To the Editor:
I read with great interest Michael Edwards’ opinion piece "Foundation CEOs Shouldn’t Serve on Corporate Boards" and appreciate the points he makes about the moral and reputational hazards foundation leaders face when serving on such boards.
Mr. Edwards focuses on Ford Foundation President Darren Walker’s decision to serve on Pepsi’s board. He writes that the juxtaposition of radical social change with corporate coziness is "confusing" and that Mr. Walker’s "accepting a formal role with PepsiCo may stoke the suspicion that foundations are places where public and private interests overlap in ways that are unhealthy."
Foundations are and always have been places where public and private interests overlap, starting with our dominant business model. Our endowment assets and income derive from the capital market: equity and debt investments in public and private companies; alternative assets such as private equity, hedge funds, managed futures, and real estate; and government bonds.
For virtually all private foundations, a reliance on and connection to the private-sector economy is not a side issue, as Mr. Edwards implies; it is built-in and central. If corporate involvement and dependency is the yardstick, we are all fundamentally "compromised" at birth.
Notwithstanding the widespread notion that grants are foundations’ core business, they are in fact a relatively small part of the whole. To the uninitiated, we look more like conventional investment funds with small giving programs, more predictably obedient to tax law than to mission. When push comes to shove, we are more dependent on corporate America than on social-justice champions.
Yet as engaged asset owners, and especially in concert with coalitions of like-minded investors, advocates, and experts on policy subjects, we have far more power to persuade and support causes such as the living wage, a path to stem the diabetes epidemic, climate-change action, and more.
Mr. Walker’s vision, as I understand it, is of the Ford Foundation as a fully engaged investor of all of its capital in pushing forward an ambitious social-justice agenda. Are there risks? Of course, and Mr. Walker will face many cited in Mr. Edward’s essay.
But if we foundations think and act systemically, as Mr. Walker is doing, and position ourselves alongside our allies for a broad, active role in the economy rather than confining ourselves to a more traditional back seat, I believe taking this step is worth the risk. In the current world of interconnected, urgent problems, where solutions will require a coalition of actors from all parts of society, Mr. Walker’s path is wise and necessary.
Clara Miller
President
Heron Foundation
New York City
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