News and analysis
June 11, 2015

Ford Shifts Grant Making to Focus Entirely on Inequality

Joshua Bright, The New York Times, Redux

Ford Foundation president Darren Walker

The fight against inequality will take center stage at the Ford Foundation under a sweeping overhaul announced today by the nation’s second biggest philanthropy.

Not only will Ford direct all of its money and influence to curbing financial, racial, gender, and other inequities, but it will give lots more money in a way grantees have been clamoring for: It hopes to double the total it gives in the form of unrestricted grants for operating support. The doubling of general operating support to 40 percent of the foundation’s grant-making budget, projected to be in excess of $1 billion over five years, will enable Ford to create what its president, Darren Walker, calls a "social-justice infrastructure" reminiscent of the support it provided nonprofits during the civil-rights era.

"By giving a set of institutions core support or seed capital, we helped initiate and support entire movements," he said. "We contributed to an entire generation of social-justice leaders around the world."

Now, he says, Ford hopes that providing support without strings attached will help make organizations more "durable" and allow them more leeway in designing their own programs.

"We’re going to move away from bending our grantees to fit into our boxes and do a better job of listening and learning," he said.

Technology and the Arts

Ford joins a growing number of foundations pouring more money into programs that fight inequality. But its plans to look at every grant to ask how it reduces inequality is a more stringent approach than other foundations have taken. That said, the foundation is taking a broad interpretation of inequality — looking not just at wealth, race, ethnicity, and gender but also access to technology and the arts.

The changes announced today mark the first substantial revisions introduced by Mr. Walker, who became president of the foundation in 2013.

The new approach is a significant rejection of an approach undertaken in 2006 by Mr. Walker’s predecessor, Luis Ubiñas.

Under that plan, the foundation’s grant making supported eight causes: human rights, freedom of expression, democratic and accountable government, economic opportunity, education, sustainable development, sexuality and reproductive health, and social justice.

Now Ford will place a high priority on alleviating what it sees as the key causes of inequality, including broken political systems, discrimination, dwindling support for schools and other public institutions, and a belief that the free market alone can cure social ills.

The foundation will support programs that promote open government, push for more equitable distribution of wealth, strengthen education and opportunities for young people, showcase free expression, and work toward justice based on race, ethnicity, and gender.

Mr. Walker said the foundation will gradually "transition" to end its support for groups that don’t work on issues related directly to inequality. But he stressed that many of the causes Ford has long supported will still be in the mix.

For instance, he said, though it doesn’t fund scientific research on climate change and isn’t likely to in the future, it will continue to support charities working on sustainability. In 2014, the foundation made $23.8 million in grants designed to strengthen local communities’ control over their natural resources and to mitigate climate change among the rural poor. Future grantees, Mr. Walker suggested, will need to show they protect people who are disproportionately hurt by global warming.

And Ford, which started Lincoln Center in 1958 with $25 million in grants, won’t abandon its support of the arts, according to Mr. Walker. But to catch the grant maker’s attention, artists, filmmakers, and choreographers will need to focus on social justice and challenge "dominant narratives" that perpetuate inequality.

Support for Overhead

While Ford’s increased attention to inequality will probably attract the most notice in the public-policy world, Ford’s signal that it will spend lots more on helping groups pay their operating costs will probably spark the most conversation among nonprofits.

Mr. Walker says he came to the conclusion that more general operating support was crucial after the foundation asked grantees and others to provide feedback on what they most needed. The comments he got from some 2,000 people who responded to his annual letter last September led him to believe that the foundation was "project-supporting nonprofits to death" without providing essential basic support to pay the rent, develop technology, and increase the number of staff members needed to carry out ambitious social-change efforts.

"I learned that people, especially nonprofit leaders, feel that foundations aren’t investing in building their institutions, building their capacity, and making them more durable and fortified," he says. "That was a consistent theme."

Ford’s pledge to increase general operating support would place it head and shoulders above some of its foundation peers, according to 2012 Foundation Center data on 809 foundations that the National Committee for Responsive Philanthropy analyzed. In 2012, foundations gave, on average, 21 percent of their support in the form of unrestricted grants, according to the committee’s analysis. In the three years that ended in 2006, an average of only 14 percent went to general support.

Aaron Dorfman, the committee’s executive director and a supporter of unrestricted giving, says that when foundations make their grants too prescriptive, nonprofits are often locked into delivering services that can become outmoded or ineffective.

"Change is messy and unpredictable," he says. "There is a correlation between funding big societal movements and general operating support. General operating support is the way to make it happen."

Back to Ford’s Roots

When Ford last overhauled its overall strategy six years ago, the nonprofit world took an intense interest because the foundation is so big that its changes cause ripples throughout philanthropy, says Rick McGahey, a professor at the New School for Social Research, who served as director of impact assessment at Ford under Mr. Ubiñas.

Mr. McGahey says it’s no surprise that Ford would want to retune its approach. Mr. Walker, he noted, spent the first several months on the job traveling the world to learn firsthand from program officers and grantees. The foundation president also hired several hand-picked leaders, including Hilary Pennington, formerly of the Bill & Melinda Gates Foundation, and Xavier de Souza Briggs, former associate director of the Office of Management and Budget under President Obama, and they played a key role in shaping the new approach.

Under Mr. Ubiñas, Ford moved away from its role as a social-justice grant maker that supported civil-rights organizations for the long run into a more business-minded foundation that demanded performance from its grantees, said Stanley Katz, director of the Princeton University Center for Arts and Cultural Policy Studies

"He wanted to refashion Ford as a modern strategic organization," Mr. Katz said. "It failed."

In an interview before the changes at Ford were announced, Mr. Katz said that Mr. Walker has steered Ford back to its traditional role of supporting broad social-change movements that can take years or even decades to bear fruit.

He is skeptical of the ability of a foundation, even one as large as Ford, which controls $12.1 billion in assets, to make a big dent in fighting inequality. But he said the foundation under Mr. Walker has taken the lead on specific problems, such as the "Grand Bargain," in which 10 foundations ponied up $370 million (including Ford’s initial $125 contribution) to help the City of Detroit emerge from bankruptcy.

"That’s not bite-sized, but it’s taking on the problem at a level a foundation can address," Mr. Katz said.

Joining Other Grant Makers

Ford isn’t alone in staking out huge goals and focusing on ending the causes of social problems.

In recent years, several of the nation’s largest foundations have pushed for systemic changes to accomplish their missions, notes Richard Marker, a grant-making adviser. As an example, he points to the Gates foundation’s quest to eradicate malaria. The foundation supports a wide range of medical research, aimed at both prevention and cures. It also throws its support behind efforts to keep malaria on the agenda of policy makers in individual countries and at multinational organizations.

With $43.5 billion in assets, Gates dwarfs Ford. But Ford is still far bigger than other philanthropies: The third wealthiest is the Robert Wood Johnson Foundation, with assets topping $10.3 billion.

"Their size empowers them to say: ‘These problems are solvable,’ " Mr. Marker says.

Mr. Walker acknowledges the size of the task ahead. But he stressed that the foundation is committed to building a movement to fight inequality whose impact will be seen over the long haul. The new strategy is just a starting point, he said. In the coming months, he expects to refine the foundation’s approach.

"It certainly could seem like we’re boiling the ocean," he says. "But we’re going to have a very focused and strategic set of interventions around which we will hold ourselves accountable. We have enough humility to know the Ford Foundation isn’t going to reverse inequality by ourselves. We hope we can contribute to slowing the trend."

Learn more: Read Mr. Walker's letter to grantees.

Send an e-mail to Alex Daniels.