How to disrupt philanthropy in response to crisis Darren Walker

I have the privilege of leading the Ford

Foundation a foundation that has existed

for 80 years

foundations in America were really

started by a man named Andrew Carnegie

who in 1889 wrote a seminal document the

gospel of wealth in it he laid out the

tenants of American philanthropy that

would be used by the great titans of

industry and capitalism of the 20th

century from john d rockefeller JP

Morgan Henry Ford Andrew Mellon all the

way through to Bill Gates Michael

Bloomberg and many others and in his

gospel he said that the role of wealthy

men like himself and Rockefeller in

society was to give back to use their

bounty and their wealth to through

terrible causes improved a lot of the

common men the poor the dispossessed and

disadvantaged that idea of philanthropy

remains with us but I read a document by

Martin Luther King about philanthropy in

which he said the following philanthropy

is commendable but it should not allow

the philanthropist to overlook the

economic injustice which makes

philanthropy necessary you see dr. King

unlike Andrew Carnegie questioned the

economic injustice the very inequality

that made their wealth possible he

challenged the wealthy to think about

inequality and their complicity indeed

the complicity of many generous donors

and philanthropists in creating economic

injustice today we

and an age of inequality and if we are

to build back better

we must reconsider philanthropy we must

consider a different kind of economy and

capitalism and the question for the

wealthy the privileged philanthropist is

not what do I do to give back but what

am I willing to give up because without

we privileged powerful wealthy people

acknowledging our complicity in creating

and sustaining a system that is based on

racism and the kind of capitalism that

has generated in these last decades far

too little shared prosperity and so

today we in this country and around the

world are challenged by a sense of

hopelessness which is the great threat

of our time along with climate because

without hope it is hard to imagine that

we can have a democracy that is vibrant

in fact hope is the oxygen of democracy

and we through inequality and the

economic injustice we see far too much

of in America are literally asphyxiates

as we saw the murder of George

Floyd the breath was taken out of his

body by a man who was there to protect

and promote

it’s a metaphor for what is happening in

our society where people who are black

brown queer marginalized are literally

being asphyxiated by a system that does

not recognize their humanity if we are

to build back better that must change

thank you Chris thank you Dan

these are these are powerful words I’m

curious though how this conversation can

best lead to change I mean everyone’s

been shaken up by what’s happened in

your conversations with people let’s say

with the wealthy and the powerful when

you talk about their being complicit in

the system and first step is to

recognize that is that effective as a

rallying cry I suspect that some of

those people feel that they didn’t know

that they had evil intent or were part

of a sort of some sort of hidden

conspiracy that they’re created or this

damage is that the winning pitch to them

or is there also a pitch just based on

look at this system you can agree that

there’s this injustice that people are

suffering let’s fight together to

improve it and to focus more on a

rhetoric of possibility

and unhappiness specific policy changes

that people can support and and get

behind help us with that with the

language because it’s it’s it it’s it’s

it’s so sensitive right now or just

whichever way you look at it that people

are sort of a [ __ ] I think in some ways

even being driven apart just by the very

language in which this current

situation is being framed what’s been

your experience the last few weeks in

how you’ve communicated with others on

this well I think the real challenge

here is that for many people many people

are tired of having to constrain and

contort their language so that

privileged people can be comfortable one

of the things that must happen if we are

to build back better is that we

privileged people have to be

uncomfortable and I think some of the

pushback that you’re seeing is some

people feeling just uncomfortable with

the conversation just as many people

many white Americans have felt

uncomfortable with the conversation

about race let’s just acknowledge that

I’ve had people say to me why do you

have to talk about inequality and race

in the way isn’t there a better pitch

isn’t there a better way of the meaning

underneath that is really can’t we find

a way to keep keep wealthy people and

privileged people comfortable in this

conversation one of the realities is

that in order for us to make progress as

John Lewis points out we are going to

have to get uncomfortable and part of

the challenge for we privileged people

is that privilege buys you insulation

from being uncomfortable the whole idea

of privilege is to buy yourself the kind

of comfort the kind of convenience that

allows you to look away and so I think

for many Americans many white Americans

the murder of George

Floyd was the moment at which we will

look back and say we could no longer be

comfortable with racism in America

and as a friend of mine said she and her

husband were heartbroken by what they

saw

because this is not the America they

want to live in but as I said to her the

hearts of african-americans have been

broken for for centuries in this country

because of racism and so we now all know

we now all have a sense of just how

deeply rooted it is so the language of

how we talk about it is necessarily

going to make privileged people who have

who have benefited from a system that is

racist and a culture of white supremacy

just talking about that makes many

people uncomfortable but it will be

necessary for us if we are to make

progress so talk about how to turn that

discomfort into you know into action

like it you wrote to a powerful op-ed in

The New York Times a few days ago

well you spoke about some of the things

that we must be willing to give up and

you said you included in there the

intricate web of tax policies that

bolster our wealth the entrenched

systems in American colleges of legacy

admissions which gives a leg up to our

children and above all the expectation

that because of our money we are

entitled to a place at the front of the

line you explained that last part what

do you mean by that what I mean by that

is in our system we have created a fast

track a fast lane for the wealthy and

the privileged and the professor at at

Harvard Michael Sandel has written quite

beautifully about this issue and I just

think it is a part of the culture that

the rich and the wealthy believe that

they should always have a place at the

front of the line always

every line and I think that is bad for

our culture do you think they believe

that or that they just haven’t thought

about it

like I I know a lot of white people and

I’ve never heard someone actually

express that belief you know publicly in

any way so is it I always expect to be

at the front of the line no one’s going

to verbalize that but culturally we see

that we see that from the ways in which

people the wealthy attend sporting

events attend the kinds of events that

used to be where we all sat in the

bleachers together I took my daughter my

granddaughter sorry I took my my

goddaughter to Disneyland or somewhere

and they met there was literally a fast

track if you paid more your child did

not have to stand in the hot Sun for as

long as both regular children did and

and my point is just we have to

understand that this is a part of our

culture and because we believe in a

meritocracy in this country most people

believe and particularly most privileged

successful people believe first that the

rules are generally fair because they’re

winners and many of them have stories

and I’ve heard countless stories that I

started with nothing my father was a

bricklayer my mother had a high school

degree I started with nothing well you

started as a white man with the degree

from Harvard Business School in 1978 if

you don’t believe you had an advantage

then you’re not living in the world that

most Americans live in Darren tell us a

bit about your own story well my story

is really punctuated by a nation that

believed in poor low-income kids who

lived in urban and rural America and

that’s how in 1965 in a small town

called Ames Texas population 1,200 a

lady appeared in front of our little

shotgun Shack to tell my mother about

the new headstart program so I was lucky

enough to be in the first class the

inaugural class of head start in the

summer of 1965 and I went to public

schools in fact I like to remind people

that I have never attended a day of

private education in my life and I say

that with great pride because

increasingly in the places and spaces

I find myself I find fewer people with

that same trajectory and it concerns me

I had Pell grants I also had private

philanthropy so my journey was really

financed by of the public-private

partnership that is this amazing web of

support what I worry about today Chris

is that I felt when I was a little boy

and growing up even though I faced

racism and homophobia and lots of issues

I always felt like my country was

cheering me on I don’t think today that

little black boys and girls living in

shotgun shacks or in housing projects in

America cities feel like America is

cheering them on that they are going to

be able to get on the mobility escalator

as I did and I was born in the bottom 1%

in a Charity Hospital in a in a very

poor rural community in Louisiana and I

now find myself firmly as a part of the

1% top 1% so I’ve been on both sides of

the inequality equation

and I see that the difference is growing

further and further apart so help us

understand that better it sounds like

what you’re saying is that for a period

of time and perhaps over the course of

your life there actually was real

progress there were these programs that

allowed some people to you you know

benefit to have at least a chance at a

different kind of life it wasn’t their

progress and and then has that been

reversed and if it has been reversed

what was what was the key cause of that

reversal absolutely there was progress

and I remind people who I hear say

things like we haven’t made any progress

since the 1960s on poverty or why is

black unemployment at the levels it was

in 1968 and such data between 1965 and

1978 we made tremendous progress in this

country rates of graduation from high

school college our wages employment

levels for blacks in America were at

all-time highs we made massive massive

progress and the data are clear on that

but something happened and what happened

was in many facets of American life

White’s saw the progress of blacks as a

threat and so one of the things that

immediately came under attack was

affirmative action which was a policy to

redress the white supremacy that is

baked in to the DNA of this country and

our policies well White’s some whites

argued that that was reverse

discrimination and took a case to the

Supreme Court that outlawed racial

quotas and since that time we have been

fight around this issue of reverse

discrimination which is a an incredibly

precious idea to turn a policy that

seeks to redress the white supremacy

that is built into our nation to redress

that as itself a form of discrimination

but this was a huge boon for blacks I am

a product of affirmative action and I

say that with pride because my country

actually acknowledged the historical

legacy but we lost and have lost on that

and it is much more difficult now there

were a number of interventions like that

that propelled us forward but what

happened was a combination of a reversal

of those policies and an economy that

increasingly marginalized black workers

and thirdly at the same time an ascent

of a criminal justice system would

proactively sought to incarcerate black

and brown Americans at higher rates and

so we have seen this convergence of

really pernicious harmful clearly

directed at African Americans these

policies these practices that have

rendered us so marginal in the economy

and it is no surprise that we see people

on the streets marching with the words

black lives matter because it is clear

in this country that black lives have

mattered less than white lives you spoke

there of the need for criminal justice

reform and you’ve played a big role in

that

many people black and white and actually

left and right have

come together to seek different forms of

criminal justice reform but the actual

doing of it ends up really hard I mean I

you published this amazing piece last

autumn called in defense of nuance and

you wrote you wrote this and this

connects to criminal justice reform in a

minute you wrote in the boardrooms of

businesses and museums on committees and

campuses and everywhere in between

seeking common ground has been replaced

by a retreat to our corners like

fighting fire with fire

the fiery is met with fiery and no one

seems willing to turn down the

temperature rather than building bridges

and relationships based on mutual

understanding or shared respect this

oppositional nuanced averse posture

rewards ideological purity and public

shame the very things that scuttles

strong working relationships and

incentivize people to dig in their heels

so that was that was as eloquent a sort

of an appeal to a kind of a bridging

mentality of saying look situations of

complex we’ve got to listen to each

other work through complexity to resolve

them and yet this piece landed you in a

firestorm because one of the examples

you you gave in this was that as part of

you know the the drive to close down

Rikers Island which is this horrifying

cesspit of a prison that you would

support for smaller prisons being built

were you know modern and collectively

much you know smaller than Rikers Island

that was a compromise that that that got

you in trouble I mean do you you know

activists said no you know you you you

can’t support any extra jail building

that they’re far too many people in jail

anyway

I mean how what’s your take on that now

do you still believe in the importance

of nuance as we address these issues I

absolutely believe in the importance of

nuance because the challenges we face as

a society are incredibly complex

and it is important to understand that

if we are to solve these problems we

can’t solve it by simply naming and

shaming I think we have to acknowledge

that there are many opportunities to

build allies and to create the forums

for people who share a diagnosis and and

and it doesn’t mean that you share an

idea about what exactly the solution is

but there are a lot of people who would

share the diagnosis that our criminal

justice system is broken so let’s get

all of those people around the table

let’s not leave out any of those people

and then let’s figure out how we go

forward

and and that’s simply my pitch on all of

these issues were facing and I

understand why for a lot of people and I

think it’s it’s it’s one of the reasons

for example the defund police movement

has has gained such currency when it did

not have the currency that it had before

George Floyd murder I think part of it

also is because for those who were

saying let’s tweak around the edges and

let’s make community policing the model

I think for many people they’ve given up

on that idea that you can actually tweak

around the edges that that may be three

years ago two years ago they might have

been willing to negotiate to say tweak

around the edges but at this point

people are tired people are exhausted

and they’re angry and they’re grieving

and it is all legitimate and so the idea

of defunding the police

which was a marginal radical idea is now

mainstream and being considered as a way

to reimagine

a different kind of law enforcement and

and I believe that we’re going to need

that kind of thinking as we consider how

to build back better No maybe that your

call for nuance is crucial there because

if defending the police is viewed as an

all-or-nothing thing it’s it’s like

that’s a huge arguably that’s a huge

force that will aid the reelection of

the president so forth if it’s fuel

you’re exactly right

so all right so let’s take some

questions from the community here

Andy Burland

what are your thoughts on the best way

for employees of big companies to hold

corporate leaders accountable to honor

their stated commitments to addressing

systemic racism and inequality well I

believe there’s going to need to be a

reckoning in corporate America that is

aligned with the reckoning in the rest

of America that we have built into our

mechanisms of promotion of recognition

with and and and success barriers and

those barriers are often race-based

they’re gender-based the way we hold

them accountable is two ways one that we

come back a year from now because the

media will move on in some ways but the

media will be back and organizations

whose work it is to actually hold them

accountable nonprofits that work in the

ESG space the civil civil rights and

racial justice organizations will hold

them to account the other thing that

must

happen and II is that we have to change

the composition of corporate America

that is how we will hold corporations to

account so we need to move beyond the

tokenism that exists on most public

company boards and in private equity

because we talk a lot about the fortune

500 there are fewer public companies

today because of private equity and yet

very few people understand what is

behind the curtain called private equity

where millions of Americans are employed

and that there are literally thousands

of small to medium sized companies with

boards so these boards need to be

diverse and we need to move beyond the

paradigm of oh we’ve got a black and the

Latinas on our board check-check let’s

move on I’ve certainly been vocal on the

boards that I’m on that we need to think

very seriously about moving from

tokenism to transformation let’s take

the next question

this one’s anonymous how have you chip

how have you changed how the Ford

Foundation operates to address fraud in

equity not in terms of the programs you

support but rather how you support them

and perhaps this is a good chance to

talk about this amazing social bond

initiative that you just announced I

don’t well I do think that we have

changed a number of ways in how we

support organizations first most

foundations provide project support and

having run a non-profit I know that

project support is basically a contract

and is something that is often generated

by the foundation and you’re treated

like a contractor and you’re paid like a

contractor often with very little

overhead I have challenged this

foundation to

a new way of funding and we have an

initiative called our build initiative

which is a is a general operating

support a five-year grant program and we

now are at 76% general operating support

having been 21 percent when I came to

the foundation

I believe providing general operating

support is the most valuable not only

capital for investment but also it is

the way to endorse the leadership the

board the mission the vision the

execution so I believe it’s not about

investing in projects or looking for the

shiny new thing institutions are what

sustain social change yes Martin Luther

King was a great individual leader a

great social entrepreneur but he had the

SCLC as a mechanism an institution

Gloria Steinem a Muhammad Yunus I could

go through the list of individuals the

fourth foundation is funded but they had

to have Grameen Bank and the MS

Foundation and the list goes on and on

so institutions should be invested in

that’s first secondly we have to get out

of our way of of conservative thinking

about the capital we have at our

disposal beyond the 5% what are we doing

with the other 95% how do we think about

deploying that and Chris mentioned an

initiative that we have led here that

came out of our concern of what was

happening what we were hearing from

nonprofits in the wake of kovat and the

wake of canceled fundraisers dark

theaters donors are pulling back on

giving as a result of what was happening

in March and April and May in the

markets so I with the trustees of the

foundation generated this idea of

issuing a social bond a bond that would

be a 50

year dead instrument that we would issue

in the capital market for 1 billion

dollars which would allow us to double

our payout so we would pay out for the

next two years we normally pay out $550

$550 or so so we pay out over 1 billion

for 2 years and that it would primarily

be general operating support to those

key mission critical critical

institutions working on racial justice

inequality issues of reproductive rights

and justice human rights the arts and so

this is how we’re working today it’s

it’s far from perfect we must do better

but we I believe at Ford have we are we

are working at understanding that

balance that legacy foundations have

that I think is too balanced too

imbalanced towards preservation rather

than innovation and I want to focus on

innovation and if we innovate well then

the preservation part will be taken care

of let me just see if I understand the

financial instrument here because it as

I read you got really favorable terms on

this debt you you have to you have these

bonds that you have to pay back at a

rate of about 2% and it’s it’s it’s a

lot lower than like big companies are

paying on the on the bond market too but

some people might wonder why not rather

than having this debt that you have to

service over the next 30 or 50 years why

not just pay out the billion dollars I

mean people you know why should a

foundation sustain its endowment forever

well the future have a lot more wealth

aren’t the intense problems that could

make or break the future with us now

what why not just pay out the money

directly or more radically why not just

have a 10 year plan to spend all of the

endowment and put yourself out out of

out of business how do you think about

that well first most foundations like

Ford or Rockefeller can’t put ourselves

out of business

our charters we are established to exist

in perpetuity and while we probably

could go to court or do something to

break up that the donor’s charter that

established us we do have that

responsibility and I would like to

believe that there will be more funders

in the future who talk about the way we

do race and social justice but we are

far from there because many of these

ideas actually challenge the very

systems that create wealth in this

country so I don’t believe at this point

that taking money and what the

investment experts would say reducing

our liquidity at a time when the markets

are more volatile and we will need that

liquidity to pay out grants that that’s

a smart investment strategy if you

believe that you do have some fiduciary

responsibility to to continue into the

future the social bond idea allows us to

do both allows us to take advantage as

you said Chris this is a historic high a

historic low in terms of rates and for

the Ford Foundation this was the first

ever foundation issued bond of its kind

we were oversubscribed we sold 1 billion

dollars of bonds we had over 5 billion

dollars of orders from customers of the

various underwriters and so there was a

pent-up demand and because of that as

you say we borrowed at basically 2.8

percent for 50 years which is

unprecedented but it shows you I think

the hunger on the part of investors in

investing even at low rates in a social

bond a a bond that is going the proceeds

of which are going to be used to advance

social justice in the world that’s

amazing that there’s 4 billion dollars

of unrequited demand there to me that

implies someone who retail

yes had a full billion dollar idea to

help make America in the world a better

place there’s funding there for it like

that seems like an opportunity to my

other friends in in philanthropy Chris

there was there is you know five point

eight billion dollars of orders and we

were only selling a billion hey guys

there’s a lot of capital out there that

we could all put to work in philanthropy

at very very attractive rates that’s

doing Ted community put your creative

hat someplace on on that one let’s have

another community question how do we

keep the arts theaters concert halls and

the vast web of culture that enlivens

our cities and communities how do we

keep that a priority in this crisis it’s

got to be a priority in this crisis

because without the arts we atrophy as a

society and so not just in the cities

but in small towns as well we have an

obligation so we are taking about of the

social bomb that we are doing we are

investing about a hundred and

seventy-five million dollars of the 1

billion in the arts I would also say

that we have to have our governments do

more and I think there needs to be as we

consider the next round and there will

be another round of support from

Washington the role of the arts is going

to is critical and we should be

advocating to ensure that that is

recognized in whatever large allocation

of federal funds comes to the cities I

also think we are going to have to think

creatively donors can think creatively

in fact I had a billionaire family in

the UK who want to start

an arts trust and through an arts bond

and they are thinking creatively we are

all going to have to think creatively

now in ways in which we never did in the

past to address this issue of inequality

and the way in which kovat is impacting

us I’ve talked about we’ve got in higher

education the HBCUs who are living

hand-to-mouth and the great Ivy’s

Harvard and Yale and Stanford with

literally more money than than one could

imagine and of course it costs a lot for

excellence but wouldn’t it be

interesting for a group of Ivy’s to

issue a social bond of several billion

dollars the proceeds of which could be

used to strengthen the HBCUs whom all

together which number well over 100 how

about taking on that kind of inequality

how about in the arts asking ourselves

not just about Lincoln Center where I am

on the board so I feel strongly about

the importance of the Lincoln centers

and Kennedy centers of the world but

quite candidly Lincoln Center is gonna

be okay it’s going to be rough and tough

but it’s going to survive there are many

arts organizations particularly arts

organizations that are led by people of

color that are in those communities that

don’t have endowments boards who can put

together emergency fundraising campaigns

who don’t have 12 months of operating

cash flow those are the organizations I

worry about being on the precipice and

while I’m gonna fight for Lincoln Center

and Carnegie Hall where I’m on the board

and the National Gallery I’ve got to

also recognize that those organizations

visa vie the larger arts community are

very privileged and we’ve got to be

focused on

the gap between those who have and those

who do not okay we’re gonna have three

more questions quickly let’s and I’ll be

brief I promise all right

so now litora can that be real progress

without taxing wealth no there can’t be

progress in reducing inequality without

and I and Chris you referenced the most