SHARE

2020 Civic Leadership Forum: A Conversation with Darren Walker

Ford Foundation President Darren Walker and Boston Foundation President & CEO Paul Grogan discuss the role of philanthropy in addressing social justice issues

November 19, 2020

2020 Civic Leadership Forum: A Conversation with Darren Walker from The Boston Foundation on Vimeo.

The Boston Foundation was pleased to welcome Darren Walker, President of the Ford Foundation, as our special guest for the 2020 Civic Leadership Forum. Mr. Walker connected with Boston Foundation President and CEO Paul Grogan for a wide-ranging conversation on the role of philanthropy to address social justice issues, and how the sector can work more effectively to address critical issues. Read the transcript of their conversation below.

 

Paul Grogan  
Well, good afternoon. My name is Paul Grogan. I'm the president of the Boston Foundation. And it's my pleasure to welcome you here this afternoon for what I'm sure is going to be an illuminating and provocative discussion about what's going on in the world, the role of philanthropy, the quest for social justice and other compelling topics. But I want to start with our very special guest, Darren Walker, who is the president of the Ford Foundation, a $13.2 billion foundation that has long been in the vanguard of American philanthropy. I wanted to ask you, Darren, now, you are so committed as a foundation to inclusion and opportunity and upward mobility, trying to figure that out, how are we going to extend that to large numbers of people? I wonder if you could talk about any lessons from your own experience, your own remarkable ascent to the pinnacle of, of American philanthropy? And, and are there lessons that that we should take in as we seek to make that kind of opportunity? Much more ordinary, then unfortunately, it is.

Darren Walker  
Well, thank you, Paul. And thank you for the invitation to be with you. It's always a pleasure. For me, our our time together, goes back to the 1990s when you did such remarkable work in Harlem, and in so many areas across the country, community development, urban revitalization, just a remarkable legacy. You leave Paul, and therefore I'm thrilled to be here. In terms of my own story, I think the lessons of my journey are threefold. One, we must have a belief in human capital as a nation, we must have a strategy for human capital. And what I mean by that is when I was a young kid, in spite of the challenges that confronted me, I felt as though my country was cheering me on my country through the institutions of democracy and public policy. And the public schools that I attended the headstart program, that I was lucky enough to be in the first class of in 1965, the financing Pell Grant Program, the degree to which my education was made possible through public investment, these were all the wins, that I think propelled me forward and made it possible for my journey of mobility. Secondly, I think the lesson of our history of race of racial caste cannot be under scored enough. That reality of, of racism that remains the original sin that remains imbued in our institutions. And our policies needs to be addressed. And finally, it is the message of hope that philanthropy can breathe, because it was private philanthropy, that also financed my journey, and that private philanthropy made it possible for me to have a scholarship and college in law school. And so I'm a believer that philanthropy can be about hope. And I like to say, at the Ford Foundation is I'm sure you feel at Boston Foundation, that we are in the business of hope. That is what philanthropy and philanthropists can bring to their communities. Hope, optimism opportunity.

Paul Grogan  
Well, it's perhaps a larger job to kindle that hope at the moment than it has been in some time with there's the formidable array of crises simultaneously affecting our cities. And, and of course, it's been another way that we have been forcefully reacquainted with the inequities in society as as the virus has brought out a whole new set of issues highlighting lack of opportunity that goes on. Do you think it's enough what we've seen and kind of been hit in the face with that it can lead to the kind of commitment that we will need to really make this a normal thing you Young people in poverty have an opportunity to move up the ladder?

Darren Walker  
Well, I think we have to address the larger challenge we have of inequality in our society in our economics and our public policy, if young people are to have an opportunity for mobility, if young people are to have a chance to feel hopeful, and what I mean by that, Paul is the degree to which when I was a child, the difference between the inputs to my education of the inputs to my development, and that of wealthy children, while that might have been significant, it was in no way, the level that we see today, the difference today, and the inputs to the education and the development of young children who are poor, and those who are wealthy and privileged, is almost insurmountable. The reality of geography being destiny is so much more strong today than it was when I was a child. And therefore, for us to really make opportunity, a reality for young people today, especially low income young people, we have to address the inequity in our systems.

Paul Grogan  
These were, this is an issue for you, in your whole life. And indeed, it's been a commitment of the Ford Foundation's for decades. And then you came in and brought new focus and zeal to the equity issue in advance of the virus. I'm curious about what effect these changes have had on on your philanthropic strategies on your strategies at the Ford Foundation. Because you you had a very ambitious set of things that you had already articulated, then the virus comes along and shuffles the deck again, I mean, what's it been like to, to keep your priorities through that kind of tumultuous period, whereas it seems like there's a new new development on a daily basis, that has to be somehow figured in

Darren Walker  
my first annual letter when I became president focused the foundation's work on inequality and all of its forms. And what I said in that letter was, we are going to see in the years ahead, the manifestation of any quality, meaning that the people who will be most vulnerable, and most harmed other people today who are most precarious for underlying conditions, whether in the area of health, underlying health disparities, in the issue of economics, the underlying changes in the labor market that has made vulnerable workers more vulnerable. Those economic realities that most low income people live with, is going to make it harder for mobility, stability, to be a part of the American landscape. And I think what the pandemic has done is simply affirm and confirm that any quality will manifest in a way that is harmful to the most vulnerable in society. And for those who are already privileged. It will only compound our privilege, if there is not intervention. I mean, look at what's happened, Paul, in just the asset growth of those of us who have been lucky enough to own real estate, own second homes, own investment, be an investor in the stock market. We are better off today than we were in March at the beginning of this pandemic, we are better off economically. While most Americans are not better off. Most Americans have fallen even farther behind during this pandemic season. So that asymmetry has to be addressed in our systems in our policies, if we are to be a more fair and just nation.

Paul Grogan  
You know, the there was an article I believe by bridgespan about this subject of relative net worth and documenting how the couple 100 largest charitable donors in America their their net worth was going up much faster than their charitable contributions. So they've started out at one point. And so what that means is there are billions and billions of dollars over above what was what people and families allocated to charity, but they're not they're not behaving as if they have that latitude? How do we unlock the billions and billions that are on the sidelines that could be deployed without any pain being felt by the donor? How do we how do we get to this?

Darren Walker  
I think we have to do it by demonstrating the power of giving, as you do so well there in Boston, I think we have to do it through kind of public. bringing some light to the issue, that we're also seeing, I think, more transparency, more attention from the public, from the media, to this subject to the subject of philanthropy has been good for philanthropy, because for too long philanthropy was this very opaque part of our society. I think we also and use public policy to, I think, bring greater attention to and address the issue of unlocking more capital, I think we need more more attention to the issue of how much money does sit on the sidelines and how while philanthropists have a right as certainly we believe at the Ford Foundation to exist in perpetuity, there ought to be the kinds of minimum giving, there ought to be when assets rise significantly mechanisms to give more, we this year, as you know, did something very innovative in issuing our first ever social bond, we issued a billion dollar social bond. And we did that because we felt it was not defensible for us to do what we normally do, which is to pay 5%. And back in March, we lost $2 billion in our endowment. And our investment advisors view was that it was not a time to liquidate the portfolio, it was not a time to spend more. To me, we had to spend more, it was essential given the crisis. And the mechanism of the capital markets emerged to me in part because I as you know, worked in the capital markets for free on wall street for years before moving to Harlem, and community and community development. And the social bond was a response to that. And it is turned out to be a great tool that allowed us to basically double our grant making to over $1 billion for fiscal year 20 and 21. And the good news is that a number of other foundations have joined with us. And at this point, we are about $3 billion, in addition to the billion dollar Ford issue, about $3 billion has been raised from other foundations. And so this is a great, this is great news for philanthropy. And it's great news that we're able to use the markets for justice.

Paul Grogan  
It makes... It reminds us that periods of great adversity do generate a lot of innovation, if we're on the lookout for those things. And I think one of the things that charitable world really has to do is, is be on the lookout for the new ideas. And that's not always the case. A number of years ago here, we celebrated the foundation's Centennial, and we investigated the history of the foundation a little more deeply than usual. And what we found was the Boston Foundation is played this incredible kind of startup venture capital role that that provided early support to organizations that have grown up to be, you know, just incredible organizations, but had that window not been open. If if all of the funders want to fund what they want to fund and they're not alive to ideas coming to them. I think something is lost. How do you struggle with that balance, as I'm sure you do between things that you've decided at the foundation you want to do, and versus people bringing you ideas that were hacked somewhere else but but should be tried?

Darren Walker  
Well, I believe that we - I believe that we have to continually innovate in philanthropy. And the history of the Boston Foundation, as you describe, is one of innovation. But the challenge for philanthropy often is that, particularly for legacy philanthropies like Ford, is that over time, we as fiduciaries become a little too focused on sorry. I work Then over time, we fiduciaries become too focused on preservation over innovation. And unless we continue to innovate, we will lose our relevance in our communities. And so for me, it is about being open to curious, listening to those who bring us ideas, but also being clear about our mission. What, where we as an foundation can really add value to solving a challenge, understanding where others are better positioned, than we are to, to invest into lead. And to have a sense of where you can really make a difference. And doing the things that are sometimes not popular. I mean, when we started our work around the campaign to increase the amount of general operating support, that is not, regrettably, a popular idea in philanthropy, philanthropists don't like funding general operating support. And that is, that is almost antithetical to the views of the nonprofit leaders we work with, who tell us that they desperately need general operating support in that that kind of capital is the most valuable capital. And yet, we continue by large majorities to find only projects. And I think I'm pleased that forward, we have moved from 23% to over 75% of our grant making is now general operating support. And that's because we believe in institutions. And if you believe in institutions, you've got to find them to be resilient and sustainable and durable.

Paul Grogan  
Well, we couldn't be in more violent agreement on this point that you and I have talked about, it's just so clear, that if you want organizations to take the initiative to have the ability to do that, they have to have unrestricted resources. And, and as you know, we're working on on a project with community Foundation's around the country to make this case for for the younger, smaller community foundations that have no ability to initiate because all of their funding is in Donor Advised funds. So it's it's frustrating that there's the evidence is so clear how powerful this is, it is disappointing that we're not further along, and the embrace of that as, as a powerful way to, to build organizations and and and see the initiative coming from them.

Darren Walker  
I think if we're to be honest, Paul, this is about power and control. This is about donors, feeling that they want to have some clear metric by which their input their grant, and the judged, graded, evaluated as having impact. And if you actually understand over time, social change, you understand the inputs for social transformation and on the individual. You will say that it's institutions and policies that make the biggest difference. Yes, the individual who came into my life helped me that individual philanthropist that individual looking out for me as a young kid was very important. So we cannot stress enough the importance of individual action and engagement. But at the end of the day, as Dr. King understood as Muhammad Yunus understood as Kofi Annan understood, as Gloria Steinem understood, if you want to sustain, change, and progress, institutions are the way it happens. institutions are the mechanisms, institutions and our communities are the ones delivering generation after generation the services. They are the one to educating our children, and therefore, we can't treat them as contractors, we have to treat them as partners. And if we're treating them as partners, we respect them and respect their ability to know how to best deploy our capital just as the fourth foundation as an investor and venture capital. does the same thing with the VCs we invest in, you find the best, you find the most promising ideas, you give them operating support, so that they can deploy that capital across business lines across product development, so that they can run their business successfully.

Paul Grogan  
Well, that's an enormously important insight about how real change happens and, and we are pleased in seeing among the community Foundation's much more willingness to embrace public policy is something that's got to be in their in their toolkit, and there have been enough successes around the country. So it seems to really be catching on. So we could see the community Foundation's really emerged as a, as a really different animal that is capable of generating far more impact in their communities. Still a lot a lot to do on that their trustees, as you know, we're very nervous about any involvement with the public sector. But I think we and some others have shown that you can rigorously maintain nonpartisanship build relationships on both sides of the aisle. And our experience with office holders has been very positive and embracing that the community Foundation's can do things they can't do that are often very, very high leverage. You are more than aware of the big target that for it is that one another thing that's going on in the field of philanthropy is more criticism than we're used to. And you refer to that as sort of its it was the black box. And and but now as you know, there are books being written, there are articles being written, there are congressional hearings being held, about various aspects of philanthropy that people would like to change. And what a lot of these critiques really reveal, however, is they're not very knowledgeable, really about how philanthropy really works. So as one of the big ones in the field, I'm curious about how you're feeling about the public policy environment and and how do we ensure that a broader set of particularly leaders understand how important these institutions are?

Darren Walker  
Well, as you know, because you know, the history of the Ford Foundation, controversy is not new to the Ford Foundation, congressional hearings and opinion pieces about the fourth edition in the media have been a part of the foundation's history for some 60 plus years. I think, today, what is happening, though, is because of social media, because of the vast amount of wealth that has accreted to a very few people. There is right, Lee, I believe, greater skepticism about philanthropy, because there's more skepticism about wealth, and about the wealthy donors who don't always lead with altruism. And, and don't always engage in the kind of deep excavation of the root causes of the problems they are hoping to solve. Because those problems are often rooted in injustice. I'm reminded of the words of Dr. King when he talked about philanthropy in 1968. He said the following philanthropy is commendable. But it should not allow the philanthropist to overlook the economic injustice, which makes philanthropy necessary. And what Dr. King was saying, was a very different thing than Carnegie and Rockefeller preached because they were perfectly comfortable with any quality. In fact, they believe that inequality was simply an outgrowth of their own genius as a capitalist and businessmen and that is good Christian man, the job for them was how to give back. Dr. King was saying giving back is not enough. Charity and generosity is not enough. The work of philanthropy must also be about dignity and justice. And if the work of philanthropy is about dignity and justice, it will require of the philanthropist a different kind of engagement and engagement that is not only with the grant recipient of your large s, an engagement with yourself with your own conscious with your own culpability, and the inequality in the problem that you are seeking to solve?

Paul Grogan  
Well, that is absolutely the case. And as you know, right now, in terms of the total pool of philanthropic giving in any one year, it's about 400 billion. I think at this point, we know that just a sliver of that is going to programs explicitly aimed at social change. And most of the large asset is going from individuals, to institutions that they have some connection with their, their church or synagogue or the the hospital where they got their operation, mainstream cultural institutions. So what what are the prospects of encouraging more and more donors at all levels, not just the mega donors to enlarge that sliver of social change philanthropy so that it's more than, you know, really a minority of what's happening now. And I am not one of those who thinks that charitable support for symphonies is the wrong thing to do, enormously important. But it seems to me we've got a lot of room to enlarge that piece of the pie that's explicitly aimed at social progress.

Darren Walker  
I join you and saying that we do need support for our symphonies, our museums, our hospitals, the key institutions, cultural, health, and otherwise, that often serve the wealthy. And so this is not a plead to not fund Harvard. But it is a recognition that there is inequality in the system, and the behavior of donors often compounds that inequality, it makes the systems of our institutions of our democracy be more frayed, because donors are often interested in being a part of large institutions, prominent institutions, there are no naming opportunities in much of the work of social justice. When you are supporting Bryan Stevenson's work at the Equal Justice Initiative, in Montgomery, Alabama, there are no naming opportunities. You are funding, frontline legal support for poor people, for incarcerated people. And I think, for many donors, that's the appeal. But for a lot of donors, the naming opportunity is very important. And I just think that what Dr. King was saying is that sometimes we let we let logo and ego play too much of a role in our philanthropy.

Paul Grogan  
Well, I think you capture it in, in the title of your book, generosity versus justice. And it really is a paradigm shift that we have to achieve, we just simply have to pull this off. And if we can, and taking again, the community foundations, as an example, the leverage, then will be enormous, because there will be an awakening, and there will be opportunities, and I applaud your billion dollar bond, I think another thing that we have to attend to, is coming up with those kinds of dramatic funding opportunities that will really excite the private sector, and convince them that of what we know is true, which is that the nonprofit sector is an enormously significant part of our society, and it needs to be strengthened and fed and that the payoff for that, as we already know, is going to be very, very substantial.

Darren Walker  
I agree. I think that there is a huge on attacked, resource in the private sector, in the capital markets. I believe that we have to make capitalism work for justice. And I think that we have to have a kind of capitalism that is also more inclusive, this is what is also contributing to the inequality that we see that we have a kind of capitalism, the economic system, the policies that are in place, have actually propelled anything inequality have accelerated inequality so bad as I know those of us with assets. Our wealth and our privilege is compounding. While those who are disadvantaged, those who live with precarity, their disadvantage is being compounded. And so I very much hope that we can have the kinds of public policies and private policies that remind us of what it could be. I am not a romantic about American history, although I am a great believer in this country. But I remember my grandfather, who was semi literate, he had a third grade education. But he was a porter and an oil company in Houston. And as a porter and the guy who used to go around shining the shoes of the executives, and the oil company, he participated in the employee pension profit sharing program. And so he got stock when the company did well. And that stock allowed him to live with dignity, while into his retirement. What happened to those employee profit sharing programs? Where did they go? Well, they went away because public policy changed. And that policy, privileged, only one stakeholder, and that was the shareholder. And that I believe, as I wrote in The New York Times, a few weeks ago, about Milton Friedman, the degree to which that public policy did so much harm for the American dream, in part is why the American Dream is suffocating today, as well as the cult of the individual that we have in our society. And and which I think will also contribute to the deleterious kinds of things we're seeing in America today.

Paul Grogan  
The recovering those stories like the one about the porter is so important. I think that people just don't don't know those stories. And I think it would, it would change them if they did. One ask you one, one last question about about one of the things that's shown up in philanthropy recently. That's kind of interesting. And it is cash assistance programs of various kinds, and a guarantee connected to that as the idea of a guaranteed annual income. We had a very positive experience with cash assistance with the pandemic, where we were able to get cash to small businesses, there wasn't any, you know, guidelines. You know, just get the money out to these businesses so they can meet the next couple of payrolls. And it had a dramatic effect and staving off the the closure of a very large number, hundreds of small business and so so we've gotten interested in that having gone through that experience. But there are other things, as you know, going on just curious about your view of the possibilities there and varieties of cash assistance programs?

Darren Walker
Well, I think there's been a lot of very interesting innovation around cash assistance. And we have supported from the kinds of initiatives during the pandemic, like that you describe small businesses, to restaurant workers, and to those workers who were who are essential. And and so those direct cash initiatives, I think, as you demonstrated in Boston, the efficacy of those programs, I think, has been proven during this pandemic and other kinds of innovations that conditional cash transfer initiative which goes back to the World Bank and Ford and others in Mexico and Latin America in the 1980s and 90s. That also the advocacy of which has been proven and and are being scaled with Bolsa Familia and other initiatives in Latin America that have lifted literally millions of people out of poverty. And then finally, the guaranteed income programs that are more controversial, but are worth I believe, further exploration and that is the program ideas that guarantee a minimum cash award to any qualified citizen worker, I was, I was very skeptical of this idea, in part because I don't want to give up on work. But I also understand if work doesn't generate a dignified wage, and then you've got to have something to supplement that. And so I am very interested in in the idea, because we, at the end of the day, we've got to make work, work for people. And unfortunately, our ideas about working a 40 Hour Workweek, and therefore not living in poverty is no longer a reality. There are literally millions of workers in this country who work full time, but need government subsidy to their actual wage for them to be able to live with some modicum of dignity. And I think that that is the problem.

Paul Grogan  
Then we've covered a lot of ground this afternoon. I'm so grateful to you. The problems we've talked about are indeed daunting, but I like to remember what Buckminster Fuller said at a time of confronting great problems. He said, dare to be naive. And I hold that close given the business I've been in and I know you do as well. And we're so grateful to you for your work, the inspiration of your personal story, the way you're using one of the most important foundations to to push ahead with the kind of force that that you're bringing to it. grateful for your friendship and thanks again for being here with us.

Darren Walker  
Thank you, Paul. It's been my great pleasure.