Dorothy S. Ridings, President and CEO, Council on Foundations: The Changing Foundation Field

It's been more than a hundred years since Andrew Carnegie, in "The Gospel of Wealth," wrote: "The day is not far distant when the man who dies leaving behind him millions of available wealth...will pass away 'unwept, unhonored, and unsung,' no matter to what uses he leave the dross which he cannot take with him...." True to his word, Carnegie gave away over $350 million during his lifetime and, with his contemporaries, John D. Rockefeller and Henry Ford, laid the groundwork for one of the most significant social developments of the 20th century: the rapid growth of the foundation field.

Partly in response to that growth, the National Committee on Foundations and Trusts for the Community Welfare — the predecessor to today's Council on Foundations — was established in 1949 "to promote responsible and effective philanthropy." In the more than fifty years since, the council (which adopted its present name in 1964), has worked tirelessly to assist foundation staff, trustees, and board members in their day-to-day grantmaking activities and to educate the public and opinion leaders about foundations and the work they do.

In October, Philanthropy News Digest spoke with Dorothy "Dot" Ridings, the council's president and chief executive officer, about the foundation field's ability to stay relevant in a rapidly changing world, its response to the events of September 11, the impact of the current economic slowdown and market turmoil on foundations, and her plans for the council going forward.

Dorothy S. Ridings is president and chief executive officer of the Council on Foundations, a national association of some 2,000 foundations and corporations that will make charitable grants of about $18 billion this year.

From 1988 until joining the Council in March 1996, Ridings served as publisher and president of Knight-Ridder's Bradenton Herald in Bradenton, Florida. She also served as a Knight-Ridder general executive while based in Charlotte, North Carolina, and held editorial and reporting positions at the Kentucky Business Ledger, the Washington Post and the Charlotte Observer.

Ridings served the League of Women Voters of the United States as president from 1982 to 1986 and as a member of its board of directors from 1976 to 1986. She has been a trustee of the Ford Foundation and a director of the Benton Foundation and Independent Sector. She currently serves as board chair of the National Civic League and Louisville Presbyterian Theological Seminary, is a member of the boards of the Foundation Center and the Commission on Presidential Debates and is a member of the councils that accredit journalism schools and law schools. Internationally, she has made speaking tours for the U.S. Department of State and led two fact-finding delegations sponsored by NATO.

Ridings taught journalism at the University of Louisville and the University of North Carolina. She holds a bachelor's degree in journalism from Northwestern University's Medill School of Journalism and a master's degree from the University of North Carolina. She was awarded honorary degrees from Spalding University, the University of Louisville and the University of Charleston.

Philanthropy News Digest: You came to the council in 1996 from the Bradenton Herald in Florida, where you had been publisher. What made you decide to leave journalism for philanthropy?

Dot Ridings: You probably know that I'd spent my entire professional career up to that point in journalism as a reporter, an editor, and a publisher. At the same time, I'd been in and around the foundation world, though never a part of it. I had been a trustee at both the Ford and Benton foundations, and I had helped start a community foundation in Bradenton. I also had done some program review work for the Mary Reynolds Babcock Foundation.

So, as I say, I'd been in and around the foundation world, though never of it. But along the way I became interested in helping the foundation world face up to what I thought was going to be one of its most significant challenges, which is putting a face on philanthropy and informing the broader world as to what philanthropy was all about. As a journalist, of course, I was always interested in telling the story behind the issue, whatever that might be. And I viewed both philanthropy and the media as doing an absolutely lousy job of that. I knew there were wonderful stories coming out of philanthropy, but the media didn't seem interested in them at all — they just thought it was a bunch of puff stuff. I also knew that the foundation field was not benefiting from the broader communication that needed to take place between foundations and the American public, and in particular public opinion leaders, who have so much to do with the health and welfare of foundations. Those folks were almost totally ignorant about what was going on in the foundation world.

So when Jim Joseph [Ridings' predecessor as president of the Council of Foundations] was named ambassador to South Africa by President Clinton and the search committee for a successor approached me, I really wasn't sure that I'd be interested, because I was happy in the newspaper business and happy being a publisher. Then a friend of mine who was on the search committee called and asked if I would just read the materials they had prepared. So I said okay, and as I was reading them I became intrigued by the fact that one of the issues they singled out as being important to the council and its leadership was the very thing that had been frustrating me, which, as I said, is the almost total disconnect between grantmaking foundations and the broader world, particularly the media, members of Congress, members of state legislatures, and other opinion leaders. But the search committee materials made it clear that they were looking for someone to help them do something about that.

Well, as you can imagine, that was music to my ears. And we've been working on it ever since. We had, for example, a three-year project called the Communications/Legislative Initiative that was designed to do two things: One, convince our members that they needed to be more public about what they did, not only for the sake of accountability, which certainly is important, and not just for the sake of providing role models to the new philanthropists that are coming along as a result of the intergenerational transfer of wealth, but also as a protective measure; and two, to enhance what they were already doing. In the legislative area, for example, damage can be done to foundations by legislators who don't know what it is you do, or appreciate your value to society. The media, likewise, need to know what it is you do. So we're working on that, and next year we're going to be doing more work specifically targeted at putting a face on philanthropy, as well as working on issues of communication and education, with an eye on doing a better job of informing policy makers about what grantmaking foundations do and the value they contribute to society.

PND: That said, media awareness of the field seems to have improved somewhat over the last five or six years, and especially since 9/11. We've seen other changes in the field over that period as well, including the rapid adoption of information technologies, the dramatic growth in foundation assets and giving, and the development of new styles and forms of charitable giving. Are foundations doing a good job of responding to this changing landscape?

DR: Many are doing a fantastic job of responding to changes in the field, and some are not doing a good job at all. One thing I'm going to have difficulty with during this conversation is being asked to speak in generalities about the foundation world. You know as well as I do that foundations are very individualistic. The diversity in the field is enormous. I mean, not only in terms of how foundations are structured and governed, but in terms of their size and grantmaking interests and geographic focus and whether they are even interested in responding to change. For all these reasons, it's very difficult to make broad generalizations, and I guess you'll just have to put up with that.

PND: Understood...

DR: Because many of them are doing enormously important work, not only in adapting to change themselves, but also in helping society at large adapt to change. Others, I regret to say, are like ostriches with their heads in the sand.

PND: What about 9/11? Did the philanthropic response to the events of September 11 tell us anything about the field of philanthropy and its capacity to change?

DR: First of all, it told us that foundations can be extremely quick to respond to needs when speed is essential, as it was in the aftermath of September 11. I think many people were quite amazed that foundations, which often take a year to act on a grant proposal, could turn on a dime and, on September 12, already have something in motion in terms of the relief effort. We saw this particularly in the community foundation appeal — the September 11th Fund was established by the New York Community Trust, a community foundation, and the United Way of New York City on the afternoon of September 11. But, of course, community foundations are known for being fairly rapid responders.

But there's the other side of that coin, which is that many foundations responded by saying, "Our dog's not in that hunt," and stuck with what they'd been doing, which is their right. Everybody says September 11 was supposed to change everything. I'm not sure it actually did. Yes, it changed philanthropy in some sense, though not all of philanthropy. The foundations that were established to provide scholarships for North Carolina Baptists are still going to provide scholarships for North Carolina Baptists. I'm using that as a generic example, of course. But then a lot of foundations are taking a long and thoughtful look at the issues they believe may have been behind the events of September 11. Many foundation leaders don't see 9/11 as a singular event that will never happen again; they expect, in fact, more terrorist attacks and are looking at the root causes of terrorism and trying to do something about increasing our understanding of them — things like religious intolerance, and issues of diversity and acceptance, and the role of foundations in terms of disaster response, and a whole range of things. So, yes, there have been changes in philanthropy, but not across the field. Again, you're going to get that answer from me a lot.

PND: In an oft-cited article published by the Harvard Business Review in 1999, Michael Porter and Mark Kramer argued that while foundations are uniquely positioned to create value for society, too often they are satisfied with, as Porter and Kramer put it, "their historic agenda of doing good" and not concerned enough about working strategically to do better. Do foundations take enough risks?

DR: Some do, some don't. I think the Porter-Kramer article was incredibly shortsighted; I'm not a fan of that particular piece. I respect the views that Michael and Mark have — I've talked with them about that. But I thought they were way off the mark. Again, the answer to the question is that some foundations do, and some don't. Actually, I'm encouraged by the growth in the number of foundations that seem to be exploring new ways of doing things, new ways of looking at things, taking more risks, so my view of this is quite contrary to theirs.

PND: Can you single out an area or a practice in which you'd like to see foundations take more risk?

DR: I've always believed that foundations can have the most impact by their work in the public policy arena. To use a line I've often used in speeches, it's wonderful when foundations provide food and shelter to the hungry and homeless, but it's even more important that foundations work to find answers to why people are hungry and homeless in the first place. I spoke about this in the first speech I gave at a council conference, in April 1996, about a month after I had come to the council, and it got a standing ovation — from some. Others came up to me afterward with strong cautions that advocacy could get them into trouble with Congress and the regulators. I'm well aware of the restrictions on direct lobbying that apply to some foundation types. But to me, a former political reporter, lobbying is an honorable word with a strong educational component to it. And I've found through the six years I've been at the council that more foundations are involved in public policy than thought they were, and I applaud that. Even when a community foundation convenes a community group to talk about finding solutions to a critical local problem, that's involvement in public policy. When a private foundation funds a research project on the increasing threat of a disease formerly thought to be eradicated, they are involved in public policy.

I'll keep pushing the idea that involvement in public policy debates is part of the tradition and heritage of philanthropy in this country. And clearly it's an area in which our foundations could engage in more of what they might consider risky. But I would argue that it's more risky not to push harder.

PND: One of the newer developments in the field has been the emergence of a set of practices loosely referred to as venture philanthropy. Do you think people will be using that term five years from now? And is there anything in the venture philanthropy critique of the traditional philanthropic model that the field should pay attention to?

DR: I think the excitement and enthusiasm over venture philanthropy was probably overhyped. It was something that got a lot of people's attention, and certainly some elements of the venture capital model did have some applicability to the field, but not much. I think the value of venture philanthropy was the role it played in getting people to look at things with a fresh eye. Although frankly, many so-called "traditional" philanthropists were already doing many of the things that venture philanthropists argued were new and different, and had been doing them for years.

Having said that, I think venture philanthropy did shake the rafters a bit. And it gave some of the more traditional foundations an opportunity to take a second look at what they were doing and to consider whether there was something about venture philanthropy that might fit with what they saw as their own missions. And some interesting things came out of that.

But there were also some areas where people said, "No, thank you very much, that's not what we're all about. We don't want to become involved in the board of directors of a charity we fund; that's not our role." And I think that was important. Again, I'm not sure where venture philanthropy left its greatest mark — probably on individual donors, the social venture circles, the giving circles, the clubs, and so forth. I think they're going to have a magnificent impact on the field in the future, because many of those budding philanthropists are going to go on to found foundations.

PND: Do you think foundations, especially large foundations, could be doing more to share knowledge and information with each other?

DR: I think a lot of that is going on and has been for quite some time. Again, most of my personal information about that comes from my days as a board member at Ford, and in those days Ford was quite active in working collaboratively on welfare issues, on housing issues, on sustainable development issues — I could cite you examples chapter and verse. Or take something like the National Community Development Consortium, which was started by the Rockefeller Foundation but enlisted a number of large foundations to create a significant pool of money for community development.

We've seen a lot of collaborations on education issues, on afterschool issues, on health issues — the Robert Wood Johnson Foundation has been collaborating with other foundations for years. I'm starting to name particular foundations, which I probably shouldn't do because I'll miss some, but Mott's done a lot of it, Kellogg has done a ton of it, Packard has done a lot, many of the foundations that work globally have worked with both the federal government and business, as well as governments and NGOs abroad. I've always thought there was much more collaboration going on than the popular literature seemed to indicate.

PND: Are the affinity groups created under the sponsorship of the council an effective mechanism for that kind of activity?

DR: Absolutely. They're a stimulus for a lot of that kind of activity. You know that the council doesn't work on particular social issues. We don't have people who concentrate on the environment, or education, or welfare reform, or what have you. That's what the affinity groups do, and do effectively. They provide a home for the discussion of issues as well as collaboration around those issues, and it's where a lot of these collaborations get started. I think the affinity groups have been enormously valuable in that regard.

PND: What about global philanthropy? In a world where transnational issues such as AIDS, poverty, global warming, control of water supplies, and so on are moving to the top of the agenda, should U.S. foundations be doing more to think locally and act globally? And is the council doing anything to encourage its members in that regard?

DR: We are in the sense that we try to make opportunities in those areas better known to U.S. funders who are interested, or might become interested, in global issues. And we do a lot of work both legislatively and on the regulatory front to facilitate global grantmaking by U.S. funders — because, as you know, that's not always easy to do.

But I want to emphasize how this is a good example of the diversity of philanthropy, which to me is its very strength. There are foundations that will never be interested in funding outside a certain city or state or region — they know what they want to do, they have their mission, and they're going to stick to it. Then there are other foundations that are looking around for new opportunities, and those are the ones we can work with and help to think globally.

As you know, we have collaborated with the Foundation Center on two editions of a directory of international grantmaking by U.S. foundations [International Grantmaking II: An Update on U.S. Foundation Trends], and it's been a very good reference work for a number of the new foundations that are beginning to think about what they want to do and are interested in international work.

You're also seeing more community foundations that are becoming interested in funding outside the United States. In many cases, that's because a funder has relatives in a certain country or her family came from there and she knows there are certain needs and wants to return some of that largesse to the place that nourished her. So a lot more community foundations are doing international grantmaking.

PND: Should the field be worried about a leadership gap created by the approaching retirement of baby boomers in large numbers?

DR: Well, we're already seeing an enormous turnover in leadership, although I can't say whether the retirement of baby boomers is the reason. I really don't know the reason, but we are seeing it developing and have put in place a number of new educational offerings for attracting and training new leaders that are coming into the field. We've had a program for new CEOs of large foundations for about the past three years, and we started one for CEOs of new community foundations about two years ago. And we're beginning a new program next year that is aimed at leadership development for private foundations that aren't very large. In fact, we have three-year commitments from a group of people who will help us develop a philanthropy institute to look at the leadership development needs in the field and plan programs that can meet those needs.

PND: Do you think the current economic slowdown will have an impact on the future of the field? Do you expect the field to grow at the same rate it has over the last twenty years?

DR: I'm not a real good forecaster and twenty years is a long way out. It's very clear, however, that the turmoil in the markets and the current economic slowdown are having a dramatic impact on foundations and will continue to have an impact for the foreseeable future, just as they're affecting the portfolios of individual investors. The recent market and economic turmoil has certainly affected foundations' ability to carry out new and expanded programs, and many foundations are cutting back on what they had been doing. At the same time, some are going the extra mile and saying this is the time, when the economy is bad and charities are suffering, to make an extra effort to increase our grants, so there's some of that going on. But most foundations are invested quite conservatively and their portfolios are pretty diversified — that's just the nature of the foundation world — so most foundations are not suffering as much as individual investors.

As I said, I'm not a good predictor, but as long as the economy remains sluggish and the stock market is in the doldrums, foundation portfolios will be affected, even when they're conservatively invested. I wish I could be the one to tell you exactly what's going to happen. If I knew, I could make a fortune. But I just don't know.

I do know, however, that in terms of numbers, the foundation field will continue to grow; I have confidence in that prediction. Because we've just begun to see the effects of the intergenerational transfer of wealth, which is something I believe in. I don't know that it's going to be as large as Paul Schervish [director of the Social Welfare Research Institute at Boston College] has predicted it will be, but I do know that it's going to happen, that it's already begun to happen. And I see no reason for it to not continue.

PND: If the foundation field continues to grow, does it follow that the nonprofit sector, in terms of the number of nonprofit organizations, will continue to increase?

DR: I'm not sure that that's a given. In fact, at the moment we're seeing retrenchment in the sector that's been caused by reductions in the amount of support coming from foundations and government. So you're seeing combinations, some mergers, and some nonprofits that are simply going out of business. I've even heard it suggested that perhaps this is a period of correction for the charity field, as it has been for the stock market. Whether that's true or not, I'm not sure that the growth rate for foundations will continue to be as spectacular as it has been since I've been with the Council. I mean, the rate of growth has been just phenomenal, and I don't think anyone would have guessed we'd see that kind of growth when I got here six years ago. But, while the growth of the field may slow, I do think it will continue, which doesn't necessarily mean that the entire sector will continue to expand and grow.

PND: There has been a general loss of confidence in institutions, both public and private, over the last few years. Is that something the field should be concerned about? And if so, what can the field do to retain and build on the trust of the public in the years ahead?

DR: You bet. This is an issue that should be and, I think, is of great concern to philanthropy, as well as to every other institutional field. In our case in particular, accountability is the bedrock of what we do and stand for. You know, my view is that foundations have agreed to a sort of contract in exchange for certain tax preferences and benefits, and it requires us to be accountable not only to ourselves but to the broader public as well. Therefore, we simply must be vigilant on issues of self-dealing, of overzealous compensation, and of any kind of malfeasance that would compromise that expectation of accountability. The public trust is extraordinarily important to the foundation field, and we absolutely must do everything in our power to maintain that trust.

PND: What are your ambitions for the council over the next five years?

DR: We have some pretty grand dreams. One, as I just mentioned, is to see that the growth of philanthropy is accompanied by a growth in the recognition, within the field, of the importance of accountability and maintaining the public trust. We believe the field will continue to grow. But this issue of accountability and public trust is at the core of how we plan to help both council members and non-members, because, frankly, even if you're not a member of the council, when we go to the Hill to talk to Congress about foundations, we're representing you as well as our members.

Our dream, of course, is that foundations will continue to expand their influence on society in myriad ways, whether it's through preserving the environment or providing scholarships or funding arts and cultural institutions. And we want to see greater public recognition of the beneficial role that foundations play in our society, which in turn will help the field understand the impact it has on society.

We also have some big dreams, as I mentioned earlier about encouraging foundations to become more active in public policy. Many foundations have not seen themselves as having a role in helping to shape the policies that affect our lives and the world in which we live, and we plan to work on that. At a bare minimum, the legal requirements placed on the field are terribly important, and we have to make sure that we continue to adhere to the letter and spirit of the law in terms of our ethics and the public trust.

PND: What about challenges — are there any out there that keep you up at night?

DR: My fear is that foundations will suffer at the hands of ignorance. I mentioned earlier the Communications/Legislative Initiative that the council conducted from 1997 to 2000, and a clear message that came out of the research for that project was that we are incredibly unknown or misunderstood by a vast majority of the policymakers and other opinion leaders in this country. For example, most of the Congress simply doesn't know us, doesn't know what we do, and doesn't know that philanthropy is a major underpinning of American democracy. Or that, increasingly, it's the underpinning of emerging democracies around the world. For all those reasons, we will be revisiting our CLI project in 2003 in order to reinforce the lessons learned during the first go-round.

I can't emphasize this enough. We simply must put a face on philanthropy so that these opinion leaders know who we are and how important philanthropy is to a stable society. Political leaders in particular need to see how philanthropy is of value to their constituents. Media and other thought leaders must learn about us in order to transmit that knowledge to those who will form the next wave of philanthropists. We need to learn to tell the stories of philanthropy so that we're not seen as "just a bunch of do-gooders" who navel-gaze, but that instead we're seen as the engines that help real people and real communities, that bring new ideas to market, and that contribute to society's research and development efforts.

PND: And on that note, I think we'll have to leave it. Thanks very much, Dot, for your time this afternoon. And best of luck with all your plans.

DR: Thank you. It was a pleasure.

Mitch Nauffts, PND's editorial director, interviewed Dot Ridings in October. For more information on the Newsmakers series, contact Mitch at mfn@fdncenter.org.