Tax exempt foundations seem to be a peculiarly or at least mainly American institution. The Rockefeller Foundation was the first. John D. Rockefeller, under pressure from the anti-trust movement and embarrassed by the exposes that had revealed the morally and legally dubious tactic by which his empire had been constructed, set out to donate a big chunk of his wealth to causes benefiting the public good: education, art, science and public health. A number of other public spirited (or intimidated) individuals followed suit. These early foundations faced a good deal of public scrutiny and criticism. Partially as a result of that skepticism, these early foundations were mostly explicitly nonpartisan and science based.
This was not to be the case in the age of what Jane Mayer calls the age of "weaponized philanthropy." They were a creation of the ultra-wealthy who found they could have their ideological cake and eat it too. With the onset of World War II, Sarah Mellon Scaife saw big tax bills approaching, and took advantage of one of those convenient tax loopholes useful only to the ultra-rich. She put a large fortune into a trust with the proviso that all income would go to "charity" for twenty years, after which the balance would pass untaxed to her heirs. The Koch family also exploited this convenient proviso. So what should all those many millions in income go to? She apparently favored the arts, birth control, and education, but after her death her son Richard Mellon Scaife had a better idea. The money should go to promote his right-wing and anti-government political views. This led to The Heritage Foundation, The American Enterprise Institute, The Marshall Institute, The Cato Institute and many others - ostensibly independent think tanks but in fact bitterly partisan political propagandists who tightly followed the political directions of the wealthy donor/masters.
Scaife's foundations masterminded the war on the Clintons, and he poured many millions in to digging up real and imagined dirt on Bill Clinton's extra-marital affairs, all while leading his own lurid sex life which culminated in a bitter and sensational divorce from wife number three. Scaife was neither brilliant nor consistent, but he was largely responsible for founding the apparatus of what Hillary Clinton called the "vast right-wing conspiracy," though the idea for these propaganda centers seems to have come from the economist von Mises.
Charles Koch is another creature entirely - brilliant, obsessively focused, and, reportedly, ruling his Cato Institute with an iron hand. It was there that the war on Obama was hatched, and Koch seems to have been both the money and the mind behind the Republicans strategy of total obstruction.
It's important to note that Koch, who operates with as much secrecy as he can, is not somebody who wants a few minor or well-studied adjustments in government policy. His targets include almost every aspect of the modern regulatory state: Social Security, Medicare, welfare, income taxes, anti-trust laws, health and safety regulations of all kinds, public education... the list goes on. He is waging a virtual war against the United States as presently constituted. He is well aware that these ideas have been roundly rejected by the public, so he pursues covert policies designed to subvert trust in the government and its leaders. For him, a disfunctional Congress is a feature not a defect.
Based on Jane Mayer's Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right.
The new, hyper-partisan think tanks had impact far beyond Washington. They introduced doubt into areas of settled academic and scientific scholarship, undermined genuinely unbiased experts, and gave politicians a menu of conflicting statistics and arguments from which to choose. The benefit was a far more pluralistic intellectual climate, beyond liberal orthodoxy. The hazard, however, was that partisan shills would create “balance” based on fraudulent research and deceive the public about pressing issues in which their sponsors had financial interests.
Some insiders, like Steve Clemons, a political analyst who worked for the Nixon Center among other think tanks, described the new think tanks as “a Faustian bargain.” He worried that the money corrupted the research. “Funders increasingly expect policy achievements that contribute to their bottom line,” he admitted in a confessional essay. “We’ve become money launderers for monies that have real specific policy agendas behind them. No one is willing to say anything about it; it’s one of the big taboo subjects.”
Mayer, Jane (2016-01-19). Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right (Kindle Locations 1554-1561). Knopf Doubleday Publishing Group. Kindle Edition.