The Rockefeller Foundation earlier this year hired outside counsel to review an internal complaint alleging that President Rajiv Shah mismanaged staff and steered contracts and grants to individuals with close professional and personal ties to him. Completed in April, the review concluded no wrongdoing occurred, according to Richard Parsons, chairman of the foundation’s board.
The review was conducted by New York law firm Patterson Belknap. In an interview with the Chronicle on Thursday, Parsons described it as a “review.” It was set in motion by an anonymous employee complaint submitted in February.
Shah has seen a copy of the review’s findings, Parsons said.
“There was no disciplinary action taken, and there was no basis for taking any disciplinary action,” Parsons said. “Virtually all the charges, if you will want to call them that, proved to be without factual basis or merit.”
With $4 billion in assets and more than $200 million in annual grant making, the 105-year-old Rockefeller Foundation is one of the biggest and most prominent in philanthropy. Shah, who served as director of USAID under President Obama, has been at the helm of the foundation since March 2017, when he succeeded Judith Rodin.
Rodin earned $1 million in base compensation in fiscal year 2016, according to the foundation’s tax filings. The foundation’s 2017 tax filings are not yet available, a foundation spokesman said, and declined to provide Shah’s compensation.
The Chronicle attempted to reach Shah for comment by email and social media but did not receive a response. The foundation declined requests from the Chronicle made Wednesday and Thursday to interview Shah.
Fellowship Program Questioned
Obtained by the Chronicle, the complaint does not include any individual employee’s name or title. It states it was authored by a “group of loyal Rockefeller Foundation staff.” The complaint also states that it is based on information gathered from dozens of colleagues in hundreds of conversations.
The complaint alleges bad management by Shah and the disbursement of foundation dollars to individuals and organizations with close professional and personal ties to Shah. It highlights several specific grants and contracts as being problematic.
One example is the newly created Rockefeller Foundation Fellows program. In announcing the inaugural group of seven fellows in January, the foundation said the monetary awards would support independent projects congruent with the foundation’s mission and priorities in areas including health, clean energy, and economic opportunity.
The complaint describes the new program as “haphazardly constructed” and the costs as “staggering.” It says Shah personally selected the fellowship recipients, each of whom had close ties to the foundation president. As such, foundation staff openly refer to the program as “Raj’s friends and family initiative,” the complaint states.
A high-level foundation official told the Chronicle that the idea for the fellowship was to give the foundation access to some of the top minds in the foundation’s priority areas. Shah offered a slate of candidates for the fellowship, the official said, drawn from his extensive professional network.
Parsons confirmed to the Chronicle that Shah had previous professional relationships with all of the fellows. The foundation is spending about $2 million a year for three years on the fellowship program, he said, or a total of $6 million. He declined to give the dollar amounts of the individual awards.
Parsons noted that the Rockefeller Foundation has a long history of awarding fellowships to world-class thinkers and leaders, noting past recipients such as Susan Sontag. He said that as the foundation charts a new course forward, it needs to figure out ways to scale its work in collaboration with others. The fellows, he said, are part of that process.
“We like what we got,” Parsons said of the fellows. “These are really good people who are helping us think through some really complicated and significant issues.”
The Chronicle attempted to reach several fellows for comment this week but did not receive responses.
Art and Meetings
In his interview with the Chronicle, Parsons described a number of other criticisms of Shah in the complaint as baseless.
For example, the complaint stated that a former USAID colleague of Shah’s was paid $100,000 to hang art in the foundation’s offices. It described the compensation as “ludicrous” and the individual in question as “unqualified” and a “junior staffer.”
Parsons confirmed that the foundation did hire Shah’s former colleague but said the work included developing a global staff retreat, implementing a monthly staff town hall, organizing global gatherings, and assisting in the redesign of the New York headquarters, work that included mounting some historic photography.
“I don’t feel uncomfortable with it,” Parsons said when asked if the compensation was appropriate for the work, adding, “Looks to me like they got a bargain.”
When contacted by the Chronicle, the individual in question confirmed his company had a contract with the Rockefeller Foundation for work that ran from January to August last year. His description of the work matched what Parsons had provided.
Parsons also denied that under Shah the foundation has spent wastefully on consultants, another criticism included in the complaint. However, the foundation would not provide details of its spending on consultants.
“There was a modest increase in administrative expenses, mostly associated with the fact that we were in transition,” Parsons said. “We have things that are shutting down that overlap with things that are starting up.”
He described at least some of it as one-time costs, something that any organization is likely to see in a transition period, “but it was not really material and not a cause for concern for the board.”
Known Leader
The 45-year-old Shah is one of a long list of former Obama administration officials to transition to prominent nonprofit jobs. Even before taking the top role at Rockefeller, he was well-known in the foundation world.
Shah worked at the Bill & Melinda Gates Foundation from 2001 to 2009, serving in several positions including director of agricultural development, director of strategic opportunities, deputy director of policy and finance, and chief economist. While there, he helped launch the Alliance for a Green Revolution in Africa, a project centered on boosting agricultural productivity and reducing hunger, for which the Rockefeller Foundation was a major partner.
Shah led USAID from 2009 to 2015. He subsequently founded Latitude Capital, a private-equity firm focused on emerging markets.
Shah joined the Rockefeller Foundation board in 2015. In 2016, when Judith Rodin indicated she would be stepping down, Shah asked that the board consider him for the job, the New York Times reported last year. Parsons told the New York Times Shah was the unanimous choice and an ideal successor to Judith Rodin.
“He’s a performer,” Parsons said. “You put him up in front of a group and people come away impressed. Now, he’s got a platform.”
When asked in an interview with the Chronicle last year about any new priorities for the Rockefeller Foundation under his leadership, Shah noted the organization’s long and consistent history in areas including economic opportunity, health, and food. He also cited its support for global refugees and building resilient communities in the face of climate change and other crises.
“I’m studying all of that, and what we do going forward will be pretty consistent with that history,” Shah said.
Speaking with the Chronicle on Thursday, Parsons reiterated his support for Shah.
“We have to learn how to work effectively to create partnerships and work effectively to bring greater resources to bear on large-scale problems,” Parsons said. “Not only does Raj have the background and experience that he brings to us but he’s got the vision and the personal standing with many of these other players with whom we need to sort of join hands and collaborate.”
Correction: A previous version of this article was imprecise in its reference to the review of Rajiv Shah, calling it an investigation. The headline of that earlier version also referred to Shah as CEO rather than president.