Deep Green: An Environmental Funder Makes Itself a Guinea Pig for Sustainable Building

Denis Hayes, president of the Bullitt Foundation and an environmental leader for more than 40 years, spoke with us recently about why he built a commercial office building, the utility of practicing what you preach, and the hazards of general support.

These days, Hayes is the president and CEO of the Bullitt Foundation, but in his long career in environmental activism, he’s been better known as the first organizer of Earth Day, the head of what’s now the National Renewable Energy Lab under Jimmy Carter, and a member of dozens of nonprofit and philanthropic governing boards. So while the lanky Pacific Northwesterner is pretty soft-spoken, he has a lot of thoughts about environmentalism and philanthropy, past and future.

But we were mostly interested in the rationale behind the Bullitt Foundation and its famed headquarters, the Bullitt Center. Bullitt is a Seattle-based environmental funder that is relatively small, with a trust of around $100 million, but has been a stalwart of environmental grantmaking in that corner of the country. But at this point it’s probably best known globally for its headquarters, a six-story building that opened in 2013 and is very likely the greenest commercial office building in the world.

Related: IP Profile of Denis Hayes, Bullitt Foundation

In fact, Bullitt has made “walking our talk,” as Hayes puts it, a point of pride, whether that means composting toilets, responsible investment of its endowment, or the diversity of its six-person staff.

“Historically, foundations have been relatively small parts of the overall economy,” Hayes said. Besides the rare, high-profile exceptions like the Rockefellers and Carnegies, people didn’t care all that much about how philanthropists lived or how their foundations operated.

“Now philanthropy is becoming a really major force in this society, and increasingly globally... Within that, there is now enough attention being paid that there will be real sensitivity to hypocrisy — to saying, ‘You ought to do this,’ and not doing it yourself.”

Hayes is at ease with taking off his "foundation president" hat and speaking candidly about the sector. And in recent years, he’s actually been wearing more of a hard hat.

The foundation sunk the equivalent of nearly a third of its endowment into the Bullitt Center—not to fund a grantee’s green building project, but to actually make itself the guinea pig by building, operating in, and leasing out a deep-green office building.

Formerly funding various conservation projects mixed with sustainability, the foundation has shifted almost entirely to cities and human environments, including green building and implementing lessons from natural ecosystems. So when the small team was ready to move out of its modest digs in an old carriage house (in which Hayes had to duck to navigate its low ceilings), the staff and board felt compelled to move into a green building.

“We looked at a lot of places around Seattle, and candidly, were just not that impressed with the actual performance of the offices,” Hayes said. They thought about building their own, but for just six people, it would have been tough to build something economically at that size in downtown Seattle. And it wouldn’t have been all that impressive.

“We could build something for ourselves, but obviously that doesn’t say much if it’s just a building that is just housing an environmental foundation where everybody is pretty committed to a set of values.” The board and staff figured, well, maybe we try something that we could rent out to architecture firms, PR firms, engineers, whoever.

“It was step after step after step, and suddenly we found ourselves real estate developers, which was not what we had in mind when we began this journey,” Hayes said.

The center’s design was inspired by the Living Building Challenge, a certification program for implementing the highest standards of sustainability, essentially creating a building that functions like a living organism. It hasn’t reached its goal yet, as it needs to hit full occupancy and then operate at the standard for a year (it's about 90 percent full). But it's been recognized by multiple architecture and building groups as a world leader. It’s the most energy efficient commercial building in the country. It uses Seattle rain for its water supply and then channels its gray water back into the soil. And it’s the only building of its size to use only composting toilets.

But the motivation wasn’t just to show off. It was to determine whether the goals the foundation set for others were actually possible. Other foundations like Hewlett and Packard have built their own green headquarters, but this one would actually attempt to be a commercial success, with tenants, rents, and a return on investment.

That was never a given, considering the huge legal hurdles to build it, and the financial hit Bullitt is taking while the investment reaches financial equilibrium. They're playing a long game.

“What we had here, as a board, is an institution that built this thing and fully expects to be holding on to it for the next couple of centuries, and that’s just a different kind of investment,” Hayes said.

But there's also a more pragmatic, short-term value in the building. The process gave Bullitt new insight into the problems inherent in the programs it funds. For example, the foundation expected the challenges to be mostly in the engineering and tech. But they were overwhelmingly related to regulatory and economic “irrationalities,” as a result of an industry that hasn’t caught up to deep sustainability. “It is fundamentally illegal to build a sustainable building,” Hayes said.

Emerging from the process, the foundation is launching a new program to deal with cost factors, the real estate industry, and regulatory hangups that are preventing more Bullitt Centers. In other words, it’s forced them out of the comfort zone of working with environmental groups and green building enthusiasts.

That's the kind of lesson that only surfaces when foundations try to do themselves what they want of their grantees, he said.

"I think that foundations really ought to be rolling up their sleeves and not just waiting for grant proposals to come in over the transom, but actually come to terms with what it is they are trying to achieve and have practical experience.”

Another example: Bullitt is one of the growing list of small- and medium-sized foundations to pledge to divest from fossil fuel stocks.

But there is one widely accepted tenet of "good philanthropy" that Hayes is not on board with, and that's general support grants, at least not on a large scale. That's because he's wary of an environmental movement bankrolled by large chunks of foundation cash.

“[General support] tends to, over time, get the philanthropies an enormous amount of clout to determine what it is those organizations do. You acquire a degree of dependency on them, and yeah, it’s a general support grant, but you know you’re not going to get that general support grant if you aren’t doing a bunch of things that are reflecting the attitudes of the foundations.”

He’d rather see the bulk of support come from membership, and have philanthropy serve as a way to craft new, edgier programs.

For that matter, Hayes doesn’t expect his foundation to take on many new environment groups as grantees at all in the near future. But for those looking to transform the real estate and construction industries, Bullitt's new green building program starts soon. You know where to find them.