The Business of Hope

September 29, 2020

Where We Go From Here

Darren Walker, President, Ford Foundation

When the Ford Foundation announced in June 2020 that it would increase its payout by $1 billion, President Darren Walker was praised by many but criticized by some for using bond financing rather than spending down Ford’s endowment. An avowed capitalist and firm believer in institutions, Walker nevertheless fears modern capitalism is benefiting too few and widening a wealth gap that leaves many behind. The solution, he argues, is to support resilient, enduring institutions that can respond to our democracy’s ongoing challenges.

In this video:

  • The mood at the Ford Foundation: hopeful and optimistic despite personal and societal stresses (0:52)
  • What brings Darren Walker hope: the people and institutions that the Ford Foundation supports (1:51)
  • Walker’s belief in resilient, enduring institutions that can respond to our democracy’s ongoing challenges (2:22)
  • How the Ford Foundation is using general operating support grants to build a strong social sector (3:49)
  • Why foundations’ strategies, designed around power and control, are holding back the social sector (5:20)
  • Why the Ford Foundation decided to pay out an extra $1 billion over the next two years, financed by bonds (7:28)
  • Walker’s critique – as a “unapologetic” capitalist – of “a capitalism that is generating far too much for far too few.” (10:10)


DARREN: Unfortunately, this is – I'm in Zoom hell all day, anyway.

ANTONY: Okay, well hopefully we can give you a little bit of Zoom heaven to start your day off.


ANTONY: You know, one thing I've noticed in my conversations with nonprofit leaders and funders the last few weeks: It just seems that the mood has shifted from defiance and almost exhilaration at the ability to respond, first to the COVID crisis and then to the uprisings after George Floyd's murder. But now it seems like the spirit for a lot of people is really focusing more on exhaustion, and a little bit of foreboding about what's going to happen in the next few months. People just seem burned out. How are you doing and what is the mood at the Ford Foundation?

DARREN: Thank you, Antony. It's great to be with you, and I think I am feeling very hopeful and very optimistic. That doesn't mean that I'm not exhausted and that we at the Ford Foundation are not feeling the stress from the multiple vectors of a pandemic, an economic crisis, a racial reckoning, people working remotely from home. There is a lot of stress, both personally for people at the Ford Foundation, and for the work, because justice has never been more on a precipice than it is today. And if you're in the business of fighting for justice and supporting those firefighters for justice, as we do at the Foundation, it's a very, very challenging time.

ANTONY: Given those challenges, what makes you so hopeful and optimistic?

DARREN:  What makes me hopeful are the very people we support, the institutions we support, and how they inspire me and us. I like to say to my colleagues at Ford, “We are in the business of hope.” And when you're in the business of hope in the middle of a pandemic, an economic crisis, a racial reckoning, you're pretty busy.

ANTONY: Yeah, I think I feel the same way. I feel when I talk to our NFF clients, I can't believe that progress is not going to win. And yet, there are so many structural challenges, and as you said, crises, and you said it feels like we're on a precipice. If it feels like we're on a precipice, there's certainly an urgency to do everything we can to put all the resources we can to pull us back. How do you balance the urgency of the moment with the need to also think and plan for what comes next?

DARREN: I think it's why I believe in institutions in a democracy as fundamental. Because we need institutions to be able to respond now and we need institutions to endure and be resilient and durable, because in a democracy when you're supporting institutions committed to justice, their work is never done. And the fight for justice can never be taken for granted, and therefore, institutions matter. We're not a foundation that is looking to make grants to get, in one or two years, some breakthrough. We need foundations like that and we need philanthropists to do that kind of giving, but that's not what we do at Ford. 

ANTONY: What you're talking about – longer term support to core organizations who will be part of the progressive movement over time – you know, we learned last week that MacKenzie Scott Bezos donated, has donated $1.6 billion in the last year and a half, almost exclusively in general support grants to organizations led by people from the communities they serve. That's an approach Ford has visibly advocated, especially with your $1 billion BUILD initiative, and at least to us it seems so obvious that supporting those kinds of leaders and those institutions they are building is the most effective way to do philanthropy. Do you think her gifts, or the announcement of our gifts is a watershed moment for other funders to follow in this path?

DARREN: I'm actually very excited by what she's done and by the direction and what I'm hearing from colleagues and philanthropy. As you know, I have been an advocate since I became president and even in my own organization to walk the walk. We, in fact, have moved from less than twenty-five percent of our grants as general operating support to now three-quarters. If you believe in institutions, you have to fund institutions to be resilient and durable. And if you're going to do project grants, we need project grants, but make sure as a funder that you're actually paying the overhead associated with your project – which is often not done.

ANTONY: Why do you think it's been so hard for other funders to come around to that point of view? I know – we know of other large announcements that will be made in the next few months, very similar, but it seems like part of the premise of the BUILD initiative at Ford was not only to do that yourselves, but to demonstrate to others how much more effective this would be in the long term. How is the reception to that leadership been in your experience and what do you say to people who are still skeptical that general support grants are a better way to go?

DARREN: A major reason foundations have not been willing, and donors have not been willing, is the issue of control and power, which we donors don't like to talk about. And the other reason is a strategy –  as we have come to understand it – I believe has been taken to an extreme that has pernicious effects and impacts. The way in which people understand how to design strategy as this logic framework where you, the foundation, is at the center and these nonprofits are recipients, contractees, in a strategy that you've designed with specific impacts and so you are buying organizations to get you those strategic impacts and goals and objectives. I see that as sort of the tyranny of strategy and how strategy, as it's come to be known, in its extreme version, has really done harm. Has done harm to institutions. Has done harm to the relationship between foundations, donors, and grantees. And that's a big part of why we're in the situation we're in.

ANTONY: How did you decide that the moment called for the unprecedented move at Ford to increase your payout by a billion dollars over the next two years?

DARREN: It wasn't hard to recognize that there was need; you just had to open your inbox and your eyes. This was back in March, Antony, when we first began the conversation with the trustees and you know, what I was hearing from the program staff and directly from grantees was the crisis they were in. As you recall back in March, we had a round of really bad news. All the spring and summer fundraisers were canceled. As you know, those fundraisers provide most of the general operating support for a lot of organizations. That unrestricted support went away. The arts organizations, everything was cancelled. No earned revenue because the museums, the performing arts, everything's closed. Of course, the emergency food needs and issues around shelter, etc. all converging. And so it was very clear that Ford needed to do more. And as you know, because you've been in philanthropy and you know how it works, the little secret is that during times of economic turmoil and downturns in the markets, that's the very time foundations actually spend less, when there is a need for more. So the asymmetry between when need grows and our endowments go down produces this really bad effect. And so my thinking was how do we make up for that at a time when any smart investment advisor is going to say, “Now's not the time to start liquidating your portfolio. I mean you're going to be selling at fire sale prices. Why would you possibly do that now?” So, when Chairman Powell announced his new monetary policy, which basically made money free, I thought well some of that ought to work for us; we could actually make the capital markets work for justice. We moved very quickly. Within a month the trustees had approved it, and, within a few weeks we were in the markets and able to borrow a 50-year bond at 2.81 percent. I mean, it's just unheard of. And so we took advantage of this opportunity.

ANTONY: When I saw this, I thought, “What a powerful and inspiring example of how the capital markets can be used for social purpose.” We've been talking about – you and I – about impact investing for more than a decade. What more pure form could we come up with than a bond whose purpose is to give money away to the kinds of progressive groups you mentioned. And yet, as you know, when you announced the bond issue, I was surprised, personally, by a critique from a lot of people who I actually respect, who said, actually, Ford Foundation should not have gone to the bond markets and instead should have sold the billion dollars of your holdings because any engagement with the financial system is oppressive. Were you surprised by that critique? I certainly was.

DARREN: No, I was not, Antony. I wrote an essay in my first year as president where I said, “I am a capitalist.” I say that unapologetically. And I also say that the kind of capitalism we have today is going to ruin capitalism if we don't wake up and change the direction of a capitalism that is generating far too much for far too few, and that if we don't have a capitalism that generates more shared prosperity, more equity, more racial parity, we are going to be doomed as a society. But that statement was met by some with a real retort and so, I'm not, I wasn't surprised. And I'm actually not surprised by the data, the most recent Gallup and Pew surveys, that show that people under the age of 40, a plurality, do not believe that capitalism is the best way to organize an economy. And I understand why they believe that, because they came of age out of college, first with a tremendous amount of debt. They come into an economy in 2008 and ‘09 that has no jobs. They don't have the opportunity like the previous generation to say, “Let's start saving for a house, let's start saving for whatever, a small business.” They don't have that option because they're paying off college debt. And so, if this is what capitalism looks like, I understand why there's so much cynicism about capitalism. So, I wasn't surprised that there were people who said we don't care what the investment advisors say about liquidating your portfolio and having a fire sale. The kind of hoarding of wealth and opportunity – I have lived on both sides of the wealth and privilege equation and it is a lot better to live with privilege. But, at the same time, this is not the time to be hoarding privilege and opportunity, to compound the privilege that we already have. So what I would say to people is: Support the policies that generate more shared prosperity. And that may mean for some of us who are privileged that we don't focus on giving back, but we ask ourselves what do we need to give up. Because this isn’t a conversation anymore about charity, and generosity, and philanthropy. This is a conversation about justice and dignity. Who has it, and who doesn't, and why?

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