What Just Happened at the Open Society Foundations? And What Comes Next?

George Soros. photo: Antonio Scorza/shutterstock

George Soros. photo: Antonio Scorza/shutterstock

Chris Stone is leaving the Open Society Foundations after nearly six years of working to tame a dysfunctional organization and navigate the complicated world of George Soros.  

As president of a foundation of a living donor with offices in 39 countries and an annual budget of nearly a billion dollars, Stone has held one of the toughest jobs in philanthropy. Soros hired Stone to bring more unity to a far-flung institution that’s had enormous influence—but which had also evolved haphazardly over two decades and was famously chaotic. The plan, as Stone explained to me in 2015, was to streamline and professionalize OSF, looking toward the day when Soros, who is 87, would no longer be around. Down the line, the expectation is that OSF will absorb the bulk of Soros's fortune, now valued at $25 billion, and that the foundation will be governed by an independent global board.

By all accounts, Stone—who is known for his cerebral, low-key style—has done a remarkable job of bringing order to OSF. Three years ago, we called Stone a champion “octopus wrestler” for his wrangling of OSF and its many moving parts. When he was first hired, nobody could even say for sure how many employees OSF had or how much money, exactly, it was spending, and on what. When Stone steps down at the end of this year, he will leave behind a transformed organization with stronger budgeting and governance, as well as a range of other improved processes.

Yet while Stone succeeded in fortifying OSF at a critical moment, some close observers worry about enduring structural tensions within the foundation and the broader Soros universe. It’s likely that Stone’s successor, Patrick Gaspard, who has served as vice president at the foundation since January, will also need some good octopus wrestling skills to ensure OSF’s long-term success.

The stakes are enormously high. Decades after George Soros first began using his wealth from investing to challenge communist regimes, he stands as the preeminent donor to civil society groups worldwide that are fighting to protect human rights and core political freedoms. In some countries, OSF is the only major grantmaker standing up for democratic norms. Yet in nearly every region where OSF operates, the Soros vision of open society faces new attacks—including in the U.S., his adopted country, where a xenophobic and reactionary president holds office.

Parting Ways

The official story regarding Chris Stone’s departure seems plausible enough and can be boiled down to two words: mission accomplished. In his resignation letter to George Soros, Stone wrote:

Six years ago, you told the world that my assignment was to unify and streamline the foundations that you and Aryeh Neier had so courageously built. I believe that assignment is now largely complete, though it will continue to require correction. The unified network that we only imagined six years ago is today here for the world to see…

While six years is a short stint as president of a major foundation, Chris Stone never imagined himself as a lifer in philanthropy. An expert on criminal justice, he had spent his career on the grantee side of the fence, as a thinker and a doer, including as president of the Vera Institute. Along the way, Stone had become keenly interested in nonprofit management and turned out to be an inspired choice to streamline the sprawling Soros operation. Having now made huge gains in this regard, it might make sense that he’d choose to move on—especially with Patrick Gaspard, an experienced diplomat and manager, ready to step up as OSF’s new chief.

That all sounds right, except there’s no indication that it was Stone who decided on the timing of his departure. Which raises the question of why George Soros would want to make a change in leadership right now.

One possibility is that, with a more adverse set of external circumstances worldwide, along with the internal stabilization of OSF, Soros came to believe it was time for a different kind of person than Stone to lead his philanthropic operation.

A number of years back, when Aryeh Neier prepared to step down as head of OSF, Soros reportedly wanted to recruit a leader with global stature to take over. One name mentioned at the time was David Miliband, a former U.K. foreign secretary, who now is president of the International Rescue Committee.

Wisely, Soros instead chose a leader for OSF who was eager to focus on its deep management problems. Now, with some of the biggest of those problems resolved and the world unraveling, Soros might well have been drawn once again to the idea of a leader with a strong political and diplomatic background. While it’s unclear whether Patrick Gaspard is a permanent choice to replace Stone, he would seem to fit this bill. Gaspard has spent much of his career in politics, first in New York City and later in Obama’s Washington, where he served in the White House after working on the 2008 campaign. Prior to joining OSF, he was the U.S. ambassador to South Africa for over three years.

A second theory about Stone’s departure—one not incompatible with the first—is that his position atop OSF had grown weaker and more fraught over time. Leaders brought in to fix dysfunctional organizations are often unpopular. They can rub key stakeholders the wrong way as they challenge existing power arrangements, nix longstanding perks and create disruption with new processes. Stone did all of that, just as he was hired to. It’s hard to say whether he made some well-placed enemies in the House of Soros along the way. What we do know is that he created enough internal friction that, last year, the staff of OSF voted to join a labor union. At the time, Stone told me that the unionization push channeled concerns "regarding the way the restructuring was handled, as well as other issues of workplace culture." Characteristically, he was even-keeled about a development that could be read as a rebuke of his management style. “We believe in unions,” he said.

For years, George Soros clearly believed in Chris Stone, and in a letter about his resignation, Soros expressed his affection and gratitude for Stone, saying that “he has become my closest and most trusted collaborator.” But it might make sense that Soros felt it was time for a fresh start with a more externally oriented leader who hadn’t accumulated a slew of dings over the years while presiding over a tough clean-up operation.

Enduring Challenges

In some ways, Patrick Gaspard has an easier job than Stone before him, in that he’s taking over a streamlined OSF. In other ways, the path ahead could prove more difficult.

Never before has Soros and his foundation faced so much pushback on so many fronts. In some countries, OSF offices and staff face serious threats to their ability to operate—or even to their physical safety. In the U.S., with Trump in power and an army of reactionaries seeking to bolster his presidency, Soros is being subjected to non-stop attacks in the right wing media like rarely before. Both domestically and globally, Soros is at the center of any number of feverish conspiracy theories—many with anti-semitic overtones. Gaspard will have to be good at ignoring this ugly background noise while working to counter proliferating attacks on the ideals of open society.

Quite apart from an adverse global climate, Gaspard takes over an institution that still faces challenges. Stone made much progress in professionalizing OSF, and it’s an organization with a rich array of talented people and a global footprint without equal in the annals of philanthropy. But it remains more difficult to manage than probably any foundation on earth. Gaspard will have to contend with a number of factors that are sure to test his management skills—and patience.

A Living Donor

Ask any high-level philanthropoid if they like the idea of working with a living donor, and they’ll probably say “no.” Why? Because it introduces a wild card into their job. The donor might micromanage too much, shift priorities midstream, end up in fights with their family or use the foundation to help friends and associates in cronyistic ways. Or they could die suddenly and leave chaos behind. “I only work for dead donors,” a foundation president once quipped to me.

Back in 2015, Chris Stone described the great working relationship that he had with George Soros, a living donor who has been explicit about his goal of building a foundation that doesn’t revolve around himself. In his resignation letter to Soros, Stone wrote that “These have been the most stimulating and fulfilling years of my life, and I will always be grateful for the trust and confidence you placed in me every day of our work together. Our partnership has been the most meaningful of my professional career.”

There’s no reason to doubt the sincerity of these words, but it’s also true that Chris Stone will soon be looking for a new job.

George Soros is a complicated person with a complex life. He has two former wives, a third current wife, as well as five children. His world also includes many high-level friends who have his ear and have benefitted from his munificence. As Soros steps back, or otherwise becomes a diminished force at the foundation, there’s the potential for conflict among competing power players in the Soros universe.

Involved Children

Among the key stakeholders in this universe are Soros’s children, three of whom sit on OSF’s global board. From what I hear, all of them care deeply about the foundation’s mission and work. Soros’s youngest son, Alexander, has been especially active on the philanthropic front lately, as we’ve reported, developing his own foundation and pursuing thoughtful grantmaking in the area of human rights.  

Still, the Soros children are known to have had conflicts with each other and, at times, with their father. To the extent that any of this may affect the dynamics of OSF’s governance, that creates another wild card for Gaspard and the foundation’s other leaders to contend with. As much as Soros intends to create a foundation that’s truly governed by an independent board, it may be difficult to fully empower such outsiders under the present circumstances. This is hardly a unique situation—which is why, as I said, philanthropy executives tend to be wary of working for living donors.

A Decentralized Structure

As much as OSF has become more closely knitted in recent years, it remains a far more decentralized organization than your typical foundation. The different branches of OSF around the world have quite a bit of autonomy, especially compared to more ordinary satellite foundation offices. This creates management challenges in terms of budgeting and getting the organization to operate in any kind of uniform fashion.

Beyond the country foundations, the Soros universe includes a number of independent organizations that OSF has created over time and which still depend on Soros funding to varying degrees. These include the Central European University, the Institute for New Economic Thinking, the European Council of Foreign Relations, and more. OSF also has a longstanding set of major grantees like the ACLU and Human Rights Watch. The leadership of these many organizations, which collectively have absorbed big chunks of Soros wealth, often have strong links into the House of Soros.

Again, any philanthropoid will tell you that this is a tricky situation. Pre-existing commitments and longstanding alliances constrain the choices of new outside leaders—all the more so when the living donor and their family remain on the scene.

Board and Staff

It’s hard to say whether the tensions at OSF that led to the union vote last year have now been fully resolved. At the time, Stone suggested hopefully that things could turn out well, with unionization creating a new spirit of collegiality. Still, OSF remains the only foundation in the U.S. with a union, and it’s safe to say that no other CEO in the sector would relish the idea of having this kind of entity looking over their shoulder. A strength of foundations is their ability to move nimbly; a staff empowered with collective bargaining could work at odds with that strength, and, at OSF, stand as yet one more factor that complicates decision making.

The board at OSF poses its own challenges. Or, I should say, boards. Beyond its global board, which Soros and Stone have worked to elevate and empower, OSF still has a number of other boards that play an advisory role in its governance, including a half-dozen regional bodies and many more program boards.

While the global board has reportedly grown stronger, the extent of its actual authority remains unclear. If Soros were to die tomorrow, it’s not apparent who would have operational control of OSF. One close student of the foundation half-jokingly suggested that in the worst case, OSF after Soros could resemble Yugoslavia after Tito. What is clear about the global board is that Soros envisions it as the primary driver of OSF. In his letter about Stone’s resignation, he wrote:

The model we sought to create differs from the model prevailing at most foundations, where the principal role of a board is to hire and fire the president. At the Open Society Foundations, the animating intelligence and guidance for our work should flow from an active board of directors who commit themselves to take responsibility for the interests of the foundation.

This vision is problematic, in that it would seem to undercut OSF’s executive leadership. Veteran foundation CEOs will tell you that dealing with boards is hard enough under the prevailing model, where directors tend to give wide latitude to management. An unusually hands-on board with several family members, not to mention some major grantees, could be a recipe for trouble.

***

Ultimately, the internal challenges OSF faces are nothing compared to the larger, external battles that this foundation is engaged in. And whatever else may have transpired at OSF lately, one thing is clear: Its broader goals and strategies haven’t changed. Chris Stone may be leaving, but everyone seems to agree that Patrick Gaspard is a strong successor and will continue the work of bolstering this critical organization. Quite possibly, he could lead OSF in its most consequential work yet, amid a global showdown between the forces of reaction and tolerance.

A lingering question, though, is whether the structural tensions within OSF are profound enough to potentially undermine its mission, especially when that time comes—as it eventually will—when George Soros is no longer around to serve as the foundation’s unifying force.

Email David: davidc@insidephilanthropy.com

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