Written Testimony of Susan V. Berresford
Prepared for The House Committee on Ways and Means
Hearing to Examine Whether Charitable Organizations Serve the Needs of Diverse Populations
September 25, 2007
Chairman Lewis and members of the Subcommittee, thank you very much for the opportunity to appear before you today. I am Susan Berresford, President and CEO of the Ford Foundation, an independent, nonprofit, nongovernmental organization. Ford’s mission is to strengthen democratic values, reduce poverty and injustice, promote international cooperation and advance human achievement.
We commit approximately 75 percent of our U.S. funding to the reduction of poverty and injustice. In the last fiscal year, this totaled nearly $220 million of our $300 million U.S. allocation. We fund people and organizations tackling systemic injustice in education, employment, housing, asset accumulation and other areas. Since poverty disproportionately affects women, minorities, immigrants and rural communities, they are at the center of our work.
This year the Ford Foundation celebrates 70 years of delivering on a promise to improve lives and create opportunity. It has provided over $13 billion for grants, projects and loans. These funds derive from an investment portfolio that began with gifts and bequests of Ford Motor Company stock by Henry and Edsel Ford. The foundation operated as a local philanthropy in the state of Michigan until 1950, when it expanded to become a national and international foundation. The foundation no longer owns Ford Motor Company stock and has no formal ties to the company. Its diversified portfolio is managed to provide a perpetual source of support for the foundation’s programs and operations which are headquartered in New York, with offices in Africa, Asia, Latin America, the Middle East and Russia.
I would like to begin by making a distinction between charity and strategic philanthropy. Philanthropy encompasses charity that provides resources to deal with immediate needs such as sheltering the homeless, feeding the hungry, healing the sick and other acts of basic generosity. Ford, for example, has made grants in the aftermath of natural disasters in the Gulf Coast region and we helped nonprofits in New York and Washington respond to the events of September 11.
But there is another kind of philanthropy, one that offers the prospect of curing, rather than simply alleviating, problems. It involves the strategic use of resources to search for new ideas that can address root causes. Both charitable and strategic philanthropy have been present in U.S. philanthropy for many decades, and both will always be needed.
Most of Ford’s work is in the category of strategic philanthropy. We see our role as a resource for innovative people and institutions worldwide, providing risk capital for pilot programs, research, institution building and developmental activity. Strategic philanthropy recognizes that bringing innovations to scale requires partners such as government, business and civil society which have capacity and reach far beyond the abilities of any single philanthropic endeavor.
Before I outline some of the ways in which we serve diverse communities I would like to provide you with a sense of who makes up the leadership and staff of the foundation and how the Ford Foundation makes allocation decisions.
Diversity of Leadership
Ford’s Trustees select the president, set policy and overall spending targets. They ensure that the foundation’s policies are implemented effectively. The composition of Ford’s board and staff reflects our intent to draw on diverse talent. Among our Trustees who are U.S. citizens, 40 percent are minorities. Twenty three percent are citizens of other countries, primarily representing the regions in which we work. Sixty two percent of our Trustees are female. Our Trustees bring experience in business, nonprofit and governmental work. The next president of the foundation, Luis Ubiñas, will be the first Hispanic president in Ford’s history. I was the first female president and my predecessor, Franklin Thomas, who served for 17 years, was the first African American president.
Today 46 percent of our professional U.S. grant makers are minorities—up from 27 percent in 1996 when I became president. Fifty percent of all grant making staff are female. This diversity helps to ensure that we bring a variety of perspectives to our operations and grant making.
Allocation Decisions and Strategies
Our mission drives the programmatic and substantive nature of our work. The board and staff explore problems to which Ford resources can be applied, each bringing ideas to the table. Ultimately, the board approves the subject areas in which we work, the broad strategies in which we invest, and the allocation of funds to those topics and to our worldwide offices. The board delegates to the president the authority to approve grants from those allocations.
Program officers, our key grant makers, explore how foundation grants can have the greatest impact, supporting people with innovative and promising ideas. Program staff and grantees regularly report to the board on how strategies are working and board members travel each year to review program work on the ground in the U.S. and overseas.
The strategies for which we seek board approval most often aim to alter or build systems and organizations that can deliver lasting benefits to disadvantaged people. We offer patient capital and partnership, often sticking with people and organizations for years as they refine and test ideas and build to scale and significance.
I would like to offer a few examples of Ford support for systemic change led by courageous men and women who share our values and aims. This work extends to both rural and urban America and represents efforts in a variety of areas, including education, economic opportunity, the arts, media, civil rights, and philanthropy.
Creating Access to Opportunity
People matter, so we try to ensure diversity in talent pools from which the U.S. draws leadership in various domains. Since the early 1960’s, Ford has supported the largest private fellowship program that fosters diversity in the American professoriate. Originally called the Ford Minority Fellows program, now the Ford Diversity Fellows Program, it has provided over $175 million for fellowships and related support for approximately 5,000 scholars from rural and urban areas, most of whom now hold positions in academe. Fifty five percent are African American, 38 percent are Hispanic, and 6 percent are Native American. The program is run by the National Academy of Sciences, whose distinguished reputation lends prestige to the fellows’ fine work.
In K-12 education, Ford has devoted more than $35 million to Project Grad, developed in Houston schools under the civic leadership of Jim Kettleson, former Tenneco CEO. GRAD improves high school graduation rates and college-going in poor, urban communities. It has expanded from Houston to Los Angeles, Atlanta, Newark and other locations. Ford also invested heavily in research to determine how and where GRAD worked best. Our principal grantee was GRAD USA, led by a Hispanic educator.
Community colleges serve as a gateway to higher education among minority communities. More than 50 percent of Latinos and 40 percent of African Americans in higher education are enrolled in community colleges. Since 1996, we have provided over $33 million for these vital institutions. This support has focused on making them more accessible, improving the way students credits are transferred, keeping tuition low, and helping students, particularly students of color, stay in school and prepare to enter the workforce. In California, we’ve recently provided nearly $1 million to study how community colleges are serving diverse communities and to propose ways they can improve.
We have also provided $100 million to historically black colleges and universities (HBCUs). And we have supported the United Negro College Fund with grants totaling over $20 million since the early 1950s.
Developing Innovations that Improve Lives
The foundation believes that giving people a fair chance to build assets is critical to breaking the cycle of poverty and dependence. Our grantees create an infrastructure of financial and workforce development services that reach poor, remote and marginalized communities that the market has served poorly.
In housing, Ford committed $50 million as a guarantee so Fannie Mae would purchase mortgage loans made to families with low income or low credit scores. Leveraging $4.3 billion from Fannie Mae, 50,000 new homeowners have been created, 44 percent of them minority families with 15 percent located in rural communities. Now in its sixth year, this 10 year initiative is demonstrating that it is possible to identify low-income families who pay their bills reliably and can support mortgages that build family assets. The program is changing banking practice in communities across the U.S. This idea came to Ford from the Center for Community Self-Help in North Carolina, a leader in innovation related to home ownership and prevention of predatory lending.
In rural America, manufactured housing accounts for two-thirds of all housing starts, yet it often fails to be the dependable asset most urban homes are. The foundation invests in a variety of rural initiatives that enable people to own the land their homes sit on and seek to improve the building standards for manufactured housing. One grantee, the New Hampshire Community Loan Fund, has received $8.4 million in grants and $5 million in loans for this asset-building work. With over $9 million in grants, the Corporation for Enterprise Development in Washington D.C. is working to improve building standards and financing mechanisms for manufacture home owners.
One of the most innovative ideas to help low income families accumulate assets is the creation of Children’s Saving Accounts. These accounts are seeded at birth by nonprofits and government and built up over time at key life intervals by contributions from families themselves and other donors. We support an ongoing national demonstration program in 11 urban and rural locations that includes 1,300 accounts, 78 percent of which are held by minority children. The accounts can be accessed only after age 18, building — through compound interest and deposits — assets that can then be applied to school fees, home down payments or other significant investments.
Since 2005, several legislative bills have been introduced to advance this idea. As we receive results of the multi-year experiment it is sure to be a resource for longer-term policy innovation. It has already prompted the creation of the Child Trust Fund program in the United Kingdom. This program came to the Ford Foundation from The Corporation for Enterprise Development, and a professor at Washington University in St Louis.
Strengthening Urban and Rural Communities
Since the 1960s Ford has been committed to community development in distressed urban and rural communities. We support efforts to create healthy, safe and strong neighborhoods where people can access employment, education and essential services. Early investments gave rise to Community Development Corporations (CDC) formed by residents, small business owners, congregations and other local stakeholders. Today there are 4,600 CDCs operating across the country. Additionally, nearly $60 million has been invested in the creation of the Local Initiatives Support Corporation, or LISC, providing services to inner city residents. We also commit to long-term revitalization efforts in regions that are in economic transition and distress such as the Gulf Coast, Camden and Detroit.
Nearly $70 million has been invested in rural communities in recent years. With loans of $6.5 million, we support Southern Bancorp, the largest rural development bank in Arkansas and Mississippi to address the needs of the poor. In Maine, we provided $4 million in grants and $7.75 million in loans to help Coastal Enterprises develop the Portland Fish Pier, enabling fisherman and fishing co-ops to gain efficiency that makes them more competitive in domestic and international markets. We have supported the First Nations Development Institute with $11 million over the past 10 years to invest in economic development in Native areas.
Supporting Civil Rights
Ford has also been at the forefront with decades of funding for the legal advocacy organizations that have helped establish standards of fairness in our country. We have funded the NAACP Legal Defense and Educational Fund, Mexican American Legal Defense and Educational Fund, the Native American Rights Fund, the Puerto Rican Legal Defense and Education Fund and Asian American Legal Defense and Education Fund. Our support to these and other key civil rights organizations since the 1950s exceeds $265 million.
We support work in the area of voter registration and participation that also helps ensure that our diverse populations can be heard in public fora. Since the early 1980s over $13 million has been granted to support the Leadership Conference on Civil Rights Education Fund for these and other efforts. Ford also granted $3.2 million to the National Coalition on Black Civic Participation, a network of 80 membership organizations committed to increasing civic participation. They operate in 12 states, including California, Georgia, Ohio and Wisconsin. Support has also been extended to organizations such as Asian and Pacific Islander American Vote, Inc.
In southern rural areas, grassroots work on civil rights includes $6.5 million to lift black rural women out of persistent poverty. The Southern Rural Black Women’s Initiative focuses resources on leadership and economic development, along with training to ensure women’s full participation in economic, civic and social life. More than 1000 women are participating across Georgia, Alabama and Mississippi. In eight southern states, black land ownership has dropped from 19 million acres to 1.5 million acres over the last 70 years. A foundation initiative totaling over $2.3 million is focused on helping African American families retain, manage and add value to these natural assets.
The foundation has also launched the Four Freedoms Fund, to support grassroots organizations working to promote civic, social, economic integration and civil rights for immigrant communities. We have invested nearly $10 million in this donor fund which has already provided support to over 65 organizations in 28 states.
Giving Voice to Diverse Cultural Expression
In a free society artistic and cultural expression contributes to our understanding of human experience. Over the last five years more than $20 million has supported minority-led arts organizations and projects. Ford helped found the Dance Theatre of Harlem and its community outreach programs, helping it to grow with nearly $7.7 million over the years. We are the nation—s largest and most enduring private funder of Native American communities, with more than $80 million in support over the past 20 years. This includes a recent commitment of $13 million to establish a Native American Arts and Culture Fund. A recent grant to the National Association of Latino Arts will support the Fund for the Arts, a national grant program to benefit Latino artists and small to mid-size Latino arts organizations.
Over $9 million was granted to support the development of the memorable award-winning documentary “Eyes on the Prize,” and recently we provided funds to renew copyrights to keep the series publicly available. In the last five years $12 million has gone to the support of minority filmmakers.
Recognizing the importance of a robust, diverse media to American democracy, the foundation has supported media initiatives that reflect and give voice to America’s diverse communities, and that promote diversity in the newsroom. We support media outlets serving diverse populations, granting $3.3 million in the past two years to the growth of ethnic media. This includes New America Media, a network of 700 ethnic news organizations. In all we have committed $60 million over five years to spark innovation in public media, focused on diversifying sources of programming and reaching new audiences.
The last area I would like to touch upon is philanthropy itself. Ford has invested in strengthening the voice of minorities within philanthropy, providing more than $22 million in grants to professional associations and networks working to increase philanthropic support for minority communities and to expand minority leadership throughout philanthropy. Leading this effort are Hispanics in Philanthropy, Native Americans in Philanthropy, National Center on Black Philanthropy, the Association of Black Foundation Executives, Asia American/Pacific Islanders in Philanthropy, First Nations Development Institute and many others.
Ford’s Enduring Commitment
I have had the privilege of working at the Ford Foundation for 38 of its 70 years. The Ford timeline you have received displays the many ways that Ford has dedicated resources to reduction of poverty and injustice, and other aims. I am proud that we have a diversity of grantee partners doing this work with us —partners from distinguished public agencies such as the National Academy of Sciences and nonprofit non-governmental groups like GRAD USA, the Center for Community Self-Help, the NAACP and MALDEF, to universities, academics, and leaders from American business. Only when all sectors of our society align resources for equality and fairness will we see lasting results.
Ford’s board and staff are proud to be a resource for the idealistic social movements of our time and the innovative ideas of diverse people.
I want to thank Chairman Lewis and the members of the Subcommittee for bringing attention to the contributions of foundations and other nonprofits to our American ideals and to struggles for equality among our diverse people.
The Ford Foundation is an independent, nonprofit grant-making organization. For more than half a century it has been a resource for innovative people and institutions worldwide, guided by its goals of strengthening democratic values, reducing poverty and injustice, promoting international cooperation and advancing human achievement. With headquarters in New York, the foundation has offices in Africa, the Middle East, Asia, Latin America, and Russia.