June 10, 2009
Ford Foundation Offers Buyouts to One-Third of Employees
By Ian Wilhelm
The Ford Foundation is offering buyouts to one-third of its 550 employees to reduce expenses and avoid cutting its grant making.
The move is the latest in a series of efforts by the foundation, the second largest in America, to trim its costs following an almost 30-percent drop in assets last year. The percentage decline in its endowment, which currently is about $9.1-billion, is similar to the decline many other foundations have experienced.
“We did substantial savings and belt-tightening, but unfortunately the economic environment remains really volatile,” said Marta L. Tellado, the organization’s vice president of communications.
Last month, the foundation’s president, Luis A. Ubinas, told staff members about the buyout offer and the economic challenges facing the grant maker.
Employees in Ford’s New York headquarters and in its foreign offices have been offered “generous and responsible” buyouts, said Ms. Tellado. “We looked at areas in the foundation where we have excess capacity.”
She said the organization does not have a specific number of employees it hopes will accept the severance offer. However, if the voluntary departures do not produce adequate cost reductions, the foundation may lay off staff members. Employees have until June 22 to make their decisions.
Other large foundations, like the W.K. Kellogg Foundation and the California Endowment, have made staff changes this year in part due to economic constraints.
Closing Overseas Offices
The Ford Foundation already eliminated 30 staff positions when it closed offices in Hanoi and Moscow in April. That move, along with reducing travel costs, instituting salary freezes, and other efforts, has generated $40-million, which Ms. Tellado said will be used to support Ford’s grant making.
“Every dollar we could save internally is a dollar we could put toward grant making, and we are really committed to not reducing our grant making,” she said.
The foundation plans to provide $528-million in grants in its current fiscal year, which started in October. That amount, which is the same the foundation gave in its 2007 fiscal year, will depend on the future performance of the endowment, said Ms. Tellado.
Several Ford grant recipients have privately expressed concerns about the shakeup at the foundation. But Ms. Tellado emphasized that the foundation is making the financial fixes to keep its giving “robust.”
“Everything we’re doing is to meet the needs of our grantees. So we feel like they’re going be in pretty good standing,” she said. “This economic crisis is not something we’re just going to bounce back from. We have to think about how do we prepare ourselves for the longer term.”
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So what is the dollar amount or percent of salary and other benefits of the employee buyout offer and how is it determined? This would be useful information for other nonprofits that may need to reduce their staffs. Also, why did Ford Fdn. choose to offer a buyout option?
— Daniel Borochoff, American Institute of Philanthropy Jun 11, 03:54 PM #
While the loss of staff and the burden it may place on their families is unfortunate, the action taken by the Ford Foundation is based upon principles that ALL foundations should adhere to during the extreme circumstances of our economy. Bravo to Ford for demonstrating responsible philanthrophy in making the needs of its constituency its priority.
— Allan L. Edmunds Jun 11, 05:27 PM #
This is commendable to have thought of it’s staff.I hope they’ll give more consideration to those in Africa offices….I wish Rockefeller had done the same some years back.
— bor Jun 12, 02:03 AM #
Could foundations like Ford, Robert Wood Johnson, and others have avoided these major reductions in endowment value by investing in a more diverse (counter-cyclical) portfolio that would have provided more balance and offsets (ie. stocks and bonds)?
— P.K. O'Rourke Jun 16, 07:01 PM #