Why Did Mac Sack Bob?

It's not often that the president of a major foundation is pushed out after only five years, and even less often that he's dissed on his way out the door by a board chair.

In this case that would be Marjorie Scardino, chair of the John D. and Catherine T. MacArthur Foundation, who said about the exit of president Robert Gallucci that "as the end of his term approaches, the board decided to look for a new kind of leadership to accelerate the pace of change in how Mac­Arthur can use existing and new tools to tackle even bigger goals.”

Translation: We want to hire somebody better than Gallucci, a PhD veteran of government and academia, who took point on the most dangerous international crisis of the Clinton era, the North Korean nuclear showdown of 1994. To be sure, Scardino also said some nice things about Gallucci, but the bottom line was crystal clear: The board wants a dog who can learn new tricks. 

Ouch—that had to hurt, even for a guy who faced down Kim Il Sung. And it seems gratuitous, too. Even when staffers are sacked at the smallest nonprofits, there's usually a nice cover story about how the parting was mutual. Surely Gallucci has some grandkids somewhere he's just dying to spend more time with, as sorry as MacArthur is to see him go. But apparently not. 

So why is MacArthur's board pushing Gallucci out the door? 

From what I hear, the story boils down to this: Watch your back if you're a traditional kind of foundation leader and your board is staffed with Economist types who believe that a market- and technology-based focus are what's needed to achieve impact. (Scardino was literally the chief executive of the Economist Group.) 

Apparently, the board wants MacArthur to evolve in new ways, and move away from a more typical grantmaking strategy, and this just isn't Gallucci's thing—either by inclination or background. There were some other issues, too, but that was the crux of the matter. 

So it would seem this episode reflects the big rift in philanthropy about the role of market-based approaches and the possibilities for greater innovation to achieve breakthroughs. But I wouldn't be surprised if the board's desire for a new direction was also driven by a more amorphous anxiety about MacArthur's status and level of performance. 

You can see how such jitters might set in given what a bowl of mush the foundation business really is. For all the fancy talk of impact and metrics, these entities—unlike nearly every other institution on Earth—have no real way to measure how well they're doing compared to peer organizations or their own potential. Yeah, they can point to this or that great program, but the truth is that it often takes years for foundations to make progress on any given goal and, even then, a clear tally of results can be elusive. By extension, it's therefore hard to know how well a foundation's president is doing—especially if they're making the trains run on time and getting along with everyone. 

And so, inevitably, the people charting a foundation's direction may come to fixate on murkier indicators of success—like whether the place has momentum and heat, whether it's adapting fast enough to stay ahead of the curve or is keeping "with it" as conditions evolve. Never mind if the fashions of the moment are actually not so important in the grand scheme of things. 

In short, foundations don't want to be left behind, at least the ones that worry about this kind of thing. (Many don't, which is a whole other conversation.) Some foundations may worry they're behind the curve because they're not doing enough on planning and assessment. Others may see a diversity and culture issue. And some, as in this case, may worry that they're not savvy enough about market-based approaches or technology. Whatever it is, the desire to keep up can lead foundations to make stark leadership changes that aim to clearly communicate a new path. The best example, of course, is when Ford brought in a former McKinsey guy, Luis A. Ubiñas, to shake up its familiar world of nonprofit lifers. That didn't last long and Ubiñas left after just five years, like Gallucci, whereupon business as usual resumed under Darren Walker. 

MacArthur is almost certain to bring in someone from right field (literally) when it fills Gallucci's shoes. Look for phrases like "true innovator" and "disrupt" in the press release. 

Will this new person be able to make MacArthur hot again? I guess it depends on your definition of hot. As I said, effectiveness may actually be in the eye of the beholder. 

Meanwhile, now that Bob Gallucci has some time on his hands, maybe he can go defuse the crisis in Ukraine.