Philanthropy’s Challenge: Communicating Its Value to Society

Susan V. Berresford joined the Ford Foundation in 1970 as a research assistant.

Thirty-eight years later, she is leaving the organization with a slightly different title: president. Next month Ms. Berresford will retire as the fund’s leader. She turns 65 in January. She will be replaced by Luis A. Ubiñas, a former business consultant at McKinsey & Company.

Ms. Berresford’s steady rise to the head of the nation’s second-wealthiest grant maker, with $13-billion in assets, was a somewhat accidental career move.

“I never expected to work at a foundation,” she said, “and I never expected to be the foundation’s president.”

But inspired by the civil-rights movement and Great Society efforts of the 1960s, she has led the foundation, whose headquarters is in New York, since 1996.

Ms. Berresford is credited with hiring more minorities to Ford’s 500-person staff; reacting quickly to the September 11, 2001, terrorist attacks; and directing the foundation’s 13 offices worldwide to assist a wide range of causes, such as supporting higher education in Africa and promoting efforts that help low-income people save money.

Her most ambitious project was the International Fellowships Program, which gives scholarships to community leaders from poor and developing nations to pursue graduate degrees anywhere in the world. In 2000, Ford started the program with $280-million — the biggest grant in its history.

When the program was announced, some education experts predicted that the scholarship winners would not finish their degrees or wouldn’t return to their native countries, as Ford intended. But a 2005 survey suggested that Ms. Berresford’s big bet paid off. The survey shows that of the first 400 alumni of the program, 85 percent had completed their degrees and 75 percent had returned home.

Such accomplishments have earned her praise.

She has brought to Ford “fresh thinking, major successes, a willingness to take risks, and the occasional uproar that a willingness to take risks inevitably brings,” said Joel Orosz, a professor of philanthropy at Grand Valley State University, in Grand Rapids, Mich.

But Ms. Berresford is not without her detractors, especially among those on the right side of the political spectrum.

“The Ford Foundation is a grant-making dinosaur. Susan Berresford helped maintain its great size and longevity, but she didn’t transform its culture or its priorities,” said Terrence Scanlon, president of the Capital Research Center, a think tank in Washington. “Ford is stuck in a bog of outmoded liberal assumptions.”

What’s more, in 2003, a handful of Jewish organizations accused Ford of supporting Palestinian groups that oppose Israel. After the controversy erupted, Ford began requiring its grantees to sign a letter saying they do not espouse terrorism or bigotry.

Ford’s move was criticized by some charities. For example, the American Civil Liberties Union stopped accepting Ford grants, arguing that signing the statement was a violation of its right to free speech.

For her part, Ms. Berresford said she views criticism as part of the job.

“If you want to engage in complex current issues, and if you’re a large, visible donor, you have to make tough calls and you’re not going to be popular with everyone,” she said.

Ms. Berresford is not retiring from all her nonprofit commitments. She will continue to chair United States Artists, an organization that Ford helped start with a $15-million grant last year. The organization makes grants to individual artists. She will also continue to assist a Ford program that helps Vietnam recover from the health and environmental damage wrought by Agent Orange. Because she grew up during the Vietnam War, she says she wants to keep a hand in efforts to heal the wounds it caused both Asia and America.

In an interview, Ms Berresford discussed her tenure at Ford:

What are the most pressing issues facing philanthropy today?

One problem that nonprofits are going to face, including foundations, is economic instability. If you take the time I’ve been president of the foundation as an example, our assets went from $7-billion to $15-billion to $9-billion to $13-billion. That’s a real rollercoaster.

The other challenge for us is to communicate the value we represent to society. People in every community depend on their church, their museum, their school, their community center, but not too many think of it as the nonprofit sector. More people need to think that way because more and more policy issues will arise about the role of our sector. And we need to do a much better job than we have done so far talking about what our sector does, what its shape and size is, what its issues are, and what its value is.

Warren Buffett told lawmakers last month that foundations should award more than the 5 percent of their assets a year required by law. How do you react to that?

I don’t agree with those sentiments. At the end of the day, the question of payout really comes out to the question of perpetuity.

If you believe in the value of very long-term institutions, which I do, then you have to set the payout level at something like 5 percent to enable an institution to exist over a long period of time.

Our society values enduring institutions. We treasure our museums, our religious institutions, our universities, our community centers. We treasure them because they express and reinforce our values. We should force only the dissolution of organizations that represent a clear social danger. And what is the social danger in philanthropy existing for a very long time? I really don’t see it.

How do you feel about the growth of new foundations on the West Coast and their emphasis on making philanthropy more business-oriented?

It’s very exciting to have new donors who bring new perspectives, so I’m all for that.

What worries me about it is what I see as a misapplication of business discipline. I don’t think every business tries to count up all its results with a kind of iron fist at the end of every year. Many businesses make long-term bets in medicine or research and the development of new products.

What I worry about is that a venture-philanthropy framework will miniaturize ambition in foundations by saying, We should be able to count everything.

If you think of the struggle against apartheid, that didn’t lend itself to a business plan.

Do you have any regrets?

I wish I had gotten to some things earlier, like making some very large grants. It took a couple of years from the time I became president for us to really get rolling with that. I think that was because I kept talking about, Why aren’t we making some larger grants. But I don’t think I managed that as well as I could have.

What advice are you giving Mr. Ubias?

He’s a very smart, idealistic, and able guy, who doesn’t need a whole lot of advice from me. But there is something that Frank Thomas [her predecessor at Ford] told me when I took this job.

He said, Remember that this job slowly reveals itself. And when he said it, I thought, What is he talking about? I’ve been here all these years. I know what the job of the president is.

But there’s truth in what he said. There’s a lot to learn, there are possibilities you don’t see in the beginning. So that’s what I would say to Luis: Let this job reveal itself to you.