The Rockefeller Foundation may be one of the most venerable names in philanthropy, but during her 11 years as its president Judith Rodin worked to ensure the $4.2 billion grant maker was also on the cutting edge.
Ms. Rodin, who announced on June 15 that she would step down as soon as a successor is in place, is perhaps best known for her access to government and corporate chieftains worldwide. She broke new ground for the foundation by supporting efforts to buttress Rockefeller’s work through impact investing and alliances with big businesses.
Early on in her tenure, Ms. Rodin, 71, scrapped the foundation’s traditional program structure and positioned Rockefeller to play matchmaker among nonprofits, government agencies, and corporations.
In a recent telephone interview with The Chronicle, she said the key to taking on big, systemic problems is bringing together members of those groups and finding ways each can best be used to push for change. She also discussed criticism of the foundation’s courting of big business, and whether John D. Rockefeller might opt for a limited-liability company rather than a traditional foundation if he was starting out as a philanthropist today. The interview has been edited for brevity and clarity.
When you joined the Rockefeller Foundation in 2005, you placed a higher emphasis on developing partnerships with governments and businesses. How did this translate into how you made grants?
We saw grant making as seed corn. It was an opportunity to do piloting, to take smart risks around new ideas and to foster and source innovation. That’s why we did a variety of global challenges, for example. We also saw it as leverage for partners to do things together that neither of us could do alone.
For example, quite early in my presidency, Shaun Donovan, who was then the New York housing commissioner, came to us and said, “We’re trying to put together a New York City housing-acquisition fund.” He didn’t have capacity through the city’s tax-credit authority to give predevelopment costs to for-profit and not-for-profit developers to acquire the land to do the predevelopment work, the legal and planning work, and the like. The banks are telling us that without those tax credits we’re sort of at an impasse. Rockefeller and other philanthropic partners put together an initial fund of $50 million. We took those risks. That immediately allowed commercial lenders to guarantee the second tier of funding at several hundred million dollars. Then the process took off.
There are many mechanisms for approaching grant making. We were really focused on tipping systems and taking a big, systemic approach to having impact. We saw that one very useful source of capital we had that some of the other partners in the system didn’t have was risk capital.
The Center for Effective Philanthropy reported that grantees often felt neglected by the foundation, and critics have suggested Rockefeller is more interested in cultivating ties with corporations than nonprofits.
It’s not a surprise that grantees who expect to be supported without being part of a broader coalition of actors to achieve a joint set of goals may fall outside of our initiative structure. We’re trying to tip systems, to bring grantees together with some nontraditional actors they might not otherwise have access to, either in the private sector or government, and to link them together strategically. That approach is not for everyone. We understand and accept that. On the other hand, our grantees gave us extremely high marks for innovation. They see benefits in our approach and they see disadvantages. We understand and accept that. We need to work even harder, then, to make [grantees] fully understand they are part of a bigger picture and a bigger group of actors.
As the foundation changed course, what skills and attributes were you most looking for in nonprofits?
Size wasn’t one. We’ve worked with grantees small and large, from the Nature Conservancy to tiny NGOs. They need to believe strongly that innovation is a value and influence is a tool. We have been funding StoryCorps, for example, and creating storytelling websites for our grantees to encourage them to develop skills sets to tell their stories.
The other skill we’ve been helping grantees develop is metrics and really understanding evaluation and monitoring as a decision-making tool for their own work. For example, when we made a $10 million grant to the cities program at [the] Brookings [Institution] we gave an additional grant to an evaluation team so they could define the outcomes they wanted to achieve in their regional economic-development work and to define baseline criteria. We weren’t doing it to evaluate them. We were doing it to develop muscle within the Brookings team to look at evidence-based decision making.
Mark Zuckerberg and Priscilla Chan last year pledged to devote their fortune to social good through an LLC rather than by establishing a charity. With so many options available for investing in social causes, have traditional grant makers run their natural course? Would John D. Rockefeller start an LLC if he were giving away his wealth today?
I reject completely the idea that the legacy foundations are dead. Those that feel dead to the outside are doing a disservice to philanthropy. It’s all of our obligation, regardless of how old or how new we are, to really think about the burden, the responsibility as well as the opportunity that philanthropic capital gives us. It’s not whether we’re new or old. It’s how smart we are and how aggressively determined we are to achieve impact in ways that will really transform things and change people’s lives.
John D. Rockefeller is a paragon. When we were preparing for our centennial we did a deep dive of our marvelous archives. His group of advisers called what they did “scientific philanthropy.” They said, “We’re going to experiment and test and change course if it doesn’t work,” and they said, “We’re going to pick big, complicated problems.” They said they’d give money in perpetuity but allowed every generation that follows to ask whether that’s the right decision for their time. We are open, to this day, to decide if this current set of problems or this era demands a different approach to the big questions, like should [the foundation] exist forever. We’re completely open and able to do that. So I don’t think being a legacy foundation necessarily made us old school.
Many of the legacy foundations have this opportunity, should they choose to take it. Sometimes spending down is really hard. What Mark and Priscilla are doing, what others are doing with their wealth, will be judged by the test of time and not by the first announcement.
Are you saying the board is considering spending down the endowment?
The times in our history when those conversations have been most vocal have been in periods where there was great upheaval in the financial sector. Like during the Depression, [or] the period in the ’70s and ’80s when so much financial endowment wealth was lost. They really debated whether they should go into spend-down mode to achieve their goals. When the recession hit in 2008 and our teams analyzed the last 100 years [they found that] our predecessors overspent, and yet the endowment over a long period of time came back.
This is another check mark in the box of why having legacy foundations is good. We became confident in 2008. We didn’t cut staff and we didn’t stop our programming because we had the benefit of 100 years of history and a board that said, “We’ll come back again, if it takes 20 years or 30 years.”
Now, as we all recognize, we’re probably facing a low-growth environment going forward. The conversation about endowments [is] being had by many foundations, including our board. I won’t second-guess where they’ll go now that I’m leaving.
It has been said that a hallmark of your leadership is that you court publicity. How does this advance the foundation’s mission and impact policy?
We are constrained in the foundation world by certain legal limits that may not give us the ability to do that frontally. But we shirk the opportunity to be visible and exert influence within the bounds of the law at our peril.
Our foundation colleagues who want to be direct advocates find mechanisms that are available to them, like 501(c)(4)s. I’ve been doubly blessed in my life to have been both a university president and the president of a foundation. Those roles are a bully pulpit. They require the courage to have views.
How have you most successfully used that position?
The field of resilience comes to mind. When we first started talking about this, people kind of rolled their eyes. Now it’s become a global movement in these times of continuing crisis, which is part of the narrative of the 21st century — building the capacity to prevent what’s preventable and to rebound more quickly from things that aren’t avoidable. Twenty-two of our 100 resilient cities’ mayors have pledged 10 percent of their annual budget to resilience building. That’s already $6 billion annually just from those first 22 mayors. It wasn’t a policy change, but it was a huge behavior change.
Many foundations have started to divert more of their assets to social investments — investments designed to generate both social and financial return. Will Rockefeller pledge to make more of these mission investments?
We have about $160 million of our endowment in double-bottom-line investments currently. We do have as a goal continuing to look for mission-related investments that could produce sizable returns on both bottom lines. Our board is analyzing the mission-related investment strategies of other foundations. They want to really understand who’s doing what, how they’re doing it, how the performance has been. That is an ongoing conversation of the foundation board.
We focus on mission, obviously, through program support first and foremost. Our commitment to use grant making to help build the field of impact investing [has helped create] an ecosystem for mission-related investing. There are many ways our commitment to mission-related investing can be expressed, only one of which is the use of our endowment.
What advice would you give your successor?
My advice is what I tell my own colleagues. These are tax-privileged dollars and we have to be bold and clear in how we use them. We need to understand who the beneficiaries are and ask if we are getting outsized impact and outcomes for the resources we’re expending. We need to understand and feel grateful every day that we are so privileged to be in a place where we have these resources and can do good. We are so lucky.
Note: This story has been updated to clarify that Ms. Rodin will depart Rockefeller once a new president is in place and that under Ms. Rodin the foundation ended its former program structure.
