Charities Try to Keep Up With the Gateses

By Stephanie Strom

For most of the last century, three names — Carnegie, Ford and Rockefeller — have defined the world of foundation philanthropy, but that is changing, and fast.

The Bill and Melinda Gates Foundation, with its $30-billion-plus endowment that dwarfs all others, now dominates discussions of philanthropy, and the philanthropic experiments of young billionaires like Pierre Omidyar and Jeff Skoll are studied and mimicked.

But the Carnegie Corporation and the Rockefeller Foundation are fighting back, hoping to get more impact for their money, increase their influence and extend their legacies by changing the way they have operated for years. They are pushing to streamline their operations by eliminating internal fiefs and to improve their efficiency by increasing collaboration among staff members.

The Ford Foundation, meanwhile, is poised for a transition when its president, Susan V. Berresford, retires at the end of this year after a decade at the helm.

“These three foundations have always been at the top of the heap, but suddenly they’re not,” said Joel L. Fleishman, author of “The Foundation: A Great American Secret; How Private Wealth Is Changing the World,” published recently. “And so they want to demonstrate that they can still achieve great things, that asset size doesn’t matter.”

Wealth has long been the yardstick by which influence and power are measured in the foundation world. No matter how many times foundation officials note that small grants have led to big changes, the grants that attract headlines these days are rarely less than $100 million.

With roughly $12.5 billion in assets, the Ford institution is the country’s second-largest foundation, but it is just one-third the size of the Gates Foundation. The Rockefeller Foundation is 15th or 16th in the pecking order with roughly $3.6 billion, and the Carnegie Corporation, with $2.6 billion, is no longer among the top 20.

So they are working to prove that money alone is not the measure of a foundation.

“We have learned that impact is what really, really matters,” said Judith Rodin, president of the Rockefeller Foundation. “We aren’t going to be remembered for how big we are, how smart we are, how hard we tried or even how much we cared. We’re going to be remembered for what we accomplish.”

Ms. Berresford pointed out that a $20,000 grant the Ford Foundation gave to a little-known economist in Bangladesh became the cornerstone of the Grameen Bank, which won the Nobel Peace Prize last year for making tiny loans that improved the lives of legions of poor people.

All three foundations have had their triumphs. The Rockefeller Foundation developed a vaccine against yellow fever. A Carnegie grant led to the creation of National Public Radio. Together, the Carnegie and Ford organizations founded the Children’s Television Workshop, while the Ford and Rockefeller foundations teamed up to start the “green revolution” that greatly increased agriculture, thereby reducing hunger, in southeast Asia and Latin America.

But over time, experts say, such institutions can grow so large and diffuse that they lose their focus.

“What you often see is a foundation that is in fact a number of separate foundations,” said Phil Buchanan, executive director of the Center for Effective Philanthropy, a nonprofit organization dedicated to helping foundations improve the way they operate, “one working on environmental issues, one in arts and culture, and so on, each headed by a program officer that has a great deal of freedom, and so the overall goals can get lost.”

The Rockefeller and Carnegie foundations are both moving to break this mold. At Carnegie, Vartan Gregorian, the foundation’s president, is looking to consolidate and integrate a lot of small programs, many of which were up for renewal anyhow. For instance, a high-profile experiment fostering smaller high schools in seven cities that was co-financed by the Gates Foundation has ended and will receive no more money until the foundation works out problems it has identified.

In consolidating and reviewing past programs, Mr. Gregorian is looking for efficiencies, including the sharing of expertise and better focus. “I’m changing the structure so that everyone has to think first of Carnegie,” not its individual programs, he said.

An evaluation process will be an integral part of each project from its outset, and Mr. Gregorian himself plans to get more involved when projects are first proposed. The overhaul has made staff members uneasy, some said, in part because Mr. Gregorian told them in October that he would no longer be renewing the two-year contracts he instituted when he took over. “We don’t know whether this means programs will be ended and jobs cut,” said one staff member, who like insiders at all three foundations would speak about the transitions only on the condition of anonymity. Mr. Gregorian said he had began renewing some contracts this month.

Dr. Rodin has already brought many of these changes to the Rockefeller Foundation. About 60 people have left since she arrived in March 2005, or roughly a third of the staff, though some have been replaced. She also eliminated the program that spent money on the arts.

“We are no longer the largest foundation,” Dr. Rodin said, “and being mindful of that, we’re looking for ways to be more flexible and faster, to take a big idea and really run with it when it’s right and to be more receptive to ideas coming in to us.”

To that end, the foundation’s Web site asks for ideas that the institution can turn into projects. “We seek high-impact ideas that have the potential to make a difference in the lives of large numbers of poor or vulnerable people, and we require some results from such ideas to be measurable within three to five years,” the site says.

One program Dr. Rodin pointed to as an example of the shift at the foundation was its status as an underwriter of Spike Lee’s documentary on New Orleans, “When the Levees Broke.” The foundation has used the film to create 20- to 30-minute DVDs on poverty in America, part of a curriculum developed by Teachers College at Columbia to teach high school and college students.

“Maybe our creativity and culture program would have thought about funding a Spike Lee movie, but I doubt it,” Dr. Rodin said, referring to the arts program she eliminated. “We didn’t really have an education program that would have thought to create these materials. It was only because we’re constructing initiatives now that we can do this kind of thing.”

Ms. Berresford noted that about one-third of the Ford Foundation’s programs involved collaboration. But she said outsiders continued to perceive Ford as a collection of silos, each myopically focused on its program and making too many small grants: the median size of Ford grants is $116,000, low by the standards of most major foundations, according to the Center for Effective Philanthropy.

“When I took this job 10 years ago, we had seven or nine programs, and I compressed them into three,” Ms. Berresford said. “I think breaking down silos is a hearty perennial.”

A note of clarification from CEP: This story references data on the median grant of the Ford Foundation and states that "the median grant size of Ford grants is $116,000, low by the standards of most major foundations, according to the Center for Effective Philanthropy." The statement is based on an analysis conducted by CEP of the grantmaking patterns of 15 foundations with $1 billion in assets or more whose grantees we have recently surveyed. Among this group, the median foundation's median grant is $225,000 and Ford's median grant size is the lowest.

Please note that our recent report, In Search of Impact, reports a median grant size of $50,000. This median grant size was calculated for a larger set of 163 large foundations, the majority of which have between $100 million and $1 billion in assets. The Wall Street Journal cited this figure in an article on December 8, 2006.

Both statements in the Times and the Journal and attributed to CEP are accurate, but they refer to different comparison groups. The first focuses on the very largest foundations in the country; the second is based on a broader set of foundations.