News and analysis
August 17, 2015

MacArthur and Ford Foundations Diverge on Strategy

Photos Courtesy of the MacArthur Foundation and the Ford Foundation
The Ford Foundation’s new approach to grant making is designed for the long run, while the MacArthur foundation is looking to shake things up quickly.

Grant-making overhauls at the foundations announced in recent weeks were both crafted by relatively new leaders who were tapped from within their organizations. They’ve positioned their foundations to spend hundreds of millions of dollars trying to have a bigger impact on a leaner set of causes. Beyond those similarities, the new strategies diverge.

Darren Walker, who became Ford’s president in July 2013, said his foundation would increase the general operating support it provides nonprofits, with a goal of building "durable" institutions that exclusively focus on attacking various forms of inequality.

Julia Stasch, who was tapped to lead the John D. and Catherine T. MacArthur Foundation in March, also announced a plan to reduce the number of programs it supports to make a bigger impact in a few areas, notably climate change and criminal justice. But unlike Mr. Walker, Ms. Stasch’s blueprint will spend on any given area for only a limited time.

Ms. Stasch says putting a "bookend" at the end of a program’s life cycle will force the foundation to act quickly and will bring pressure on the grant maker to change course if necessary.

"Having a sense of urgency and relevance requires that you create structures that force you to constantly examine" the foundation’s impact, she says. "Being time limited does that. If we don’t get traction in the first few years, there may be better ways to use our money."

‘Polar Opposite Approaches’

Of the two strategies represented by Ford and MacArthur, Aaron Dorfman, executive director of the National Committee for Responsive Philanthropy, favors Ford’s dedication to building long-term movements. He wishes foundations offered more general operating support because doing so allows grantees greater autonomy. That’s especially crucial in building movements to address inequality, which can take more time, he says.

However, Mr. Dorfman added that MacArthur’s approach may inspire other foundations to act quickly on issues like overhauling America’s criminal-justice system, which has recently gained traction among policy experts from each end of the political spectrum.

"They represent polar-opposite approaches to philanthropy, but both approaches have real value," he says.

The two foundations have chosen different methods based on the problems they’re trying to solve, echoes Paul Brest, the former president of the William and Flora Hewlett Foundation. Mitigating climate change, Mr. Brest says, requires immediate attention, which explains why MacArthur has put more than $50 million into the effort so far this year and plans to keep it as a focus.

"If we don’t deal with global warming in the next five to 10 years, we’re in hot water," he says. "That’s why MacArthur wants to deal with it now. Ford is looking at problems that are not going to be solved in 10 years, and investing in the long run makes sense."

Perhaps more important than their differences is the fact that each foundation leader has promised to support fewer program areas to have a greater impact, says the former Hewlett leader.

"The most important part of a strategy is deciding what not to do," he says.

Room for Flexibility

The paths chosen by both organizations leave some room for overlap.

Ms. Stasch says MacArthur’s core, unrestricted grants will continue to be "sprinkled" throughout its grantees, and at least one "anchor" institution in each of its areas of focus will receive such help.

Meanwhile, Ford, while aiming at long-term change, has not scrapped measuring the impact of its work. When he announced the New York foundation’s new strategy in June, Mr. Walker promised to deliver a "very focused and strategic set of interventions, around which we will hold ourselves accountable."

Despite MacArthur’s increased attention to fewer types of programs — it is winding down, for instance, programs in maternal health, housing and juvenile justice — the Chicago grant maker is still leaving room to support causes outside of its key areas. Ms. Stasch said the foundation is planning a $100 million grant every three years to an applicant that comes up with a novel way to solve a major problem. MacArthur’s board has not finalized how the grant will be awarded, but Ms. Stasch said she’s personally biased toward giving the money to a group working in an area outside of the foundation’s purview.

"We need to be humble and acknowledge that some of the things in the world that need to be worked on are not on our radar," she says.

That attitude, says Peter Frumkin, director of the Center for Social Impact Strategy at the University of Pennsylvania, is a major change from the way large foundations typically make grants.

"It’s a rare day when a foundation opens up and says, ‘we might not have all the answers,’" he says.

Send an e-mail to Alex Daniels.