"Supporting institutions as well as individuals," Interview with Jonathan Fanton from Alliance Magazine
October 2006 | Speech | Higher Education in Russia & Africa, MacArthur Fellows, MacArthur Award for Creative & Effective Institutions

The MacArthur Foundation is best known for its Fellows Program, which celebrates individual creativity. Each year, 25 people in diverse fields receive a phone call out of the blue granting them the freedom to do their own work with a $500,000 no-strings-attached grant. In late August, MacArthur announced the first nine recipients of the new MacArthur Award for Creative and Effective Institutions. Alliance talked to Jonathan Fanton, President of the MacArthur Foundation, about the Foundation’s new award, about the new Russian NGO law, about funding higher education in Africa, and about how international grantmaking has become increasingly crucial in the years following the September 11 attacks.

Alliance: I’d like to start by asking you about the MacArthur Foundation’s recent awards for small, creative and effective institutions, and particularly how you see these relating to the MacArthur Fellows awards. What are the parallels and differences?

JF: MacArthur has been supporting creative individuals through its Fellows Program for years. Much less well known is the fact that we support lots of institutions, large and small, and part of what we’re trying to do with this award is not only to honour these organizations, but also to make the larger point that institutions of civil society are essential for pursuing all the programmatic goals that MacArthur cares about. Creative individuals are of course absolutely essential, but individuals working together through institutions have a much greater reach.

So we see the awards as parallel and related. The processes for selection are of course different. The Fellows are first nominated anonymously and then selected by committee. The institutional award winners are organizations that we’ve been supporting so we know them well. The nominations come from our programme officers, and an internal committee at the Foundation makes the final selection. Another critical difference is that the Fellows Program for individuals is restricted to people living in the US, whereas the institutional grants programme is worldwide.

Is there a particular reason for that?

We have a good network and basis for comparison in the US, so when people we don’t know come forward, we are able to assess them. We don’t have that basis for comparison around the world. But with the organizations, we already know them well so we feel we have the requisite knowledge to assess them and make good comparisons between them no matter where they are.

I notice that you don’t have any sort of evaluation for the Fellows award. You don’t assess how creative they’ve been or what they’ve done with their award. Is the same going to apply to the institutional awards?

The Fellows awards are no strings attached. The institutional awards are for a particular purpose: once we have chosen an organization for the award, we work with them to understand how they want to use the money. A number of them are buying buildings or setting up reserve funds, and we expect the money to go to those purposes. But with respect to the evaluation of their work, we do that anyway, because they are already grantees. I think it’s very important to note that these grants do not eliminate them from ongoing support, and we expect they will be getting MacArthur support in the future. So our normal evaluation process will be applied.

I should add that, under US law, grants made outside the US have to be for specific purposes, so we would not be allowed to make a completely unrestricted one.

You give the examples of buying a building and creating a reserve fund. Are the purposes of the grants generally institution building rather than to further the cause that they’re working on, which is presumably what your other support is for?

Yes. As the name of the award implies and the selection criteria make explicit, we’re looking for organizations that are effective at what they do – organizations that are pushing boundaries, that are innovative and creative, and that have strong leadership at both executive and board level. And, importantly, organizations that are at a critical moment in their development – ready to grow, ready to undergird their financial base, maybe about to launch a drive to raise more money. So the moment matters.

It’s a combination of really strengthening what they do and giving them a more secure base, and at the same time, we hope, enabling them to expand their activities.

There are a couple of things I’d like to add. First, this is an ongoing programme, it’s not a one-time award. Over a period of five or seven years, we support or have supported about 900 organizations with a budget of under $2.5 million, and we have a deep pool of very strong organizations here and around the world, so I anticipate no problem in choosing organizations of this quality year after year.

The second is that this is emblematic of MacArthur’s belief that institutions, large and small, really matter. We give endowment grants to larger organizations as well – Human Rights Watch, the Population Council, Conservation International – but here we’re highlighting the importance of smaller and emerging organizations. Smaller organizations are often more nimble, more creative, more willing to push the boundaries, and to look for an opening where civil society can make a difference.

I’d like to move on and ask you, very generally, whether the MacArthur Foundation’s work has been much affected by anti-terrorist measures?

So far, I would say no. Probably if you looked at our budget you’d see that we’ve been putting more money overseas in the last five years than before. Our new diligence procedures are very deep and thorough. So far we’ve had no difficulties, we haven’t had any grants that have gone astray and we’ve had no trouble complying with the relevant US law.

I think it’s more important than ever for US foundations to be working abroad in support of civil society and the promotion of democracy. Unfavourable views of the US are rising, not only among countries in the Middle East like Turkey and Jordan, but among European countries. According to the most recent Pew Global Attitudes Survey, at least half of the populations of England, France, Germany and Russia have less confidence than in the previous year that the US is trustworthy and less faith in its commitment to fostering democracy around the world. Building NGOs is a good investment in our collective security. A country with a vibrant network of NGOs will not tolerate authoritarian rule.

Have you had to change your due diligence procedures?

They were already very good. The one change that we’ve made is that we are asking for more information when there is a re-granting element. For example, there’s an organization called the Fulcrum Foundation in Russia that is nurturing very small emerging NGOs and we now ask them questions about the second level of grantees, but I would say that is probably the only real difference. Most of the money is transferred by wire, so banks are doing double checks. We’ve had a few false positives but we’ve had no match with any of the US government terrorist lists.

Are clampdowns on civil society like the new NGO Law in Russia – one of the major countries you work in – affecting your work?

Of course we’re concerned about the new NGO Law in Russia – though the law that finally passed was less onerous than the law initially proposed. We and other foundations made our views known while it was being debated in the Duma. I was in Russia recently and spoke to the president’s national security adviser, the federal ombudsman and the president’s adviser on civil society, and all three assured me that MacArthur grantees would not be adversely affected by the law. So we’ll wait and see.

We support directly and indirectly about 60 human rights organizations in total. When I was in Russia in spring, I met with a lot of our grantees and asked them if they expected this to affect what they do, and at that time they said that it would not. I’m not predicting the future, I’m simply telling you what my experience is as of today.

So do you think more fuss has been made of it than need have been? Or do you think that you and your grantees have benefited from cultivating good relationships within Russia at these official levels?

I think that the worries about it are appropriate, and I also think it is a sign of progress that the Russian leaders listened and changed the first draft. So in some sense a process is working where there is both internal and international discussion about proposed laws, and some flexibility about changing them.

All that said, the law still gives the government enormous power to move in on NGOs and we have to worry about that. MacArthur has a good strong reputation in Russia because we have spent $100 million over a few years to strengthen higher education and independent academic life there. We’ve worked in partnership with the Ministry of Education to support centres of excellence in the sciences and the social sciences in Russian state universities. The Ministry of Education have been very good to work with, and we’ve established a number of journals and independent think-tanks and three independent universities that are doing quite well. There may be a few grants to human rights groups that are uncomfortable for the government, but I think it looks at MacArthur as a whole and realizes that we’re there to help Russia and work with all sides – government, civil society, higher education – and that we have tremendous respect for Russia and the Russian people.

Do you feel that, if MacArthur was a foundation that just supported human rights groups, for instance, they might take a less favourable view of you?

That’s possible. We are also very keen on encouraging Russian philanthropy. We are part of a donors’ forum in Moscow, which brings together both international and local foundations. There’s a lot of money being made in Russia now and it would be a good time for Russian tax laws to begin to encourage indigenous Russian philanthropy, and I think that’s coming. I think Russia will feel better if the NGO sector is nourished not just by international foundations but also from local foundations, government sources and so on.

I gather you supported a university in Belarus which is now in exile. What’s the situation with that?

That’s the European Humanities University. It was founded in the early 1990s, and I actually worked with it when I was president of the New School for Social Research in New York, so I have a deep personal affection for it. It was something of an anomaly in Belarus, which was becoming more and more authoritarian, but it allowed this independent and high-quality university to exist. Eventually the government couldn’t tolerate it, put pressure on it, and then tried to close it down and forced it to flee into exile. Happily, the government of Lithuania was very welcoming and helpful in providing premises and support and it is prospering in difficult circumstances. I was over there in spring and high-quality education is going on – some of it with students in Vilnius, and a lot via the internet, so-called distance learning, with students back in Belarus.

Is MacArthur still supporting it?

Oh, yes. We recently made a $250,000 grant and we are likely to do more. I see the European Humanities University in exile as a kind of symbol. When it is allowed to go back to Minsk, we will know that the people of Belarus have a degree of freedom. As long as it is forced to stay in Vilnius, we will know that Belarus is an authoritarian regime out of step with the march of history.

Are there other countries that you find it difficult to work in because of corruption, countries like Nigeria and perhaps also Russia? Is that an issue for you?

We’re very careful with our grants and require detailed financial reports. On occasion, we have independent audits done. I have to say, knock on wood, that I believe our money has gone to its intended purposes in both Russia and Nigeria.

I’d like to ask you a very broad question: what do you see as the major challenges for international grantmaking?

I think it is possible to do good work in most countries, and I’m urging American foundations and private individuals to step up their attention to the rest of the world. Our money is put to very good use, especially in the developing world where a reasonably modest amount goes a long way. So I think the challenge abroad is the same challenge as here, and that is how to use modest resources against big problems in a way that finds a strategic niche.

So you don’t believe that there are ‘special problems’ with international grantmaking?

I think once you build up experience, not only in international grantmaking but within a country, it might be a little more difficult than giving money in the US, but not much. There’s checking for terrorists and so forth, but it’s really not as daunting as people think.

I’d like to say that the MacArthur Foundation is very willing to help any other foundation or individual wishing to give money abroad. We are happy to offer technical assistance on how to do it, and to advise on worthy organizations in the fields that we work in – conservation, population, human rights, peace and security, migration and the mobility of people. We’re very happy to help on a pro bono basis.

What would you feel if other private donors came to you and wanted to put their money into the MacArthur Foundation? Has it happened at all?

It hasn’t, but we would certainly be open to it. But I think the more likely model is really just giving advice. Given the scope of our work, we have plenty of experience. We work in 65 countries, and we have offices in Moscow, Abuja, New Delhi and Mexico City, and we’re thinking of opening a small one in Beijing.

We would certainly be willing to accept and administer funds, but I think a better way to do it is to partner, and we really enjoy partnering with other foundations.

I wanted to ask you about partnership, and specifically about your experience of the Partnership for Higher Education in Africa. Is it difficult working with other foundations or has it been an entirely positive experience?

Well, it’s always more complicated to do things together than to do them on your own, but the benefits of working in partnership outweigh the additional administrative burden that might come from it. And the Africa Higher Education Partnership is a good example.

I was having breakfast with a number of other foundation presidents in New York and each of us in our own way was talking about doing more on higher education in Africa, so we said ‘hey, why not put all this together and do it as a partnership’. There would be at least two immediate advantages: first, it would be a symbol of commitment to Africa and a symbol of hope for the future of higher education in Africa if four prominent foundations, now six, agreed to work with a number of universities in different countries.

Second, a project might come along that was bigger than any one of us wanted to take on alone, and, sure enough, expanding access to bandwidth at a more reasonable cost was just such a project. We cut the cost of bandwidth by two-thirds and increased access dramatically by working together. So that’s one good example of a partnership.

But it’s a loose partnership. We’re all working in different countries in our own way. But a common theme is that we’ve picked really good universities that have been neglected, have good leadership now, and a clear plan for the future, and are poised to get better.

Do you co-fund some of these universities?

As I said, we co-funded the bandwidth project. We also co-fund a consortium on strengthening macro-economics in Africa and we’re considering similar efforts in political science. Sometimes we work at the same university with the Carnegie Corporation and help it develop, but a lot of the work of the partnership is done individually, and that cuts down the transaction costs. We don’t adopt a one-size-fits-all approach, and we’re listening to the needs of each institution.

And the partnership involves the exchange of experiences and ideas?

Oh yes. The presidents meet once a year here in the US and sometimes we’ve invited the vice-chancellors of the universities to come and meet with us. When we announced the second phase of the partnership – it is now in its second five years – we did it at the Ford Foundation and invited the presidents of Ghana and Kenya and two or three other countries. Part of what we’re trying to do is raise the visibility of higher education in these countries. We’re trying to make the point that higher education is absolutely essential, both for building a stronger democracy and for economic development.

We are all sponsoring a conference in South Africa, which will bring university leaders together with businesses, both international and African, to talk about businesses’ human resource needs and to work on technology transfer in engineering and scientific operations.

Do you feel there are any issues in international grantmaking - or in grantmaking generally - that people don’t talk about but should, whether it’s power or failure or mistakes or unintended consequences?

Well, I’m on the side of more transparency about how philanthropy works all over the globe. I think we have an obligation to be very clear about what we’re doing and how we do it. That has led us to publish our first annual report in Russia in Russian. We’re going to do it in each of the four countries where we have offices. So I would say, issue number one: be more transparent about what you’re doing and how you do it. Issue number two: take stock of whether the grant itself fulfilled its intended purpose, but more than that whether a cluster of grants on a particular issue is having the impact you hoped – and be willing to talk about the disappointments as well as the successes. I think the underlying theme here is more transparency and greater evaluation, analysis and discussion of what works and what doesn’t, and I think that’s true practically everywhere.

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