Two transitions occurred in New York City this week that illuminate an important debate occurring in American philanthropy today.
One was the appointment of Luis A. Ubiñas as the next president of the Ford Foundation. Mr. Ubiñas is a business consultant with no previous grant-making experience.
The other was the death of Brooke Astor, a legendary donor who, over her long lifetime (she was 105 when she died), made numerous large gifts to educational and cultural institutions in the city.
Each stands for a different approach to grant making. But whether the newer one, represented by Mr. Ubiñas, will be more successful than the older one, epitomized by Mrs. Astor, remains to be seen.
Mrs. Astor’s version of philanthropy was based on the idea that people with great wealth — her fortune originated with the fur trappers of the nineteenth century — have a responsibility to take care of important civic organizations.
The donations she made through the Vincent Astor Foundation often played a critical role in renewing or expanding organizations like the New York Public Library and the Metropolitan Museum of Art. While she also assisted neighborhood and economic-development programs in poor neighborhoods of New York, her philanthropy will be best remembered for its patronage of what are often called “elite” institutions, a focus that has come under increasing criticism for failing to deal with the problems of the poor and disadvantaged.
By contrast, though it has always supported a wide range of organizations, the Ford Foundation, in selecting Mr. Ubiñas as its new president, seems to be signaling that it wants to take a more self-consciously businesslike approach to these problems.
A product of a crime-ridden neighborhood in New York City, Mr. Ubiñas eventually graduated from Harvard Business School and went on to a successful career as head of the West Coast media practice at McKinsey & Company, mostly advising corporations about new technologies.
Although he had been involved with nonprofit groups over the years, including an award-winning educational program for disadvantaged children called Steppingstone, it is his experience in the corporate world that most distinguishes him from Ford’s outgoing president, Susan Berresford, who has spent her entire career at the foundation.
When he takes office in January, Mr. Ubiñas is likely to try to apply techniques adapted from successful entrepreneurs to poverty and the other problems that Ford has long been trying to solve.
Ever since the dot-com boom of the 1990s began to produce new foundations, this kind of rethinking of how philanthropy operates has frequently been advocated. Replacing foundation leaders with business executives has also been a new goal. Some donors, such eBay’s Pierre Omidyar and the founders of Google, have even suggested that grant makers would have more success achieving their goals if they invested in for-profit enterprises, rather than making grants to nonprofit organizations, “elite” or otherwise.
Now the Ford Foundation seems to be joining the Bill & Melinda Gates Foundation, and others, in these views. But before going too far down the path toward a new approach to philanthropy, Mr. Ubiñas would do well to examine what we have learned so far.
Perhaps the most obvious lesson is that success as a business executive does not always carry over into the nonprofit world. At the end of the 1990s, for example, the David and Lucile Packard Foundation chose a former newspaper publisher as its president; his tenure was short-lived. Other grant makers that embraced new approaches for philanthropy — including the Gates foundation — have also experienced tough going. In some instances, the most outspoken advocates of these models are now engaged in other activities.
Part of the problem is that the culture of philanthropy resists change.
Even with trustees and top executives favoring new approaches, foundation staff members and grantees may have other ideas. And unlike real businesses, foundations do not suffer financial consequences if their “investments” flop.
Moreover, as with any organizations, the larger and longer established they are, the greater the forces of inertia. In short, Mr. Ubiñas has his work cut out for him.
In addition, exactly what a new approach might really entail is often maddeningly unclear.
The idea that foundations should be run in more businesslike ways is hardly a new one. Philanthropists going back to Andrew Carnegie and John D. Rockefeller, if not further, have been urging that approach.
But the steps required could range from relatively minor ones, such as becoming more cost-conscious or making greater use of technology, to bold moves, such as providing economic incentives for improved performance or developing financially sustainable models of delivering services.
Depending on the goals to be achieved (and the people to be involved), some of these might be more appropriate or work better than others. As any business leader knows, one size rarely fits all.
Indeed, at the heart of any successful business is an unshakeable commitment to pragmatism. Companies thrive by looking for realistic ways to meet achievable goals.
Yet, in the philanthropic world, and especially in those organizations with institutional histories of thinking ambitiously, such an outlook can be difficult to instill. Foremost among the challenges Mr. Ubiñas faces will be reminding his new colleagues that, for example, as important as fixing American education is, enabling a few more children from crime-ridden neighborhoods to pursue a path that takes them to Harvard Business School is not such a bad idea. And perhaps it is more readily attainable.
In that regard, Mrs. Astor’s approach to philanthropy deserves more respect.
As easy as it is to disparage “elite” philanthropists for supporting schools, libraries, or museums that serve their own interests, it is worth remembering that such institutions can also benefit those who are trying to get ahead by making available opportunities they could not otherwise grasp. And even make it possible for a child from a modest background to become the head of a major foundation.
Leslie Lenkowsky is professor of public affairs and philanthropic studies at Indiana University and a regular contributor to these pages. His e-mail address is llenkows @iupui.edu.