Big Changes at the Rockefeller Foundation

By Ian Wilhelm

As one of the world's most venerable grant makers tries to revitalize its efforts, the Rockefeller Foundation is making major personnel changes and overhauling its giving.

Since March 2005, when Judith Rodin joined the foundation as its president, roughly 25 percent of its employees have been replaced or their positions eliminated. At least one grant-making program in the arts has been cut and others may face the chopping block as part of an effort the foundation said will make it more effective at fighting social ills in America and abroad.

As Rockefeller warns charities in its 2005 annual report: Last year's grant making should not be used to predict future gifts. "It is important to note that this annual report summarizes the programs and grants of the foundation in 2005, many of which will change in 2006," the publication, which was published last month, states in bold type.

'Needed to Clean House'

The changes at the foundation have raised concerns among former Rockefeller employees and current grant recipients, who say valuable programs and people are in jeopardy.

But others argue that the move is a much-needed "culture shift" at an organization that has been content to rest on its laurels during the last decade or so.

"Rockefeller had reached the point where it definitely needed to clean house," said Brian I. Byrd, who was the foundation's assistant director of communications for eight years until leaving in 2005 to become a lobbyist at a New York law office. For many years the fund lacked inspiration, he said. "It was sort of like business as usual" for the employees.

For Ms. Rodin and her staff members, the foundation's transition has less to do with internal lethargy than with external realities.

"The world in which the foundation operates has changed considerably, and the ways in which the foundation must operate have been transformed," said Ms. Rodin in a letter that outlined her broad goals.

She sent the four-page letter in April to the organization's 170 or so employees at its New York headquarters and offices in San Francisco, Italy, Kenya, and Thailand.

Ms. Rodin, the former president of the University of Pennsylvania, in Philadelphia, said Rockefeller must foster a "shared culture within the foundation that is guided by a passion for excellence and a search for impact in everything we do."

Established in 1913 by the oil magnate John D. Rockefeller Sr. with the broad mission "to promote the well-being of mankind throughout the world," the foundation is best known for supporting scientific research to help impoverished countries. Its most highly acclaimed achievement is helping to spur the "green revolution" that has helped to feed more than two billion people around the world.

Since its inception, the foundation has given $13-billion to cultural groups, charities helping urban areas, public-health institutions, and other charitable efforts.

But the foundation faces a somewhat diminished role in the hierarchy of American philanthropy today. For decades Rockefeller ranked as one of the 10 wealthiest grant makers in the nation, but now it is the 15th largest foundation, with $3.35-billion in assets.

In addition, the world's richest grant maker, the Bill & Melinda Gates Foundation, has focused on two causes — eradicating disease and bolstering agricultural work in developing countries — that have historically been major concerns for Rockefeller. (Rockefeller is expected next week to announce a new agriculture partnership with Gates.)

In the past, Rockefeller "had big ambitions and resources that allowed it to carry out those ambitions, so it had enormous successes. It's had a very hard time tailoring its ambitions to its current resource level," said Kenneth Prewitt, a professor of public policy at Columbia University, in New York. Mr. Prewitt was a senior vice president of the organization from 1985 to 1995.

"In name it's still in the top rank, but in terms of resources, it certainly is not," he said.

Indeed, the foundation's senior staff members in charge of its makeover say its traditional approaches are outdated and its philanthropy needs to be re-energized with new ideas and new blood.

"Our goal is to be an ambitious and effective 93-year-old start-up," said Darren Walker, a Rockefeller vice president.

He said the foundation needs greater flexibility to work on emerging problems.

As an example, Mr. Walker points to the foundation's disaster-recovery work along the Gulf Coast, where less than a month after Hurricane Katrina made landfall it distributed $3.5-million, a move the foundation would not have made as quickly in the past, he said.

Mr. Walker, former director of the foundation's program to aid impoverished neighborhoods in America, and Nadya K. Shmavonian, another Rockefeller vice president, are leading the transformation of the foundation.

Ms. Shmavonian, who joined the grant maker 18 months ago, said Rockefeller's challenge is to adapt to a globalized world with its more-complex problems and greater number of nonprofit players, while also staying true to the grant maker's storied legacy.

"It is a dual challenge in a sense," she said. "On the one hand, we absolutely have a wonderful legacy to build on; on the other, how do you infuse the energy and constant searching for new ways of operating as we go forward?"

While the foundation is willing to discuss the general thinking behind the overhaul, it is tight-lipped about specific changes in grant making. It refuses to say when its review will be complete, what programs are in jeopardy, or what charities have received so-called tie-off grants to formally end the foundation's commitment to them.

The quiet approach has led some Rockefeller grant recipients to comb through the foundation's annual report, speeches by its president, and other foundation statements as if they were reading tea leaves.

"Everyone wonders what's going on. My take on it is not a lot is known outside the foundation," said Brian M. Newman, executive director of National Video Resources, an arts organization in New York that was established by Rockefeller in 1990. Mr. Newman said he has been rereading public statements by Ms. Rodin "to glean from the verbiage" any clues of where the organization is headed.

Mr. Walker, the Rockefeller vice president, said the foundation has kept beneficiaries aware of new developments.

"The last year we have been very much engaged with grantees in conversations and updating them in very specific ways about the programs, strategies, and development process," he said.

"Having been a grantee, I certainly understand it can be a little unsettling and a little taxing, but it's very important for us to do this work."

Arts Program Cut

While the foundation is not ready to unveil its new grant-making priorities, it has eliminated a program that supports arts and humanities groups and individual artists, known as the Creativity and Culture program.

The move has drawn criticism.

"I was really disturbed when I heard the entire division was no more," said Lynn Szwaja, who worked at the foundation for 27 years until leaving in 2004. During part of her tenure, she oversaw grants to the humanities.

Ms. Szwaja said the culture program at Rockefeller had diminished under previous leadership, so Ms. Rodin was not able to understand its full value.

"She didn't see the strong programs we had for many years," said Ms. Szwaja, who now works at the Henry Luce Foundation, in New York.

Peter Costiglio, the foundation's communications director, said that despite the decision to eliminate the cultural program, Rockefeller will continue to support the arts and humanities in other grant making. "Creativity and Culture is over," he said. "It doesn't mean Rockefeller has abandoned the arts."

As an example, he pointed to the foundation's $3-million contribution this month to United States Artists, a Los Angeles charity that provides arts fellowships.

'Clearing of the Decks'

Perhaps the most drastic changes at the foundation are in the staff.

While foundations in the midst of overhauling their programs often shuffle employees, Ms. Rodin's efforts are far more sweeping, say philanthropy observers.

"It's not just a matter of trying to trim a little deadwood," says Joel J. Orosz, a professor at the Dorothy A. Johnson Center for Philanthropy and Nonprofit Leadership at Grand Valley State University, in Allendale, Mich. "It's more a general clearing of the decks."

Since Ms. Rodin joined the foundation, 47 people have left the fund, with 40 of them resigning or accepting buyouts, and seven being forced to leave, said Mr. Costiglio, the fund's spokesman.

During the same time period, the foundation has hired 35 people, including a new chief financial officer, general counsel, and chief operating officer.

Currently, it has a total staff of 176. The foundation expects to hire more people soon; as of today, the foundation listed more than a dozen job openings on its Web site.

The fresh faces include several people outside the nonprofit world, such as Rockefeller's chief operating officer, Peter Madonia, who was the former chief of staff for Mayor Michael R. Bloomberg of New York.

To be sure, the mass turnover of employees has unsettled a few of Rockefeller's employees, but the foundation believes it is for a greater good, said Mr. Walker.

"Is there some degree of ambiguity? Of course there is. Sometimes some people aren't happy with ambiguity," said Mr. Walker. "But I do think at the end of the day, people are quite energized by the new direction here."