Ford Foundation Newsroom

Luis Ubiñas Op-ed on Forbes.com

09 Oct 2008

How To Keep Americans In Their Homes

By Luis Ubiñas
Published on Forbes.com: October 9, 2008

The government's effort to stabilize the financial system has started a long overdue debate about economic fairness in America.

This conversation is important because how it plays out will determine how our financial system serves the aspirations of the American people for decades to come. Congress struggled to pass legislation to support financial institutions precisely because it found the public skeptical of a package that does not address the needs of families losing their homes.

Unfortunately, the debate on the mortgage crisis has given life to a damaging and unsubstantiated myth about how we got into such bad shape to begin with. The basic premise is that irresponsible households—most of them lower-income—are to blame for the bad debt that has brought down Wall Street. The myth maintains that far too many people who simply couldn't afford to pay a mortgage took on the debt with abandon.

This explanation leads many to suggest a seemingly logical solution: Make sure the nation's mortgage brokers avoid lending to families of modest means and modest credit scores. Once we cut these "undesirable" families out of the picture, the housing market will eventually recover (helped by the federal plan for big banks).

In most cases, however, this myth doesn't hold. New research by the Center for Community Capital at the University of North Carolina suggests that, given an opportunity to access fair mortgages, most families who foreclosed under the burden of reckless loan products would still be in their homes.

The national study tracked two large groups of borrowers with similar risk profiles, the kind that would have prevented them from getting prime loans from traditional lenders. The first group wound up with subprime loans, while the second group received prime fixed-rate loans through a program seeded by the Ford Foundation to help banks serve low-income families. Both groups had the same financial background and the same ability to pay.

Not surprisingly, the study shows that the loans with prepayment penalties, variable interest rates and other subprime features were four times more likely to fail than the prime mortgages. Put simply, it's the loan products that are the problem, not the families.

Such results have tremendous implications for the road ahead. First, we must reject the notion that helping homeowners facing foreclosure amounts to a bailout of "deadbeat" households. Instead, we should pursue a plan to stabilize American families with the same urgency that has been applied to the financial system. Such an effort should include counseling to prevent additional foreclosures and a new mechanism to restructure mortgages into sensible loans that keep borrowers in their homes.

The time has passed for a loan-by-loan, piecemeal approach to the crisis. The government must facilitate the bulk transfer of mortgages to institutions with the incentive to restructure them on viable and fair terms for the current owners.

Second, we must end predatory lending practices that made subprime mortgages destined to fail. Key features of these loans and the way they were marketed—such as prepayment penalties, escalating interest rates and hidden fees—made it next to impossible for families to stay current on payments. What's worse is that many families did not need to pursue these products in the first place. Three years ago, researchers at Freddie Mac estimated that 20% of subprime borrowers would have qualified for prime loans at closing. Housing experts believe that this number is much higher. Whatever the figure, these practices must never be allowed again.

Third, we must act quickly to ensure that properties vacated by foreclosure are put back into use. If left vacant, these properties threaten all nearby families by driving down property values and putting precious home equity at risk. Getting these homes back in use will require creating a national entity that can acquire them in bulk and transfer them to cities for renovation and sale to private owners. Each abandoned house within 500 feet of an occupied home reduces the value of every surrounding home by 2.27%, according to a 2007 study by the Land Policy Institute at Michigan State University.

Finally, we must respond to the mortgage crisis not by closing the door to homeownership, but by ensuring that all Americans have access to fair and responsible financial services. Such services promote saving and the building of assets, which enable families to move up the economic ladder and boost the economic stability and opportunities of the next generation. Denying access to these opportunities would extend the impact of the current housing crisis by years, limiting the chances of a generation of Americans to reach the economic mainstream.

Over the last decade, innovative partnerships between the public and private sectors have proven that low- and moderate-income Americans can be reliable borrowers and responsible homeowners. Turning back the clock on this progress is the exact wrong way to respond to today's mortgage crisis. We know that responsible lending to these communities works. Now, more than ever, we need the commitment to ensure it continues.

Luis Ubiñas is president of the Ford Foundation.

Read the article in Forbes.com

Eric Doppstadt Designated to Succeed Linda Strumpf as Chief Investment Officer of the Ford Foundation in 2009

26 Sep 2008

NEW YORK, 26 September 2008—The Ford Foundation Board of Trustees announced today that Eric W. Doppstadt has been designated to succeed Linda B. Strumpf when she retires as the foundation's vice president and chief investment officer in 2009. Mr. Doppstadt has worked on the Ford Foundation's investment team for nearly 20 years, currently serving as director of Private Equity Investments.

Ms. Strumpf announced in May that she would retire in 2009 after 28 years of service to the foundation, consistent with the plan she outlined to the foundation some three years ago. She will continue to serve as vice president and chief investment officer until next summer.

The board of trustees, which generally elects foundation officers once a year at the annual meeting in January, will formally elect Mr. Doppstadt in January 2009.

Mr. Doppstadt currently manages the foundation's $1.7 billion private equity portfolio. He also serves on the investment advisory boards of numerous private equity and venture capital funds.

He previously served as a manager and senior manager within the foundation's private equity unit. He joined the Ford Foundation in 1989 as resident counsel to the investment team.

Mr. Doppstadt received his undergraduate degree in social science from the University of Chicago, studied international economics at the Walsh School of Foreign Service at Georgetown University, and received a law degree from NYU School of Law. He also holds the Chartered Financial Analyst designation from the CFA Institute.

Ford Foundation President Featured in Alliance Magazine

11 Sep 2008

1 September 2008

Alliance magazine

There's an old saying that new brooms are inclined to sweep clean. Luis Ubiñas came from outside the philanthropy sector (he was previously at McKinsey) to become President of the Ford Foundation in January this year. As he explained to Caroline Hartnell, however, this 'new broom' is concerned to maintain and build on the strengths of the Foundation as a global institution and to ensure that fairness continues to be its core value. Above all, he says, it must remain a learning institution. He also outlines strong views on the importance of collaboration—with other foundations, with other sectors, and with grantees as partners, in fact not just in name.

You have been at the Ford Foundation for six months now. I'd like to ask you about your initial impressions of the Foundation and of the foundation sector more widely. What are the things that seem most different working at Ford from being at McKinsey?

I'm first struck by the similarities. Ford and McKinsey really are both global institutions. They begin by understanding that the world is a diverse place, with very, very specific local needs. I'm struck by the extent to which both organizations are talent-driven organizations. Here at Ford, the primary asset really isn't the endowment but the people. It's the same at McKinsey. And I'm struck by the extent to which both organizations are innovation-driven: they exist effectively to deal with innovation, one in business, one in the social sector. So the biggest surprise is the level of continuity in values and capabilities between the two organizations.

Now, I don't know if this is a surprise, but it's something that I value enormously: I love being able to wake up every day and think 'today we are working on some of the most important challenges facing people who are marginalized, people who are economically challenged'. It's wonderful to be surrounded by people who spend every day caring about issues that affect those who are least able to fight alone.

Isn't there anything that surprised you by being different? Either in the Ford Foundation itself or in the foundation sector more widely?

The ability to collaborate across foundations is a substantial difference. I can reach out to other foundation presidents for advice, for sharing ideas, for sharing programmatic initiatives in a way that is in fact barred in business because of the need to compete. If there is a single thing I'd like to have even more of, it's this ability to reach out across organizations, across programmes, across issues, and work collaboratively with my peers. I think there's enormous value in that – value to society and value to our organization.

Do you think more could be done in the foundation sector in the way of really sharing experiences of what's working and what's not, so that foundations could always start where everybody else has left off rather than having to reinvent the wheel, as too often seems to happen?

Well, many of the Ford Foundation's greatest accomplishments have been collaborative efforts. The Green Revolution work with the Rockefeller Foundation was a hand-in-glove collaboration. With some of the work we did in the area of civil rights we were the leading organization, but other organizations joined very quickly. The work we did in the women's movement, under Susan Berresford, attracted other grantmakers and other foundations. So there is a history of real collaboration here at Ford.

But I think you'll find one of the hallmarks of my time here will be the sense that on almost everything we should have other foundations as partners, grantees as partners, NGOs as partners. This question of partnership is central to how I think, and central to the history of the Foundation and central to our future.

Don't you think it could be valuable for the sector as a whole to have a more systematic way of sharing information so that other foundations that Ford doesn't work with directly could benefit from Ford's experiences and vice versa?

I'm new enough to be cautious about making pronouncements across the foundation world. I have only been here six or seven months. That said, we have a philanthropic sector really dedicated to working on common issues of fairness and social justice, and to the extent to which we are working on those issues on a shared basis, it can only be helpful. So absolutely, we should be, as a sector, looking for more opportunities to learn from each other. I've had several other foundations come to me and share their message and their thinking with us, and to the extent to which we can encourage that dialogue, I think we bring a kind of value that private sector organizations can't bring to each other.

Since Matthew Bishop coined the word 'philanthrocapitalism', in an article in The Economist in February 2006, there is a lot of talk about bringing business practices into the philanthropy sector. Do you see that happening? Are there practices from Mckinsey that you could usefully bring to your work at Ford?

I think that learning across sectors is inherently valuable. I think that there are things that foundations do that would be very interesting to businesses – taking a long-term approach, taking a more holistic approach, attacking problems from multiple angles, learning about qualitative measurement.

At the same time, I think there are things from business that philanthropy can learn: thinking about grants as investments, thinking about the possibility of expecting returns, thinking about grantees as partners instead of grantees, people we work with on an ongoing basis, closely, in a shared, open dialogue.

I think the question isn't what can philanthropy learn from business, it's what can philanthropy learn from itself, from business, from government? Establishing a learning environment is what matters, who we learn from is secondary. You'll find successful organizations in every sector are defined by their capacity to learn and the Ford Foundation has a history of that. So I think this is something the organization is very, very comfortable with.

Do you think philanthropy could learn from the private sector in the area of setting specific goals and targets and measuring progress against them?

I think we need to be extremely careful how we think about measurement. When you move to narrow quantitative measures, you run the risk of moving to narrow quantitatively driven activities. Many of the issues the Ford Foundation works on, important social issues, are long developing, long simmering, long brewing. So we need to bring a very, very sophisticated view to measuring and understanding impact, and that has to take into account the long-term qualitative measures. That's not to say that there's no room for the quantitative, of course there is, but you need to be thoughtful; you need to have a deep understanding of the complexity of measurement and how measurement can drive behaviour. Which is why it's so important for an organization like ours, which deals with long-term social change, to ensure that we take a long-term view that is both qualitative and, where necessary, quantitative.

I understand you are going through a comprehensive review of the Foundation's work? What do you hope will come out of this?

I think that the Foundation's going to find itself, at the end of this process, much more focused on the issues that have been most central to its history, issues that are at the centre of its DNA, and that that focus will allow us to bring substantially more resources to the things we do. It will allow us to have even clearer objectives, an even clearer ability to understand, in all its complexities, how we're making progress, and the ability to think of grantees as partners, who we're working with over the long term to achieve shared goals. And we're on our way to doing that.

So what are the activities that you see as most central to the Ford Foundation historically?

We're at the beginning of the process, I've only been here just over six months. These things will become much more specific some time next year and we will communicate that very, very clearly in a number of ways.

But I think if you look at the issues that define the Foundation – issues around rights for marginalized people, around economic opportunity and access to economic opportunity, around educational opportunity and access to quality education – all of these issues are basically issues of fairness. It's these that define the Foundation, issues that say we as citizens, regardless of where we are, have basic rights to fairness, equal access to opportunities, equal access to being heard.

Are there areas that you feel are more peripheral then?

I think it's important not to think of things as peripheral. Everything we work on now is important. I couldn't point to an area of our work that I would consider in any way peripheral. The question is how do we make hard choices among very important things so that we can bring scale to some of them?

What do you see as the main challenges in front of you?

Any new role brings challenges, I think I still have an enormous amount to learn. I remind myself every morning that I'm still new, that six months is a very short amount of time. I think my central challenge right now is to continue to listen and learn. I have the challenge of getting to know the environment, my peers, my friends here at the Foundation, our partners in the grantee community. I think I have a challenge in getting to know how to live in New York – it's a magical city but I haven't lived here in almost two and a half decades!

Where would you like to be in five years' time?

I'd like to think I'd be president of a foundation that really thinks about the broad challenges that we're dealing with globally – questions of access to opportunity, poverty and inequality, citizens having their basic human rights respected. That we as a foundation are so focused on dealing with these issues, which have been so central to our history, that our economic, and much more importantly our staff, resources are clearly and actively and at scale linked to them. And we're making progress – progress not measured in months, or even in a year, but progress measured over time.

What do you hope to achieve in your time as President of the Ford Foundation?

When I think about what Frank Thomas and Susan Berresford accomplished – Frank Thomas in helping to end apartheid and in the arena of civil rights and Susan in institutionalizing the women's movement and in human rights, my aspiration is to leave behind a legacy like that, a legacy that I can point to and say, this world is a better place because the Ford Foundation – not Luis Ubiñas, but the Ford Foundation – focused on a range of issues that really mattered to the poorest and most marginalized people, and we were able to make a difference on some of these issues.

Luis Antonio Ubiñas

Luis Ubiñas became the ninth president of the Ford Foundation in January 2008, succeeding Susan Berresford. He was previously a Director at McKinsey & Company, leading the firm's Media Practice. In this role, he led research on the impact of new technologies on business and society, worked with traditional media companies responding to the effects of new media, and with emerging technology companies on the introduction of new media services. He also founded McKinsey's Latino recruiting and mentoring group to introduce and cultivate diverse talent at McKinsey.

Luis Ubiñas has also devoted much of his personal time and energy to working with non-profits. He has advised senior management and served on the boards of Leadership Education and Development (LEAD), a national organization providing educational opportunities to low-income African-American and Latino high school students, the Bay Area United Way and the Steppingstone Foundation.

To contact Luis Ubiñas, email office-secretary@fordfound.org

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Read the article in Alliance magazine.

Ford Foundation Support for Gulf Coast Revitalization Exceeds $75 million

29 Aug 2008

NEW YORK, 29 August 2008—The Ford Foundation announced today that its grants and loans for Gulf Coast recovery exceed $75 million as of the third anniversary of Hurricanes Katrina and Rita. To date, the foundation has supported over 100 organizations across coastal Louisiana, Mississippi and Alabama that are driving revitalization efforts throughout the region.

Launched in the aftermath of Hurricanes Katrina and Rita, the foundation's Gulf Coast Transformation Initiative (GCTI) supports grassroots efforts to rebuild inclusive, culturally and economically vibrant neighborhoods in communities devastated by the twin disasters. The initiative is committed to strengthening local nonprofit and philanthropic leaders and institutions so that they can chart a new path for the region's long-term redevelopment in a way that advances equity and human dignity.

"Three years after the storm, the Gulf Coast has begun to emerge as a real cradle for democracy, with courageous new civil society leaders emerging from many of the most devastated areas," said Suzanne Siskel of the Ford Foundation. "These communities faced significant challenges of poverty and inequality before the storms. Our support is about empowering local leaders to re-imagine and rebuild their neighborhoods in a way that advances opportunity for all the region's citizens."

Since 2006, the Ford Foundation has supported efforts to both expand access to economic opportunity and to nurture and strengthen the region's cultural heritage and community leadership. The foundation has been behind initiatives that aim to secure the rights of low-income families to live and work in the region, boost affordable housing and employment opportunities, preserve and develop cultural legacies, and strengthen the role of community leaders in the region's rebuilding. This support has included:

$30 million to strengthen the region's nonprofits to rebuild more equitable and inclusive communities. Foundation support to local philanthropic partners including the Greater New Orleans Foundation and the Louisiana Disaster Recovery Foundation has helped launch innovative donor partnerships—including the Community Revitalization Fund and the Greater New Orleans Planning and Organizing Fund. These funds have sought to rebuild coastal Louisiana's affordable housing stock and ensure active civic engagement in the region's epic reconstruction. Grants to local civil society partners, including the Lower 9th Ward Neighborhood Empowerment Network Association, the Mississippi Center for Justice and the Hope Coordination Center, have allowed displaced residents to return to their communities and champion affordable housing as a defining feature of the region's long-term redevelopment.
$8 million to promote enterprises and work opportunities for all. Grantmaking has supported the economic revitalization of communities across the Gulf Coast—from Vietnamese shrimpers in rural Louisiana and Alabama to minority-owned businesses in coastal Mississippi. Grants to partners including the New Orleans Workers Center for Racial Justice and the Mississippi Immigrants Rights Alliance have helped build multiracial alliances to ensure that rights and opportunities for workers across the Gulf Coast are preserved and advanced.
$7 million to preserve and grow the region's rich cultural legacy and assets. Funding has supported local artists and arts institutions, including neighborhood-based cultural institutions such as the Ashe Cultural Center, Free Southern Theater Institute and the Thelonius Monk Institute of Jazz. Ford's grantmaking in this area has helped mobilize and engage artists in the revitalization of the region.
$6 million to strengthen the region's emerging civil society and public sector leadership to build a stronger, more equitable Gulf Coast region. Over the past three years, Ford has supported the launch of the New Voices Gulf Coast Transformation Fellowship as well as the Gulf Coast Fellowship for Community Transformation. Both of these fellowships are building the skills of grassroots leaders, many from marginalized communities, to ensure that they play a meaningful role in the rebuilding of a more equitable region.

To date, the foundation's work in the Gulf Coast has been instrumental in ensuring that the voices and needs of the region's most vulnerable are heard. The Ford Foundation is firmly committed to serve as a long-term partner in the region, supporting community-led initiatives to ensure that the region's long-term reconstruction directly addresses the inequality and poverty that so shocked the conscience of our nation three years ago today.

Ford Foundation Named "Diversity Champion" by Leading Higher Education Magazine

22 Aug 2008

Ford has been a champion of diversity for more than three decades. The latest issue of Diverse Issues in Higher Education magazine named the Ford Foundation one of 10 "Diversity Champions"—individuals and organizations that "are forging ahead with innovative, bold and consequential approaches to achieving a more inclusive society."

Creating Access to Opportunity

Ford Foundation Diversity Fellowships program was established in the 1960s as the largest private fellowship program to foster diversity in the American professoriate. Originally called the Ford Minority Fellows program, it has provided more than $175 million for fellowships and related support to approximately 5,000 scholars from rural and urban communities—many of whom now hold positions in academe. Fifty-five percent are African American, 38 percent are Hispanic and 6 percent are Native American. Run by the National Academy of Sciences, the program annually makes some 60 predoctoral awards, 35 dissertation awards and 20 postdoctoral awards.

The Diversity Fellowships underscores the foundation's long-term efforts to focus on the needs of marginalized and underserved people—whether shut out from economic opportunity, human rights, or access to education—and ensure diverse leadership in the U.S. and abroad.

Building a Network of Support

Diversity Fellowships is one of many scholarly programs that we have long supported in the U.S. and abroad. Our other major initiatives include:

Project Grad
To improve high school graduation rates and college-going in poor, urban communities.

Community Colleges Bridges to Opportunity
To ensure a gateway to higher education among minority communities.

International Fellowships Program
To help emerging leaders from marginalized areas around the world pursue advanced degrees and apply their skills to their home communities.

Partnership for Higher Education In Africa
To help improve universities and higher education institutions in seven African countries.

Pathways to Higher Education
To help poor and minority students worldwide gain access to higher education and earn a university degree.

Written Testimony of Susan V. Berresford

29 Oct 2007

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.

Remarks by Susan V. Berresford at the John W. Gardner Leadership Award Dinner

23 Oct 2007

Thank you for this generous tribute. It belongs as well to my colleagues on the Ford board and staff who have shared the foundation's leadership with me.

But tonight we should also pay tribute to democratic principles and their protection by women and men around the world. In part, our achievements spring from the freedom we have to strive and advocate for each other. John Gardner knew that freedom and civic activism matter. The award in his name rests on that powerful truth.

Not long ago, I had two opportunities at archaeological sites to think about social connection and activism. The first occurred in Sterkfontein, South Africa. I viewed, deep in a cave, embedded in hard earth, a perfectly preserved ancient skeleton of a young man. Experts believe he fell through a concealed hole in the ground and died alone, three or four million years ago. I will never, ever forget his small injured skeleton, in a fetal position, and my sense of his suffering and fatal loneliness.

Recently, I visited the Southern Rift Valley in Olorgesailie, a site famous for its landscape littered with hundreds of early human rock tools, called hand-axes. The axes seem to have been deposited in heaps near where they would be used but not where the early human lived. The hunters using them appear to have agreed that this location was a safe place for cleaning and storing the heavy tools and avoiding having to carry them home. Contrast this sign of cooperation with the image of the mortally injured boy dying painfully, alone in the dark bottom of the cave.

Today, we have new opportunities to come together and create community and safety on a wide scale. For example, we now know that for the first time in history, human activity is significantly affecting our environment, rather than the other way around. We have a chance to devise strategies to avoid environmental destruction.

But will we find leaders who ensure not only survival but also broad scale well-being? We need them in government, business and, very importantly, the Independent Sector.

Some of us here tonight grew up in the United States in a period of social idealism—idealism about fairness and opportunity. We were inspired by leaders who were social prophets. Their idealism became our personal north star. I hope we can begin to help more of our civic leaders discover those north stars today.

I see three particular challenges I hope our sector's leaders will address.

First, we must ensure that economic opportunity is open to all in societies around the world. In the next decade, the majority of the world's population will, for the first time, live in cities. Huge urban conglomerations already exist. Beyond their delights, they include vast, miserable and dangerous slum areas. Unless we generate far greater earning and living opportunities than our economies now provide, tragedy is surely in store.

In the United States, we already see growing proportions of our working-age populations in low-reward jobs. Our social compact teaches that if you play by the rules and work hard, you can get into the middle class, pay for college, health care and have a reasonable retirement. If we tolerate the growing concentrations of compound disadvantage, we make a dangerous mockery of that notion.

We must remember that huge advances in national well-being occurred not only when our economy expanded. They also came when the United States made ambitious investments in people and public moral standards. Think of the Homestead Act of 1862, signed by Abraham Lincoln; the GI Bill, signed by Franklin Roosevelt; the Federal Home Mortgage Program, giving a new generation of homeowner's a stake in their communities and a long-term financial asset. Recall the Civil Rights Act of 1957, which Wade Henderson reminded us was an Eisenhower innovation and the Civil Rights act of 1964, the Americans with Disability Act of 1990 and other such sweeping laws that helped tear down unjust advantage systems, opening access to the mainstream.

Now is the time to consider dramatic public investments that will have significant intergenerational skill-building payoffs. Over the last decades, people in this room have incubated ideas on which new ambitious and generation-boosting investments could be based. For example, Ford and other foundations' grantees have tested children's savings accounts, individual development accounts, college accounts, life-long learning accounts. These programs could be knit together into a national system of publicly and privately supported, individually earned Asset Accounts. They could have dramatic effects on aspiration and opportunity in disadvantaged communities. That is the first challenge I see before us.

A second and closely related challenge is to show the ways that our organizations support the worth and dignity of every human being. We can ensure that differences based on gender, ethnicity, race, sexual orientation, disability, religion, geography or other qualities do not marginalize “the other.”

But inclusiveness is something too few of our organizations are very creative about. Think of all the debate and writing about so-called “new philanthropy” or the “buzz” about new combinations of nonprofit and business efforts. We have far less dialogue and buzz regarding inclusion. Leaders in our sector need to show that we know how to make an asset of our many differences.

In the United States, this means intentionally including marginalized groups in our hiring pools, our boards and decision-making bodies. It means examining what may be out-of-date concepts of qualifications. It involves seeing that formerly under-represented people are welcomed and effective where they can earn and learn.

I believe we still need affirmative action. For one thing, we have clear evidence of prejudice from paired studies of black and white job applicants, health care and housing seekers. So declaring that we want to be a “colorblind” society doesn't get us there. We have to take differences into account to ensure equal opportunity. And when we do so, we must embrace our full diversity. Bishop Tutu has said it so well: “We can't pick and choose for justice.”

Affirmative action is such a modest measure when compared to the power of accepted advantage systems. We need to reveal how many among us have had crucial advantages that people don't often count—people who say: “I made it up the hard way; why can't everyone else?” Often that person does not see what helped along the way—being in a poor family but one with a long tradition of work and learning; a school teacher or relative who reached out and rescued a young person in a dysfunctional family or neighborhood; or a family member who could loan money at a key moment.

The truth about advantage is complex. It is not just about being rich. We have to help people see and extend to others the many kinds of support and opportunity that make a difference.

The third challenge I see is ensuring that our sector's organizations are effective and accountable. Our sector is making progress, particularly in standard-setting. Civil society organizations in many states have now framed standards of proper governance and operation. In the last year, the IS's panel has pulled together common elements in these various systems and has admirable plans to promote the core principles.

But, will we vigorously promote our various standards? We need to make them so widely understood and part of the public's understanding that everyone feels pressure to meet them. We can't do this on the cheap. I hope each person here tonight will make a significant contribution to this public education effort—in time and money.

In that connection, I have to say that I am disappointed by the lack of a broad commitment to our field's common good. For example, too few foundations support research and analysis about philanthropy. We should all work together to support creation of accurate data on our field. We need to ensure that it is disaggregated in ways that make it useful for policy makers. Part of our difficulty in the legislative arena stems from lousy data that suggests damaging norms and benchmarks.

The same is true for the broader independent sector. We need to know about the diversity of our field's top ranks and talent pipeline. Are poor people really served by charities set up for that purpose? We should be asking ourselves these questions, not waiting for our regulators to do so.

We will be better off if we band together and generate sophisticated research that helps us define and reform our field. To put it simply, if we don't take ourselves seriously, why should anyone else?

Finally, as we put standards to work, we need to be willing to critique and repair organizations that fall short. Let's not gossip about them, let's engage with them. And we have a corresponding obligation to support those who are unfairly criticized, not just feel relieved that someone else is in the cross-hairs. The Council on Foundations and the IS have done a very good job in this respect in recent years, citing missteps and chastising bullies.

John Gardner expected us to aim high. Let us not disappoint him. Let us not leave people behind. Let us beseech our country to invest in dramatic generation-boosting opportunity programs that are earned by striving. Let us also keep difference and equality in the forefront. And let us take our sector seriously.

I feel proud to have the honor you have given me tonight. I leave the presidency of Ford knowing I will miss so much of what Ford and you have given me.

I had a chance to lead an idealistic institution dedicated to equity, justice, free expression, good governance, excellence and creativity. It has been fun and deeply satisfying. And I am proud that with many of you in this room, I have defended Ford and other institutions so we can continue to freely support courageous people and their organizations around the world.

Thank you.

Remarks by Susan V. Berresford at the Board Source Leadership Forum

18 Oct 2007

Thank you for inviting me to Board Source and your leadership forum. I am glad to be here because the concern of Board Source, proper nonprofit governance, is of utmost importance, especially since nonprofit organizations are growing in importance around the globe. Third sector governance is an area in which we have seen many new developments in recent years — the emergence of new laws, rules, voluntary standards, and higher and higher expectations.

Many of these advances are helpful, but part is probably overkill, so we can expect a shake-out period. This time will enable us to sort through what is simply mechanical and time wasting, and what gets to the heart of accountability and transparency. Board Source will very likely be at the center of these discussions.

But laws, rules and standards are not the whole story. There is an important area beyond these aspects of accountability and transparency. That is the matter of ultimate effectiveness.

At the end of the day, human behavior is a powerful variable in effectiveness and good governance. In other words, beyond the importance of playing by the rules, the question is HOW you play by the rules. Doing it the right way can positively influence organizational effectiveness. Since I am now near retirement, I decided to use my time today to offer thoughts I have developed over the years about the "how" — the behavioral qualities of good board members. I come to these ideas from various angles.

I have been a founding board member of several organizations, a very junior observer of the Ford Foundation board decades ago and then a full member beginning when I first served as its president 12 years ago. I have been on large and tiny, for-profit and nonprofit, prestigious and obscure boards. I have been a board member as well as board chair. And I have talked about board governance with a good number of our sector’s regulators. These experiences shaped the ideas I want to offer today.

Clearly there are some behavioral basics of good board service. They include regular meeting attendance, responsiveness to the organization’s requests, mastering how the organization works, how it is financed, and what its challenges are. Success in these matters rests on both the board and staff members’ level of effort and candor.

We have seen vivid examples of failure to follow the basic rules: board members being blind to what is really going on, self-interest trumping the duty of loyalty, and time wasting. So the basics are not yet common practice, which is one reason why Board Source is so important.

But even when the behavioral basics are mastered, the huge grey area of board member behavior also needs attention. I will explore this in a series of 6 principles I have come to believe are important.

#1. Good board chairs consider themselves a partner of the CEO. Executive leadership of an organization is often challenging and lonely. It requires 24/7 readiness, and creativity. The CEO needs and should have a colleague in the board chair — someone in addition to the top management team with whom to kibitz, try out ideas, talk about the worst and best case scenarios without risk.

Candor and comfort in these relationships will spring from a sense that the chair and CEO are partners, not in a rigid hierarchy. Obviously, there is a hierarchy. The board chair has ultimate responsibility, but that does not have to frame the relationship, assuming the organization is functioning pretty well. In fact, this point illustrates another I would note. I believe that the board chair must always make one fundamental decision — does he or she have confidence in the CEO. If the answer is yes, then the chair’s job is to assist the CEO fully. If the answer is no, then a new CEO is needed; plain and simple.

In contrast, some presidential colleagues in foundations and other nonprofits told me that they had relationships unlike what I enjoyed. They often talked about the time they spent trying to manage the chair, respond to issues the chair raised that were not core concerns of the organization, and for some, simple respectful exchanges were rare. The sad result was a lot of energy being put into "high maintenance" personalities rather than the organization’s mission.

#2. Good board members are good listeners. They are interested in hearing others’ views and ultimately in building consensus. They refrain from dominating board discussions. Many now agree that diversity of board members’ backgrounds and experience enhances board decision-making. People come at issues from different perspectives and that helps ensure that decisions are sound at multiple levels. But diversity often requires patience. Board members need to take time to listen carefully to others’ views, try to understand why someone may have a different perspective, and then work toward a decision.

In the many boards I have watched and hear about, a few board members always jump in at the start with a settled view, usually stated with utter certainty or at great length. Sometimes these board members’ aggressive style or forcefulness silences others who have different views, thus cutting off healthy debate. Good board chairs avoid these patterns themselves and they remain alert to others, speaking to those who seem disinterested in colleagues’ views. They try to prevent colleagues from undermining legitimate and valuable exchange.

#3. Good board members understand the balance between giving the CEO ample room to manage with independence and ensuring that ethical standards are met. Creative leaders don’t want to be second guessed all the time. Micromanagement by a board will drive away any self-respecting and creative CEO. Life is simply too short and organizational leadership too challenging for the CEO to spend enormous amounts of board time explaining and justifying routine matters.

But we have seen far too many examples of very able and respected board members checking their common sense at the board room door. We see high profile board members approving or winking at organizational practices that most people would find unacceptable — for example, lavish spending by the CEO, operational costs out of proportion to benefits rendered, and even self-dealing. Sometimes this failing seems to spring from assumptions that the organization is "special" or the CEO plays a very unique role and is, therefore, immune from normal standards. It is as if the trustees believe that the organization exists in a special category or bubble, with its own rules.

It is important for board members to challenge any such suggestions, and to apply common sense when they see possible ethics problems. Nonprofits exist for community benefit and their actions have to somehow square with the expectations of reasonable people.

Another complex balance point between chair and CEO roles can be seen when board members bring creative ideas to the deliberations, thinking the organization might have become complacent or not yet see an opportunity or risk. This is a very valuable role for board members. It draws on their wider perspectives and can help the CEO look beyond his or her immediate horizon. But this should not be confused with trustees who insert their own agendas and dictate a course of action related to it. That may not be formal self dealing, but it is self centered and counter to the interest of the organization for which board members have a duty of loyalty.

#4. Good trustees ask "naïve" questions that others want to ask but may shy away from. In boards I have watched or been part of, board members may not know the jargon in the field, may be unfamiliar with organizational history or technical matters. When they are being briefed by staff members who fail to give adequate background or basic facts, trustees can be reluctant to ask about these basics for fear of looking unsophisticated or uninformed. I have had board members say to me, "I really admire X (another board member) because she always asks what I am thinking but am too shy about." Others say "I don’t want to be the one who slows things down."

I say: "three cheers for the naïve questioners." But they should not be confused with trustees who ask about the basics because they have not read or mastered material given to them. That practice reflects laziness or disinterest, neither of which fit with good board service.

Good trustees ask naïve questions because they have faith in their own common sense and instincts. If after reading and being briefed things are still unclear, they press a bit, or ask for more, saying they really don’t grasp the matter being discussed. Several trustees I know stand out in this way and they have my admiration for their candor, self-confidence, and seriousness. By example, they make space for others to follow suit.

#5. Good board members are ambassadors for their organizations and understand the responsibility that comes with that role. Trustees have multiple opportunities to talk with friends and people they meet about what they like in the organization for which they have stewardship responsibility. They can select what particularly interests them, become knowledgeable about it, and promote it. In doing so, they help convey ideas about effectiveness and significance. Given their responsibilities of stewardship, this is all important. They are advocates and fans generating good will for the organization and the work in its field. Board members can do this on their own and CEOs can also ask board members to take on outreach assignments.

But I am sure we also all know about a few situations in which board members unwisely disclose to others internal operating challenges or problems the organization is working on. This information can become gossip and be repeated over and over, in less and less accurate form. Gossip about the organization’s challenges can severely undermine its effectiveness. In the end, the organization has to put out a fire in public that might have been resolved more effectively in private.

I have heard wise board members reply to inquiries about sensitive matters simply by saying "The board/or the CEO is handling this and it will soon be resolved" or some such clear statement that conveys awareness and action.

#6. The final point I want to make is about energy and interest. Good board members are energetic in learning about and helping the organization. They take genuine pleasure in board responsibilities. Their fresh insights and their enthusiasm inspire and renew the senior staff’s energy and determination.

But we have all encountered board members who one CEO recently described to me as "tired and cranky." They have been around for years and have somehow lost the desire to engage deeply with the organization. They may like being linked to the organization but they don’t read the board materials, they don’t listen carefully, and they cut short the time they give to board meetings.

Getting tired or bored is normal. We all know the phrase "Been there; done that." It is not surprising or troubling that it happens to trustees. We are all human. But if most other board members seem appreciative and engaged, the "tired and cranky" one probably ought to rethink his or her relation to the organization. Board chairs can help this process along by exploring what is really going on. Is it a failing of the staff or board process, or has the board member simply lost the level of interest that good board service requires? If the latter, the cure is clear.

So, those are a few reflections that I would offer on the grey zone of board member behavior. I hope they are useful, and they obviously need to be adapted to each organization’s unique culture and history. I would summarize them as follows:

Board members of healthy organizations are especially valuable when they are:

Partners
Listeners
Consensus builders
Ethical watchdogs
Naïve questioners
Discreet ambassadors
And energetically and enthusiastically engaged.

Board Source fosters the best in boards, on the basics and on these more subtle measures. Our sector is all the stronger for that work. Thank you.

An Opinion Piece in the Guardian UK Online by Susan V. Berresford

31 May 2007

Raising the Bar

Philanthropy today is grabbing headlines, due in part to the rapid growth of the giving pool along with the celebrity and generosity of some of its newest donors. In Spain, which this week hosts the European Foundation Centre's annual conference, there has been remarkable growth in philanthropy over the past decade, with an average of 400 new foundations appearing each year. Philanthropy made the cover of the Economist not once but twice last year and countless column inches have been dedicated to the topic in the major dailies on both sides of the Atlantic – not all of it flattering.

Media scrutiny of what private institutions do for the public good has thrown a very bright spotlight on questions of regulation and accountability, of investment practice and good governance, and the sector, at times, has been found wanting. We should not be surprised. As with business and government, the performance bar has been significantly raised.

Good intentions – and almost all foundations have them – do not trump lax governance or weak accountability. The flaws and failings of a few in the sector, whether intentional or rooted in ignorance, can damage the field just when the potential for good is growing. So it is imperative that philanthropy is on the front foot, setting its own standards for transparency and accountability and abiding by them.

In the United States, foundations have learned some tough lessons, but our sector is stronger and better for it. The Council on Foundations, an umbrella group representing tens of thousands of donors, has developed principles of accountability, best practices in grant-making and a code of ethics (www.cof.org). And thanks to Independent Sector, a leadership forum for donors and non-profit organizations, we will soon have guidelines to strengthen the governance, ethical conduct, and accountability of charitable organizations of all types and sizes. As someone who was part of both organizations' efforts, I can say that this was not an easy exercise but it was overdue and worthwhile.

Europe, whose philanthropic traditions stretch back to the middle ages, now has some 200,000 organizations that call themselves foundations. It faces a unique set of challenges, not least because any talk of harmonization of laws and regimes for accountability will be politically charged. But a process is underway. Over the past five years, the European Foundation Centre (EFC) has done an excellent job on draft legislation to support a European Statute on Foundations. This is no mean feat for an organization that draws together thousands of nonprofits from more than 40 countries, with vastly different tax codes and modes of operation.

EFC guidelines reinforce the importance of good practice, openness and transparency and with its U.S. counterpart, the Council on Foundations, has developed accountability principles for international philanthropy. Voluntary and aspirational, these principles nonetheless reflect the new imperatives of this increasingly global and high-profile sector. It is vitally important that the momentum continue, in Europe and in the US.

But who is ready to join in the effort? It should not be left to a handful of organizations to develop infrastructure and standards. Nor should it be left to a handful of donors to pay for the process -- to fund the research and institutions that develop norms and principles on philanthropy's behalf. In both the US and Europe there are still too many free-riders watching from the sidelines. A far broader coalition should take ownership in and responsibility for these efforts.

With the opening of today's meeting in Madrid we have a perfect opportunity to move the European process forward and help raise the bar for other regions around the world where philanthropy is just beginning to grow.

Link to the Guardian UK Online

An Opinion Piece in the Seattle Post-Intelligencer by Susan V. Berresford

27 Apr 2007

Diversity, the Strength of U.S. Giving

The emergence of a new generation of entrepreneurs-turned-philanthropists offering their fortunes to tackle pressing problems has prompted reports of a philanthropic divide -- a generation gap between established foundations and their young counterparts. Such phrases as "venture philanthropy" and "social entrepreneurship" are in vogue. New foundations are said to be ambitious, strategic, entrepreneurial, innovative and focused on measurable results. Established foundations are said to lack those qualities.

As the president of an "old" foundation and a nearly 40-year veteran in the field, I am here to say this dichotomy does not fit reality. It does not capture the breadth of philanthropy's scope and history, and it has the potential to damage our field.

It is worth asking what is truly new. Is today's philanthropy new because it is strategically aimed at root causes, results-oriented, global and influenced by the business model? History tells us otherwise. Foundations of all sizes have performed generations of work strategically aimed at root causes of enormous problems.

They supported new agricultural practices, now called the Green Revolution, saving hundreds of millions from hunger; they funded decades of work renewing inner city neighborhoods; they sustained the civil rights movement as it battered down barriers to education, jobs and housing; and they supported brave people who dismantled apartheid.

This is just a sample of what American foundations have helped achieve in recent decades. Led by ambitious, globally minded people, they have been just as focused on root causes as today's exciting new entrants into our sector.

Philanthropy also has a track record of fostering for-profit activity that results in social good. More than 40 years ago, the Ford Foundation's Lou Winnick pioneered the idea of making loans from the foundation's endowment as "early venture capital" to non-profits experimenting with profit-generating activities. That approach, now common in philanthropy, helps finance affordable housing, provides guarantees so banks can lend to low-income clients and finances micro-enterprise programs worldwide.

But not every aim worth striving for can fit within the short time horizons of a business model or aim to generate profit. American philanthropy builds upon the broader but still very American idea that a diverse nation thrives when the full ingenuity of its people is given freedom to flower. Philanthropy -- whether initiated by Benjamin Franklin, John Rockefeller, Henry and Edsel Ford, Bill and Melinda Gates or the tens of thousands of less well-known donors and visionaries now putting their dollars to work -- is strong because it is diverse in its ambitions and approaches. This diversity is the true strength of American giving, and should be celebrated and reinforced.

When we fall prey to false divisions, we undercut that strength, by suggesting that some kinds of donors may be less valuable or necessary over the long run. That is plain wrong. The tough challenges before us demand that we draw upon many philanthropists' skills, perspectives and experiences. AIDS and other diseases, the stubbornness of deep poverty, the ongoing struggle against ignorance, intolerance and oppression -- there is no single way to conquer those, and no single conqueror.

We need all kinds of donors, abilities and ambitions. We need people with near-term goals as well as long-range aims. We need business management skills, but also moral leadership skills. Great leaders such as the Rev. Martin Luther King Jr., Nelson Mandela, Mother Teresa and Mahatma Gandhi combined powerful moral vision, concrete action and extraordinary dedication and courage over time. For enduring social change, for humankind, we need it all.

Link to the Seattle Post-Intelligencer