A few months back I wrote a column about Philadelphia’s community foundation, which will celebrate its 100th anniversary in a few years.
I noted that The Philadelphia Foundation has not kept pace with other community foundations around the nation in terms of civic prominence and asset growth, particularly given its age and regional context.
After a long search, the Foundation’s board of trustees recently chose Pedro Ramos to lead them into their second century. It was a good choice for a variety of reasons.
Too much of the old philanthropy is riddled with the can’t do attitude of many in the public sector. Philanthropy often mimics the ideology, solutions, and organizational processes found there. The Philadelphia Foundation will have to leave that line of thinking if it wants to strike out into new territory.
First, Pedro Ramos has standing in the region as a public manager, private attorney, and civic activist. His resume is impressive, including stints as the city’s Managing Director, as an executive at the University of Pennsylvania, and as chair of the School Reform Commission.
Second, Pedro has the ability to stretch across a wide swath of the Philadelphia region. He was born and raised in North Philadelphia and has relationships with everyone from university presidents and bank executives to community leaders and elected officials. He is as comfortable at 5th and Allegheny as he is in Radnor.
Having credibility from low-income neighborhoods to boardrooms is a good attribute for this position. He will have to stretch those relationships even further to be effective.
Third, he is not afraid to think outside the box and make tough decisions. I have known Pedro for many years. I got to work with him indirectly during the very brief time I was at the William Penn Foundation and he chaired the School Reform Commission, in the chaos of the post-Arlene Ackerman era.
Pedro recognized the depth of the financial and organizational deficit at the District and worked the situation as well as could be expected, managing the politics on both sides of the aisle, working the data, and leading the search that brought Bill Hite to town.
He came to terms with the need to build a portfolio of public options for parents, the need to renegotiate labor contracts, and even do the unthinkable – closing down underutilized school buildings – in an effort to help save the District’s finances.
Ramos will need the same standing, broad based credibility, and willingness to re-think how business is done to succeed at the new job. He will have to do four things in his first year or so at the helm.
First, he has to spend time listening to the donor and grantee constituencies that make up the Foundation’s core customers. But he must also spend even more time listening to potential customers that the Foundation will need in the future, if they want to be successful.
Success for a public foundation is about asset growth and social impact. The first is easy to measure; the second is easy to talk about, but difficult to measure. He will have to do both.
Secondly he will need to help author a strategy that aligns the twin goals of social impact and asset growth. This may lead to partnerships with others in the donor advised gift world, retail relationships with the large private foundations, a revamping of their technology and fundraising platform, and a willingness to take on a few big regional issues of importance.
Like any good strategy it will require organizational introspection, industry comparison, and knowledge of external factors that drive success or failure.
Thirdly, he will need to use the new strategy as the basis for re-branding the Foundation as a forward-looking institution. A second century celebration is a good time to re-boot the system. I still meet too many people of means in this region who have no idea who they are. Not a good thing!
A brand is something that an organization owns that differentiates it from others in their field. Figuring out what it is (or ought to be) requires discovery and creativity. It has to be something more than “We are the region’s community foundation.” Re-branding will be important in order to help the Philadelphia Foundation partner with other leading national philanthropies that want to work in the region.
Fourth, he will have to build a team of staff and board members to help him implement strategy in ways that are respectful of the past but oriented toward the future. That team will have to be willing to sometimes eschew conventional wisdom and take some reputational risk.
It is tricky to lead change in philanthropy because there are few outside forces telling you that you must do so. Any sense of urgency has to come from within. This is particularly true for privately endowed foundations that have no customers in the ordinary sense of the term.
With a community foundation that has to raise new gifts from donors, the challenge is both on the buy and sell side. They have to be relevant to private sources of capital that do not necessarily need their services. To get them to join, they will have to demonstrate their added value.
Sean Parker, of Napster and Facebook fame, says philanthropy is changing. New capital is coming from people naturally oriented towards rapid results, technological disruption, problem solving, and identifying weaknesses in old systems. Parker hopes things will not atrophy back to the more common state of philanthropy.
In some ways, the Philadelphia Foundation family – board, staff, donors, and others – would be wise to think of this as a turn around. I do not mean that in a literal sense. The Foundation’s balance sheet is fine. But they are coming out of a period of relative stagnation and transition and now have the opportunity to move the ship forward in a whole new way.
Three additional things are worth noting as the Foundation moves forward. For one thing, the leadership change is happening at a time when a significant number of new private foundations are being formed all over the nation, based on the remarkable amount of private wealth created over the past few decades.
Much of the new philanthropic wealth functions more entrepreneurially than the more established endowments. A recent Wall Street Journal op-ed from Sean Parker of Napster and Facebook fame framed the issues and potential of the new hacker philanthropy, as he termed it, as well as I have seen.
Parker notes that this new capital comes from people naturally oriented towards rapid results, technological disruption, problem solving, and identifying weaknesses in old systems. The same orientation is reflected in their philanthropic efforts, which Parker hopes will not atrophy back to the more common state of philanthropy.
The Philadelphia Foundation has to create linkages to a number of new private philanthropic efforts around the region. But to do so, they will have to demonstrate that they have a bit of the hacker mentality that Parker noted in his op-ed, including optimism about finding new solutions to old problems.
Too much of the old philanthropy is riddled with the can’t do attitude of many in the public sector. Philanthropy often mimics the ideology, solutions, and organizational processes found there. The Philadelphia Foundation will have to leave that line of thinking if it wants to strike out into new territory, both in terms of donors and grantees.
Secondly, alongside the rise of the new private philanthropy there is also a wide-scale transfer of inter-generational wealth going on in America. Boston College’s Center on Wealth and Philanthropy estimated that the minimum wealth transfer over the next fifty years or so could be in the magnitude of $58 trillion.
Thirdly, there is a small revolution taking place in corporate social responsibility around the globe that has some companies trying to align their business goals with social investments and new product development.
Whether it’s a venture fund created by Adidas to catalyze environmentally sustainable products or a line of healthy food that Danone and the Grameen Bank in Bangladesh are producing and distributing to villages, the once bright line between the economic and social spheres is dimming. A regional foundation can help lead in efforts with local companies to enable the cross-fertilization between economic returns and social outcomes.
There is great opportunity for the Foundation if they can actively market their value as a manager of assets, as a place that invests in solutions, and a system for enabling cross-sector innovation. Let’s hope they are able to do just that.
Hiring Pedro Ramos was a good start.