The MacArthur Foundation … In bad times as well as good, Part I

GUEST: Dr. Jonathan Fanton
TITLE: The MacArthur Foundation … in bad times as well as good
VTR: 01/06/09

I’m Richard Heffner, your host on The Open Mind.

And my guest today is Dr. Jonathan Fanton, American historian and University President who for the past decade has led the huge, the prestigious, the excitingly innovative John D. and Catherine T. MacArthur Foundation.

Now a number of foundation chieftains have joined me here at this table over the past half century and more, in conversation about their challenges and opportunities, about their programs and plans, about the very American quality of foundations themselves.

Dean Rusk, George Harrah, John Knowles and Peter Goldmark … all Presidents of the Rockefeller Foundation… have been here on The Open Mind at one time or another.

So have Carnegie Corporation Presidents John Gardner, David Hamburg and, of course, Vartan Gregorian.

And Russell Sage Foundation President Eric Wanner, Ford Foundation President Franklin Thomas, Revson Foundation President Eli Evans and The Open Society Institute’s Aryeh Neier and George Soros have discussed the foundation world here as well … all striving to make a difference with their resources…as they inevitably do.

Yet even as my guest prepares this year to conclude his own decade presiding over the MacArthur Foundation, the resources of all who give – and get! – have been diminished. And today I would first like Jonathan Fanton to expand upon his Letter-to-the-Editor in the New York Times some weeks back, when he stated that:

“…foundations should maintain, even increase, their giving in difficult economic times. The issues the MacArthur Foundation confronts at home and abroad – human rights, conservation and affordable housing preservation, among others – grow more, not less, urgent when the global economy is in recession.”

The thrust to what my guest wrote then, of course, was quite direct: “The MacArthur Foundation’s endowment has declined this year, yet we remain committed to being a long-term, steady partner to organizations we support. We chose to maintain our grant-making levels in past recessions, and we intend to do so again now.”

But I would ask Dr. Fanton whether most other foundations are likely to do the same. Indeed, Dr. Fanton, can they?

FANTON: Well, my guess is most foundations, big ones, will stay the course at least through ’09. I think a real test will come in 2010 and beyond.

MacArthur, and you well stated our position, believes that we have an obligation to the issues we work on and to the people and organizations we support, to be there for them at a time of, of need.

We made a lot of growth in our endowment over the past few years and now we’re giving some of it back. But that seems only right.

We’ve also set aside a modest Special Fund on top of our normal giving to help grantees with particular difficulties in the year ahead.

HEFFNER: What do you anticipate is going to happen to … not just your grantees, but grantees around the country and around the world … because, of course, you reach out beyond national borders.

FANTON: Well, MacArthur wants to be a steady force and wants to calm things down.

HEFFNER: Calm things down? It seemed to me you …

FANTON: Every …

HEFFNER: … stir things up.

FANTON: Well we stir things up in the work we do. But at, at this moment when people are anxious, they need to look at some institutions they can trust and count on.

And I’m very careful about not aggregating anecdotal information and leaving the impression that organizations we support are in freefall, or stepping back from the front lines of human rights in Nigeria, conservation in Peru, women’s health in Mexico and all the other good things we do.

I think it’s time to … just to keep our senses about us, realize this will go on for a bit, but we’ll come through it. And to be happy that our grantees are resilient, flexible, adaptive organizations which can grow, but also continue to do good work with fewer resources.

And our job is to cushion the impact of the recession both here and abroad.

HEFFNER: You know, years ago I asked Peter Goldmark, very pointedly about … I don’t even know quite how to put it … I didn’t then and I don’t know that I succeeded very well …but I was thinking about the role that major foundations play in taking positions, supporting positions that the elected representatives of the American people do not take.

Maybe you’re not going to have to worry about that now … that now in the Obama years. But what about that strange combination of foundations moving in one direction and government moving in another.

FANTON: Well, MacArthur while based in the US is a global institution, so we’re looking at governments all over the world, not just in the US. We take the long view, we’re not working on an issue just for tomorrow, but for ten years from today.

As we think about our role in public policy, which is what you’re asking, I’d say there are four or five elements to it.

The first is to get the question right. To approach a question in a fresh and different way. For example, we supported Brookings and Harvard and Stanford on the cooperative threat reduction program which resulted in the non-Lugar legislation that was a cooperative venture between the US and the Soviet Union. And that reducing the dangers of weapons of mass destruction; reducing stockpiles.

We do research that comes up with solid objective evidence that can be used to influence policy. We have research networks on complicated issues like adolescent development and juvenile justice.

This network some years ago did path breaking work I think proving beyond a shadow of a doubt that kids are different, developmentally. Their ability to reason and confidence to make judgment matures not at 15, but in the later teens. And it was this path breaking work that was cited in the Supreme Court case of Roper v Simmons that outlawed the death penalty for children under 18, as an example.

Ah, modeled demonstration projects would be third way in which we can influence policy. For example, take us now out to the South Pacific where MacArthur works on conservation as we do in 30 countries around the world. Very important to encourage local people to be partners in conservation. In this case not over fishing around the shores of Fiji. And we put in place a model project that had local councils police the amount of fishing that was done. These are called locally managed marine areas and from this little beginning in Fiji there are now seven countries and 250 sites all across the South Pacific where these locally managed marine areas are now in force.

Another area, another way we, we help is to set “norms”. That is to say to do the intellectual work that leads to the evolution of “norms”. And here an example would be the Commission on Humanitarian Intervention in State Sovereignty which the country of Canada put together. We put some money into it and this came up with the notion of the responsibility to protect, basically saying that when a country fails to protect its own citizens or worse, is the aggressor, the responsibility to protect citizens rises up to the international community and the UN adopted that and at the summit in 2005 as a “norm” the world try to abide by.

And finally, we can affect policy by shows like this one. By supporting quality journalism, public television … getting good information that people can use in the belief that people, when they know the facts … they will choose their leaders and policies wisely.

So in all those ways I think we can be helpful. And none of them really is pinpointed to affecting a particular policy at a particular moment.

Some of our grantees do that, but we take the long run.

HEFFNER: Now you can take the long run, I gather, because your founder basically said …

FANTON: Yes.

HEFFNER: … “I made the money, you make the decisions how to spend it.”:

FANTON: Yeah.

HEFFNER: Is that rare in American philanthropy?

FANTON: I, I think it is rare and you have it right, John MacArthur said “I made the money, you fellows figure out how to spend it.”

So the Board had had the freedom over the years to decide what the most urgent problems are in places were we could add value.

HEFFNER: You have the easiest answer then at hand to those who have been saying that foundations sort of “spit in the eye” of their Founders. Let’s take Carnegie, let’s take Rockefeller, let’s take the other industrial giants or robber barons … call them what you will … who have founded the major foundations of today.

FANTON: Well, most of the wealth that has endowed these foundations comes from people who were really smart and themselves very attuned and alert to opportunities. So I think it’s in the spirit of a Rockefeller or a Carnegie to imagine that they would have a point of departure, but they would imagine that the world would change and if they were still living they would be changing with that world.

HEFFNER: That’s a fascinating way to put it. Awful lot of conservative people in this country would take exception to that.

FANTON: Maybe. But I think it’s a mistake to line up foundations … left to right … to a political spectrum. That we don’t see ourselves as Left or Right … we don’t see ourselves as on a political spectrum. There are characteristics that we own up to. We’re optimists. We believe that humankind can improve. We believe in fairness and transparency. We believe in stewardship, that every generation has an obligation to the future. We believe in opportunity and trying to help those less fortunate develop their talents.

These don’t strike me as Left or Right values, but as basic American values. And I would like to think that the work we do and the words that would come to mind when you hear the word “MacArthur” is objective, high quality research, non-ideological, in the public interest.

HEFFNER: You say “non-ideological” …

FANTON: Right.

HEFFNER: … and yet you also say you find this to be in the best tradition …

FANTON: Right.

HEFFNER: … of the American past. Now I wanted to ask you about your own background as an American historian and how much it has played in your comfort level with what the MacArthur started to do thirty years ago and that you have continued over the past decade.

FANTON: Well, as an historian and you also have studied history … I believe in looking at the current moment in the ark of history and asking “where are we?”. I do think history comes in cycles. I read a book and used to teach it at Yale … called Seed Time for Reform. It was a book about the 1920’s and it was a religionist theory … the twenties were seen as a kind of arid period, not much going on, but this book argued that there was an enormous amount of experimentation happening at the state and local level and that experimentation was seed corn for the New Deal, when Franklin Roosevelt came to office.

I think we’ve been in a period in a way equivalent to that in which a lot of good ideas have been brewing, have been experimented with at the state and local level that now will be drawn on as America enters what I believe will be a new period of, of reform.

HEFFNER: Well, when New York’s Mayor Giuliani sneeringly spoke about “community organizer” at the Republican Convention … I didn’t wonder then, but I wonder now what the relationship of the MacArthur Foundation will be to the new Administration. After all, you’re located in Chicago, you have a peculiar, particular interest in community organization in Chicago. And how will the state from which our new President comes and what he has done with his life affect what you’ll be doing?

FANTON: Well, you, you mention our work in Chicago. It’s … community organizing wouldn’t be the way I would describe it. We work intensively with most of the high poverty neighborhoods in Chicago, having made a ten year commitment to work on all the issues that must work together in the same time … education, jobs, economic development, housing preservation, public safety, health and all the rest.

But this is not a theory that begins by saying community groups can do it alone. It’s a theory that says community groups, government, the not-for-profit sector, the market forces all have to work together to bring these promising neighborhoods to a place where they can develop and open opportunity for their residents. And I would hope that the President-elect has looked at our work, which we do in partnership with the local admission of support corporation, not just in Chicago, but it’s been taken as “the Chicago model” to a dozen other cities around the country.

I would hope that he would be aware of that. I’m very happy to see that a number of grantees that MacArthur supported are assuming important positions in the new Administration. The Secretary of Education is our CEO of Chicago Public Schools and we’ve supported his work … Arne Duncan, a fabulously talented leader. Sean Donovan, the new Housing Commissioner has received MacArthur support both as an individual, then in his work as Commissioner here in New York for 15 years. Cecilia Munoz of the Council of LaRaza is working on an inter-government affairs. Long time grantee John Holdren, the new Science Advisor, was a Trustee of MacArthur. And so it goes. We have a number of people in high places that have been supported by MacArthur, have worked with MacArthur and …

In the housing field, for example, we brought a whole number of our grantees together three years ago to begin working on a set of policies that we would hope a new administration … whoever it would be … might embrace.

So I think there is … on the ready … very specific, concrete, useful ideas that have been developed in this last ten year period.

HEFFNER: Of course, you remind me of what was said in the FDR days …

FANTON: Yeah.

HEFFNER: … when Columbia University played such a large role in supplying …

FANTON: Right.

HEFFNER: … people to the New Deal and we called it the “germ … Columbia, the germ of the notion …”

FANTON: (Laughter)

HEFFNER: … and it seemed to be just that.

FANTON: (Laughter) Yeah.

HEFFNER: Intellectually, speaking do you think that the new Administration will latch on to much that you have done? Even beyond the personnel that you have mentioned thus far?

FANTON: I’m hopeful that the new Administration will take a different approach to the rest of the world. I’m hopeful that a spirit of partnership will re-emerge. I’m hopeful that the work we’ve supported, articulated in an OpEd piece by George Schultz and Bill Perry and Henry Kissinger and Sam Nunn called for rekindling of the spirit of Reykjavik, to get going on the nuclear disarmament issue. I’m hopeful that will be taken up by the new Administration.

I’d expect attention to climate change is a real issue. That’s important to us because we’re preserving areas of high vulnerability around world that are threatened by climate change, so … yes, I’m optimistic. I caution, as always, as you and I, as historians, know that expectations can run very high. The President-Elect has to concentrate on the economic crisis to start with. And I would not favor pressing him on every issue on the 21st of January. I think … I have confidence that he’s putting a good team together, they will sort out their priorities and that we will see, over the next few years a number of these issues addressed. But I wouldn’t expect all the questions we care about (laughter) to be addressed in year one.

HEFFNER: Fair enough. But in the Year One, which issues would you press?

FANTON: Well I think the economy is the overwhelming concern and I would remind him, if he were to ask, of the mistake that Franklin Roosevelt made. Remember Franklin Roosevelt came to office … I’d say as a fiscal conservative, believing in balanced budgets, was very loathe to do too much deficit spending. And the New Deal really didn’t put enough into the stimulus package of that until it was clear by, I think, ’36 that it simply wasn’t working. And then much more was put in. Then, of course, the war came along and … so I would urge the President-elect not to … not to be too cautious. To undertake the stimulus measures that are going to be required to get the economy moving. And be mindful, as I know he will be, that there’s a long term fiscal challenge that … as our deficit mounts … that we have to deal, but we’ll let that come second.

HEFFNER: But you know I … recently … I’m revising my Documentary History of the United States and will include the new President’s inaugural address, of course. And many of the other speeches. But I went back and read, re-read FDR’s Second Inaugural Address which we think of in terms of “a rendezvous with destiny”. But I was astonished by the radical, the economic radicalism of that address. And when I think of what is being said now … what was said in the past election … and what the Obama to-be Administration seems to be looking like … I’m astonished by the, by the fact that FDR was so much more radical … at least in words … in 1936/37 …

FANTON: Then he was in ’32?

HEFFNER: Yeah.

FANTON: Yeah. And he learned.

HEFFNER: Well, and then …

FANTON: And he learned.

HEFFNER: Well, he learned, but then much more radical than I think the President-Elect seems to be. Or his primary challenger, Senator Clinton, seemed to be.

FANTON: Well, we’ll have to see how that plays out. You asked about foundations and how we intersect with public policy. And I mentioned that we think long term. There’s not much we can do day-to-day, the first 100 days, that’s not our, our role.

But we have three related project underway that will have some significance over time. And I’ll tell you just real quickly, if I may.

The first is a network … research network looking at the aging society. We’re projecting the estimates of how long we’re going to live, how much disability free life we’re going to enjoy going forward and what implications longer life will mean for … on the positive side … what you and I can as we get older.

And on the challenging side .. what the costs will be to Medicare, Social Security and all the rest. That, in turn, will inform a second project.

We’ve supported an expert committee at the National Academies to lay out the fiscal challenge this country faces even before the recent economic downturn. And it’s stark. We’re building up deficits at a very rapid rate. The Baby Boom generation living longer … are going to press entitlement costs through the roof. And we will face, within the next 20 or 30 years a truly unmanageable fiscal situation unless corrective action is taken with the next ten years. And so on the “watch” of the next President.

The purpose of this expert commission and the National Academies very careful “vetting” process is to lay it all out in a way the public and policy makers can understand and trust.

And the third and final initiative we have going is a series of, what I would call, complex cost/benefit analysis that show that government programs that are well designed and well implemented actually save money. And we’re so used thinking of the interests of people in trouble and need as different from the interest of the rest of us. But I think that’s a paradigm that will need to shift. And I hope will shift in the course of the new administration.

I’ll give you an example. Ned Gramlich did a study many years ago of kids in a federal pre-school program in Ypsilanti, Michigan called the “Perry pre-school” and he followed those kids for 30, 40 years versus kids who were not in a federal pre-school program. It was amazing to see how much better kids who’d had a modest investment in pre-school training did with respect to graduating from high school and college, getting better jobs, paying higher taxes, avoiding welfare, committing fewer crimes and when all was said and done, the public got a $17 dollar return, inflation adjusted, for every dollar invested.

And that pattern, which then turns on its head, this notion that when you help poor people it’s just a tax burden on you … just isn’t true. It’s a, it’s a wise investment. And we’re showing … we’re doing studies in health and housing, community development, prisoner re-entry. And I believe that same pattern is going to reveal itself.

So, people living longer … bigger entitlements, bigger social deficit, fiscal deficits coming up. But some hope that we can learn how to use our public dollars more wisely.

HEFFNER: Dr. Fanton, my mother used to say, “from your lips”, when she liked something, “to God’s ear”. So one might say, “from your lips to Barack Obama’s ear.” And that’s all the time we have for this program … you’ve promised to sit there and wait and do a second program. Thank you for joining me today.

FANTON: I’ve had a great time. Thank you for very good questions.

HEFFNER: And thanks, too, to you in the audience. I hope you join us again next time. If you would like a transcript of today’s program, please send $4.00 in check or money order to The Open Mind, P. O. Box 7977, FDR Station, New York, New York 10150.

Meanwhile, as an old friend used to say, “Good night and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.