April 29, 2004 | Read Time: 14 minutes
Would a first lady also be able to run a big foundation?
The nonprofit world faces an unprecedented prospect this presidential election: What if the country’s
first lady was also leader of one of the nation’s wealthiest foundations?
That could happen if voters elect Teresa Heinz Kerry’s husband — Sen. John Kerry of Massachusetts, the presumed Democratic nominee — in November. Ms. Heinz Kerry has said that as first lady she would continue in her role as chairwoman of the Heinz Endowments, in Pittsburgh, which hold more than $1-billion in assets.
While many nonprofit officials believe that a first lady with such direct expertise in philanthropy could lead to new partnerships with government and help the nonprofit world claim a higher public profile, others say Ms. Heinz Kerry’s dual role would lead not only to criticism of her philanthropic work, but also to greater scrutiny and regulation of all foundations and nonprofit organizations. Already some conservative critics have charged that Ms. Heinz Kerry and the charities she is connected with have used their charitable efforts for Mr. Kerry’s political gain.
As both first lady and head of a foundation, “she’d be wielding two things that are frightening to people — power and money — and that will make people suspicious,” says Paul Costello, who worked as a spokesman for Rosalynn Carter when she was first lady, as well as for Kitty Dukakis when her husband was a Democratic presidential candidate. “There may not be anything amiss, but perceptions of conflicts of interest will be there and be exploited.”
‘Spiritual Leader’
Philanthropy has been a top priority for Ms. Heinz Kerry for more than a decade.
Since the 1991 death of her first husband, Sen. H. John Heinz III, a Republican from Pennsylvania, Ms. Heinz Kerry, 65, has served as chairwoman of the Howard Heinz Endowment and on the board of the Vira I. Heinz Endowment, which are named after Senator Heinz’s grandfather and great aunt. As heir to the H.J. Heinz Company fortune, Ms. Heinz Kerry is estimated to be worth $700-million.
Though established as two separate organizations, the endowments practically work as one, with similar grant-making agendas, a shared staff, and two boards that meet together. In combined assets, the endowments held about $1.3-billion at the end of 2003. Last year, they awarded $60-million to projects in southwestern Pennsylvania that focus on the arts, the environment, child care, and public education.
Maxwell King, the Heinz Endowments’ president, describes Ms. Heinz Kerry as the “spiritual leader” of the institution. “She doesn’t run it day to day, but she’s the guiding force,” he says.
Along with overseeing the endowments, Ms. Heinz Kerry serves as chairwoman of the Heinz Family Philanthropies, a group of funds she established in Washington — worth at least $69-million at the end of 2002 — that primarily provide awards of $250,000 each to individuals for achievements in environmental science, the arts, public policy, and other areas.
‘Pushing the Public Sector’
One of Ms. Heinz Kerry’s philanthropic goals has been to foster good ideas that governments can carry out on a larger scale.
Mayor Tom Murphy of Pittsburgh, a Democrat, credits Ms. Heinz Kerry and the Heinz Endowments with helping the city’s downtown develop economically and, through financial assistance, making its new convention center an “environmentally friendly” designed building. “The Heinz Endowments have been very helpful at pushing the public sector to think critically about what kind of city we want to have,” he says. “It’s been a wonderful partnership.”
The foundation’s reach has extended beyond the city. Massachusetts in 2000 adopted a version of a prescription-drug plan for the elderly developed by the Heinz Family Philanthropies, says Jeffrey R. Lewis, president of that organization and Ms. Heinz Kerry’s chief of staff. Today, the program provides prescription-drug coverage to 90,000 elderly and disabled residents, he says.
And a childhood-development program supported by the Heinz Endowments has helped increase support for a State of Pennsylvania childhood program, says Donna R. Cooper, policy director for Gov. Edward G. Rendell, a Democrat. “The work they did in Pittsburgh, specifically building understanding among the business leaders of the importance of early-childhood education, was helpful in our efforts,” she says.
In 1997, Ms. Heinz Kerry told The Chronicle: “I can come to people in government who I know on both sides of the aisle on issues that I care about, without having any political ramifications.”
But Ms. Heinz Kerry’s ability to sidestep partisan politics would be seriously thrown into doubt if her husband wins the White House, says Adam Geller, president of National Research, a Republican polling company. “She’d have to step down from her organizations and positions that take advocacy roles,” he says. (Ms. Heinz Kerry declined to be interviewed for this article.)
Some observers also wonder whether Ms. Heinz Kerry will be able to remain as candid and outspoken as she has been in the past, traits that many believe have contributed to her effectiveness as a philanthropist.
Right now, “she speaks her mind, for better, for worse,” says Lois M. Gibbs, director of the Center for Health, Environment, and Justice, in Falls Church, Va., who met Ms. Heinz Kerry in 1998 when the Heinz Family Philanthropies gave her an award for environmental work. “I’m hoping when Kerry becomes president she doesn’t become plastic.”
Agenda Concerns
Sometimes Ms. Heinz Kerry’s foundations have influenced public institutions by deciding to withhold funds rather than award them.
In 2002, the endowments, along with the Grable Foundation and the Pittsburgh Foundation, announced that they were suspending grants to the Pittsburgh public-school system until relations between the school board and the school superintendent improved. After personnel changes were made on the school board, including a new president, the groups decided this year to recommit their money.
Many local observers, such as The Pittsburgh Post-Gazette’s editorial page, praised the foundations’ move.
But David Bergholz, former head of the George Gund Foundation, in Cleveland, criticized the high-profile nature of the action. “I’d still argue that the way in which they managed that was too heavy-handed and may have been unfair to the school district,” he says. “I am someone who gets very worried when foundations start defining and setting community agendas as opposed to responding to the organizations and people who ought to be setting the agenda.”
Ms. Heinz Kerry is usually not troubled by such criticisms. “Accountability is essentially tough love,” she writes on the Web site of the Heinz Family Philanthropies. At the Heinz Endowments, “we have realized that the open hand of charity, while honorable in every respect, is generally less effective than the helping hand of strategy,” she says.
In response to concerns that she might try to have undue influence on her husband’s public policies, Ms. Heinz Kerry recently told the Associated Press that she would not want a policy-making job in a Kerry administration. “I think anyone in that position needs extra support, but I don’t want to formulate policy,” she said.
Advocate or Undue Influence?
Ms. Heinz Kerry did say, however, that she wants to keep advocating for causes she believes in through her charity work. “That excites me, because I learn a lot from that, and I can give my own perspective of how we did or failed or whatever,” she told the wire service. “That’s the kind of thing I like to do.”
Such a prospect worries some political and nonprofit observers who feel she could have too much influence on policy.
“It’s one thing to have a first lady advocate, and another thing entirely if she is throwing chips in the pile,” says Tim Blessing, a presidential scholar and associate professor of history at Alvernia College, in Reading, Pa. “If the Heinz Endowments were giving money to a pilot project that was being sold to Congress as a template for legislation, and there’s another project that didn’t get money and didn’t get a look from Congress, I can see how they’d sue on grounds of undue influence.”
Ron Arnold, executive vice president of the Center for the Defense of Free Enterprise, a conservative group in Bellevue, Wash., that supports a free-market approach to environmental problems, believes previous grants by Ms. Heinz Kerry’s philanthropies illustrate some of the potential conflicts that could emerge. In a report he wrote, released in April by the Capital Research Center, a conservative nonprofit watchdog in Washington, D.C., he questions a 2003 award, worth $250,000, that the Heinz Family Philanthropies provided to a board member of the League of Conservation Voters. The Washington group endorsed Mr. Kerry last January, “conspicuously early in the election cycle,” the Capital Research Center report says.
The League of Conservation Voters says its endorsement was based on Mr. Kerry’s support for the environment in the U.S. Senate, and not on Ms. Heinz Kerry’s award.
Above the Partisan Fray
While the Heinz philanthropies may provide clues to Ms. Heinz Kerry’s policy views, some observers caution against thinking that she fits neatly into any political party’s agenda. They point out that she was a registered Republican until Mr. Kerry’s presidential campaign began.
Yet the campaign season has already shown just how hard it will be for Ms. Heinz Kerry, and the nonprofit groups with which she is affiliated, to stand apart from the partisan fray.
While Ms. Heinz Kerry continues to serve on the boards of a number of nonprofit entities, including the Brookings Institution, a think tank in Washington, she has suspended her board membership with at least one nonprofit group. In January, she took a leave of absence from the H. John Heinz III Center for Science, Economics, and the Environment, in Washington, a group that conservatives have criticized for supporting environmental work that hurts businesses.
Ms. Heinz Kerry also came under attack in the editorial pages of The Wall Street Journal, the New York Post, and other newspapers for a grant made by the Tides Foundation, a San Francisco charity that had received Heinz money. At issue was a grant to September 11th Families for Peaceful Tomorrows, which protested President Bush’s use of images of the destroyed World Trade Center in campaign commercials.
According to the Heinz Endowments, since 1994 they have awarded or pledged about $8.1-million to the Tides Foundation and its subsidiary, the Tides Center, but only for environmental projects in Pennsylvania. The Heinz Endowments denied it had any ties to the September 11th group.
After the allegations appeared last month, Tides sent an e-mail message to donors, posted a denial on its Web site that Heinz Endowments money was used to support Peaceful Tomorrows, and hired a public-relations company to deal with the deluge of inquiries.
But despite its efforts, the news media continue to make the accusations, says Drummond M. Pike, the Tides Foundation’s president.
For the nonprofit world, Mr. Pike says his experience shows what happens when a charity is dragged into the “polluted political process” by partisan attacks.
He says that while Ms. Heinz Kerry’s connection to philanthropy could heighten the charitable world’s visibility, “I’m afraid though that these initial efforts have shown some are going to spin it in a very negative light.”
Some nonprofit officials say continued criticism of Ms. Heinz Kerry’s philanthropic work will fuel the general public’s cynicism of charities and foundations, which is already high because of news reports of alleged nonprofit abuses, such as questionable salaries and perks for officials.
“The media has not been kind about running monthly stories about goodness and generosity,” says Gregg S. Behr, president of the Forbes Funds, a Heinz Endowments grantee.
But Mr. Behr says Ms. Heinz Kerry’s prominence also provides nonprofit organizations with a vehicle for countering the public’s lack of confidence in charities generated by these articles.
“It presents an opportunity for the sector to tell its story in positive ways,” he says. If Ms. Heinz Kerry becomes first lady, he says, charities and grant makers would have a presidential term to promote their accomplishments. “It would be a four-year teachable moment,” he says.
Adds Carol R. Brown, a board member with the Howard Heinz Endowment: “It would be a time when individual Americans would begin to contemplate the use of their own resources for, certainly more modest, philanthropy.”
Handling a Dual Role
Despite her announced intentions, some observers question whether Ms. Heinz Kerry really could retain her role at the Heinz Endowments if her husband wins in November or whether political pressures would force her to take a leave from her foundation roles. They speculate she would hand the reins to her eldest son, H. John Heinz IV, who already sits on one of the Heinz Endowments’ boards.
Indeed Mr. Lewis, her chief of staff, says that Ms. Heinz Kerry is prepared to distance herself from her philanthropies if she feels they are being threatened.
“It’s pretty hard to imagine how her socially beneficial work would create any type of serious conflict,” he says.
He adds, however:”It’s safe to say, though, that if a conflict ever were to arise, Teresa would err on the side of safeguarding the reputation of philanthropy and of the foundations she has worked so hard to strengthen.”
Those who have worked with Ms. Heinz Kerry say her passion for her charitable work would make it hard for her to part with it.
William E. Strickland Jr., president of the Manchester Bidwell Corporation, a Heinz Endowments grantee that helps poor Pittsburgh families, says Ms. Heinz Kerry even took Mr. Kerry on a tour of his charity when they were dating.
“She’s very committed, very intense, and very serious about what she does,” says Mr. Strickland, a Republican who has known Ms. Heinz Kerry for more than a decade.
Mr. King, the endowments’ president, says the Heinz Endowments already are taking steps to handle Ms. Heinz Kerry’s new political role as wife of the likely Democratic presidential nominee. At its May board meeting, for example, the endowments will have to accommodate the Secret Service, he says.
Mr. King says that while he realizes other changes would probably be needed to diffuse any negative perceptions of conflicts of interest if Ms. Heinz Kerry became first lady, he hopes a workable solution can be found.
“It can be managed in a way that’s very careful about the appearance of a conflict,” he says. “I hope very, very much myself personally that we can work it out that she can stay involved because she does a lot for us, and we would miss it.”
History: Howard Heinz — a former president of the H.J. Heinz Company, known for its ketchup and other condiments — established the Howard Heinz Endowment in 1941 through a bequest from his estate. Vira I. Heinz, wife of Howard’s brother, Clifford, established the Vira I. Heinz Endowment in 1986 through a bequest from her estate. The two funds essentially operate as one institution, known as the Heinz Endowments.
Purpose and areas of support: The endowments award most of their money to groups in Pittsburgh and the surrounding counties of southwestern Pennsylvania, where the Heinz family built its business. They provide grants in five areas: arts and culture; children, youth, and families; economic opportunity; education; and the environment.
Combined assets: $1.3-billion as of December 31, 2003
Grants and operating programs: In 2003 the Heinz Endowments awarded a total of $58.7-million in grants. The largest grant, $1.29-million, went to the Sarah Heinz House, which runs recreational and other programs for Pittsburgh youths.
Key officials: Teresa Heinz Kerry, chairwoman (Howard Heinz Endowment); James M. Walton, chairman (Vira I. Heinz Endowment); Maxwell King, president (Heinz Endowments)
Application procedures: Grant seekers are asked to send a concise letter of inquiry to the foundations after reviewing the grant guidelines to see if their work would qualify. In response to such letters, the foundations follow up with a request for a more formal proposal from the projects that most closely meet their guidelines.
Address: 30 Dominion Tower, 625 Liberty Avenue, Pittsburgh, Pa. 15222; (412) 281-5777
Web site: http://www.heinz.org
