Charitable foundations work to streamline

Gates prompts former giants of philanthropy to rethink operations

January 14, 2007|By New York Times News Service

For most of the past century, three names - Carnegie, Ford and Rockefeller - have defined the world of foundation philanthropy, but that is changing.

The Bill and Melinda Gates Foundation, with a $30 billion-plus endowment that dwarfs all others, now dominates discussions of philanthropy, and the philanthropic experiments of young billionaires like Pierre Omidyar and Jeff Skoll are studied and mimicked.

But the Carnegie Corp. and the Rockefeller Foundation are fighting back, hoping to get more impact for their money, increase their influence and extend their legacies by changing the way they have operated for years. They are pushing to streamline their operations by eliminating internal fiefs and to improve their efficiency by increasing collaboration among staff members.

The Ford Foundation, meanwhile, is poised for a transition when its president, Susan V. Berresford, retires at the end of this year after a decade at the helm.

"These three foundations have always been at the top of the heap, but suddenly they're not," said Joel L. Fleishman, author of The Foundation: A Great American Secret; How Private Wealth Is Changing the World. "And so they want to demonstrate that they can still achieve great things, that asset size doesn't matter."

Wealth has long been the yardstick by which influence and power are measured in the foundation world. No matter how many times foundation officials note that small grants have led to big changes, the grants that attract headlines these days are rarely less than $100 million.

With about $12.5 billion in assets, the Ford institution is the country's second-largest foundation, but it is just one-third the size of the Gates Foundation. The Rockefeller Foundation is 15th or 16th in the pecking order, with about $3.6 billion. The Carnegie Corp., with $2.6 billion, is no longer among the top 20.

So they are working to prove that money alone is not the measure of a foundation.

"We have learned that impact is what really, really matters," said Judith Rodin, president of the Rockefeller Foundation. "We aren't going to be remembered for how big we are, how smart we are, how hard we tried or even how much we cared. We're going to be remembered for what we accomplish."

Berresford pointed out that a $20,000 grant the Ford Foundation gave to a little-known economist in Bangladesh became the cornerstone of the Grameen Bank, which won the Nobel Peace Prize last year for improving the lives of legions of poor people through the granting of small loans.

All three foundations have had their triumphs. The Rockefeller Foundation helped develop a vaccine against yellow fever. A Carnegie grant led to the creation of National Public Radio. Together, the Carnegie and Ford organizations founded the Children's Television Workshop, while the Ford and Rockefeller foundations teamed to start the "green revolution" that greatly increased agricultural yields, thereby reducing hunger, in Southeast Asia and Latin America.

But over time, experts say, such institutions can grow so large and diffuse that they lose their focus.

"What you often see is a foundation that is in fact a number of separate foundations," said Phil Buchanan, executive director of the Center for Effective Philanthropy, a nonprofit organization dedicated to helping foundations improve the way they operate, "one working on environmental issues, one in arts and culture, and so on, each headed by a program officer that has a great deal of freedom, and so the overall goals can get lost."

The Rockefeller and Carnegie foundations are both moving to break this mold. At Carnegie, Vartan Gregorian, the foundation's president, is looking to consolidate and integrate a lot of small programs, many of which were up for renewal anyway. For instance, a high-profile experiment fostering smaller high schools in seven cities that was co-financed by the Gates Foundation has ended and will receive no more money until the foundation works out problems it has identified.

In consolidating and reviewing past programs, Gregorian is looking for efficiencies, including the sharing of expertise and better focus.

An evaluation process will be an integral part of each project from its outset, and Gregorian plans to get more involved when projects are first proposed.

The overhaul has made staff members uneasy, some said, in part because Gregorian told them in October that he would no longer be renewing the two-year contracts he instituted when he took over.

"We don't know whether this means programs will be ended and jobs cut," said one staff member, who like insiders at all three foundations would speak about the transitions only on the condition of anonymity. Gregorian said he had begun renewing some contracts this month.

Rodin has brought many of these changes to the Rockefeller Foundation. About 60 people have left since she arrived in March 2005 - about a third of the staff - though some have been replaced. She also eliminated the program that spent money on the arts.

"We are no longer the largest foundation," Rodin said, "and being mindful of that, we're looking for ways to be more flexible and faster, to take a big idea and really run with it when it's right and to be more receptive to ideas coming in to us."

Berresford noted that about one-third of the Ford Foundation's programs involved collaboration. Working groups of representatives from all of Ford's programs also meet regularly to discuss how to confront broad problems like human rights. But she said outsiders continued to perceive Ford as a collection of silos, each myopically focused on its program and making too many small grants: the median size of Ford grants is $116,000, low by the standards of most major foundations, according to the Center for Effective Philanthropy.

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