Foundations Should Follow Ford’s Lead

To the Editor:

Pablo Eisenberg’s column “How the Ford Foundation Should Select a New Leader” (Opinion, April 19) criticized the foundation for lack of leadership and vision, preferring to recall the glory days of the foundation in the 1970s.

As the nation’s largest foundation for most of its history, Ford has often been a lightning rod for criticism.

I worked at Ford for most of a decade and have now spent another decade raising funds from dozens of foundations, including Ford. Mr. Eisenberg’s column motivates me to cite some of the foundation practices and protocols that I now think of as vintage Ford — and that newer foundations might emulate.

First, Ford’s tag line, “support to innovative individuals and institutions worldwide,” is the real deal.

Ford is the real venture capitalist of philanthropy; providing core support rather than project support whenever possible.

The Ford Foundation believes that the grantee knows best how to use its funds to pursue its mission and it understands that keeping the lights on is part of the challenge of any nonprofit.

Further, it employs 5- to 10-year term limits for its program officers, encouraging Ford grant makers to take their broad observations of a field back into the world of nonprofits or public service, meanwhile creating space for diverse talent from the field to cycle through the Ford team and stimulate new ideas inside.

For decades, Ford has maintained more than a dozen field offices in developing countries and emerging economies in Asia, Africa, and Latin America.

In doing so, Ford carefully balances expatriate support with local talent that invests these offices with authority to make decisions in context. In recent years, it has become more common for the leaders of these offices to hail from the target country, as the foundation has become more global in its outlook and aspirations.

Again, like a savvy venture capitalist, the foundation exits a country — or a field of grant making — when its early-stage investments succeed in attracting bilateral and other forms of philanthropy or investment that in turn enable the local institutions and grantees to stand on their own.

In 1976, when Ford offered the Nobel Prize winner Muhammad Yunus his first grant to investigate bottom-up approaches to tackling poverty in Bangladesh, the foundation could not have envisioned the density of funders who eventually would flock to Dhaka, to the Grameen Bank, and to the field of microfinance that Mr. Yunus popularized.

After 40 years on the ground, Ford exited Bangladesh in 1997, creating room in the portfolio for China and Vietnam to enter and start the process again.

One of Mr. Eisenberg’s criticisms relates to Ford’s payout protocol. Rather than spend down, Ford manages payout to preserve the spending power of the endowment.

For decades the foundation has been among the most important investors in fields like community development; it has changed strategies and tested new ideas and leaders over time, while holding its fire; and it has conserved assets in the belief that future problems may be even more complex than today’s and that the world may benefit from the wisdom and reach of this leader in philanthropy.

There is nothing wrong with spending down assets in one’s lifetime, but who can say the problems of today (and tomorrow) are not likely to need the experience, access, and legacy of a Ford Foundation?

Finally, over the last 30 years, Ford quietly pioneered concepts and investments to leverage the significant capacity of the private sector in community development and poverty alleviation.

Today’s social entrepreneurs trumpet the wisdom of matching the charitable instinct with business know-how. Since the 1960s, Ford has developed and refined the practice of mission-centric social investing and helped create and build major financial intermediaries that leverage private investment dollars for poor neighborhoods.

Those intermediaries have, in turn, created significant local development capacity in urban America.

In fact it was a Ford program manager, Louis Winnick, who convinced Congress in 1969 to let private foundations experiment with social returns for investing, dubbed program-related investments — the precursor to social entrepreneurship and close cousin to the then-nascent field of social investing.

In spite of its remarkable record, the foundation rarely toots its own horn, preferring that its grantees take the credit for the heavy lifting and local successes.

I am not worried about whom Ford will choose as its next president — there is much talent to draw from — nor am I surprised that the job description emphasizes humility alongside management skill and vision.

Judith Samuelson
Executive Director
Business and Society Program
Aspen Institute
New York