Newsroom
Speeches
10 November 2000Philanthropy and the Marketplace of Ideas
Thank you Michael and thank you to the Roundtable leadership for including me in your interesting conference. I admire the success of those who built this organization. Building institutions is hard work. That is because healthy institutions must evolve over time and their leaders must continually refresh their thinking about the values and goals they hold dear. The Roundtable seems to have done that.
What is the institution I lead? Ford's $14.5 billion assets put us among the three largest U.S. foundations. We have the largest international presence with offices in 15 countries. We make tiny grants of a few hundred dollars and mega-grants of many millions. Unlike many others, we manage our own investments in house. Around the world, all of our offices have international staff. Our board of Trustees includes people from the U.S., Africa, Asia and Latin America.
I am not here to convince you that Ford is a model for others. Each foundation finds its own way and the resulting variety is healthy. Instead, I hope to describe how a large, international foundation like Ford operates so that you have a clear picture of us. Maybe with that picture in mind, we can agree to disagree on some things and build alliances for joint grantmaking and learning.
Learning should get higher priority in our field. Like some of you in this room, Ford sees a steady stream of "new" donors creating new foundations. They come to ask about our grants and lessons from them. Each of us owes these newcomers, and indeed our regulators, more than anecdotal accounts of our work.
Over the past years, staff at Ford have developed training materials for our new program staff that gets beyond anecdotes: we have cases for teaching program development skills; CD's and videos of Ford grantmakers reflecting how they do their work: We have an annual two-week long training program for new program staff which we open to other foundations. We share our teaching materials with others and are beginning to put them on our website under a tab "Tools for Grantmakers." We believe foundations must develop a body of knowledge for practitioners and the public about good philanthropic practices, and are trying to do our part.
I've been with Ford over three decades. I have seen some huge successes brought about by Ford-supported people and institutions such as Sesame Street, the human rights struggle in Eastern Europe, and the US civil rights movement. I have also seen programs crash and burn—Ford's support for school reform in Ocean Hill Brownsville in Brooklyn and some of our early voter registration work. I have also seen the Foundation change and evolve under the leadership of two former presidents whom I admired. The changes reflected their own perspectives and personalities and remained true to the Foundation's charter.
The Foundation's current character and goals were defined in 1950. The Ford family planned the Foundation's transformation from a small, locally focused Michigan foundation (founded in 1936) to a far larger entity with a national and international structure and program. They appointed a task force, headed by Rowan Gaither, to set a new course for the Foundation. With the approval of the Ford family and other board members, the Gaither Report became Ford's roadmap.
It suggested that the Foundation work on world peace, strengthening allegiance to democratic principles, advancing economic well being, supporting education and study and work on human behavior and intergroup relations. From 1950 onwards, Ford's work has grown out of the Gaither Report's ideas about ways of addressing complex world problems.
Today, I want to talk about three ways that the contemporary Ford Foundation works with ideas. We take ideas seriously—first by incubating them, second by promoting them and third by exploring them in other countries.
First, Ford incubates ideas with their inventors. Let me give two recent Ford examples.
One is Ford's work on Individual Development Accounts, or IDAs. These are savings accounts opened by low income people. Their savings are matched, sometimes on a dollar-for-dollar basis, sometimes even three or four to one. The savings grow but can't be touched for a set period. Then the money can be withdrawn only for specific purposes—usually buying a house, getting an education, investing in a business. Savers are often required to be in savings clubs where they get counseling and peer sessions on employment, home ownership and credit.
The IDA idea originated with Professor Michael Sherraden at Washington University in St. Louis. His research on welfare policy found that poor people often wanted to save but could not because of welfare regulations. He came up with IDAs as a way to help low income families accumulate capital and think strategically about life choices. Savings would not only create an asset but perhaps also a new mind-set, helping people become more optimistic, confident and able to plan ahead. Sherraden's was an intuitively appealing idea, especially in an environment that discourages welfare dependency and emphasizes education and entrepreneurial activities. So it's not surprising that IDAs have taken off.
There are now thousands of low-income savers in hundreds of IDA programs in the U.S. Their accounts are held in credit unions, banks, churches and community organizations all across the U.S. They are matched by corporate and philanthropic donors and even some local governments. Thirty-two states have passed waivers to allow welfare recipients to have IDAs. Bipartisan Congressional support for a federal IDA program is clear and the British government has plans for IDAs.
A series of Ford grants since 1996 totaling close to $5 million supports and tests the idea of IDAs. We and our grantees want to learn: who saves, how much they save, what savings are used for and whether it makes a difference in people's lives. After all, you can get a degree, buy a house or invest in a business and still be poor or in deep trouble.
We're already learning a lot. For example, the programs have found that IDA savers should be allowed to buy a car or a computer, two important investments people can make to get jobs but that were overlooked in the program's design. Surprisingly, savers like the restrictive rules against early withdrawal, since they give savers an easy way to say no to friends and relatives who want to borrow. 70 percent of savers say they now shop more carefully for food and 68 percent say they eat out less. Another surprising finding: a good number of savers don't want to use the money when it does become available—they like having the cushion. And it has become clear that the savings club activities are as important as the matched accounts in changing savers' lives. When I met with the largest IDA program in California, in Oakland, savers repeatedly talked about the help and guidance they got from the clubs. Finally, the family interviews have shown that kids in savers' families now have piggy banks they never had before.
That has led to an additional IDA idea which Ford and its grantees are incubating—Kids' Accounts. At birth, children would have an account for their own savings and for matching contributions made at milestones such as graduation from primary school, middle and high school. The accounts would be protected until age 18 at which time they provide an asset for education, home ownership and the like.
There is much more to the IDA story, but this should suffice as one example of incubating ideas that we and our grantees hope will help reduce poverty in the United States.
We also incubate ideas in educational reform, as in Ford's support for Project GRAD—meaning Graduation Really Achieves Dreams. GRAD is the brainchild of Jim Kettleson, former C.E.O. of Tenneco. Jim was convinced that Houston's worst public schools could be good schools. He traveled the United States looking for successful public school innovation. He ultimately stitched together programs borrowed from here and there and he named the approach GRAD. He worked with public school leadership to introduce GRAD into clusters of schools that feed students from one level to another as they progress through Houston's system. In Houston, GRAD now includes 36,000 students in 54 schools.
GRAD creates quiet, orderly classrooms, effective teaching of math, reading and writing. It provides counseling and support services for students and practical problem solving assistance to GRAD parents. It gives scholarships enabling disadvantaged high school graduates to attend college.
Here is a sample of GRAD's test and school climate results from the schools that have been in it the longest: At Davis High School, prior to GRAD, in a typical year just 20 of the 600 students who entered the 9th grade went to college four years later. Now, nearly 200 do. Using the Texas-wide achievements test, the number of students passing the reading and math test has tripled. At 3rd through 6th grade, this is nearly 80 percent. Disciplinary visits to principals' offices have declined by 75 percent and student pregnancy rates are down more than 50 percent. Sure, there is still room for improvement, but these gains are far wider and more sustained than in other school reform programs I have seen.
Project GRAD's success has encouraged six other cities and states to adopt it. That brings the total to 125 GRAD schools with about 100,000 students. This is important because unless school reforms achieve measurable learning gains in multiple locations, they are merely successful boutiques with no national impact.
Jim Kettleson and the Houston school system needed a partner to incubate GRAD so it could grow to scale in Houston. Later, he needed a partner to help move the program to other cities. Ford has tried to be that partner, providing $25 million to support the innovation and its comprehensive testing and evaluation in Los Angeles, Atlanta, Newark, Columbus and Nashville. Other partners from business and government are joining as well.
Ford's work with GRAD will ultimately constitute a decade or more of systemic public school reform and related research. It should contribute to educational reform thinking and to the improvement of public schools in tough communities. Ford's varied school reform portfolio also includes evaluations of charter schools, studies of schools generated by the New American Schools Corporation, as well as other lines of work.
Both IDAs and Project GRAD exemplify Ford's willingness to help innovators incubate their ideas. This work often requires decades-long commitments, a readiness to fund at a growing scale, and open mindedness about what you fund because the course is never clear at the beginning.
Let me now switch to a second type of Ford Foundation activity. This work goes beyond incubating ideas to promoting ideas.
Foundations are not, and cannot be entirely neutral, value-free institutions. Foundations are shaped by their founders' wishes stated in the original charters. They are also shaped by their leaders' values and ideas. All of us hold values and ideas, and in the United States we have the freedom to advocate and act upon them. Our nation has become a better place through open, robust debate about issues—the meaning of federalism, the need for abolition of slavery, racial and gender inequality and poverty. These debates can be contentious and engage not only politicians but also private citizens and leaders of civic institutions, including foundations.
A foundation can promote a wide range of ideas. The most common and low risk promotion involves unfamiliar but promising program concepts. But foundations also promote ideas that are the subject of highly charged political debate. Most, like Ford, do so carefully to avoid lobbying and election activity prohibited by the tax code. Today, we add our voice to the most politically contentious debates carefully, and only when the issue is close to Ford's core values and experience. And we take opposing ideas seriously. Sometimes we fund people to explore opposing opinions, since it is important to constantly re-examine and test ideas.
One example of Ford's promotion of ideas is seen in our support for affirmative action. Ford's work related to poor and disadvantaged people includes grants for fellowships, training programs, school reform, neighborhood renewal and economic development programs, and more. But our experience in these and other areas has led us to support the notion that our country still needs affirmative action. So we promote affirmative action by using our voice and supporting grantees who share this view.
Affirmative action is a divisive issue. Sensitive subjects like this should be explored. And in Ford's 1999 Annual Report I tried to do this by outlining my views and those of the Foundation's leadership on affirmative action.
I will neither repeat my essay nor try to convince you that I am right. This is not a debate on affirmative action and I don't want to create one. But I would like to describe the essay briefly as an example of Ford's willingness to promote ideas and contribute to discussion in a marketplace of ideas.
My view on affirmative action is shaped by the recognition that we are not the society we aspire to be. Minorities are disproportionately poor, and most of our communities and institutions are not well integrated. We feel an urgent need to address this situation and believe that affirmative action can help us become a better, fairer, more stable country for all.
The essay offers three observations. First, affirmative action is consistent with American values and ideals of equality of opportunity. The apparent ethical paradox of doing what some perceive as wrong in order to do right is troubling. But most policies involve tradeoffs—often difficult ones. The words of Rajeev Dhavan, Senior Advocate in India's Supreme Court suggests a resolution of this paradox:
"For a society to agree not to discriminate…is unexceptional, but can any society be totally blind to the fact that discrimination stems from deep-rooted prejudices which the constitution seeks to outlaw…. The simple injunction of nondiscrimination does not enjoin the state to be a spectator to racism….The constitutional command not to discriminate falls miserably to the ground if endemic disadvantage continues to be sustained in society."
My second observation in the essay is that societies need to understand the history of inequality and then address it with long-term, evolving affirmative action in different sectors. Today's inequalities were produced over a long period of exclusion and marginalization. Understanding those processes and their duration can give us the political will to maintain the extended remedial effort our nation needs. And yesterday's cure may not fit today's or tomorrow's need. So I also note that affirmative action should be periodically reviewed and refined, just like all policies.
My third belief is that affirmative action often works best when it includes incentives, goals and time frames. The business community routinely uses incentives, goals and time frames to achieve its ends. Countries such as Brazil and South Africa, as they wrestle with social and economic inequality, see the need for incentives and goals as they fashion remedies that fit their histories and cultures. We should too.
I conclude my essay with a reminder of the continuing racial segmentation of our society, and the vital importance of keeping alive the vision of an integrated, equitable society and trying to get there—soon.
Ford's support for affirmative action does not preclude exploring promising alternatives. One recent grant, for example, funds a large, long-term research project that will assess the consequences of the "ten-percent plan" on minority college enrollments in Texas. We fund data collection and analysis on California's new approaches to graduate school admissions. We need to know if these plans offer desirable and effective alternatives. Taking ideas seriously means being curious about new ideas and not being ideologically rigid.
This brings me to my third topic for today, exploring ideas in countries that may not share America's democratic values or respect diversity of thought. How does Ford, whose goals include strengthening democracy and human rights and reducing gender, racial and other forms of discrimination, accomplish its work in nations whose political environment and culture are vastly different from our own?
The Ford Foundation has maintained an office and program in Nigeria for several decades, some of which saw Nigeria under harsh military dictatorships. We could have left and operated in neighboring and more peaceful countries. But we chose to stay, accepting the difficulties and sometimes danger for our staff and grantees, because we believed we could make a difference.
During the toughest times, we funded intellectuals who developed small institutions promoting ideas about decent government. We funded community level economic development that helped people survive; reproductive health programs for women; and organizations that could help restart the country once the political landscape improved. When the dictatorship collapsed, a valued Ford trustee Olusegun Obasanjo resigned from our board to become Nigeria's popularly elected President. We are now partially funding a commission to help draw up a new constitution and hold constitutional hearings across Nigeria, and a truth commission to explore official misdeeds. In addition, we fund many other economic, social and cultural renewal efforts.
Ford's work in China offers another example. We began making grants in China in 1986. The Chinese government had asked us to help introduce their officials to modern foreign affairs concepts and economics. Ford paid for overseas training for senior and promising young Chinese policymakers. We did this gladly, building sufficient trust on both sides to enable Ford to open an office in Beijing in 1988. We are still the only foreign foundation with an office there.
We then funded broader training for Chinese policy makers and academics—exposing them to modern research methods. This enabled them to explore ordinary people's opinions about the real impact of government programs. These were new ideas for authoritarian, bureaucratic-oriented agencies unused to genuine consultation. We supported law reform as well as travel that introduced Chinese judges to other nations' legal systems. We supported women's groups challenging unfair employment and education practices, associations of young economists with new ideas, environmental and cultural institutions in the poorest ethnic minority areas. Some of the groups we funded are spinning off tiny independent organizations that may some day be akin to nongovernmental organizations outside China.
We are under no illusions about the difficulty of the economic, education and governmental reform work our grantees undertake in Nigeria and China. Both countries face huge challenges. Both countries struggle to regulate and sometimes control NGO activity. We are not naively trying to duplicate overseas the free civil society that exists in the United States. Each country must invent its own institutions, adapted to its history and culture. But Ford can familiarize their people with the ways that other nations increase freedom and governmental accountability. We have confidence that grantees who admire democratic principles and democracy's varied forms will ultimately build their own kinds of democratic institutions.
Sometimes within Ford we have disputes about whether the glass is half empty or half full. For example, in 1997, the head of our China office wrote an op-ed article for a major international newspaper, noting that while repression existed in China, so did positive change. It described the effects of a new law that had enabled citizens to sue the government for wrongdoing —a new concept in late 20th century China. Some 700,000 such suits had been filed and the article celebrated this sign of growing freedom. But some Ford staff and some human rights grantees were concerned that the article whitewashed China and criticized Ford for allowing the article to appear.
My response was that Ford has within it, people with different views. Our person in China was expressing views that reflected his experience, as critics expressed theirs. I believed that both sides needed to open their minds to two seemingly contradictory realities. Yes, there still was repression; and yes, there was also an opening process going on. Again, returning to my central theme, if you take ideas serious, you find that reality is complex and ambiguous.
In the broadest sense, what the China and Nigeria examples suggest is that no country is monolithic or homogenous. Even during South Africa's apartheid period, the Ford Foundation funded black and white groups struggling to create more democratic systems. We supported people in the ways they felt it was safe to work. If we were patient and good partners, many of them could incubate institutions to project their democratic ideas and values. And that is exactly what happened.
Of course, we do work that goes beyond these three categories of incubating, promoting, and working overseas. But, most of what Ford supports, in one way or another, deals with the social effects of ideas. Our agenda is constantly evolving. One new program, Religion in Society, is at an early stage but already gaining momentum. Like other donors, we recognize that religions can mobilize people to address social problems. So we have a long-standing line of funding for the secular services of black and other community churches in the United States. But we also go beyond this valuable and familiar type of work. We fund scholars of religion who are researching old and contemporary religious teachings to help broaden interpretation of ways to respond to contemporary problems. For example, in Indonesia, the Philippines and Egypt, we fund scholars and teachers of Islamic tradition who are linking religious beliefs to support for human rights, reproductive health, women's education and freedom and other important struggles. Religion frames many people's values and world perspectives and we believe this work may help illuminate the often overlooked pluralism within religious traditions. Greater appreciation of that pluralism could increase opportunity for marginalized groups and lessen religious conflicts over time.
I hope that these examples give you a distinctive picture of Ford's work. It is part of the diverse pattern of American philanthropy. One of the great American freedoms is the possibility that through foundations, one person's success and vision of helping others can support the hopes and dreams of others still struggling. Each donor has his or her approach to this task, and our philanthropic institutions mirror that variety of visions. Some donors choose to spend down the foundation's assets in their lifetimes. Others want to create a foundation for future generations. Some specify a sharp, particular focus on an issue or place. Others leave the lens wide open to allow for the unforeseen. That variety is what our treasured freedom is all about.
I feel very privileged to do this kind of serious work. It all begins with ideas, taking them seriously—incubating and promoting them at home and abroad. And like you, I hope that what I do with my colleagues and Ford grantees leaves the world at least a little bit better than it was before, maybe even a lot better. That is the opportunity we have. Thank you.
Click here to read Philanthropy magazine's interview with Susan Berresford.
Share