Part two: Bankrolling the movement

John Sellers is wearing a woolly lime-green sweater. He has a big shaved head, neat little ears and electric blue-painted toenails popping out of his sandals. On a late summer's day in Berkeley, California, he bears more than a passing resemblance to Shrek.

Like the cartoon ogre, the thick-set director of The Ruckus Society, the civil disobedience group which trains activists for tree-sits, banner-hangs and barricades, also has a giant laugh.

Particularly, when he mentions the origins of $100,000 worth of Ruckus funding this year: "It is great that it is Unilever money. There is no better way to launder corporate multinational largesse than giving it to the movement that is confronting it."

The Ruckus Society trained activists who helped shut down the World Trade Organisation meeting in Seattle in November 1999. It is also one of a handful of radical activist groups which this year have enjoyed a big lift thanks to Unilever, the consumer goods multinational.

The company, which sells a range of goods from Lipton tea to Dove soap in 150 countries around the world, has made $5m available to anti-globalisation initiatives via Ben & Jerry's, the ice-cream company with a social conscience.

When Unilever was courting Ben Cohen and Jerry Greenfield last year, the company was pressed to offer a little more to the inventors of the Cherry Garcia and Phish Food ice cream brands.

In order to get Ben & Jerry's agreement to sell their ice cream business to Unilever for $326m, the Anglo-Dutch group offered a further inducement: a $5m contribution to Ben & Jerry's Foundation, another $5m for a venture capital fund for ethical start-ups called 'Hot Fudge' to be run by Ben Cohen and a minimum $1.1m a year commitment to annual grants for social change groups.

The Unilever money has been a boon to several activist groups.

Ben and Jerry's foundation, through a special fund overseen by three senior company staff including Jerry Greenfield, gave $1m over three years to Global Exchange, the San Francisco-based group which campaigns to abolish the World Bank and the WTO as well as name and shame irresponsible big companies. Unilever has been a leading corporate advocate of trade liberalisation.

United for a Fair Economy, which campaigns among other things against what it sees as excessive chief executive pay, also got a grant. Niall FitzGerald, the Unilever co-chairman, had total compensation last year of £1.3m.

When Unilever bought Ben & Jerry's, the management of both companies had a discussion about their differing views of the world. "We explained to Unilever that the values of Ben & Jerry's would be anti-globalisation and they said they were very much supporters of globalisation," says Cohen.

Today, he does not oversee the disbursement of the $5m, which is being distributed to groups "like Ruckus, which support progressive social change as it relates to the global economy," according to another person at the company. Instead, Greenfield is one of three people who decides where the money goes.

Unilever, Ben & Jerry's executives say, is well aware of where the money is going. Allowing Ben & Jerry's to support anti-globalisation, they suggest, was a price worth paying to own the Ben & Jerry's brand.

As counter-capitalism has grown, it has begun to bump up against corporations, the complex business of financial planning and the rough world of stock market investments.

Organisation has helped campaigners channel popular disaffection with global capitalism into protest. A new network of fundraisers and office managers for activist groups have sought to make the new protest movement a permanent feature of life by rooting it in sound finances.

September 11 threatens to provide an ugly illustration of how tightly the movement has become tied to the mainstream economy.

For just as the Unilever-backed donations to the likes of The Ruckus Society were a mark of how activism prospered on the back of America's boom, the movement now promises to suffer financially as the West teeters towards recession.

For anti-globalisation activism faces a financial squeeze after the attacks on America. Charitable foundations fear the value of their endowments will shrink further with the stock markets and the boads of philanthropic organisations look set to shy away from the critics of capitalism.

The funding stream to anti-globalisation groups was anyway just a trickle. Some sympathetic foundations have their wealth tied into the stock market and, in particular, into technology stocks. Even before September 11, therefore, foundations were cutting back on donations to some environmental and human rights groups. Several San Francisco-based activist networks have had to cut their full-time staff, because the squeeze on resources has made it impossible to pay their salaries.

Now, those endowments could shrivel further as economists forecasts a gloomy spell for the Europe and the US. More importantly for the protest movement, the boards of charitable foundations which have been some of the big givers to critics of international financial institutions, for example, are now wary of being aligned with the critics of capitalism.

The result is that you will find anti-globalisation activists in San Francisco sounding rather like depressed dotcommers. They talk about the need to be "entrepreneurial". Rather than depending on charitable giving, they look to running fair trade shops or "reality tours" for holidaymakers with a global conscience. They do not have the managerial talent, they say, to match the group's ambitions with its resources. Charitable foundations will often fund projects, but not infrastructure or back office operations. They fret about the strings attached to donations, particularly when they come from suspect corporations.

The movement, critical though it was of burgeoning global companies, was buoyed by the wealth which filtered through from an expanding international economy. In fact, a large number of businesspeople have - wittingly or unwittingly - become big donors to counter-capitalism.

FitzGerald from Unilever and Cohen and Greenfield from Ben & Jerry's are just one case.

George Soros, the hedge fund operator, Anita Roddick, the founder of the Bodyshop chain of stores, and Doug Tompkins, the founder of the Esprit and North Face clothing lines, are among a new breed of philanthropist born of the corporate world who are giving to protesters against corporate-led globalisation.

Governments, too, have been significant financiers of protest groups. The European Commission, for example, funded two groups who mobilised large numbers of people to protest at EU summits at Gothenburg and Nice. Britain's national lottery, which is overseen by the government, helped fund a group at the heart of the British contingent at both protests.

Counter-capitalist budgets are still tiny. While the latest figures show Nike spending $545m on a year's advertising in the US, United Students against Sweatshops, which campaigns against the company, has an annual budget of roughly $250,000.

While 50 Years is Enough is trying to marshall forces against the World Bank and International Monetary Fund with a $233,000 annual budget, the World Bank's public relations budget is $21m.

Even before September 11, some campaigners were fretting that in the wake of chaos in Seattle and Genoa, conservative donors and corporate-backed foundations are pulling back donations to political activism. Ted Turner, the ebullient founder of CNN and voluble philanthropist, was an early giver to radical environmental groups. But in the last year, he has pulled back from funding groups like The Ruckus Society and mining campaigners Project Underground.

For the last four years, Mark Rand was part of the hand-to-mouth movement of activists.

Running one of America's more radical youth groups at the same time as having caring for a young baby, he slept with a radio beneath his pillow. When his daughter woke him up in the middle of the night, he would switch it on and let the ramblings of US talk radio guide him back to sleep. The alternative, he had discovered, was to lie awake for the rest of the night fretting over whether he would make payroll for the nine members of staff at Just ACT, the politically active youth group run out of San Francisco.

This year, Rand took to a different remedy for his insomnia. He has taken the reins of a quiet new effort to build a sympathetic web to finance the movement: the Funder's Network on Trade and Globalisation.

Counter-capitalism has begun to organise its finances. The Funder's Network is not the first to try to co-ordinate "progressive donors". One group in the US, known informally as The Doughnuts - as in, plenty of "dough" - has been gathering in wealthy heirs and heiresses to work on putting money into social justice groups.

Pulling together funders, Rand hopes, will mean not quite so many groups are "operating on a shoestring".

Since Cohen and Greenfield sold Ben & Jerry's, the movement hopes others selling up will fund the movement.

Anita Roddick's Body Shop is currently being pursued by potential buyers. If the sale goes through, Roddick, who is on the board of the Ruckus Society, is looking forward to increasing support for anti-sweatshop activists, independent media organisations, dissent groups, local environmental start-ups, socially responsible ventures and a range of others.

"I will not be funding large organisations, but poverty, human rights abuses, civil rights, economic rights is where my heart lies," she says.

Depending on the terms of the sale, Roddick would have the kind of funds at her disposal to be talked about as a radical funding figure in the same league as one of the leading businessman-turned-philanthropists: Doug Tompkins.

Tompkins gave the money to set up the Foundation for Deep Ecology, which is based in California. Today, it has a roughly $90m endowment, according to a Deep Ecology director. The money comes thanks to Tompkins' business acumen. He started and built Esprit, the retail chain, and North Face, the mountainwear business. Since he sold it, he has been using the money to buy land for environmental conservation and funding anti-globalisation projects.

To activists, Tompkins, who now lives out of telephone contact on a vast environmental retreat in Chile bigger than Massachussetts, is the model of the new philanthropy.

There are others. George Soros has diverted some of his fortune into the Open Society Institute. In turn, it has been an important donor for the Ella Baker Center, which campaigns against what it calls the "prison industrial complex" and the creeping privatisation of public services which it sees as a function of corporate-led globalisation.

Bob Young and Marc Ewing, co-founders of Red Hat, the designers of the Linux software and Open Source systems, have established the Center for the Public Domain, a group which has already made over $5m of contributions to civic society initiatives. In the UK, some of the fortune left by Sir Jimmy Goldsmith has gone into the JMG Foundation, which is overseen by Jon Cracknell, one of the founder members of the Funders Network on Trade and Globalisation. Mr Cracknell did not return phone calls. (Sir Jimmy's brother, Teddy, is editor of The Ecologist and a leading light in the movement.)

Much of the money which funnels into the movement is given by anonymous donors. 50 Years is Enough, the campaign group at the heart of the protests planned against the World Bank and the International Monetary Fund later this month, has been sustained primarily by one woman who has given the activists roughly $250,000 over the last few years. She did not want to be identified.

Almost all the money which comes into the movement, whether from foundations or inviduals, has some link to a corporate past.

The CS Mott Foundation, one of the bigger givers to groups campaigning against the World Bank and the IMF, owes its wealth to General Motors. The Ford Foundation, which has given widely to environmental groups, got its money from the Ford Motor fortune. Richard Goldman, an insurance executive and the descendant of Levi Strauss, has long had a fund established with his wife, Rhoda, which, thanks to the jeans fortune, has been a big donor to environmental and social groups. Likewise, the Rockefeller Brothers Foundation and the Samuel Rubin Foundation have turned old business fortunes into funding for a new breed of activists who are suspicious, if not hostile, towards business.

The bulk of US foundation money is tied up in the stock markets. Ironically, this means that the collapse in stock prices on Wall Street is pinching activists working across the US. Foundations have seen the value of their portfolios shrink. Donations are being reined in.

As a bunch of people danced in a circle to the beat of a Native American drum at a party on a Berkely roof-top this summer, a few environmentalists and human rights activists sounded like they were having the kind of conversation you might expect in Silicon Valley, on the other side of San Francisco. They faced a cashflow crisis, said one. "We'll be all right later in the year, but there is a cash problem right now."

On the other side of the Atlantic, where smoke from stubby French cigars wafts through the offices of Attac and Le Monde Diplomatique, the intellectuals who run Europe's largest counter-capitalist group do not need to worry about the vagaries of the stock market. The finances of Attac - the Association pour la taxation des transactions financieres pour l'aide aux citoyens - are provided mainly by its 30,000 members across the continent and the organs of the European state.

Bernard Cassen, director of Attac and one of the top editors of Le Monde Diplomatique, the French journal which has been an ardent critic of corporate-led globalisation for nearly two decades, says donations of FFr50 to FFr200 ($7-$28) per year from its members make up the bulk of the E6m ($5.5m) annual budget.

Across counter-capitalist movements, much of the giving comes from the membership, whether through labour union dues or student group levies or membership fees for environmental groups.

The Jubilee campaigners for the cancellation of Third World debt relied most heavily on donations from church members in the late 1990s. A mailshot to church supporters in the late 1990s could deliver as much as a 40 per cent response, according to Jamie Drummond, who works with Bono and Bob Geldof on debt relief. In a commercial setting, a mailshot which yields replies from 1-3 per cent of addressees is a success.

But the biggest single donor to Attac, which estimates it sent nearly 5,000 people to protest in Genoa, was the European Commission. The EU gave FFr800,000 over two years.

"In the European Commission, we have very few friends," says Mr Cassen, who has used his columns in Le Monde Diplomatique as a platform for persistent criticism of what he sees as the EU's failure as a democratic insitution. "It was very difficult to obtain [the money], but we obtained it." The Commission's directorate general for development gave most of the money, while more is expected to come from a new unit for engaging with civil society, according to Attac.

The EU, through its commitment to community groups, education forums, new media platforms and academic research, has provided, activists estimate, millions of euros across the continent to groups whose work has fed into the new movement. Still, the EU has become a target.

"We regard the European Commission as the spearhead of neo-liberalism in Europe," says Mr Cassen, noting that Brussels is now beginning to feel the heat. "Nice and Gothenburg were a new thing. The European institutions used to be able to escape the opprobrium, but now they are in the front line."

Britain's World Development Movement, which over the years has taken on the UK government in court over the Pergau dam, campaigned against Rio Tinto and the governments of Europe and the US over Third World debt, is described by its director, Barry Coates, as the "shock troops" of the movement. It has also been a beneficiary of EU funding. In the last two years, it has received nearly £100,000 from the European Union, the WDM's biggest single donor.

The British National Lottery, which has provided just over £55,000 over the last two years, is the third largest financial contributor to the WDM, just behind the United Reformed Church.

There is also the beginnings of a funding network in Europe, which is based on the model of progressive foundations in the US. But the organisations are few and small.

The Network for Social Change is said to have enlisted about 60 wealthy individuals. To be a member, you have to have assets of over £250,000, either earned or inherited (excluding your main residence) and you must be willing to put £2,000 a year into socially or environmentally beneficial causes. Among others, the Network has helped finance Corporate Watch in the UK, the Oxford-based group. The Network for Social Change did not respond to requests for an interview.

Perhaps the best measure of how counter-capitalists are beginning to find their way to resources are the emerging signs that business is trying to squeeze the funding veins into the movement.

In recent months, companies and conservative foundations have been clubbing together behind the fronts of industry-wide lobby groups to try to staunch the flow of funds to counter-capitalist groups.

Frontiers of Freedom, which is backed by oil companies, defence groups and pharmaceuticals businesses, has been lobbying in Washington to see the Rainforest Action Network stripped of its tax exempt status.

RAN, which campaigns to protect old growth forests, has targeted companies such as Home Depot, the hardware chain, Staples, the stationery stores, Boise Cascade, the logging company, and Citigroup, the bank. Frontiers of Freedom has started research looking to target the Ruckus Society.

At the same time, the Guest Choice Network, which says it is backed by 30,000 restaurateurs and tavern owners defending the freedom of Americans to eat and drink what they like without interference from meddling regulators, has been seeking to put together a full list of foundations, including their corporate board members, who are backing groups which they describe as being part of the "Nanny culture". In the food industry alone, including the genetically modified foods area, activists have access to $180m in funds, the Guest Choice Network says.

More worrying to some than the efforts to cut off funds is the corporate willingness to suffocate moderate critics with money.

Coates at the World Development Movement, which like others at the pure end of the grassroots movement will not take any corporate money, says his biggest concern is co-option: "I am not so worried about infiltration [of groups by intelligence officers for companies and the state], although that is an issue. The bigger worry is advances to NGOs to take a more conciliatory line. Many NGOs take money from corporations - from Rio Tinto, British American Tobacco and Monsanto. They are seen as being able to be bought."

After Seattle, Gardner Peckham, a former aide to the Republican and former US Speaker of the House Newt Gingrich, sought to put together a corporate coalition to take on the activists. By then a lobbyist with a political arm of Burson Marsteller, the public relations group, he wrote to dozens of companies suggesting a riposte. His idea was "The New Corporate Partnership", which would act as "both shield and sword".

"Corporations would like to respond, but don't want to draw individual attention to themselves," said the letter from Black, Kelly, Scruggs & Healey, the lobbyist firm on K Street, Washington's lobbyist row. "Our goal is to present a positive image of corporate responsibility, to reveal the true nature of the activists and consequently to reduce their impact."

A year on, Peckham is disillusioned. In his office on K Street, which is to lobbyists what Madison Avenue is to advertisers, Peckham said no one had yet committed to The New Corporate Partnership: "Corporations do not want to take these people on. They would rather pay them off."

Part Three: The by-product of globalisation

Contact James Harding at james.harding@ft.com