent. The sanctity of donor intent is stated explicitly in our Articles of Incorporation. Moreover, the President of Heritage is personally responsible for answering donor questions and reporting expenditures of donor funds. From the boardroom to the mailroom, everyone at Heritage understands our obligation to our members. That’s why our Board of Trustees makes this formal pledge to every donor: “We will always respect your philanthropic intent and always hold ourselves accountable to you in our use of your generous contributions.” For a free brochure about donor intent, please call our membership line at (800) 546-2843. And, if you ever have any questions about your contributions or a complaint about the way we spend them, please contact us immediately. We will make sure that your questions are answered and your problems resolved.

Ed Feulner enjoys a moment with Heritage Legacy Society Members Barbara and John Rumpel at the Fall President’s Club Meeting. Photos: Chas Geer Heritage Associate Vince Kolber (left), Chairman of the Chicago Community Committee, with President Ed Feulner at the Fall President’s Club Meeting.

Betty Anderlik, a Heritage Heritage Founder Diana Spencer with Rep. Founder, tours the Anderlik fl oor Mike Pence, R-Ind. (left), and Ed Feulner at of our new 227 Pennsylvania Ave. the Spring President’s Club Meeting. building on opening day.

34 ■ 2010 ANNUAL REPORT THE HERITAGE FOUNDATION

Premier Associate Tony Saliba and family – Moira (left), Anthony and Magdalena—cut the ribbon opening our 227 Pennsylvania Ave. building as President Ed Feulner and Chairman Tom Saunders (right) look on.

Executive Committee Members Bob and Barbara Hathorne join Ed Feulner (left) at the welcome reception of the Spring President’s

Club Meeting. Photo: Chas Geer Photo: Chas Geer Photo: Chas Geer Photo: Chas Geer Michael Needham (left), CEO of Heritage Action for America, and Founder Herb Morgan (right) and his son, Mark Morgan (left), join Heritage Associate John Lewis, a member of the Dallas/Fort Worth Vice President and Senior Counselor John Von Kannon at the Supreme Committee, visit at the Spring President’s Club Meeting. Court dinner honoring Edwin Meese.

Legacy Society Member Mary Jo Thielen, who also chairs the Omaha Committee, came away with talk radio host Mark Levin’s autograph at a President’s Club book-

Photo: Chas Geer signing event.

Founder Jerry Grossman questions a panelist at Heritage’s annual Board

Photo: Michelle McMinn Meeting and Leadership Conference in Naples, Fla.

2010 ANNUAL REPORT ■ 35 THE HERITAGE FOUNDATION

Building a Better Future Exciting new developments in 2010. fi xture on the Senate side of Capitol Hill since 1973, Foundation Staff Offi ces, the Robert and Audrey Zinser Heritage opened a House Annex building on Sept. Executive Offi ce and, of course, the Voss Brothers’ Execu- A 14, just two blocks from the Cannon House Offi ce tive Restroom. Building. Its four conference rooms were soon buzzing with briefi ngs for House members and senior staff. Heritage Action for America Three of those conference rooms memorialize gen- In April, our Board of Trustees approved creation of a new, erous donations from Thomas Colbert, Berniece and sister organization: Heritage Action for America. A grass- William Grewcock, and Henry E. Haller, Jr. Other named roots advocacy group, Heritage Action lobbies lawmakers spaces include: the Joseph C. and Elizabeth A. Anderlik on key legislation. Its fi rst major projects: maintaining the Executive Floor, the Michael Jude Lobby, the Mark A. Bush-era tax rates, repealing ObamaCare, and preserving Kolokotrones Executive Offi ce Suite, the Saliba Family our nation’s missile defense program.

Membership Levels at a Glance Heritage membership increased by 128,000 in 2010. Members choose from among 14 levels of support to advance solutions for America.

Level Starting at Basic $25 Supporting $50 Patriots Club $100 Sponsoring $250 Heritage’s new Young President’s Club $250 House-side building President’s Club $1,000 at 227 Pennsylvania Executive Committee $2,500 Ave., SE, opened for business Sept. 14. Premier President’s Club $5,000 Associate $10,000 Executive Associate $25,000 Premier Associate $50,000 Founder $100,000 Trustees’ Circle $500,000 Chairman’s Circle $1 million For details on benefi ts for each level, please call (800) 546-2843 or visit MyHeritage.org.

Heritage Action CEO Michael Needham thanks supporters and well-wishers at the July 21 reception

marking the debut of the grassroots advocacy group. Photos: Chas Geer

36 ■ 2010 ANNUAL REPORT Staff at the Heritage Foundation PRESIDENT’S OFFICE Margaret Thatcher Legal Center Mark Kelly Brian Byrne Samuel Walker Edwin Feulner Center for Freedom Todd Gaziano Michael Leland Jadon Ephraim Nathaniel Ward Derrick Morgan Nile Gardiner Robert Alt Teri Ruddy Michele Palmer Kathleen Rowan Ted R. Bromund Christine Carletta Michael Smith Special Events Our Mission Robert Steele Steven Groves Elizabeth Garvey Lectures and Ryan Townsend Ann Bula Missy Stephens Sally McNamara Jessica Kline Seminars Matthew Bagnoli To formulate and promote conservative public Kenneth Sheffer Erica Munkwitz Charles Stimson John Hilboldt Online Brittany Balmer Brett Schaefer Hans von Spakovsky Adam Brickley Communications Ann Beckwith policies based on the principles of free enterprise, EXECUTIVE VICE Brian Walsh Andrew Parks Timothy McGovern Janine Brown PRESIDENT’S OFFICE DOMESTIC AND Jeph Christoff Dria Graham Phillip Truluck ECONOMIC POLICY Simon Center for Young Leaders Program Martha Galante Cameron Moss limited government, individual freedom, traditional Jean Barry David Addington American Studies James Lawruk Heather Sexton Jack Ruddy Matthew Spalding John O’Keefe Personnel Doug Ernst Amanda Valauri Center for Data David Azzerad Steve Sharman American values and a strong national defense. Wesley Dyck Lauren Volpe Analysis Anna Leutheuser Maria Sousa Matthew Adkins William Beach Julia Shaw FINANCE AND Roger Spurzem Kristine Bramsen Robert Book Ashley Varndell OPERATIONS COMMUNICATIONS Board of Trustees Honorary Chairman and Trustee Emeritus Karen Cook Karen Campbell Ted Schelenski Mike Gonzalez Christopher Marcel Patrick Fleenor Research Editors Joanne White DEVELOPMENT Georgianna Nutt Thomas A. Saunders III, Chairman David R. Brown, M.D. Becky Turco Rea Hederman Richard Odermatt John Von Kannon Lynette Wilhelm David Kreutzer John Fleming Accounting John Fogarty Broadcast Services Christie Grennes Richard M. Scaife, Vice Chairman John Ligon James Kidd Vern McHargue Matthew Streit Robert Hartsook Honorary Trustees CENTER FOR David Muhlhausen William Poole Keith Capp Audrey Jones Michelle Lancto J. Frederic Rench, Secretary POLICY INNOVATION Guinevere Nell Jon Rodeback James Gabele Judy Mayka Kathryn Davis Bernard Lomas Stuart Butler Jason Richwine Karina Rollins Alyson Miller Sarah Mills Robert E. Russell Jr. Meg Allen The Hon. Frank Shakespeare Bob Moffi t James Sherk Sandra Noone Israel Ortega Pamela Ouzts Patrick Tyrell DISTINGUISHED Michele Pecora Hannah Sternberg Douglas F. Allison Paul Winfree FELLOWS Mark Schreiber Major Gifts Patron of The Heritage Foundation DAVIS INSTITUTE Elaine Chao Edward Sharrer Nick Reid FOR INTERNATIONAL Center for Media Larry P. Arnn, Ph.D. The Right Honourable The Baroness Thatcher, Center for Health Lee Edwards Anthony Campau and Public Policy STUDIES Policy Studies Ernest Istook Jessica Dean LG, PC, OM, FRS Kim Holmes Administration Robert Bluey The Hon. Belden H. Bell Nina Owcharenko John Shadegg Eric Korsvall Rebecca Eddy de Tina Korbe Alexis Hurter Brian Blase Jim Talent Broekert Midge Decter Jan Smith Lisa Castellana Margot Crouch Anna Hui Brandon Culp Steven DeBuhr Senior Management Ed Haislmaier JB Horton Editorial Services Edwin J. Feulner, Ph.D. Allison Center Katie Smith Emily Dunham James Weidman Edwin J. Feulner, Ph.D., President Kathryn Nix Jason Snead Kevin Germany DeEtte Chatterton Jones for Foreign Policy Sandy Mikilia Paul Gallagher Studies Tina Wei Dorothy Hodo Marguerite Higgins Steve Forbes Phillip N. Truluck, Executive Vice President John Fleming and Kenneth McIntyre Domestic Policy & Jay Rinehart James Carafano Ebony Hunter Kenneth McIntyre DeVos Center on LEADERSHIP Leah Sammons Robert J. Herbold Michaela Bendikova Antonio Machenguer Rachael Slobodien David Addington, Vice President Religion and Civil FOR AMERICA Doug Stamps Peter Brookes Society Maria Mendoza David Weinberger Graphics: OPERATIONS Marvin Moon Jeffrey Trimbath Todd W. Herrick Stuart M. Butler, Ph.D., Distinguished Fellow Yvette Campos Jennifer Marshall Genevieve Wood David Parker Ariel Cohen Kiki Bradley Christine Cheatum Albert Potts Heritage Legacy Strategic Jerry Hume Becky Norton Dunlop, Vice President Helle Dale Lindsey Burke Freida Warren Society Communications Mackenzie Eaglen Collette Caprara Rory Cooper Kay Coles James John P. Fogarty, Vice President Owen Graham Creative Services Michael Barvick Chuck Donovan Melissa Bluey Anna DeJarnette Mike Brownfi eld Jena McNeill Christine Kim Business Support Michael G. Franc, Vice President Elizabeth Brewer Services Roxana Laing Conn Carroll The Hon. J. William Middendorf II James Phillips Diane Mannina Spencer Anderson Ralph Buglass Renault King Lori McNicoll Isabel Isidro Michael M. Gonzalez, Vice President Morgan Roach Leslie Merkle Doug Sampson George Adams Brandon Stewart Abby Moffat Erin Sedlacek Ryan Messmore Renzo Boyd Membership Todd Thurman Kim R. Holmes, Ph.D., Vice President Baker Spring Robert Rector Nersi Nazari, Ph.D. Strategic Marketing Berdie Carter Programs & Grant Raymond Walser Rachel Sheffi eld Keesha Bullock Edwin Meese III, Reagan Fellow Jessica Zuckerman Amy Hart Development HERITAGE ACTION Cover Photo: Joe Brichacek Robert Pennington Roe Institute for Annette Keymist Carsten Walter FOR AMERICA Ted E. Schelenski, Vice President Asian Studies Center Emily Rein Deonte Starr Erin Bender Michael Needham Economic Policy Joshua Shepherd William E. Simon, Jr. Walter Lohman Gabriel Conger Timothy Chapman Michael A. Spiller, Vice President Studies Steven Weyrich Dean Cheng GOVERNMENT Sarah Ferguson Jessica Anderson Brian Tracy Alison Fraser John Von Kannon, Vice President and Senior Counselor Lisa Curtis Curtis Dubay Strategic Operations RELATIONS Christine Fogarty Tripp Baird Nicholas Hamisevicz Jessica Greer Dustin Carmack Phillip N. Truluck J.D. Foster Brian Blake Michael Franc Genevieve Wood, Vice President Elizabeth Hamrick James Gattuso Heath Hall Brian Darling Estefania Holler Frank Carni Bruce Klingner Emily Goff Laura Trueman Laurie Craney Kristen Hoopes Danielle Doane Barb Van Andel-Gaby Graphics, Inc. Chroma Bernard Lomas, Counselor Derek Scissors David John Jessica LaHousse James Dean Michelle Jehring Daniel Holler Katherine Kraft Marion G. Wells Robert E. Russell Jr., Counselor Nicholas Zahn Nick Loris Samir Kapadia Erin Kanoy Brian Riedl EXTERNAL Landon Zinda Anne Judge Leo Knepper Printing: Center for Jack Spencer RELATIONS Richard McAdams Maggie Piggott International Trade Ronald Utt Becky Norton Dunlop INFORMATION Eve Newell Russ Vought and Economics Bethany Murphy As a nonprofi t 501(c)3 organization, we rely on the fi nancial contributions of the general public: individuals, foundations and Robert Gordon TECHNOLOGY Nathanael Yellis Terr y Miller CENTER FOR LEGAL Mary Larson Michael Spiller Candace Porter Daniel Ziegler corporations. We accept no government funds and perform no contract work. We welcome your support. Charlotte Espinoza AND JUDICAL Amanda Reinecker Anthony Kim STUDIES Coalition Relations Information Systems Joseph Shattan Fred Flerlage Fred The Heritage Foundation ■ 214 Massachusetts Avenue N.E. ■ Washington, D.C. 20002 ■ (202) 546-4400 ■ heritage.org Bryan Riley Edwin Meese III Bridgett Wagner Mark Harris Aaron Thompson (List current as of James Roberts Stephanie Bortner Alexander Adrianson Kibreab Berhe Mecca Turner Feb. 1, 2011) Design: THE HERITAGE FOUNDATION 2010 ANNUAL REPORT

What They’re Saying about Heritage… “A powerhouse of conservative ideas…. If anything, its infl uence has grown in ‘opposition’…. Its econometric analyses of the House of Representatives cap-and-trade proposals have stopped legislation in its tracks.” – The Daily Telegraph, Jan. 14, 2010

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