Reflections on Philanthropy and Giving Away a Fracking Fortune

Recently, I spent some quality time with Katherine Lorenz, the tall, (ex-Davidson College varsity volleyballer), charming, savvy-beyond-her-35 years president of the Cynthia and George Mitchell Foundation. (See my earlier piece.)

In case you missed it, the Mitchell Foundation, which has given away more than $400 million since 1978, is on track to grow about six-fold from its current $120 million, once the estate of her late grandfather, Texas energy titan George P. Mitchell, settles. Lorenz envisions the scale-up to be fully functional in 2018.

The core value of the foundation is environmental sustainability, which is ironic in some conservation circles because Mitchell, the son of a Greek immigrant who ran a dry cleaning business in Galveston, is the father of the controversial oil and gas extraction process known as hydraulic fracturing, or fracking.

So would-be grantees are lining up to reject fracking funds, right?

"We haven't seen people say no to funding. I'm not saying it won't happen," Lorenz says. "But my grandfather had a serious record of giving to environmental causes for 40 years. To my knowledge, we haven't been accused of greenwashing, so giving to environmental organizations is not perceived as a way to look cleaner. We know that natural gas is cleaner than coal and it's important that we extract it safely and environmentally responsibly."

Lorenz is the daughter of Sheridan Mitchell Lorenz, one of Mitchell's 10 children. She was elected as president of the foundation in 2011, and serves on a year-to-year basis. By 2018, she hopes to yield leadership of the foundation to a CEO. Leading a family foundation is quite different from heading an institutional foundation, she says.

"A family foundation is actually a family doing business together, but the business is something they care passionately about," Lorenz says. "When they decide to do something, there's not really a right or wrong answer. Family philanthropy is really about honoring the family. Whatever family dynamics play out at the Thanksgiving table, play out at the boardroom table. In institutional philanthropy, it's more of a professional setting. It's different when the other persons at the table are your family. It's a highly emotionally charged setting. Some families do it well; some struggle with it."

I asked Lorenz what’s lacking in modern philanthropy, or what can make it more effective, given that she will soon preside over a foundation with approximately $870 million in assets. She’s a big advocate of donor education to increase effective giving, but she also believes that philanthropists should be comfortable about taking risks.

“I mean, why not try something that seems crazy,” she says, citing Teach for America as an example of a program widely derided at its outset that has succeeded for two decades. “Education reform needs out of the box thinking,” she adds. “Throwing money at a problem isn’t going to solve it.” Exhibit A might be Mark Zuckerberg and Priscilla Chan’s $100 million gift to education reform in Newark, which was mainly a bust. “I bet he learned a lot from that,” says Lorenz.

“Writing checks is easy; having an impact is hard,” she declares. “Even Bill Gates admits that.”