Amid a swirl of controversy over the leadership and direction of the Ewing Marion Kauffman Foundation, in Kansas City, Mo., three board members this month resigned from their posts.
The controversy has aroused the curiosity of the Missouri attorney general’s office, which has begun a review of Kauffman’s grant making and whether it is in line with the intent of the philanthropy’s founder, Ewing Marion Kauffman, a former pharmaceutical executive and owner of the Kansas City Royals baseball team. Mr. Kauffman died in 1993.
Kauffman, one of the 25 largest private foundations in the United States, with assets of $1.6-billion, has been the subject of criticism from politicians and some of the foundation’s former leaders because of its plans to phase out grants to some neighborhood and youth groups in Kansas City that have regularly received money from the foundation. Foundation officials deny that the philanthropy and its embattled chief executive, Carl J. Schramm, have turned their backs on Kansas City’s neighborhoods and children.
Following a board vote on whether to retain Mr. Schramm, Michael F. Morrissey, Michie Slaughter, and Bob Compton announced their resignations.
“I had a fundamental difference of opinion over matters of the foundation’s operations with the chief executive and the remaining board members,” says Mr. Morrissey, a retired managing partner at the Ernst & Young accounting firm who joined the foundation’s board in 1999. “It just made sense for me to leave.”
Mr. Slaughter, who started the foundation’s entrepreneurship division, which was formed in part to find ways to increase business opportunities for Kansas City’s poor people, declined to comment. He was the only remaining board member who had worked with the foundation’s founder. Mr. Compton, chief executive officer of Noink Communications, a software company, could not be reached for comment.
A fourth board member finished his term amid allegations in The Kansas City Star that before casting the deciding vote to retain Mr. Schramm he had discussed a paid consulting deal with John A. Mayer Jr., a member of the board who became the chairman after Mr. Morrissey resigned. The board member, Brian O’Connell -- an author of books on nonprofit ethics and the founding president of Independent Sector, in Washington, an umbrella organization of charities and grant makers -- gave up his board seat instead of seeking another term after voting in favor of Mr. Schramm.
Mr. O’Connell couldn’t be reached for comment, but Mr. Mayer said the newspaper’s account was inaccurate. “There is no amount of money in the world that could buy Brian O’Connell,” said Mr. Mayer. “We had no discussions about money before that vote.”
Former Leaders Irked
Two former Kauffman presidents, Louis Smith and Bob Rogers, and past board members of the foundation have been critical of the philanthropy’s heightened emphasis on entrepreneurship and scholarships since Mr. Schramm took over 15 months ago. They say that small groups that serve youths and neighborhoods in Kansas City have been hurt, and argue that Mr. Kauffman made it clear that much of the foundation’s money should stay in Kansas City to help its neediest citizens.
Foundation officials say that by making larger grants to youth groups that focus on education, Kauffman will make more of an impact.
“We were stretched too thin among a variety of youth groups and issues surrounding youth,” says Mr. Mayer. The philanthropy makes grants totaling about $100-million per year.
The foundation, temporarily down to 4 board members after having had as many as 11 last year, says it will look to build its numbers back to 8 to 12 members. One new member, Siobhan Nicolau, president of the Hispanic Policy Development Project, in Washington, and a former employee at the foundation when it was run by Mr. Kauffman, has already been recruited.
She and other board members may find the foundation’s operations under tighter scrutiny. Missouri Attorney General Jay Nixon started a review of the foundation’s recent grants earlier this month. “We’re looking to make sure that grant money is being used for the stated purposes of the foundation,” said Scott Holste, spokesman for the attorney general’s office. Foundation officials say their grant-making strategies closely follow those stipulated by Mr. Kauffman.