Wednesday, January 17, 2007
?I AM not a ?steady as it goes? sort of person,? says Judith Rodin, with admirable self-awareness. In the 21 months since she became president of the Rockefeller Foundation, Ms Rodin has shaken to its core the charitable foundation established by John D. Rockefeller, an oil tycoon, in 1913. The 58 people who have left the staff, about one-third of those she inherited, are but the most visible evidence of the thorough change in culture over which she is presiding?or, rather, the most audible evidence, judging by the vociferous public complaints of some of the departed.
Ms Rodin is helping to answer one of the questions raised by a new generation of business-minded philanthropists, led by Bill Gates: whether the older philanthropic institutions would respond, and if so, how. Few institutions are less accountable than charitable foundations, which face no meaningful market pressure to keep them on top of their game. Yet who wants to work for, let alone run, an outfit widely seen as out of date and out of touch, not least by the fashionable new entrants to the industry?
Certainly not Ms Rodin, who joined Rockefeller after a successful career at the top of American higher education?one that briefly established her as the world’s highest-paid university president. She is determined to make the foundation fit for the 21st century. She now talks of the ?new Rockefeller?, while deploying the favourite buzzwords of the new philanthropists, stressing the importance of being ?strategic?, of ?leveraging? the relatively small sums of money at its disposal (it makes grants of around $100m a year) through partnerships, and, above all, of achieving ?impact?.
As reformers often do, she describes her revolution as returning the Rockefeller Foundation to its roots?in this case to the ?scientific philanthropy? of its founder, who said that the ?best philanthropy is constantly in search of the finalities?a search for a cause, an attempt to cure evils at their source.? Among other historic achievements, the foundation played big parts in developing a vaccine against yellow fever and in the ?green revolution?, which spectacularly increased farming productivity and reduced poverty in many poor countries in the 1960s.
By the early 1970s most of the Rockefeller Foundation’s greatest achievements were in the past and a long period of drift had begun. Ms Rodin inherited a foundation that was no longer the best nor the biggest?in its early years it gave more foreign aid than the American government. There was a danger of ?becoming marginal in our impact?, says Ms Rodin. ?Impact needed to be reasserted as a fundamental criterion for everything we do.?
This was not easy, partly because the foundation had been divided into several fiefs (health, arts and so on), each defended with the vigorous politicking at which the charitable sector excels. Several of Ms Rodin’s predecessors had arrived expecting to reform the foundation, only to leave disillusioned a few years later. For her part, Ms Rodin was confident of her ability to change an ossified organisation and see off vocal critics, thanks not least to her successful ten-year reign as president of the University of Pennsylvania. There she returned the loss-making medical centre to profit and revived the impoverished community on the university’s doorstep.
At Rockefeller, she promptly reviewed its programmes and their effect. She consulted experts, including two former treasury secretaries, Robert Rubin and Larry Summers, to identify the big 21st-century trends that the foundation could hope to affect. She also sought advice from groups that are helping the new philanthropists foster a more businesslike approach, including Bridgespan, a management consultancy for non-profit organisations, and the Centre for Effective Philanthropy. The centre’s survey of the organisations funded by Rockefeller revealed a high cost structure relative to its peers, cumbersome decision-making and a culture that did not expect high performance or reward it.
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