When I joined MacArthur in the fall I made a promise to myself that I would stay off the speaking circuit for a year. But I have some early impressions of Foundation work I want to share. I have great respect for your work, and the opportunity to come back to the University of Chicago is always tempting. So here I am.
My C.V. does not highlight my own work in development but as some of you know I led Yale's Capital Campaign for a year in the mid 1970s and then came to Chicago with Hanna Gray to reorganize the development program here. Of course as head of the New School for seventeen years I was more or less constantly in a fundraising mode. So I feel very much a part of the CASE family.
I want to make brief comments to start a conversation. My comments come in three parts: some first impressions of foundation work in general, then a word or two about MacArthur in particular, and finally some advice.
We meet at a time of change and transition in the foundation world. Large new foundations in the west, Gates ($21,800,000,000), Packard ($13,000,000,000) and Hewlett ($2,738,943,000) dwarf some of the established blue chips like Sloan ($1,300,000,000), Carnegie ($1,705,527,531), and for that matter MacArthur. Which is not to say that we have not enjoyed tremendous growth. Foundation giving rose 22% between 1997 and 1998 and still more since then. And many of the largest foundations have new leadership.
Several of the new foundation presidents have come from the academic world and we are comfortable sharing with each other our early impressions about our new line of work. We all find that giving money away wisely is harder than it looked from the outside. Speaking now for myself, I think a large foundation has an obligation to tackle a few significant problems and make a difference. But that goal is in some tension with another objective, which is to be always open to other peoples' good ideas. We try to strike a balance by limiting the number of areas in which we work and then within each area construct a balanced portfolio of grants, some which proceed according to our own theory of change and some which do not.
I am not ready to suggest what proportion of a foundations assets should be concentrated on a very few problems or how many big issues a foundation of our size can take on at once. My guess is that the number is under five, the amount per program must be in the tens of millions and the commitment in the range of a decade or more.
Almost by definition, large issues will exceed the resources of a single or even several foundations. So the objective must be to define the issue, experiment with possible solutions in demonstration projects and then bring the intervention to a sufficient scale so that either the market or government takes over.
Ask yourself how many significant contributions to human betterment can be traced to foundation initiatives — I would be interested in hearing your list in the question period.
MacArthur is at an interesting moment in its own history and in the spectrum of foundations. At twenty-two years old we have come through adolescence and are embarked on early adulthood. We are something of a bridge between the older Eastern establishment foundations and the new Western giants. We are in the middle by size, age, and geography — able, I hope, to relate to all.
I suspect most of you have read the MacArthur guidelines which give you a sense of the sweep of our work, deep in our home areas of Chicago and Palm Beach County, yet national and international on some issues. We blend research, advocacy, and practical interventions more than most foundations. The combination of many fields of interests and these three modes of action mean we are spread rather broadly.
I see it as my role at least in the early years to help the Foundation choose from among its many programs those in which we will make deeper investments. This means for the immediate future that growth we enjoy from the rise in the market will not result in new initiatives but rather more resources for existing programs.
We will be looking at candidates for further investment over the next eighteen months and decisions will come as we go along. We know already, for example, that we will be doing more in Africa, focusing on Nigeria in the West and Tanzania and the Great Lakes countries in the East. Our population and environment programs are already on the ground and we will be adding initiatives to strengthen civil society and the rule of law and to build capacity in the university system. We are spending perhaps $5-6 million a year now, an amount that will at least double over the next few years.
Deeper investment in some areas implies scaling down in others. For example our work in peace and security now has five sub components: nuclear disarmament, chemical and biological weapons, regional security in Latin America and the Middle East, conventional weapons and small arms, and the tracking of global military expenditure all for $5 million a year. But in practice we do not do much work in some of the areas so we will be concentrating on nuclear disarmament and phasing down our work in chemical and biological weapons. And in small arms we will concentrate on work in Africa as part of our deeper involvement there. And since Russian U.S. relations are critical to further progress on arms reduction and a stable world nuclear order, we will be increasing our work in this area. This fits nicely with our broader work on human rights, building civil society and strengthening scholarly infrastructure in Russia, which we will be increasing.
This process of readjusting our portfolio of programs will be gradual but three to five years from now look for a more sharply focused MacArthur Foundation.
Now for some advice. University development offices have grown in their sophistication over the past twenty years. Foundations have also expanded their professional staffs and, I think, are doing a better job in making plain what they are interested in. The summit meetings between university presidents and foundation presidents are an obsolete art form, especially the general get-acquainted meetings. They may even be counterproductive. The Board and the President take the lead in determining the strategic direction of the Foundation and the staff takes the lead in implementing that direction through particular grants. The Presidents of large foundations are not in the grant-making business.
The best way to proceed is have clearly in mind what you want support for, do your homework in finding the most promising foundations and then arrange for the faculty principals to communicate with the appropriate foundation staff members. Finding out about foundation interests has never been easier, courtesy of the Internet. Our annual report and printed guidelines no longer carry the burden of communicating our programs: over 5,000 people visit our website each week. A letter of inquiry, a phone conversation, perhaps a visit can save a lot of time because the staff is very knowledgeable about what is, and is not, likely to be funded. It often takes time to find the right fit and you are always helped if you can arrange for a staff visit to your campus. Too often invitations, focused on the President of the foundation, would be better extended to the relevant staff.
This is not to say that a University President with a big idea should not come by and talk. Most foundations can respond to a fresh idea if they want to. MacArthur now sets aside a modest amount of flexible funds within its General Program for this purpose. And I would like to increase this amount so we could respond especially to new leadership making a difference in important institutions. It pains me to tell a wonderful new Dean, as I did the other day, sorry, we have no program to give you what you most need: a million dollars of flexible money to build your institution. Instead I had to counsel him on how to thread his way through the eye of our programmatic needle. Not a happy outcome for him or me.
To return to my main point: there is no substitute for principal to principal relationships — deans and faculty to foundation staff — built and sustained over the years. Getting the deans and faculty to formulate ideas for funding and take the initiative is, I know, not an easy task; but it is at the heart of your work.
From our side, we need to give clear signals promptly, not lead people on or encourage wasted effort and we need to be available and responsive. If you ever have trouble getting a timely response from MacArthur I want to hear about it.
I am eager to demystify the way foundations work, to foster a spirit of colleagueship between our staff and those who seek grants, and encourage humility in those who have the privilege of supporting you who are on the frontline. We are all trying to make the world a better place and to match resources with opportunities that offer the best chance, in our case, of promoting human rights, preserving the environment, building strong communities, redressing inequities and opening opportunities on the basis of individual merit.
These are big issues on which many people need to work — through the public, private and nonprofit sectors — over many years. No one has a monopoly on right thinking and there are no magic solutions. A good foundation professional staff proceeds with strategic grant making informed by a theory — or theories — of change but should also respond to other points of view. This is one of the inherent tensions in our work how to concentrate giving in a way to produce a positive impact while being open to fresh ideas and interests. One way to harness that tension in pursuit of better grantmaking is for a foundation to invite honest criticism of its work. I hope to foster an atmosphere within MacArthur and between MacArthur and the outside world that takes challenges in stride in the belief that better decisions come through a critical dialogue rather than a steady stream of acquiescent flattery.
This is perhaps a dangerous note on which to conclude, but let us start the candid dialogue here and now. I would like to hear your critique of how foundations in general and MacArthur in particular work.
Let me stop here hoping that I have primed the pump for discussion.