Stanford Social Innovation Review / Summer 2014 55

INSIGHTS FROM THE FRONT LINES

are able to tend to their board of directors, to The Artful Juggler manage their organization internally, and to drive their foundation to make an impact ex- Foundation CEOs play a complex, ever-more-demanding role— ternally. By their own reckoning, few CEOs a role that may not lend itself to on-the-job training. are equally successful in all three domains. BY FAY TWERSKY Engaging the board | The CEO must en- sure continuous alignment between the daily work of a foundation and the interests, passions, and values of its board members. As one CEO put it: “Never get too far ahead ost foundation CEOs come into from scholars, little attention has been paid of your board.” their role with no professional to the topic of foundation leadership. If we When a CEO cannot achieve such align- experience in philanthropy. Ac- were to walk through the opaque doors of ment, unexpected challenges and failures Mcording to research conducted the executive suite at a foundation office, occur: board behavior becomes idiosyn- in 2012 by the Center for Effective Philan- what kinds of people would we meet? What cratic; unresolved interpersonal issues fes- thropy, 60 percent of CEOs from the 100 are the qualities that enable a foundation ter; board members end up being either dis- largest foundations came from outside the CEO to succeed? I set out to answer those connected from the work or over-involved foundation world. The Council on Founda- questions by learning from the experience of in it. “People who in their business life are tions, moreover, reports that 67 percent of others. Along with reviewing the slim body very disciplined fall asleep in a nonprofit all foundation leaders appointed from 2004 of literature on this topic, I interviewed 65 or foundation board role. They display no to 2008 did not come from grantmaking or- people who have served on the front lines rigor,” one CEO complains. ganizations. In some cases, newly installed of philanthropy, including active and re- Conversely, when a CEO and a board are CEOs had previous experience at nonprof- tired foundation CEOs, board members, in tight alignment, the CEO is in a strong its, but foundation boards generally seem to and other leaders in the field. position to cultivate a sense of shared un- prefer hiring their chief executives from ex- derstanding. “I spent a lot of time getting ternal fields such as academia and business. A TOUGH ACT the board members comfortable with one The practice of expecting new founda- My research led me to conclude that success- another,” recalls Chris DeVita, who served tion leaders to learn their trade on the job ful CEOs at foundations of all sizes tend to as CEO of the Wallace Foundation for 25 is noteworthy, in part because that job is es- be artful jugglers—people who can pursue years. “I gave them common experiences sential to the operation of a growing—and multiple high-pressure goals at once. They and created a climate of open inquiry. We increasingly important—sector. In the past created a terrific board two decades, the number of foundations team that is enormously in the United States alone has more than helpful, unusually engaged, tripled, rising from about 32,000 founda- and committed.” tions in 1990 to approximately 115,000 to- Cultivating a healthy day. The job of foundation CEO is also one organization | The CEO is, that makes considerable demands on those ideally, the number-one who do it. “As a leader in philanthropy, you culture leader in a founda- want to take the long view and act with ur- tion. Successful executives gency. This is one of the key tensions to navi- usually embrace the oppor- gate,” notes Thomas Beech, a retired CEO tunity to build a healthy who led three very different institutions internal culture. Charles (the Minneapolis­ Foundation, the Burnett Edelsberg, CEO of the Jim Foundation, and the Fetzer Institute) over Joseph Foundation, offers a period of 33 years. this advice: “Obsess about I spoke with Beech as part of an exten- the human architecture of sive research project that I recently under- the organization.” took. Although the world of philanthropy In some cases, CEOs has begun to receive more media attention view the responsibility of

ILLUSTRATION BY DAVID POHL DAVID BY ILLUSTRATION than previously, as well as more attention organizational management 56 Stanford Social Innovation Review / Summer 2014

FAY TWERSKY is director of the Effective Philanthropy The author would like to thank Thomas Beech, Jill Blair, Group at the William and Flora Hewlett Foundation and Paul Brest, Phil Buchanan, Jim Canales, Chris DeVita, Charles former director of impact planning and improvement at Edelsberg, Larry Kramer, Patty Stonesifer, Melinda Tuan, and the Bill & Melinda Gates Foundation. Kathleen Yazbak for their comments on earlier versions of this article. She also extends special thanks to the many other CEOs she interviewed as part of her research.

as a burden. One CEO tells this story: “At confidence not just in internal candidates, many foundations have hired an executive one point, I was working with an executive but in any candidate with philanthropy expe- (such as a chief strategy officer or a vice coach who asked me what I was looking for- rience. As rare as it is to hire from the inside, president) specifically to serve in a kind ward to next week, and what I was dreading. it is equally rare to hire laterally—from other of number-two role; that person could be And I realized that everything I was looking foundations. (The Barr Foundation recently groomed for the top job. Third, foundations forward to was outside of the organization, hired a new president, Jim ­Canales, who pre- have more flexibility than almost any other and everything I was dreading was inside— viously served for many years as president kind of institution. If it were a priority for dealing with the board meetings, the orga- and CEO of the James Irvine Foundation. foundation boards to plan for internal suc- nization, the hiring and firing.” That decision is a notable, and perhaps prom- cession, they could do so. In reflecting on her time as the founding ising, exception to the rule.) In his book Good to Great, Jim Collins ex- CEO of the Bill & Melinda Gates ­Foundation, Almost all of the CEOs I interviewed, plores how companies that he deems “great” Patty Stonesifer acknowledges that she from both large and small foundations, em- handle succession, and he contrasts that could have paid more attention to the issue phasized how long it took them to under- approach with how other, less great com- of organizational culture. She cites an axiom stand their job, their organization, and the panies tackle this challenge. Rather than drawn from the hospitality industry: “The sector as a whole. It took time to learn about pursue charismatic leaders from the outside, front of the house has to match the back of relevant fields of practice, to investigate high-performing companies often promote the house.” In other words, if you want to donor intent, and to cultivate new donor their CEO from an internal role. Such lead- ensure that your customers will receive first- relationships. It took more time to chart ers, Collins argues, can seamlessly build on rate service, you have to treat your employ- a grantmaking path, and still more time the work of the CEO who preceded them. ees in a first-rate way. Foundation culture is the same. A foundation cannot have strong, trusting, productive grantee relationships if Foundation board have a strong tendency to ­ it doesn’t have strong, trusting, productive resist hiring from within. Board members focus staff relationships. on ­finding the best CEO “in the marketplace.” Achieving impact | All of the CEOs whom I interviewed are quite sophisticated about their approach to driving change in the world, and they eagerly share lessons on to build an effective organization. And fi- In some cases, that principle clearly ap- achieving impact. Here are two such lessons. nally, it took time to implement policies that plies to foundations as well. Nancy Roob, First, learn from those with field experience. would achieve actual change in the world. president of the Edna McConnell Clark “The real knowledge is in the community,” Why isn’t internal promotion more com- Foundation (EMCF), for instance, was a says Beech. “It is essential to develop rela- mon? My research suggests that foundation program officer and then COO at EMCF tionships of trust and exchange with our boards have a strong tendency to resist hir- before assuming her current role. She had grantee partners. The key lesson for me is ing from within. Board members view hir- worked side by side with her predecessor that—contrary to the mythology of foun- ing a CEO as one of their primary respon- and the EMCF board as they reshaped the dations—I can’t control anything.” Second, sibilities, and they focus on finding the best foundation around a strategy that focuses be humble in your work and be skeptical of CEO “in the marketplace.” The practice of entirely on disadvantaged youth. Because silver-bullet solutions. “Never presume that hiring outsiders is reinforced by the execu- she knew what she was doing when she a great idea for solving a complex social prob- tive search industry. Search firms have an stepped into the presidential role, Roob lem is either original or sufficient. It likely obvious incentive to cast a wide net, nation- has led EMCF to become an influential foun- isn’t either,” says Stonesifer. ally and internationally, when they generate dation that punches well above its weight. names for boards to consider. (A trend in this direction may be under A DIFFICULT CHOICE Some attribute the rarity of internal suc- way. The ­Kellogg Foundation and the Ford Selecting a new chief executive is no easy cession to a lack of bench strength. They ­Foundation both recently selected internal task, and foundation board members take argue that most foundations have too small candidates to be their next president.) it seriously. It’s interesting, therefore, that a pool of leadership talent from which to In short, when foundation boards are in hiring their next “artful juggler,” so many choose a new chief executive. But for several looking to hire someone for the CEO job, boards choose a candidate for whom philan- reasons, this argument is not entirely con- they should consider people who understand thropy is a new field. vincing. First, large foundations do have a philanthropy. Or, better yet, they should con-

Boards, in fact, seem to have little sizable pool of experienced leaders. Second, sider grooming that leader from within. n POHL DAVID BY ILLUSTRATION