About Those "Big Changes" at the Ford Foundation

No foundation has had more influence over the past half century than Ford. And today, it remains the second largest grantmaker after Gates, giving away over a half billion dollars a year.

Now, that sum of money is about what New York’s public school system spends in a week, or what Coke’s advertising division spends in two monthsa reminder that even the biggest foundations are pretty puny.

But in the nonprofit world, Ford is a giant. While it’s best known as the mothership of social change philanthropy, it’s much more than that: A funder whose reach has extended into nearly every sphere of life, and in nearly every part of the world. Some have described Ford as the “New York Times of philanthropy.” The foundation of record, in effect.

Yet like the Times itself, Ford has faced some struggles in recent years. It’s been trying to do too much, across too many issues and regions of the world, with an operating model that is bureaucratic and costly. (The foundation’s overhead consumes a fifth of its resources annually.)

More ineffably, it has seemed lately that Ford had lost its mojo. It’s been more of a reliable friend than a dynamic, creative leader. I love the Ford Foundation, which not only funded a nonprofit I helped start in 1999, but did the same for my father in 1969. And I bet I’m not the only person who could tell that kind of story. But "always being there" for everyone is not exactly strategic philanthropy, and when I think of the most effective foundations nowadays, Ford doesn’t spring to mind.

Darren Walker wants to change that, and he may be just the guy to do it. Why? Because he’s not the scary outsider that set people instantly on guard when he walked into the door 20 months ago. He came in well-known and well-liked, a perfect fit for the foundation’s culture. He’s smart and strategic, but also a listener and an empathizer.

And Walker has done a lot of listening since taking charge, a process he describes in today’s announcement of how the foundation will restructure to focus on six program areas and change how it makes grants. Combating rising inequality, in all forms, will be the major through-line of Ford’s workanother testament to just how much traction the inequality issue has gotten in recent years.

It remains to be seen how much things will change in terms of what Ford will actually fund. Previously, the foundation had eight program areas, and it’s hard to tell yet what areas of grantmaking it’s going to drop. Walker says he’ll make more detailed announcements over the next few months. At that point, we’ll see whether this is a nip-and-tuck operation or a more major consolidation of the foundation’s priorities.

You can only imagine the wrangling within Ford as program staff fight for their pet issues, not to mention their paychecks. Meanwhile, outside the foundation, many grantees are surely waiting with bated breath.

These high stakes and anxieties underscore why the ever genial Walker has faced such a tough task. When foundations drop issues, people both inside and outside take a hit. Colleagues lose jobs; longstanding grantees lose lifelines. It’s an unhappy business, which helps explain why foundation restructuring often doesn’t go very far. It’s too painful, with too much pushback, and the absence of an external bottom line means that there’s no urgent imperative to keep swinging the ax until the job is done.

What will happen in Ford’s case? It’s too early to predict. But one very important thing that Walker did say is that the foundation will change how it makes grants, and that could be big.

As Walker gathered feedback from outsiders, one recurrent theme heard from grantees is that they needed more long-term general support to be effective. No big surprise there, given that nonprofits have been making that same point forever. But up until now, Ford hasn’t listened, and the vast majority of its grants in recent years have taken the form of program support.

Walker is listening, though, as a former grantseeker who remembers well the exhausting chase for project support. And he promises that Ford will change its ways. Indeed, the biggest news from his announcement today is that the foundation will ramp up its core support of “key anchor organizations” in its six program areas, with the goal of nurturing truly strong institutions over the long-term.

Over the next five years—from 2016 to 2020—our trustees have authorized us to allocate up to $1 billion for a concerted effort to support stronger, more sustainable, and more durable organizations... In some cases this may mean larger, longer-term grants that can be used more flexibly. In other cases it may mean support for wraparound services that help an organization develop, adapt to change, or even merge with others.

Hip-hip hooray, right? Well, yeah, assuming you’re among the anchor organizations. If you’re not, watch out. Walker writes: “Almost certainly, providing deeper, more intensive support will result in fewer grants, and, most likely, fewer grant recipients.”

And herein lies a great example of why you should be careful what you wish for. Over many years, nonprofits have rightly called for more general support grants without stopping to think much about how it might force change in a sector with crazy levels of fragmentation.

It’s no secret that there are too many small, inefficient nonprofits engaged in duplicative activities. If funders ever really do break their addiction to project support, and the control that comes with it, they’ll logically start writing bigger checks to fewer groups—the ones they think can really move the needle. Less effective organizations will find their support drying up, forcing them to merge with other groups or close down.

That would be a good thing, but also painful and disruptive, and Walker seems quite aware that Ford’s shift toward more consolidated grantmaking could have major implications for the nonprofit ecosystems where its money looms large. I would add that such a shift has obvious internal implications, since if you’re making fewer program grants, you need fewer program officers. Again, that’s a good thing, given the huge overhead costs at Ford and other places.

In explaining why he wants to move toward more general support, Walker mentioned a number of other leaders in philanthropy who’ve inspired him, including the chiefs of OSF, Hewlett, and Packard. Could it be that the big foundations are really, finally going to scrap a program grantmaking model which is both ineffective and expensive to administer? We’ll believe it when we see it, but Walker’s step is huge.

In explaining Ford’s shift, Walker also mentioned two other people who influenced his thinking: The philanthropist Herb Sandler and Paul Shoemaker of Social Venture Partners. Both have been outspoken in calling for more general support, as we’ve reported, and Sandler’s giving in particular has showcased the impact of focused organization building. Many other new funders on the scene are also achieving results by placing bigger bets on fewer numbers.

An encouraging takeaway from all this is that while it may seem that the big legacy foundations are accountable to no one and impervious to outside criticism, they’re not. They are watching and they are listening. No institution wants to be left in the dust by change.

With Darren Walker running Ford, that fate is less likely to happen to this iconic foundation. But, as we said, there are still many details to be filled in here as Walker charts what may or may not be truly a new era at Ford.