No Apologies: Rajiv Shah Stands by Rockefeller’s Top-Down Approach

For years now, the discourse in liberal philanthropy has been all about sharing power as well as giving away money. By making long-term, unrestricted grants to nonprofits, donors place decision-making power where it belongs, they say, with those closest to the problems they want to solve.

The Ford Foundation has given nearly 350 organizations more than $1 billion in Build grants, which provide five years of general operating support. Billionaire MacKenzie Scott has donated more than $14 billion to about 1,600 nonprofits to “use as they see fit,” she says.

The 110-year-old Rockefeller Foundation is different — and it always has been. In contrast to Ford or MacKenzie Scott, who respond to the needs of nonprofits, Rockefeller and its president, Rajiv J. Shah, take a strategic, big-picture, top-down approach to philanthropy: Major efforts are developed in-house and carried out by nonprofits and consultants. Of 267 grants awarded by Rockefeller in 2021, only 19 provided general operating support.

In his new book, Big Bets: How Large-Scale Change Really Happens, Shah disdains what he calls “passively tossing cash to needy causes” and instead favors “big, transformational bets for humanity [that] are about trying to lift up as many people as possible.”

“If we don’t aspire to do big things, we’ll fail before we get started,” Shah says.

Big Ambition

Shah has been pursuing big ideas since the early 2000s when, as a young physician, he was introduced to philanthropy at the Bill & Melinda Gates Foundation, another grant maker that sets its own path. “The scale of ambition and potential at the foundation felt intoxicating to me,” Shah writes.

This ambition is evident at Rockefeller. In 2020, when the Trump administration was slow to make Covid-19 tests widely available, the foundation stepped in and created STAT, the State and Territory Alliance for Testing, which brought together state health departments to buy and deploy tests. Early in 2021, the foundation launched the Pandemic Prevention Institute, committing $150 million to create a global early-warning system to stop future pandemics. Later that year, Rockefeller announced the biggest bet in its history, a $500 million commitment to build a new organization called the Global Energy Alliance for People and Planet, or Geapp, which aims to deliver clean, reliable, and abundant energy to 1 billion people. That’s part of a recently announced $1 billion commitment to climate action.

Hubris? Perhaps, but Rockefeller has a storied history of funding scientific and medical breakthroughs with world-changing impact. It helped endow the schools of public health at Johns Hopkins and Harvard. Against formidable obstacles, Rockefeller financed research that led to the creation of the Nobel Prize-winning yellow-fever vaccine. (Six researchers funded by Rockefeller died during the quest.) During its 50-year leadership of the Green Revolution, Rockefeller invested $600 million into research that boosted crop yields in Asia and Latin America, saving countless millions from starving.

Rockefeller Foundation

It’s safe to assume that John D. Rockefeller, the foundation’s patriarch, would be proud. “The best philanthropy,” he famously wrote, “is constantly in search of finalities — a search for a cause, an attempt to cure evils at their source.” The quest to uncover the root causes of social ills requires professionally trained, well-credentialed experts, the Global Climate Resilience Fund theory goes, so Rockefeller also has tried to “increase the body of knowledge, which in the hands of competent technicians may be expected in time to result in substantial social control,” according to a history of the foundation’s support for the development of the social sciences.

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Faith in professionally trained and credentialed experts remains a Rockefeller hallmark. The foundation hired 171 consultants who were paid at least $50,000 each for professional services in 2021, many more than bigger foundations, including Ford (96) or Hewlett (64), according to their latest IRS informational returns.

No Findings Released

Of course, experts can be wrong, sometimes spectacularly so and occasionally with grave consequences. More than a century ago, with the Carnegie Institution and the Russell Sage Foundation, Rockefeller created and funded the pseudo-science of eugenics, which was built on the belief that the human race could be improved through selective breeding. Defective genes were thought to be the root cause of crime, poverty, and ignorance, so experts funded by philanthropy persuaded states to sterilize or institutionalize people deemed feeble-minded or unfit. Over time, eugenics provided some of the intellectual underpinning for what became the racist ideology of Nazism.

William Schambra, a conservative critic of liberal foundations, sees a lesson there: “Philanthropy should reflect on what the history of eugenics has to teach us about the dangers posed by the grand projects that seek to drive down to the root causes of social problems and solve them once and for all.”

Shah knows the history, but he also jealously guards Rockefeller’s reputation. When a group of academics called the Anti-Eugenics Project organized a forum in 2021 about philanthropy and eugenics — it was sponsored by the Ford, MacArthur, Robert Wood Johnson, and W.K. Kellogg foundations but not by Rockefeller — Shah issued a statement commending the effort and wrote: “The Rockefeller Foundation is currently reckoning with our own history in relation to eugenics. This requires uncovering the facts and confronting uncomfortable truths, and this investigation is underway.”

Two years later, no findings have been released. The foundation asked the Rockefeller Archive Center, an independent nonprofit, to research the issue in the fall of 2021 and got a detailed memo outlining the connections among the foundation, the Rockefeller family, and eugenics. Nothing more was done until this past summer when the Chronicle asked what became of the investigation. Rockefeller says it is still planning to do a study.

’Boy Wonder’

The son of Indian immigrants — his father was an engineer, his mother an educator — Raj Shah grew up in the well-to-do Detroit suburb of West Bloomfield. From an early age, he had a hunger to make a big difference in the world. “Every day I felt the weight of making good on the opportunity my family had provided,” he writes in Big Bets.

Shah earned a bachelor’s degree from the University of Michigan, a master’s from the Wharton School, and a medical degree from the University of Pennsylvania, but he never practiced medicine. Instead, he joined Al Gore’s 2000 presidential campaign, where he made lasting friendships, one of which led to an offer to join the still-new Gates Foundation in Seattle.

Smart, personable, energetic, and full of ideas, Shah worked directly with Bill and Melinda Gates at the foundation, leading programs to vaccinate children in poor countries around the world and rising to become director for agricultural development. “He was the boy wonder at Gates,” says a former colleague, who asked not to be identified.

In 2009, President Obama appointed Shah the administrator of USAID, where he led the agency’s response to the 2010 Haiti earthquake and Ebola outbreak in West Africa in 2014. He then started a private-equity fund called Latitude Capital to develop energy and infrastructure projects in the global south but left in 2017 to become president of Rockefeller, where he had been a trustee since 2015.

Jason Reed, Reuters, Redux

Once the largest philanthropic enterprise in the world, the Rockefeller Foundation no longer towers over its peers. Foundations created by the Bloomberg, Gates, Hewlett, Packard, and Walton families during the second half of the 20th century all give away more money; Rockefeller ranks No. 17 among U.S. foundations in terms of assets, according to Foundation IQ.

Emphasis on Programs

But, as Shah knows, the value of the foundation’s legacy and brand is immense, particularly outside the United States. “One hundred years of trust, serving vulnerable communities, it’s priceless in its value,” he says. The power of the Rockefeller name helps the foundation bring together leaders from government, business, and philanthropy and build sweeping public-private alliances. “If your goal is to help people at massive scale, you’ll need others to join you,” says Shah.

Some 60 meetings a year are held at the Bellagio Center, an elegant 50-acre retreat center on Lake Como in Northern Italy owned by the foundation. Rockefeller believes so strongly in the power of getting people together to talk that it published a 22-page guide called Convening Design.

Rockefeller’s emphasis on creating and operating programs, as opposed to giving away money, helps explain why it spends so much money on itself. In 2021, Rockefeller spent $136 million — nearly 23 percent of its spending — on administrative and operating expenses. Put another way, Rockefeller spent $1 on its own operations for every $3.37 that it made as charitable gifts. No other foundation spent nearly as much proportionately in-house that year, and some spent much less. The Lilly Endowment, which is more than twice as big as Rockefeller, spent just $16 million on administration and operations and made $46 in grants for every $1 that it spent in-house. A Chronicle survey of 15 large foundations showed that they spent, on average, about 10 percent of their budgets on operations.

Every foundation is different, of course, and a global foundation like Rockefeller, with offices in New York, Washington, Bangkok, and Nairobi and the conference center in Italy, will cost more to run than, say, the Robert Wood Johnson Foundation, which is U.S.-centric. Bill Roell, chief financial officer at Robert Wood Johnson, says it’s hard to know “what is the right number [for any foundation] without knowing how they work.”

As Covid-19 spread during 2020, Shah sprang into convening mode. The crisis was a good fit for Rockefeller, which is credited with creating the field of public health, and for Shah, given his past work on Ebola at USAID and on global public health at Gates.

Bettmann, Getty Images

The Trump administration’s decision not to make Covid-19 tests widely available created an opening. “They were going to let the market figure it out, but it was a broken market,” says Eileen O’Connor, senior vice president for strategic communications and policy at Rockefeller.

States and private companies scrambled to get tests: Larry Hogan, then Maryland’s governor, obtained tests from Korea with the help of his Korean American wife, Yumi, while the National Basketball Association came under fire for testing players at a time when ordinary Americans couldn’t get tests.

“That’s the kind of chaos that we were trying to tame,” says Stefanie Friedhoff, a Brown University professor who now leads STAT, the network of state health officials formed by Rockefeller. Says Shah: “Finding a solution sometimes requires developing one yourself.”

STAT grew from a group of 10 states to include nearly every state and territory, evolving as the needs of the states shifted. Rockefeller made a $30 million advance market commitment to expand pandemic testing, essentially guaranteeing a manufacturer that the states would buy at least $30 million worth of tests if the supplier would provide them.

Importantly, STAT became a forum where state health officials on the front lines of the pandemic could build relationships and share information. It remains active today.

Heather Drummond, who was the Covid testing manager for the state of Washington, says: “We were able to hear in real time what other states were learning and doing. That was invaluable.”

Rockefeller’s investments also led to “the procurement and distribution of millions of Covid-19 tests in India, Latin America, and Africa,” the foundation says in a 40-page impact report, covering the period from 2020 to 2022, that it published this year.

Pandemic Prevention

Not as successful was the Pandemic Prevention Institute, a new collaboration intended to detect, prevent, and mitigate future pandemics. Launched at a World Health Summit in October 2021 with a $150 million commitment and led by Rick Bright, a hard-driving scientist and former government whistle-blower, the institute was shut down quietly less than a year later.

From the outset, skeptics questioned how the “new venture [would] stand out among efforts by governments, academia, industry, and the World Health Organization,” as Science magazine reported. Rockefeller “is entering an increasingly crowded and well-funded field,” the magazine said.

To its credit, Rockefeller describes what went awry in its impact report, which acknowledges the foundation’s “missteps” as well as its successes. The report says, among other things, that Rockefeller “misjudged the time and cost” needed to build a new organization and “sought to be the central hub for pandemic-related data instead of supporting existing institutions and networks.”

“We took a top-down approach to product development — hoping decision makers in low- and moderate-income countries would readily engage and validate the need for our data platform and products, but ultimately we did not meet the market’s needs or interests,” the report says. “We learned that instead of building an independent institution, we should focus on strengthening the organizations already dedicated to pandemic prevention.”

The institute was relabeled an “initiative.” About $60 million has been spent or committed, including a $9 million grant to researchers at the Stellenbosch University in South Africa, who identified the Covid-19 Omicron variant when it surfaced there.

“We’re still very much committed to the pandemic-prevention space,” says Naveen Rao, senior vice president for health initiatives at Rockefeller, who now focuses on the intersection of health and climate change as climate issues take center stage at Rockefeller.

New Emphasis on Climate Change

Until Raj Shah came along, the Rockefeller Foundation’s response to the threat of climate change had been spotty, at best. It helped start the Energy Foundation in 1991 but has not been a major financial supporter of that philanthropic collaborative for years. It does not support ClimateWorks, another nonprofit that’s received pooled funds from major foundations for climate action. In 2013, Rockefeller made a mark with Resilient Cities, a program to help cities adapt to climate change, but it was dismantled six years later. And not until 2020 did Rockefeller pledge to sell the fossil-fuel investments in its endowment, six years after the Rockefeller Brothers Fund, a smaller foundation formed by the grandchildren of John D. Rockefeller, promised to divest. Ford, Hewlett, MacArthur, and Packard have all been bigger philanthropic players in the climate arena.

Lately, though, Shah has put climate change at the center of the foundation’s work, with a $1 billion, five-year commitment and a new strategy. At its center is Geapp, the sprawling global clean-energy alliance. The organization was developed by Rockefeller and launched in 2021 with the IKEA Foundation and the Bezos Earth Fund. The three anchor partners committed $500 million each over five years.

Rockefeller Foundation

Geapp is tackling one of the world’s biggest problems: Some 3.6 billion people, or nearly half the world’s population, lack access to reliable, affordable, and clean power. They need energy to escape poverty, educate their children, produce food, and create businesses. What remains to be seen is whether their energy will come from fossil fuels — coal, diesel generators, or kerosene — or from cleaner, renewable sources like solar and wind power.

“The stakes are extraordinary,” Shah says. “Whether the fight for climate change is won or lost will actually depend on what’s happening in developing and emerging economies and their energy sector.”

Inevitably, given its ambition and scope, Geapp is a complicated undertaking. The anchor foundation partners are joined by a dozen global, regional, and national development banks that have pledged to invest another $9 billion. Based in London, Geapp is now an independent nonprofit, staffed with a number of former Rockefeller employees, working in seven countries — the Democratic Republic of Congo, Ethiopia, India, Indonesia, Nigeria, South Africa, and Vietnam. Rockefeller has put about $100 million into Geapp to set up the organization and fund programs in those geographies.

While billions have been committed, Geapp’s accomplishments during its first year appear modest. And they are difficult to measure. Geapp this year published a 57-page annual report, jam-packed with words, images, and stories but lacking any financial data. That said, the organization has created a pilot program in Nigeria so that companies developing off-the-grid electricity can procure renewable energy at a lower cost, helped to fund a small hydropower project on a river in Sierra Leone, and supported efforts by the government of Malawi to add batteries to store electricity to its grid, among other things.

In the DRC, which has one of the lowest electrification rates in the world, a solar -power company called Nuru secured funding from Geapp and its partners to build so-called metro-grids that will transform lives, Shah says. “We are rolling out solar electrification that will reach 7 million people,” he says.

Ashvin Dayal, who leads Rockefeller’s power and climate program, says it will take years for Geapp to deliver renewable energy at a large scale. “We’re probably still very, very early in the cycles of innovation around getting these models right,” he says. But by bringing foundations, development banks, governments, and industry together, he says, Geapp will be able to “bring not just ideas but a chunk of capital” to speed the transition to clean energy.

Some question Geapp’s approach. The Global Greengrants Fund supports grassroots environmental organizations around the world, trusting local people to drive change democratically from the bottom up. “When grant-making decisions are distributed towards the grantees and their movements, philanthropy becomes more effective, democratic, and just,” says Laura Garcia, the group’s chief executive.

Unpopular Top-Down Approach

Since joining Rockefeller, Shah has proven adept at turning ideas into new organizations such as Geapp that can be incubated and spun out of the foundation. Rockefeller created its own charitable offshoot, called RF Catalytic Capital, to bring in money from the outside and house new projects. In 2019, it created an impact-investing vehicle called the Zero Gap Fund in collaboration with the MacArthur Foundation. It is currently guiding Invest in Our Future, a funding collaborative of seven donor partners that will help communities access federal money available for clean-energy projects from the climate and infrastructure legislation enacted under the Biden administration.

Rockefeller Foundation

Perhaps not surprisingly, Rockefeller’s top-down approach has not proven popular with nonprofits because they prefer unrestricted funds. In a survey conducted by the Center for Effective Philanthropy, nonprofits funded by Rockefeller rank the foundation below its peers on “nearly all measures related” to its interactions and communications with them.

Rockefeller’s staff is said to be less responsive, less respectful, less transparent, and less trusting than its peers, as well as not as knowledgeable and or compassionate as peers are about those it aims to serve. The foundation was given higher marks for its evaluation process and for the extent to which its brand and reputation added credibility to the nonprofit’s work.

Rockefeller declined to provide a copy of the report on the survey, saying it first has to be shared with the board and the staff, which will seek to improve its relationships with nonprofits. The Center for Effective Philanthropy also declined to provide a copy of the report, noting its policy of never disclosing a client’s survey results. A source familiar with the report shared highlights with the Chronicle.

While Shah is confident that what he calls “scientific” or “strategic” philanthropy is right for Rockefeller, he says he respects the bottom-up approach taken by Ford and MacKenzie Scott. Big foundations can bring their resources, expertise, convening power, and reputation to bear on some problems, he says, while others are best attacked at a grass-roots level, adding: “There’s no one right way to do philanthropy.”

(The Ford, Hewlett, and MacArthur foundations and the Lilly Endowment are financial supporters of the Chronicle.)