Clark Foundation sees success in its controversial youth program
Over the past decade, the Edna McConnell Clark Foundation has undergone a radical makeover. The New York
foundation wound down its grant-making programs that had focused on solving broad, entrenched problems — such as overhauling large child-welfare and criminal-justice systems — and instead placed all of its chips on a new effort to improve youth groups.
Through its Youth Development Fund, the $808-million Clark Foundation scours the nation for the highest-performing organizations that help young people become successful adults. Grantees must set and hit specific targets for improving their operations, and they must pledge to expand their programs to a much larger number of children. In return, Clark writes big, long-lasting grant checks, averaging more than $1-million per year, and Clark officials and outside consultants work closely with the charities to help them meet their goals.
Most notable among Clark’s successes has been the Harlem Children’s Zone, which has committed to improving academic success for 5,600 children annually in a deteriorating 60-block area of Harlem. The charity has increased the number of children from low-income families it serves, and nearly quadrupled its budget, to $35-million, since Clark asked the charity’s chief executive, Geoffrey Canada, to take his ambitious vision and raise it even higher. Clark provided Harlem Children’s Zone with a $5.5-million grant over three years in 2001 and followed that up with an additional $7.5-million over five years in 2004.
But the sailing hasn’t been entirely smooth for the foundation. Clark officials abruptly ended a grant to one charity, and the foundation has faced some criticism for cherry-picking among youth-development charities — leaving out those just a notch below the best — and for providing no money to advocacy organizations.
One thing is certain: The Clark Foundation, which was started by the family of the founder of the company now known as Avon, is far more closely watched today than at any other point in its history.
Heavy Involvement
The Clark foundation is often lumped together with “venture philanthropy” funds (though Clark doesn’t use the term to describe itself), which are similar to Clark in that they make long-lasting grants and get heavily involved in a charity’s operations. Clark is among the wealthiest foundations — one of the country’s top 100 by assets — that are committed to such an approach.
Youth-development charities dream of making it into the Clark fold, and foundations interested in youth organizations scrutinize its grantee list to benefit from Clark’s “due diligence.” Many others follow Clark’s progress simply out of curiosity — they want to see whether the wrenching changes Clark undertook in the late 1990s will bear fruit.
“We all know foundations that ‘reinvent’ themselves every five years, but then don’t really change,” says Sterling Speirn, who took over as head of the W.K. Kellogg Foundation last month. As president of the Peninsula Community Foundation, Mr. Speirn worked with Clark to bring one of its grantees, a provider of after-school programs called Citizen Schools, to the Silicon Valley area of California. “I could see that Clark was really changing.”
The architects of the change — Nancy Roob, Clark’s current president, and her predecessor, Michael Bailin — say it is still too early to declare the new approach a success. Even so, they believe that the early results are promising enough to start sharing them with others in the hopes of raising additional funds for Clark’s grant recipients. The foundation sponsored a one-day meeting with community foundation leaders in Seattle last fall, for example, as a coming-out party of sorts to discuss its work.
“Clark’s money alone isn’t going to be enough,” says Ms. Roob.
‘A Critical Need’
In 2000 Clark officials decided to focus all of their efforts on the Youth Development Fund to avoid diluting the foundation’s impact by spreading money too widely. (The foundation currently awards grants worth about $35-million per year.)
“A critical need exists in this country to help young people from poor families make a successful transition to independent adulthood,” Mr. Bailin wrote in the foundation’s 2000 annual report.
But the charity immediately faced a problem: Very few organizations that serve young people possess independent data that demonstrate their effectiveness.
In studying the problem, Clark officials say they believe grant makers and the government have made it easy for mediocre groups to survive because charities can get money whether they produce results or not. They also have found that many donors would rather swoop in to save a flailing charity than support a stable one that is poised to grow.
“The more successful you get as a youth-serving organization, and the bigger you get, the more likely it is that foundations will walk away,” Ms. Roob told the crowd of about 130 at the Seattle conference, which was organized by the Coalition of Community Foundations for Youth.
Clark does not accept unsolicited grant applications. It has two full-time employees who search for high-performing charities that the foundation might consider supporting (with several other staff members pitching in), and it sometimes hires research organizations, such as Public/Private Ventures and Child Trends, to help identify charities.
Once it unearths a promising charity, Clark undertakes a due-diligence process that can last several months. It wants to know whether a charity has a compelling product, strong leadership, a commitment to evaluation, financial viability, and compatibility with Clark’s hands-on approach.
Some six years after making its first grants through the Youth Development Fund, Clark has finally hit its stride in finding youth charities that can productively use millions of dollars of capital to improve already-strong programs and take them to new communities. As of three years ago, Clark had only brought eight organizations into the fund. Now it has 21.
Eligible Charities
Clark divides its grantees into three groups — organizations that provide a single type of service and are expanding nationally, like Citizen Schools; organizations that serve specific neighborhoods, like Harlem Children’s Zone; and large national organizations, like the Boys & Girls Clubs of America.
When Clark decides it wants to aid a charity, it makes a “business planning” grant — usually about $250,000, plus free consulting services from the Bridgespan Group, a nonprofit organization that works solely with other charities. That process is designed to ensure that the charity has the right plan in place — one that is ambitious, but realistic — for achieving the results and growth that Clark will seek with the long-term grant that follows. (Ms. Roob recently signed a contract with Bridgespan to take the foundation through a similar business-planning process, in which Clark officials will think hard about what would constitute success with the estimated $300-million or more that Clark is likely to spend over the next decade.)
Harlem Children’s Zone decided during its planning process to spin off programs that focused on older people and high-school dropouts because they were consuming too much money and management attention. Citizen Schools scrapped plans to quickly expand to 30 states, after discussions with Clark officials and Bridgespan consultants convinced the charity’s leaders that it should first perfect its approach in Boston, and experiment with expansion in a handful of areas.
‘Portfolio Managers’
Once the business plan is in place, Clark makes a multiyear grant that ranges from $500,000 to $8-million. Unlike most foundation grants, which go to support specific programs, the Clark money is largely unrestricted, and charities are often encouraged to use it to develop their central-office capabilities.
The charity might hire new staff members — such as a chief operating officer — to strengthen its management or buy new software to better track its results and effectiveness. Each grantee is also assigned a “portfolio manager” — Clark’s equivalent of a program officer — who works with the charity to help it accomplish goals set out in the business plan.
With organizations like Citizen Schools and Nurse Family Partnership, a Denver charity that specializes in sending nurses to make home visits to low-income, first-time mothers, Clark wants to see the charity expand its program around the country. With organizations that work in neighborhoods, like Harlem Children’s Zone and Good Shepherd Services, in New York City, Clark wants to see the charity serve more young people in the city or region.
The goal is somewhat different for the large, already national organizations, like Big Brothers Big Sisters of America and the Boys & Girls Clubs of America. Even Clark’s million-dollar grants are a drop in the bucket for such organizations — Boys & Girls Clubs had revenue of $1.12-billion in 2004, for example — and so Clark tends to require that its money be used for specific projects.
In 2001, Clark gave Boys & Girls Clubs $5-million over three years for Project Upward Bound, a quality-improvement effort designed to move 100 low-performing clubs up a few notches on the charity’s internal numerical grading system, known as “standards of effectiveness.” When negotiating the grant, Clark pushed hard — and successfully — for Boys & Girls Clubs to require that clubs offer Project Learn, a program that Columbia University researchers found had raised academic performance among participants, if the club desires to earn the charity’s highest rating.
“The grant gets us what we were looking for: It gets more kids into a proven program with demonstrated results,” says Woodrow McCutchen, a Clark portfolio manager who works with Boys & Girls Clubs.
Clark has been pleased with the charity’s progress. In September 2005, the foundation gave Boys & Girls Clubs $8-million over five years, to expand Project Upward Bound to more clubs and to start a new program focused on developing the management skills of executives at local clubs.
Boys & Girls Clubs has expanded at a furious pace in recent years, nearly doubling its number of clubs, to 3,700, since 1998, but its discussions with Clark have led to a change in strategy, says Roxanne Spillett, the charity’s president.
“We don’t use the word ‘growth’ anymore,” she says. “It’s ‘growth with quality,’ and that’s really as a result of the Clark investment.”
An Early Ending
Clark has ended only a few of its relationships with grantees. In March 2003, it made an early payment on a $1.25-million grant to BELL (Building Educated Leaders for Life), a charity founded by Harvard Law School graduates that specializes in after-school and summer programs, to assist the charity during a financial crisis. Clark ended its relationship with BELL in 2004, when the charity failed to hit certain goals, such as serving more children. Clark wanted out of the relationship because its funds were going for basic things like meeting payroll, according to Ms. Roob.
“The bottom line is that milestones weren’t achieved, and we didn’t see a good pathway for how we could go forward,” Ms. Roob says.
Earl Martin Phalen, BELL’s chief executive and co-founder, says the charity’s fortunes have radically improved since Clark departed, thanks to increased federal support for after-school programs under the No Child Left Behind Act. BELL is now serving more than 7,000 children, up from 1,300 in 2003, and its budget has more than quadrupled, to $15-million.
“Should Clark have left us? No, I thought they left us too soon,” Mr. Phalen says. “Do I understand why they left us? Absolutely. They had their own scorecard, and we had missed four out of their six metrics.”
Clark recently decided not to renew a three-year, $450,000 grant to Asian-American Leadership Empowerment and Development, a Washington charity that helps Vietnamese and other Asian-American youngsters from needy families complete high school and go on to college.
Ms. Roob calls the charity’s founder and executive director, Sandy H. Dang, “outstanding,” and says Clark is still interested in the group’s approach. But she says the charity hasn’t achieved the growth that Clark expected when it first awarded the organization money in 2004. The grant won’t actually end until 2006-7.
“We thought they would have the capability of growing, and they may still grow, but part of the beauty of what they are is that they’re embedded in a small community,” Ms. Roob says. “We’re committed to getting the biggest social return possible on our investment.”
Ms. Dang says she is disappointed by Clark’s decision. Her group serves about 180 youths in the District of Columbia, and plans to move into the surrounding Maryland and Virginia suburbs soon, as part of a plan to serve more than 700 students by 2010. “We’re growing very strategically,” Ms. Dang says. “We can’t become a national organization overnight.”
Only the Best
The very core of Clark’s approach — finding only the best youth-serving organizations, and taking their programs to more kids — is somewhat controversial. Clark officials maintain that they keep the number of groups they support small because few charities are ready for the kind of growth and results-oriented assessment that Clark demands.
But others say it would be useful for Clark to share information about charities that it investigates but declines to support.
“You almost create a lottery for kids,” says Gregory Roberts, president of the D.C. Children and Youth Investment Trust Corporation, which spends more than $12-million per year from government and private sources to support 135 youth programs in Washington. “If a child is enrolled in a program that Clark has invested in, that child will benefit significantly.”
Mr. Roberts says if he knew which organizations had gone through Clark’s vetting process, but failed to get money, he could provide those groups with support to “get them working up the trajectory.”
Even Mr. Canada, president of Harlem Children’s Zone, which has received more money from the Youth Development Fund than any other charity, believes Clark needs to work harder to develop a “farm team.”
“There are folks who worry that Clark may have gone out and cherry-picked the top groups and ignored those right underneath,” Mr. Canada says. “We don’t have enough organizations growing in the pipeline.”
But Mr. Bailin and Ms. Roob view Clark’s approach as a way to raise the bar in a field in which grants have traditionally flowed freely to performers and nonperformers alike.
In 2001, Clark gave Big Brothers Big Sisters of America $4-million to help the charity bring its one-on-one mentor programs to more schools in large cities. Traditionally, the charity’s programs had been community-based, which means the charity matches the volunteer with a youth, and the two agreed on a place to meet. Thanks to the school-based programs, the charity doubled the number of young people it worked with by 2004, and it is now aiming for another double, to working with nearly one million kids per year, by 2010. Clark pledged another $6-million to the organization in 2004 to help pay for that growth.
Mr. Bailin notes that Public/Private Ventures, the research firm he headed before he joined Clark in 1996, conducted a study that found that the charity’s programs have a positive impact on the lives of youth.
“I can’t tell you how many smaller programs we could have worked with that had no evidence of effectiveness, and all the while Big Brothers Big Sisters would have been moving along at a grudging pace of growth,” Mr. Bailin says. “It’s very seductive to want to be able to do a little bit of everything. It’s very painful to say no.”
Ms. Roob says the “farm-team” concept has been considered, and that Clark’s list of grantees may grow slightly in the future, but that it would probably never top 30. “We do have a responsibility to try to share what we’re learning,” she says. “But a lot of knowledge-sharing has no effect on anybody. We have to figure out how we can do that in a way that’s meaningful.”
Some groups also have chided the Clark Foundation privately for not supporting advocacy work, to help build coalitions that can argue for greater federal spending on youth organizations.
Mr. Bailin, who is caring for his ailing mother while trying to decide if he wants one last full-time job (no word on what that would be), says such arguments put the cart before the horse. Congress, he notes, has grown tired of sinking money into programs that don’t work.
“You can’t go down to Washington without anything but an argument for what the needs are,” he says. “You need to be able to say, ‘These programs work, and here’s the proof.’”
THE EDNA MCCONNELL CLARK FOUNDATION
History: Founded in 1969 by Edna McConnell Clark, a daughter of the founder of Avon Products, and her husband, Van Alan Clark.
Areas of support: Starting in the late 1990s, the foundation wound down its five grant-making programs and adopted its current one — the Youth Development Fund. The program primarily makes large, long-term grants to organizations that focus on one of three areas: educational out-of-school efforts, programs that prepare youths for work, and charities that help young people avoid high-risk behavior.
Assets: $808-million as of September 30, 2005.
Grants: In the 2005 fiscal year (ending September 20, 2005), the foundation paid grants totaling $31,175,000 to 55 organizations. The foundation expects to add three to five new charities to its Youth Development Fund in 2006.
Key officials: Nancy Roob, president; Ralph Stefano, director of finance and administration; James McConnell Clark Jr., chairman of the board.
Application procedures: A special unit within the foundation conducts research on youth-development groups around the country to identify potential grantees. The foundation does not solicit proposals, but officials at youth organizations are invited to share information about their charity by filling out the Youth Organizations Survey form on Clark’s Web site.
Address: 415 Madison Avenue, 10th Floor, New York, N.Y. 10017
Web site: http://www.emcf.org/
