Larry Kramer's Hewlett Foundation Has a Brain. Does It Have a Heart, Too?

Larry Kramer remains a relative newcomer to philanthropy two years into his tenure as president of the William and Flora Hewlett Foundation and still is kind of amazed to be running the place. "It's peculiar," he told me, “that foundations will hire people with no prior experience in philanthropy.”

Peculiar, indeed. But Kramer's hardly an outlier in this regard; one study found that 60 percent of CEOs of the 100 largest foundations came from outside the foundation world.

In Kramer's case, he came to Hewlett from academia, where he'd started as a law professor and eventually rose to become Dean of the Stanford Law School. (Much earlier in his career, Kramer clerked for Justice William Brennan.)

Kramer says that he actively went after the Hewlett job when Paul Brest stepped down as the foundation's president. Kramer had already been running the Stanford Law School for a long while and didn't want to stay much longer. Neither did he want to go back to being a law professor or start publishing again. He found that he enjoyed "facilitating the work of others," and so he was looking at other jobs of this kind.

The Newcomer

And what does Kramer think of Foundation Land now that he's been immersed in it since 2012? Well, for one thing, he thinks that "people in the foundation world spend way too much time beating ourselves up about our failings.”

As Kramer sees things, philanthropoids should cut themselves some slack, given that foundations actually wield small resources relative to the size of the problems they're tackling. Hewlett is the fifth biggest foundation in America, with an $8.6 billion endowment, but Kramer has called this pile of money "miniscule."

Kramer has a good point on that score: The small city of Palo Alto, just down the road from the Hewlett Foundation's headquarters, spends twice as much every year on things like education and transportation as Hewlett spends annually on its five main program areas, some of which are global in scope. The State of California spends the equivalent of Hewlett's endowment every ten weeks, and spends three times as much annually as do all 86,000 private foundations in the United States.

It's good for foundation presidents to have perspective and humility, and Kramer certainly does.

Kramer's other big impression of philanthropy is how high quality the people are. The sector is filled with “smart, well intentioned, good willed people trying hard," he says.

"Smart" may be the single best word to describe Hewlett itself, which is brimming with brainy staff and has a culture of careful inquiry. This culture was heavily shaped over a decade by Paul Brest, who like Larry Kramer, came to the foundation from legal scholarship and, yes, a stint as dean of Stanford Law School.

Brest is the archetype of a deliberate thinker and he spent a whole year prior to taking over Hewlett talking to people about philanthropy and foundations. Under his tenure, Hewlett emerged as a high-profile leader in strategic philanthropy, or what Brest called "Outcome Focused Grantmaking (OFG)." Brest is the co-author of a book on strategic philanthropy, Money Well Spent, and also a detailed Hewlett paper on OFG published in 2012.

Inheriting a Legacy, and Controversy

Kramer has immense regard for Brest, and his reign at Hewlett so far is very much a continuation of the Brest era. While Kramer offers that he's less of a scientist than Brest, the same brand of strategic philanthropy endures as Hewlett's modus operandi.

This approach has attracted criticism, with fire coming from different directions. One critic of Brest's ideas, going back a few years now, is William Schambra, a fellow at the Hudson Institute, who blasted strategic philanthropy in a speech last year (at Hewlett of all places) for trying to apply "a science-based approach to solving human problems," even as such efforts have failed in the past because there's no clear formula for understanding human behavior.

Instead of a wonky overthinking of things, Schambra said that plain common sense can often go a longer way. Talk to ordinary people, see what they need, and then "write the damned check."

A related line of criticism is that strategic philanthropy is too inflexible, and that hewing to elaborate strategies can make it hard for funders and grantees to adjust as conditions evolve, as they often do.

Yet a third critique, and one that I share, is that Hewlett's faith in reasoned inquiry and detached analysis is, well, quaint in an era when public discourse is so heavily shaped by values-based arguments and ideological combat.

Read the OFG strategy paper and you'll find no mention of how Hewlett should look to a set of core normative values in deciding what issues to address or how to approach them. Of course, that's no surprise since the foundation doesn't articulate such values anywhere, a notable omission at a time when many institutions in the social sector see clarifying their values as a key step to having greater impact.

Defending the Hewlett Way

Kramer says that Hewlett is in the process of revisiting some elements of its strategic philanthropy, while keeping "core" elements. And he's been quick to defend how Hewlett does business.

In rebutting Schambra's point about Hewlett having its head in the clouds, Kramer had this to say:

It is undoubtedly true that one can misstep, and badly, by approaching problems in an overly abstract manner, without paying attention to local knowledge and circumstances. But one can also misstep, and just as badly, by relying on the unsystematic anecdotal experience of local participants. A sensible approach relies on both.

As for the charge that Hewlett follows rigid methodologies, or is obsessed with metrics, Kramer says that's been a bum rap and the foundation has always operated in a "nuanced and flexible" way.

Indeed, the 2012 strategy paper by Brest stated, "OFG is not a formula. . . it incorporates program officers’ expert intuitions at the same time as it tests them. It avoids over-simplification and rigidity, and maintains an adaptability appropriate for the contingent nature of theories of change."

As Brest saw things, OFG was mainly a framework for thinking methodologically about where and how to spend the foundation's money. To Kramer, the essence of this "hard-headed" approach remains invaluable in answering the toughest of all questions that foundations face: “How do we decide what we’re going to do?”

As for the critique about values and ideology, Kramer stresses that the Hewlett Foundation really doesn't have an overarching normative framework that guides its work. "There's no broad animating theory" about human nature or society, says Kramer. Rather, "We start with problems and then figure out how to address them."

Daniel Stid, who directs Hewlett's new democracy work, has also stressed (writing here at IP) that "grant making is pragmatic and non-ideological. We do not begin with a grand theory of society and reason down from this abstraction to programs and strategies."

What Does Hewlett Believe?

Kramer says that the foundation's approach reflects how Bill Hewlett saw the world and how he tackled challenges as he helped to build Hewlett-Packard into a tech powerhouse. And sure enough, if you take a close looked at the famed "HP Way," you'll find ample mid-20th century faith in the power of brainpower and smart people.

But the HP Way also reflected a clear normative worldview of how corporations should behave. As David Packard put things: "Management has a responsibility to its employees, it has a responsibility to its customers, it has a responsibility to the community at large."

Bill and Flora Hewlett also had strongly held values when it came to reproductive freedom, the arts, and environmental conservation.

These values, along with a deep belief in reason and the ability of government to solve problems in partnership with other sectors, were hallmarks of an establishment worldview that prevailed during the middle decades of the 20th century. Compared to what came later with the rise of the New Left and the conservative movement, this mindset certainly does look "non-ideological." Really, though, it's yesteryear's liberalism, and the Hewlett Foundation is hardly alone in defending this ground. Other big foundations like Carnegie occupy a similar space.

If Bill Hewlett were still alive, would he want his foundation to operate more like the Ford Foundation or Atlantic Philanthropies, which espouse a clearer set of progressive values? That seems unlikely, and anyway, the foundation's board has always included four family members, who presumably take care to channel "donor intent." (Kramer describes Hewlett as a "strongly family influenced professional foundation.”)

The Limits of Technocratic Grantmaking

Before leaving the discussion here, though, it's helpful to air out the idea that funders like Hewlett are limiting their impact by placing too much faith in evidence-based analysis.

Like it or not, public policy unfolds within the gut-level context of America's values and culture. And unless funders can influence debate at this level, they can find their work stymied on specific issues—especially if they face adversaries adroit at operating at the values level to thwart even the most enlightened and rational of policy fixes.

Climate change is a great example. Thanks in part to funders like Hewlett, we now have endless evidence that humans need to dramatically change their relationship with nature, along with a robust menu of policy options for how to reduce greenhouse gases. Yet still little happens and the power of the fossil fuel industry only partly explains that inaction. An arguably deeper obstacle is America's love affair with individual autonomy and its trappings: cars, freestanding homes, and few restraints on personal consumption.

Conservatives play to libertarian values in attacking environmental regulation, along with government more generally. Can funders like Hewlett hope to win this argument without activating competing values related to the common good and broadly defending government intervention in the market? Or without defending the principle that humans must live in balance with nature, as opposed to dominating nature?

That seems doubtful, and yet it's hard to play the values game if you're allergic to any kind wholistic view of society and human nature.

While "ideology" tends to be equated with inflexible viewpoints, it's better understood as a coherent way of thinking about values, and a theory of change to advance those values. Foundations that lack clarity on this level, as Hewlett does, are likely to be frustrated as they find themselves winning battles but losing the war.

His Biggest Move Yet

Whatever the case, the Hewlett Foundation is clearly operating in its comfort zone and you can see why the board chose Larry Kramer as president and CEO. Quite apart from his management experience, and the pleasure he takes in facilitating the work of others, Kramer's thought long and hard about big issues such as governance and constitutional law, but he's never been a partisan combatant.

When Kramer interviewed with the Hewlett board, they asked him what the foundation should do differently. Kramer replied that he thought Hewlett was working on the right issues—which explains why, when he started the job, Kramer didn't do the usual annoying thing that new presidents do of hitting the pause button on grantmaking for an extended "strategic review."

That said, Kramer does have his own ideas. At Stanford, he had been an entrepreneurial leader, pushing changes at the law school that included new joint degree programs and a bigger focus on public service as well as hands-on legal training. That activist track record, presumably, was one reason he got the top job at Hewlett

One of Kramer's earliest steps was to push the foundation to become more transparent, since Kramer just didn't get why big funders couldn't be more open about how they operated. An upshot of that push has been a foundation blog where staff write on a range of subjects, offering insights into their thinking and decision-making, or just musing aloud about whatever is on their minds.

This year, Kramer has put his imprint on the foundation's grantmaking in a big way with two new initiatives—one on cybersecurity and a larger effort to tackle political polarization called the Madison Initiative. Both were his ideas.

The Madison Initiative, a $50 million three-year exploratory effort, plays to Kramer's strengths as a scholar steeped in the constitution, governance, and legal history. But it also reflects his fears. “People should not take American democracy for granted," he says. "It could fail." And that's the direction Kramer has seen things heading over the past few decades amid an escalation of what James Madison called the "mischief of faction."

More practically, the initiative grew out of Kramer's view that government needs to work if Hewlett is going to achieve its goals, which often involve affecting public policy. “All of our work is dependent on government functioning," Kramer says. And so he came to see reducing partisan gridlock and better coping with polarization as a precondition for the foundation's success.

Which is to say that Larry Kramer is attuned to the larger societal context of Hewlett's grantmaking, but has zeroed in on improving the process of governance as opposed to shaping values and culture in ways that could advance the foundation's goals. Whether that makes sense is the subject of an article I wrote here. You can also read Daniel Stid's response to my critique.

A Risky Bet

Regardless of what you think of the Madison Initiative, one thing is clear: It's a pretty brazen leap into the unknown.

Philanthropy would seem uniquely unsuited to addressing polarization, given the scale and complexity of the problem. Many experts see the rise of the hard right as a key driver of polarization, while other drivers include purer political parties (and a breakdown of the party system itself), a geographic self-sorting of Americans, and a new media business model that has found profit in ideological fervor.

It's hard to see how Hewlett can get much traction on any of these drivers through traditional grantmaking.

Kramer and Daniel Stid spent many months talking with experts of different stripes in developing the Madison Initiative, and are optimistic that the foundation can identify useful points of leverage. They are honing in on three areas in particular: reforming elections to reduce the power of extreme voices, especially at primary time; reforming congress to reduce gridlock on Capitol Hill; and improving the state of civic engagement and the information available to citizens.

The game plan is to put the $50 million into work in these three baskets and then decide whether it makes sense to move forward. While Kramer says he's "absolutely hopeful" that the initiative will bear fruit, he can't predict whether it's likely to be thumbs up or thumbs down on a bigger long-term effort when 2017 rolls around. “We’re not sure we have solutions to push in a lot of these areas," Kramer admits.

If this work does move forward, Kramer says “you’ve got to assume this is a twenty or thirty year effort."

In short, Larry Kramer is uncertain whether his signature initiative can work and he is unlikely to get any credit if it does. How many foundation presidents would choose to go down that path?

It's worth noting that the Madison Initiative is the antithesis of rigid strategic philanthropy. There's no clear-cut set of "expected returns" and the endeavor doesn't lend itself to tangible metrics. Rather, Hewlett seems guided here by an "emergent" model of philanthropy whereby a funder gets a ball rolling and then adjusts as new information appears. That kind of model, according to a trio of scholars in the latest issue of the Stanford Social Innovation Review, is crucial in tackling complex problems.

Polarization is complex, all right. Stid has described the foundation as grappling with "systems within systems." Sounds like fun, right?

Well, actually, yeah, which surely is another reason Kramer is taking this on. It isn't easy for foundation presidents to find big complex new problems to work that other funders aren't already all over. And, so far, Hewlett has the polarization beat to itself.

What Else Is Cooking?

Luckily for Larry Kramer, getting Hewlett's arms around polarization is not the only bet he's making as president. His cybersecurity initiative, rolled out this spring, is much more of a slam dunk in terms of having an impact. (See IP's coverage here.)

Hewlett has long worked on nuclear security issues, and as that work reached a juncture, the foundation talked about where things might go. Kramer identified cybersecurity as an area of opportunity, and for some very good reasons: Everyone now gets how important this stuff is, yet the foundation and nonprofit world has so far targeted few resources here, leaving industry and government to exclusively shape the debate.

Hewlett is laying out an initial $20 million to build up the field of independent experts and organizations who can weigh in on cybersecurity issues and enlarge the conversation to include new ideas and, crucially, a real voice for civil society.

Meanwhile, the foundation continues to work its five main program areas: education, environment, global development, the arts, and effective philanthropy. Kramer says the foundation has no plans to pull the plug on any existing work even as it takes on new challenges.

There's interesting movement in several of these areas. For example, the climate debate is showing signs of forward progress with the EPA's new emissions rules, and the foundation's development work, with its big focus on reproductive freedom and women's empowerment, is another hot spot.

Long-time observers of the foundation world can't help but notice the way that different funders rotate into the limelight and get a bunch of attention, only to recede again into the pack. Lately, it's been Hewlett's turn, and in some rarefied circles at least, Larry Kramer is the man of the hour.