Economy Forces Two Big Foundations to Make Staff Reductions

July 17, 2009

Economy Forces Two Big Foundations to Make Staff Reductions

By Ian Wilhelm

Philanthropy continues to feel the effects of the economic recession as the W.K. Kellogg Foundation said it is offering buyouts to 40 percent of its staff members, while the Ford Foundation announced that almost 11 percent of its employees have left the grant maker after accepting a voluntary severance package.

Sixty-eight of Kellogg’s 167 workers have been offered a severance deal, said Joanne K. Krell, the organization’s vice president of communications. While she said the move was “largely driven by economics,” the foundation is also revamping its grant-making programs, which requires some personnel changes.

(Read the Chronicle’s article about Kellogg’s new approach, which was developed before the recession.)

Employees have until mid-September to make their decision. Three senior executives at the fund — Rick Foster, vice president of programs; Greg Lyman, a senior vice president; and Gail McClure, vice president for international programs — have already accepted the buyout.

In June, Kellogg, in Battle Creek, Mich., announced that it laid off 13 staff members at an office it closed in South Africa.

With its assets suffering a 22-percent decline last year, Ms. Krell, said, “We want to protect them for the long term.”

Ford Foundation Changes

The Ford Foundation, in New York, is facing a similar drop in its endowment, and 60 of its 550 staff members decided to take the severance package. In addition to its buyouts, which were announced in the spring the grant maker eliminated 30 positions by closing offices in Vietnam and Russia.

Both foundations stressed that the staff reductions and other budget cuts would help the organizations maintain their giving.

“We moved $40-million from internal costs to grant making,” said Luis A. Ubiñas, Ford’s president. “We sacrificed in order to keep our core program budget as strong as possible.”

He said that the foundation does not anticipate further reductions in staff members, barring any significant drops in its assets, and described the buyout process as one of the toughest periods in his professional life. “It was like losing my aunts and uncles as co-workers.”

To hear Mr. Ubiñas talk about the cuts, please click on the audio player below.

Comments

To hear Luis refer to employees he terrorized to take voluntary packages, as family is a very funny. If these people were like family, then why is the foundation denying unemployment claims, especially to all single parents who could benefit for the extra economic cushion. I guest it like referring your family to the welfare dept. for help. That’s what a rich nephew would do!!

— Harry Jul 22, 06:58 PM #
Terrorized is the appropriate word. This country is experiencing the worst economic climate it has in years. New York City is an extremely expensive area in which to reside. So, you have to ask the question, what employee in their right mind would “voluntarily” leave their job now?! All of the false compassion Mr. Ubinas is putting out in the press is just another kick in the teeth to the lower-income people he threw out into a jobless market without unemployment insurance. It is interesting how he avoids mentioning that none of the managers, directors,VPs and professional staff (not offered the package) were not required to take even a small reduction in compensation. I guess New York is indeed an expensive place to live but only for them, not for us little people.

— Mary Jul 23, 05:23 PM #
Mr. Ubinas: Middle-Class Single-parents can “make an easier transition to unemployment” than your VP’s, Directors and Managers – Is that why you are not approving unemployment benefits to your “aunts and uncles”? Mr. Ubinas: you can call an Ass “a swan”, but that does not change the fact that it is, still, an Ass. The Ford Foundation is Self-Insured, and to avoid incurring the cost of paying out unemployment benefits out of its own pocket, Ford chooses to call this massive layoff of nearly 70 employees – “voluntary”. No one in that group left voluntarily!!!

— Guess Who Jul 23, 06:53 PM #
How dare Mr. Ubinas compare the loyal employees whom he discarded, to his “family!” The Ford Foundation can spin this anyway it chooses to, but the reality is that those who took those packages did so out of fear. Mr. Ubinas “robbed Peter to pay Paul.” Part of the Foundation’s mission is to “reduce poverty and injustice” and neither was reduced in this scenario. He, as well as upper management, continues to collect a fat paycheck, while the “little people” are forced to fight one of the largest non-profit institutions for unemployment! It’s ludicrous! Can the Ford Foundation also stop them from applying for food stamps? I am sure most of the people who took this package will be eligible in a few months. The “internal sacrifice” undertaken in this situation (and my heart really bleeds) was to get rid of those who held the least power. Is this not unjust? Despite the hardship of those who left, The Foundation will continue to lull itself into a false sense of security. After all, it moved 40 million dollars toward more grant making by getting rid of 60 of the lowest paid employees! Mr. Ubinas touts personal ethics and claims he cares mostly about poor people, yet those who took the package are soon going to be part of the community that the Foundation claims it wants to serve (as long as they don’t apply for government benefits). The people who are left behind should keep a watchful eye, because it’s not over….

— Mr. Poser Jul 23, 08:39 PM #
It is admirable that the Ford Foundation does not want to risk the grantees, but yet felt comfortable with risking the livelihoods of 60 staff in New York, plus 30 staff overseas in the worst global economy in decades. This number is more when you consider that all of these people have families they are supporting – maybe even aunts and uncles!! Many of the people who left were with the Ford Foundation for 10 to 20 years. These people have to compete in an intense job market and no assistance was offered for retraining, resume writing and support. If in the near future the Ford Foundation will be hiring some new staff in “similar positions” maybe the Ford Foundation should consider rehiring some of the “aunts and uncles” they so recently lost.

— Nelson Jul 23, 08:54 PM #
I have found some of the best reasons I ever had for remaining at the bottom simply by looking at the men at the top. —Frank Moore Colby

— whatever Jul 24, 11:55 AM #
Luis Ubinas has no morals or ethics to speak of. He will ruin the Ford Foundation. Luis, if this time was so difficult for you, why did you announce that you would personally take Fridays off while drawing a $600G salary and denying “your aunts and uncles” unemployment claims? You have no soul.

— another Ubinas victim Jul 24, 03:03 PM #
No one will deny that the work of the Foundation is extremely important, and its whole reason for being. However, it is a misrepresentation to say that 60 workers out of 550 took the package. The 60 were in NYC alone, which has only about 350 staff, and there are even more ff folks worldwide who are now out of jobs, beyond the closing of the two offices mentioned.

It is really shameful that claims for unemployment for single parents are being denied based on info provided by Ford, especially in such an expensive city as New York. That part of the funding formula could have been handled with a little more sense of fair play.

— Batman Jul 25, 02:41 PM #
“No one will deny that the work of the Foundation is extremely important.”

The Ford Foundation is as relevant as that other institution that sits directly across the street on 1st Avenue. Mr. Ubinas and his millionaire cronies are the archetypal limousine liberals.

To all of the NRP crowd, who still “work” at that preposterous institution: do you still think the Democrats are the lesser of two evils?

Perhaps they are, and what Mr. Ubinas just did to his staff is called compassionate liberalism.

— Oh please Jul 25, 03:24 PM #
Re: the severance packages at Ford -those comments does’nt tell the true story because majority of the staffers who took the package received three weeks pay for each year they were at the foundation + medical benefits for life in some cases -separate and apart from their regular benefits they would receive. These kinds of rewards are unheard of in these hard ecomonic times. they should have been thankful instead.

— Michael Moore Jul 27, 03:00 PM #
And what benefits, “separate and apart” from the package would you be referring to??
If the “majority” received three weeks pay for every year they were there, then what did the “minority” receive?
Michael Moore?? Mr. Ubinas, is that you!!!

— Mr. Poser Jul 27, 07:37 PM #
To #10 above: are you for real?

Your comments are best described by what Woody Allen once said in the movie Bananas: “a travesty of a mockery of a sham of a mockery of a travesty of two mockeries of a sham.”

— Give me a break Jul 27, 07:46 PM #
Re: #10 above. Is this the best damage control The Ford Foundation can come up with? How about keeping your mouths shut and declining any future requests for interviews? The “losing my aunt and uncles” statement by Luis Ubinas is pathetic and hypocritical. And, the comment by Michael Moore (#10) is arrogant and insulting to all the poor souls who will be struggling to make ends-meat in the coming months.
Those of us who are still working – BE THANKFUL. Those of you, “fortunate” enough to get Ford’s unheard of rewards, during these hard economic times, good luck in finding a job, and May God Bless You All.

— Thankful Instead Jul 27, 07:58 PM #
#10 — Severance and unemployment are two separate issues. Receiving severance does not disqualify a person from unemployment eligibility. The real issue is that Ford is lying. They are claiming that people quit on their own and that there was no downsizing and no threat of layoff.

They also lied when they claimed that they offered the severance where there was “excess capacity.” If ALL the non-exempt staff were “excess capacity” then why did they have to hire temps immediately and why are they planning on rehiring some of the positions? (Rehire them after downgrading them to lower salary grades and decreasing the benefits, of course.)

Ford has other plans for its money than the “every dollar saved has gone directly to our grantees” mantra its talking heads are peddling to the press. This is the rise of Ford as an entity whose main game is press and spin. No surprise, given its current leadership. Fordkinsey, anyone?

— The Truth Shall Set You Free Jul 27, 08:11 PM #
Batman indicated above at #8: “… it is a misrepresentation to say that 60 workers out of 550 took the package. The 60 were in NYC alone, which has only about 350 staff, and there are even more ff folks worldwide who are now out of jobs, beyond the closing of the two offices mentioned”.
Just to put some concrete numbers to his comment: Worldwide employees were reduced from an approximate total of 180 to 100.
Do the math to get an accurate, or at least more realistic, number of employees forced to leave the foundation. By the way, a “voluntary package” was not even offered to those worldwide ff folks.
Mr. Ubinas, that’s definitively a much higher number of “aunts and uncles” than the one you are trying to sell to the press… what a shame.

— John Jul 27, 09:23 PM #
What do all you brilliant folk propose instead in a time of declining revenues? The cuts have to come from somewhere.

— Dee Jul 27, 10:16 PM #
It’s obvious from these comments above, (can’t speak for #10 and #16) that this group is indeed, quite brilliant. Right on, Dee. If only this question, #16, was asked of staff, primarily those these drastic moves would be affecting, (the poor ones), before they were sent packing – then maybe, just maybe, this could have been the “inclusive” process some repeatedly pretend it was. As many have said before, could any of the top 10 highest paid staff even offered a 5%, a 10%, cut in salary to help reduce layoffs? EDs at nonprofits with much lower annual operating budgets have chosen more honorable ways to go about a process, had contingency plans developed to deal with the recession, have made “personal sacrifice” on an individual level for the greater good.

Since you asked and seem to want suggestions, I propose you check out this link to find such honorable CEOs, both corporate and nonprofit alike:

http://www.fastcompany.com/blog/cali-yost/worklife-fit-not-balance/downsizing-flexibility-champions-alternatives-layoffs-honor-

— Too Little Too Late Jul 27, 11:15 PM #
“What do all you brilliant folk propose instead in a time of declining revenues? The cuts have to come from somewhere.”

Hey Dee, here’s a thought: how about starting out (with cuts) to Ford’s crack investment staff? These are the same people who decided to gamble the foundation’s portfolio in that casino down on Wall Street. There are scores of bankers out of work from places like Goldman Sachs and Morgan Stanley for no other reason than poor performance (i.e. risky investments).

King Bloomberg himself was fired way back in the 80’s from Salomon Brothers, where he was head of equity trading. Correct me if I’m wrong, but I don’t think Mr. Bloomberg was fired because of his short stature.

The proper question to be posed here is: what are the consequences to Ford’s investment team for allowing their organization’s endowment to drop by several billion dollars?

Furthermore, anyone and everyone knows that Ford’s reduction in staff had nothing to do with the current economic climate. This (the elimination of the foundation’s lowest-paid employees) was in the works from the first day Mr. Ubinas stepped foot in what Neal Freeman, from The American Spectator, so aptly termed, “that rosewood palace.”

— Fielding Mellish Jul 28, 09:39 AM #
#16 – here is an idea: Closing the, hardly used and heavily subsidized, private dinning room will cover the cost of unemployment benefit for the 60 people who have lost their jobs. But wait… that may be too much of a “collective sacrifice” during these hard economic times.

— What's on the Menu Jul 28, 02:50 PM #
We need to thank Luis and the Board of Trustees for the fear tactics used to carry on their agenda to reorganize. Here is an idea why didn’t Luis make real cutbacks on the travel budgets and perks for him, Board (including spouses/family), program staff and management???

— Aunt Jane Jul 31, 10:58 PM #
What has happened at Ford is appalling and will damage the company for years to come. Everyone involved in philanthropic work knows this story and it is a very very ugly one. It is Luis Ubinas who should be fired; not the dedicated people who worked for Ford and have been committed to its values.

— Marilyn Morris Aug 5, 07:12 PM #
Luis Ubinas and the Board of Trustees have lost all credibility with the remaining staff at the Ford Foundation. In one felt-swoop they have not only broken the back of the Foundation but have also broken its spirit. The support staff that they so callously intimidated into accepting severance packages was not “just” administrative assistants. It took pure ignorance and arrogance to not recognize that these were not the types of positions that you would find at a manufacturing company, a financial services firm or even at the Harvard Alumni office. These positions were an integral part of a team whose collective knowledge and experience benefited grantees around the world for decades. No temp, intern or just out of college new-hire, can ever, ever replace this loss. Not only is the non-profit world watching you Luis and Trustees, but now you have the entire world’s attention. What will you all do next? Run for public office?

— Last But Not Least Aug 6, 09:04 PM #
Dear Mr. Ubinas,

I am thankful
For losing my job,
And my health insurance.
For not being able to pay my mortgage,
Or my children’s education.

I am thankful
For losing my financial security,
And my retirement contributions.
For being forced to “voluntarily”
Leave a place I called home.

I am thankful
For the soup kitchens
The Ford Foundation is funding
Which I will surely visit
In six months.

— xoxoxo Aug 9, 07:12 AM #

Commenting is closed for this article.

Previous: Grant Makers Step Up Advocacy Efforts to Help Disadvantaged People, Report Says
Next: 52% of Charities Saw Drop in Spring Donations, Survey Finds