The Rockefeller Foundation and Philanthropy for Social Change - Centre for Public Impact (CPI)

The Rockefeller Foundation and Philanthropy for Social Change

The Rockefeller Foundation was set up in 1913 to deploy the vast wealth of the John D. Rockefeller's company, Standard Oil, in philanthropic projects. The first major donation was to the American Red Cross, and health and education were initially its central concerns. These were widened to include social and environmental concerns, addressing the needs of countries throughout the world. It is now the 26th largest such foundation, with assets of USD4.1 billion, and it plays a major role in enhancing global wellbeing, with a current focus on resilience — to both environmental and man-made emergencies.

The challenge

At the beginning of the twentieth century, there was widespread poverty in the US and throughout the world, which governments were unable or unwilling to address. The magnates of the time, such as Andrew Carnegie and John D. Rockefeller, felt obliged to use their wealth to make a positive contribution in areas such as health and education. Because their resources were so great, and because the approach also offered financial benefits, they and their descendants placed their charitable efforts on a formal footing. Similar challenges still abound, in health and education, society and the environment, and there remains an imperative for wealthy individuals and families to alleviate distress and enhance wellbeing around the globe.

The initiative

One such initiative was the Rockefeller Foundation, which was created by the Rockefeller family in 1913, the year before the outbreak of the First World War. “From the very first grant to the American Red Cross through to the present-day initiatives, the Rockefeller Foundation has a legacy of trailblazing new fields, convening unlikely partners, and sparking new innovations that lead to transformative change."[1]

In the early years of the Foundation, when its secretary, Jerome D. Greene, wrote a memorandum on principles and policies for the trustees, its focus was already "on problems that 'go to the root of individual or social ill-being and misery'".[2] Its current mission is to "promote the wellbeing of humanity throughout the world through dual goals:

  • "Advancing inclusive economies that expand opportunities for more broadly shared prosperity
  • "Building resilience by helping people, communities and institutions prepare for, withstand, and emerge stronger from acute shocks and chronic stresses."[3]

To achieve these goals, the Foundation "works at the intersection of four focus areas: advance health, revalue ecosystems, secure livelihoods, and transform cities to address the root causes of emerging challenges and create systemic change".[4] More than a century after its creation, the focus on wellbeing is as intense as ever. “Over the last decade, the organisation has built on this legacy, advancing the work across health, agriculture, and cities and their interdependencies with ecosystems and livelihoods. All told, the Foundation has given more than USD17 billion... to support thousands of organisations and individuals worldwide.”[5]

The public impact

The Foundation has made a positive impact throughout its existence. The Rockefeller Foundation played an instrumental role in influencing the nature of philanthropy. “In sum, the RF [Rockefeller Foundation] was involved in all aspects of public health: ideas, theory, research, professional training, practice, implementation, organisation and institution-building. As the only health agency truly operating internationally until the founding of the WHO in 1948, it helped to shape global public health to a greater extent than any other organisation of its day.”[6]

One of the areas on which Foundation currently focuses is resilience, investing "more than a half billion dollars in helping communities of all kinds build resilience to the shocks and stresses of the 21st century world",[7] whether those are natural disasters, such as earthquakes, or man-made disasters, such as civil war. For example, it collaborates with the United States Agency for International Development (USAID) and the Swedish International Development Agency in the Global Resilience Partnership. “In 2015, The Global Resilience Partnership... announced the eight winning teams for its Global Resilience Challenge, chosen from more than 500 applications. Selected teams received up to USD1 million each to implement their solutions, which demonstrate innovative thinking about traditional resilience challenges."[8]

An example of the Foundation's initiatives to alleviate the effects of natural disasters is its work in New Orleans. “In August 2015, New Orleans commemorated ten years since Hurricane Katrina made land fall, a harbinger of what was in store for cities all over the world in the 21st century. In the decade since, The Rockefeller Foundation has partnered with New Orleans to unify its neighbourhoods at the request of local leaders, catalyse economic development and revitalisation efforts, and build resilience to future threats.”[9]

It also invests in social impact for disadvantaged groups in the US. “In 2015, [the Foundation] rolled out [its] impact hiring model to help businesses better source, recruit, and retain disadvantaged young workers who do not have easy access to entry-level positions. [Its] partnership with the 100,000 Opportunities initiative launched in Chicago with the goal of hiring 100,000 disadvantaged and unemployed young people. The initiative includes some of the largest US employers, including Wal-Mart and Starbucks. The 100,000 Opportunities initiative met its ambitious 100,000 person goal two years ahead of schedule.”[10]

Its efforts are not confined to the US. “After exploration, piloting, and modelling solutions, [the Foundation] officially launched Smart Power for Rural Development, an $80 million initiative to electrify 1,000 rural villages in India. The initiative harnesses the innovation of decentralised minigrids, which can provide reliable, clean, and affordable power to small businesses (or microenterprises) and households, improving economic and social outcomes for villagers in some of the poorest places in India.”[11]

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Public Confidence Fair

As Erin Long of the University of Delaware wrote in 2007, the Rockefeller Foundation encountered a mixed public perception at its inception. "Foundations are important organisations within the non-profit world. However, they are not always the most trusted organisations. By looking at one of the first modern foundations, The Rockefeller Foundation, and its struggle to gain a national charter [between 1911 and 1913], we can gain insight into where the trust issues originated."[18]

While the reaction from the recipients of its grants may be positive, there is an argument that the Foundation has too much power and influence over policymaking, as a recent Global Policy Forum paper asserts. "Through their multiple channels of influence, the Rockefeller Foundation and the Gates Foundation have been very successful in promoting their market-based and biomedical approaches towards global health challenges in the research and health policy community — and beyond... However, too often the underlying more complex socioeconomic causes of health problems and the need to strengthen public health systems have remained neglected."[19]

Stakeholder Engagement Good

The Rockefeller Foundation engages fully with numerous actors, whether they be other philanthropic organisations, local stakeholders, governments (as in the Global Resilience Partnership), NGOs, the private sector, or academic institutions. "During the execution phase of every initiative, it gathers key stakeholders together to clarify a common vision of the problem being addressed, the desired outcomes, and indicators for success."[12] The relationships will vary according to the nature of the project. "The Foundation works with these partners in a variety of ways, including as a funder or co-funder, thought partner, or provider of technical expertise.”[13]

In one of many instances, the Foundation worked closely with one of its private sector grantees, the consulting firm, HR&A Advisors in partnering with other actors: “In July 2015, The Rockefeller Foundation, working with its grantee HR&A Advisors, concluded its second round of 'Resilience Academies', two-day workshops that brought together local municipal leaders, federal agencies, and resilience experts to build design projects that address shocks and stresses, and unleash resilience dividends”.[14]

Political Commitment Fair

The Rockefeller Foundation is an apolitical organisation. However, it is dependent on the support of local and national governments for the success of many of its projects, whether in the US, Italy, Kenya, Thailand, Mexico, Turkey, India or elsewhere. The political support to the Foundation varies from country to country. For instance, the governments in the US and Mexico have supported many initiatives undertaken, whereas in Turkey, for example, the government's commitment to projects has been equivocal.

There is a long and close relationship with the US government: “officers and field staff of the Rockefeller Foundation in New York, frequently conferred with government officials regarding the operation of the [Foundation's] programmes.”[15] The relationship with the Mexican government is also of long standing and demonstrates the commitment of both parties. “In 1943, the Rockefeller Foundation and the Mexican government established a cooperative programme to improve Mexican food crop production. As a result the RF and Mexican government agencies and universities sponsored dozens of joint projects that stressed inter-American agricultural cooperation. Crop improvement programmes for maize, wheat, and rice were included as well as weed control and fisheries projects.”[16]

The contrast with the Turkish government indicates that relationships can be fraught and political commitment lukewarm. “The Mideast Wheat Research and Training programme was a project funded by the Rockefeller Foundation to help with crop research and agricultural production in Turkey. Relations with the Turkish government were also complicated, and issues arose with organisation and method. There were also struggles with various governmental departments. These issues were not helped by Turkey's bureaucracy and climate of administrative instability, attributable to constantly changing governments.”[17]

Policy

Clear Objectives Good

The Foundation’s objective has been clear from the start: “The Rockefeller Foundation’s mission has remained unchanged since 1913 — it is to promote the wellbeing of humanity throughout the world.”[20] Its focus, though, has shifted in order to reflect social, political and economic change during the century since its inception, with an increasing emphasis on environmental projects, for example, and a broader geographic range. “For more than 100 years, each generation of trustees has been entrusted with the responsibility for establishing the investment strategy. Its trustees continue to evolve the investing strategies within a changing landscape, and consistent with the organisation’s mission.”[21]

The approach to investment has also evolved over time. “There are a variety of approaches that lie between traditional investments and grants that provide alignment with mission. These range from Responsible Investing to Sustainable Investments to Impact Investing. The Foundation has taken steps across this spectrum to enhance investment alignment with mission.”[22] Social impact investing is a relatively recent approach to its philanthropy, but one that is clearly espoused by the influential family members. "[Eileen Rockefeller] and the Rockefeller Foundation are leading proponents of Philanthropy 2.0 – also known as social impact investing. This is investment made both to generate financial return and to make a social or environmental impact."[23]

Evidence Fair

The concept of private philanthropy is clearly of long standing. However, in setting up a foundation the oil magnate John D. Rockefeller was clearly influenced by a near contemporary exercise, that of the Carnegie Corporation, which preceded The Rockefeller Foundation by two years. "The roots of modern philanthropy can be traced back to the beginning of the 20th century in the United States when business tycoons John D. Rockefeller and Andrew Carnegie set up the first large American foundations, primarily as a way to shield some of their income from taxation but also as a way to garner prestige and influence in the US and world affairs. In 1911 Andrew Carnegie established the Carnegie Corporation of New York and gave it an endowment of USD125 million, making it the largest single philanthropic trust ever established up to that time."[24]

Feasibility Weak

The vast wealth of Standard Oil made the creation of the Foundation entirely financially feasible. "The Rockefeller Foundation was established in 1913, two years after the US Supreme Court ruled that John D. Rockefeller’s Standard Oil Company was an illegal monopoly and ordered it to be broken up into smaller companies. The dissolution of the then world’s largest oil company made its founder and major shareholder John D. Rockefeller the richest man in the world. With the establishment of his foundation, he could insulate a large part of his fortune from income and inheritance taxes."[25] The successful investment of the Foundation's immense funds since that time have given the Foundation's philanthropic activities an even greater reach, with endowment assets of USD4.1 billion and annual giving of USD156 million.

Action

Management Strong

The management of the Foundation's assets forms a significant aspect of the Foundation's success. “For more than 100 years, each generation of trustees has been entrusted with the responsibility for establishing the investment strategy.”[26] In parallel with this function is the Foundation's leadership team: "The Rockefeller Foundation’s leadership team and staff bring a broad range of talents and backgrounds drawn from scholarly, scientific, private, and non-profit disciplines".[27]

The Foundation's management recently emphasised the importance of the setting of strategy. “The Foundation also established an in-house Strategy team in 2009 to strengthen our strategic design and planning process. In 2010, the strategy team began holding regular 'Strategy Soaks', in which intervention strategies are tested and enhanced. Every initiative receives support from the strategy team, helping to develop and shape prototypes, test strategies, and design interventions."[28]

The management structure also places an emphasis on an agile response to changing circumstances. “The creation of three strong in-house teams has also contributed to The Rockefeller Foundation’s adaptability in important ways. The Foundation’s dedicated in-house Scan and Search team, which was formally established in 2013 as an outgrowth of our in-house research unit, has enabled to identify and explore potential interventions much more nimbly... Through the Scan and Search function, a dedicated specialist team at the Foundation, the Strategic Insights Team engages outside experts, practitioners, and innovators around the world to explore and evaluate potential opportunities.”[29]

Measurement Strong

Monitoring and evaluation is one of the key components of the Foundation's strategy: "to achieve the greatest possible impact, The Rockefeller Foundation engages in evidence-based philanthropy, measuring the progress of each initiative against specific goals and outcomes to ensure the strategy is delivering results".[30] This function has been formalised within the Foundation: "the Foundation formed an in-house Monitoring and Evaluation team in 2008, to provide centralised coordination of the initiative monitoring activities and mid-term and post-term evaluation of specific initiatives that we work with third parties to carry out.”[31]

As a function, measurement is central to the Foundation's operations. “One key aspect of the Foundation’s approach to monitoring and evaluation is that it not only compiles information on the outcomes of its initiatives, but also utilises this information as an essential element in its management processes so that [it] can take action based on what [it is] learning. By tracking the performance of individual pieces of work in this way, the organisation course-corrects as necessary and ensures transparency and accountability in how [its] work is designed and implemented.”[32]

The measurement function also involves the Foundation's partners. “Once an initiative enters the execution phase, that measurement approach is more fully developed and validated. Often this involves gathering key stakeholders together to clarify a common vision of the problem being addressed, the desired outcomes, and indicators for success.”[33] The Rockefeller Foundation also supports the development of global monitoring and evaluation capabilities by funding regional monitoring and evaluation networks and institutions that train, coach and mentor evaluators and by partnering with evaluators from other regions.

The measurement activity extends to the management of the Foundation's assets. “The analysis of progress is also used more broadly to manage the Foundation’s overall portfolio for maximum impact, to derive evidence-based lessons learned from their work and share them externally, and to advance the practice of monitoring and evaluation in the field of social change.”[34]

Alignment Good

The Foundation sees itself as well aligned with all its partners and grantees in the various relationships that such collaboration creates. "Given our systems-based approach, we engage fully with the entire spectrum of actors in a particular space. Potential collaborators may include project grantees and beneficiaries, local stakeholders, governments and multilaterals, NGOs, the private sector, academic institutions, and other philanthropic organisations. The Foundation works with these partners in a variety of ways, including as a funder or co-funder, thought partner, or provider of technical expertise. Sometimes, as in the cases of 100 Resilient Cities and Smart Power India, we create new free-standing organisations that become our partners on the ground."[35]

It shares a common view of charitable giving with other, similar foundations, such as the Bill and Melissa Gates Foundation, and it often partners with such organisations on its larger projects. It is also large enough to take a leading role in many of its projects: "together with partners and grantees, The Rockefeller Foundation strives to catalyse and scale transformative innovations, create unlikely partnerships that span sectors, and take risks others cannot."[36] As stated in Stakeholder engagement above, it is well aligned with many national governments, such as the US and Mexico (although less so with others such as Turkey) and with local administrations, as in its work in New Orleans in the wake of Hurricane Katrina.

Bibliography

Our History, The Rockefeller Foundation
(https://www.rockefellerfoundation.org/about-us/our-history)

Philanthropic Power and Development: Who shapes the agenda? Jens Martens and Karolin Seitz, November 2015, Global Policy Forum
(https://www.globalpolicy.org/images/pdfs/GPFEurope/Philanthropic_Power_online.pdf)

Philanthropy and the family business: Translating family ethics and values into giving, Prof. Dr. Bernhard Lorentz, 2016, The EY Family Business Yearbook, EY
(https://familybusiness.ey-vx.com/pdfs/essay-philantropy(1).pdf)

The Rockefeller Foundation 2015 Annual Report, 2015, The Rockefeller Foundation
(https://www.rockefellerfoundation.org/about-us/governance-reports/annual-reports/annual-report-2015/)

The Rockefeller Foundation and the Public's Perception of Its Trustworthiness: 1911-1913, Erin Long, 2007, University of Delaware
(https://books.google.co.uk/books/about/The_Rockefeller_Foundation_and_the_Publi.html?id=NrqjuAAACAAJ&redir_esc=y)

The Rockefeller Foundation Archives: 1905-2014, The Rockefeller Foundation
(http://rockarch.org/collections/rf/)