Opinion
September 02, 2014

Foundation CEOs Need Candid Feedback to Succeed in Driving Change

Leading a foundation is hard. That’s among the messages in a thoughtful, just-released letter from Darren Walker, president of the Ford Foundation, reflecting on his first year in office.

Mr. Walker writes that he was "unready" to take on a "job for which one might assume I had been preparing for years."

"Easy as foundation work may look from some vantage points, the truth is that it is hard," Mr. Walker writes. In his letter, he remarks with candor on both the joys and unexpected challenges of his role. "My single greatest fear is that I am not hearing enough constructive criticism."

His fear is a well-founded one.

I have worked and interacted with hundreds of CEOs of large foundations over the past 13 years and have seen first-hand the challenge they have in understanding what’s really happening, and what people really think—as opposed to what they are told.

When you’re in control of vast charitable assets, and surrounded by people who want a share of those assets, candid criticism may not be exactly forthcoming—making you more likely to live in a bubble of what the psychologists call "positive illusions." This can be the case even for CEOs who are well aware of the risk.

Indeed, in our research at the Center for Effective Philanthropy, we have seen that foundations CEOs tend to be sober about the progress they have made in advancing their charitable missions, and are fairly critical of their fellow foundations, but convinced that their foundations are making significant contributions. We also have seen a disconnect on key issues, such as transparency and performance assessment, between how foundation CEOs see things and how those running nonprofits do. (This is documented in a new article in Foundation Review written by my colleagues at the center.)

This matters. Foundation leaders can’t be effective if they don’t understand the views of others trying to achieve the same goals. The absence of candid feedback, which may seem to those on the outside to be a blessing, is actually a curse to foundation CEOs, as Mr. Walker clearly understands.

Some people might be tempted to roll their eyes at the idea that running a foundation is hard or that being surrounded by those predisposed to tell you what you want to hear should provoke fear rather than rejoicing. After all, until recently, foundation presidencies were often considered cushy resting spots for those who had essentially finished their careers. As an accomplished older friend, considering his next career step, put it in a conversation with me two decades ago, "I have one more real job in me. I’m not ready to be a foundation president yet."

While that was probably never a fair assessment, and my friend was probably well aware he was exaggerating, something has changed.

The pressure is amped up, at least from what it was in the past, and claims of success—and effectiveness—are more likely to be questioned. Media and public scrutiny of at least the larger foundations is more intense, and boards are pushing harder to gauge performance of the institutions they govern and the CEOs they are responsible for hiring and firing.

As Benjamin Soskis notes in a thoughtful piece in The Atlantic, we are emerging from a "brief, balmy season at the closing decades of the century and the opening of the new one" in which "philanthropy began to enjoy the benefit of the doubt."

Mr. Soskis argues that this increased scrutiny is positive and healthy. "In the midst of this latest Gilded Age, as the prerogatives of concentrated wealth march onward with little resistance, an aggressive—even at times antagonistic—engagement between the public and their benefactors shouldn’t be considered a mark of incivility. It should be considered a democratic imperative."

This new era of greater critique—which Mr. Soskis argues is just a return to the historical norm—appears to have translated into, or at least coincided with, more upheaval in the boardrooms of large foundations.

In the past year, several prominent foundation CEOs have been abruptly bounced from their roles.

At the John D. and Catherine T. MacArthur Foundation, for example, the Board of Directors issued a statement that its president would leave the foundation after five years, adding, "As the end of his term approaches, the board decided to look for a new kind of leadership to accelerate the pace of change in how MacArthur can use existing and new tools to tackle even bigger goals."

While the circumstances of each case are both difficult to discern from the outside and undoubtedly different, it does seem clear that more boards of large foundations are holding their CEOs’ feet to the proverbial fire. Board impatience for results is a good thing as long as it’s coupled with realism—a recognition that there are few quick fixes or magic bullets when addressing the most difficult societal challenges, from climate change to income inequality to improving public education.

Successful CEOs help their boards to understand the complexity and educate them about what’s realistic, how difficult and also vitally important it is to assess foundation performance, and the limits of what a single institution—however well endowed—can do. Indeed, the challenge of productively "engaging the board" is one of three dimensions of the role that must be juggled "artfully" to be successful as a foundation CEO, argues Fay Twersky, Hewlett Foundation’s director of effective philanthropy in a report published by the center last month.

Ms. Twersky draws on a series of interviews she conducted with current and former CEOs and makes the argument that, given the ways in which the foundation leadership role is uniquely challenging, foundation boards should more frequently hire from within, or at least more highly value philanthropic experience. She describes what she sees as a bias toward leaders who come from outside philanthropy, quoting one CEO as saying, "Boards think you don’t actually have to know anything about philanthropy … to be successful. But, the learning curve is just huge. A lot of time gets wasted when you hire from the outside."

But, as Ms. Twersky notes, there is at least increasing anecdotal evidence that the dynamic may be changing. Perhaps boards are recognizing what Mr. Walker says was a revelation even to an insider like him: just how tough it is to do the job well.

Mr. Walker himself was promoted internally, as was LaJune Montgomery Tabron at the W.K. Kellogg Foundation.

Recently, Pittsburgh saw a sort of musical chairs in which Pittsburgh Foundation CEO Grant Oliphant left to assume the presidency of the Heinz Endowments, where he had worked previously as a senior executive. Mr.

Oliphant’s successor at the Pittsburgh Foundation? Maxwell King, who served as CEO of Heinz Endowments from 1999 to 2007.

My hope is that foundation boards will continue what appears to be a trend of placing greater value on philanthropic and nonprofit experience but that they’ll look not just for foundation experience but also for experience on the other side of the table—as a grantee. Knowing what it’s like to worry about the responsibility of meeting payroll and mission—and the anxious feeling of seeking support from a foundation program officer who may not understand the stress of being a nonprofit executive director—may be the best preparation of all.

Mr. Walker, for example, possesses both types of experience and speaks often of the importance of remembering what it felt like to be a grantee.

All of this matters because the quality of foundation leadership matters.

Foundations play a crucial role in helping to address the issues other actors can’t or won’t. Although they cannot achieve much acting alone, the concentration of resources within the walls of large foundations gives them enormous influence over the future of both fledgling and established nonprofits and over the likelihood of making progress against important goals.

We need strong foundations with good leaders. And we need more of the kind of candid conversation about the role contained in Mr. Walker’s letter and Ms. Twersky’s thoughtful report.

In his letter, Mr. Walker says he has "a favor to ask, and it is a big one" of readers. His request is for the candid feedback and criticism he worries he’s not getting.

Let’s help him—and his foundation CEO colleagues out—by voicing our constructive criticisms. This kind of candor is healthy for foundations, nonprofits, and the issues and communities they both seek to transform.

Phil Buchanan is president of the Center for Effective Philanthropy and a regular columnist for the Chronicle of Philanthropy. All of the foundations mentioned in this article are either current or past clients or grant supporters of the center. Fay Twersky and Grant Oliphant are members of the organization’s Board of Directors.