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Interview With Darren Walker: Masters in Business (Audio) · Masters in Business

0:03
Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio.
0:08
Speaker 1: This week on the podcast, I have Ford Foundation President
0:11
Speaker 1: Darren Walker, and I have to tell you you probably
0:14
Speaker 1: have never heard of this gentleman, and that's unfortunate because
0:18
Speaker 1: he's really a fascinating guy. And this was a really
0:22
Speaker 1: really interesting conversation. I found him kind of randomly reading
0:28
Speaker 1: something about another project I was working on in philanthropy,
0:32
Speaker 1: and I ended up coming across something he had written,
0:36
Speaker 1: and I was very much enchanted by it, and I
0:39
Speaker 1: had the folks here reach out to him, and apparently
0:44
Speaker 1: he's very well known to everybody here. He runs a
0:47
Speaker 1: huge philanthropic organization. Other people in the Bloomberg family run
0:53
Speaker 1: uh philanthropic organizations, and so I meet him, thinking, I'm
0:57
Speaker 1: gonna sneak this guy in who no one's ever heard of,
1:00
Speaker 1: and it will be quite a coup to to find
1:03
Speaker 1: somebody that people are not familiar with. I'm not exaggerating
1:07
Speaker 1: when I say from the elevator to the studio, which
1:09
Speaker 1: is really not all that far, dozens of people stopped him, Darren,
1:14
Speaker 1: how are you? And it's it was just fascinating, and
1:17
Speaker 1: people looked at me, how do you know this guy.
1:20
Speaker 1: I read something you wrote. I thought it was really interesting.
1:23
Speaker 1: So if you're at all interested in philanthropy and how
1:27
Speaker 1: a twelve billion dollar foundation decides where it's gonna put
1:31
Speaker 1: its money, how it's gonna measure it, how it's gonna
1:33
Speaker 1: stay on top of it, um, I think you'll find
1:36
Speaker 1: this to be an absolutely fascinating conversation. So, without any
1:39
Speaker 1: further ado, my chat with Ford Foundations Darren Walker. This
1:47
Speaker 1: is Masters in Business with Barry Ridholts on Bloomberg Radio.
1:52
Speaker 1: My special guest this week is Darren Walker. He is
1:55
Speaker 1: the president of the nearly thirteen billion dollar Ford Foundation.
2:00
Speaker 1: A little background about Mr Walker, formerly an attorney with
2:04
Speaker 1: Cleary Gottlieb and an investment banker at UBS. He is
2:09
Speaker 1: running this massive foundation, but he hails from humble beginnings.
2:13
Speaker 1: Born in a charity hospital in Lafayette, Louisiana, raised by
2:18
Speaker 1: a single mom, he became one of the first children
2:23
Speaker 1: to benefit uh from the head Start program. And let
2:27
Speaker 1: me tell you, he has certainly accomplished a lot in
2:30
Speaker 1: a relatively short period of time. In addition to being
2:33
Speaker 1: president of the Ford Foundation, he is on the boards
2:36
Speaker 1: of Carnegie Hall, the New York City Ballet, the High
2:39
Speaker 1: Line Park, the Council on Foreign Relations, and many American
2:43
Speaker 1: Academy of Arts and Sciences. He is the co chair
2:46
Speaker 1: of the New York Public Library Council and Vice chairman
2:50
Speaker 1: of the New York City Ballet. Darren Walker, Welcome to Bloomberg.
2:54
Speaker 1: Thank you, Verry. Happy to be here. I'm excited to
2:56
Speaker 1: talk to you about a lot of things. But before
2:59
Speaker 1: we get into the details of the Ford Foundation and
3:02
Speaker 1: its portfolio, you're really a real, live Horatio algia story.
3:07
Speaker 1: How does one go from relatively humble beginnings too on
3:12
Speaker 1: the board of all these prestigious institutions I just named, well,
3:17
Speaker 1: first one is lucky enough to be born in America,
3:20
Speaker 1: doesn't hurt. I was born in America, and that meant
3:23
Speaker 1: that I was born in a country where even a
3:27
Speaker 1: poor African American kid could have dreams and those dreams,
3:32
Speaker 1: those aspirations could be realized. That's the country that we
3:36
Speaker 1: have lived in, and at the Ford Foundation, we're asking
3:40
Speaker 1: that question, can we continue to be a land of
3:45
Speaker 1: opportunity where little Darren Walker's and lots of others like
3:49
Speaker 1: me can dream and have those dreams be realized. So
3:53
Speaker 1: let's get into the realization of that dream. And I'm
3:57
Speaker 1: gonna pull some quotes that that I've found in various
4:00
Speaker 1: fightings of yours. You once said a teacher to you,
4:03
Speaker 1: the value of quote learning self control? What does that mean? Well,
4:09
Speaker 1: at the time, I was a fleling, rather undisciplined third
4:14
Speaker 1: grader who was constantly getting into trouble. Familiar my third
4:19
Speaker 1: grade teacher, Mrs Majors, took me aside after class and
4:23
Speaker 1: she sat me down and she gave me a stern
4:26
Speaker 1: talking to as we say back home. She said, little
4:29
Speaker 1: boys like you who get in trouble too often end
4:35
Speaker 1: up not succeeding. And I worry that you are going
4:39
Speaker 1: to get in trouble and are going to end up
4:42
Speaker 1: not succeeding in life, and you can succeed. And it
4:46
Speaker 1: was having her tell me that I could succeed, but
4:49
Speaker 1: that in order for me to succeed, I needed to
4:53
Speaker 1: gain control of my emotions, my temper, dealing with issues
4:59
Speaker 1: I was dealing with that home in the classroom and
5:03
Speaker 1: manifesting a lot of bad behavior. But your third grade
5:07
Speaker 1: what are you eight years old at the time? Is
5:09
Speaker 1: that about right? Who makes a life choice? To gee,
5:13
Speaker 1: I really have to get my act together when they're eight. Well,
5:16
Speaker 1: I understood because I saw some of my cousins what
5:19
Speaker 1: was happening to them as early as the third grade,
5:22
Speaker 1: for example, being put in special education. Some of my
5:26
Speaker 1: cousins who I played with as a little boy, by
5:29
Speaker 1: high school were already in juvenile centers. And sadly, seven
5:34
Speaker 1: of my cousins ended up in prison, and and one
5:37
Speaker 1: of my cousins committed suicide in a Paris jail in Louisiana.
5:42
Speaker 1: And you were aware of the risks of not being
5:46
Speaker 1: in control, even at that early age, at least after
5:49
Speaker 1: the teacher brought this to your attention. Absolutely, I was
5:52
Speaker 1: aware of it, and I was aware of the consequences
5:55
Speaker 1: because it was right in front of me. I would
5:58
Speaker 1: hear my mother talk about stories of what was happening
6:00
Speaker 1: in our family. I'd see it in our community, and
6:03
Speaker 1: I hear about it from others. So I was aware
6:06
Speaker 1: that if you are a bad boy, bad things happened
6:09
Speaker 1: to you. So less fast forward a couple of years,
6:12
Speaker 1: you go to college, go to law school. How does
6:15
Speaker 1: one make the transition from bad kid to good lawyer
6:20
Speaker 1: to philanthropy A lot of luck, a lot of hard work,
6:25
Speaker 1: and a lot of people cheering me on along the way.
6:29
Speaker 1: That's a theme that in the various other eighty or
6:33
Speaker 1: so interviews we've done here, hard work and a little
6:36
Speaker 1: bit of luck comes up over and over again. So,
6:40
Speaker 1: so you're a practicing attorney, what tell me what the
6:44
Speaker 1: transition is like? How does how do you decide I'm
6:46
Speaker 1: going to give up the law librarian and and move
6:50
Speaker 1: towards a different focus with my life. Well, one thing
6:53
Speaker 1: happened for me. I have to be honest, I didn't
6:56
Speaker 1: find my way into the nonprofit sector, the charitable sector
7:00
Speaker 1: early in my career. I was very clear with myself
7:03
Speaker 1: when I was in college and law school that I
7:06
Speaker 1: never again wanted to be poor. I feared, more than
7:11
Speaker 1: anything else, being poor. And so because of that, I
7:15
Speaker 1: used my my my law degree, I went into business. UM,
7:21
Speaker 1: I had a good run on Wall Street. But for me,
7:24
Speaker 1: it was never about piling up money. It was about
7:28
Speaker 1: comfort and finding myself in a position so that I could,
7:32
Speaker 1: for example, take care of my mother, UM support my
7:35
Speaker 1: sisters as they were going to college. And I was
7:38
Speaker 1: able to do that, and for me, that was enough.
7:41
Speaker 1: But what I didn't have was passion. I didn't have
7:46
Speaker 1: the day to day excitement about doing good in the world.
7:50
Speaker 1: And that's what I was yearning for. And I was
7:53
Speaker 1: lucky enough to meet a man named Calvin Butts, who
7:56
Speaker 1: was the minister of the Abyssinian Baptist Church in Harlem.
8:00
Speaker 1: I'm Barry Ridhults. You're listening to Masters in Business on
8:02
Speaker 1: Bloomberg Radio. My special guest today is Darren Walker. He
8:06
Speaker 1: is the president of the Ford Foundation. And for those
8:10
Speaker 1: of you who may not be familiar with this philanthropic enterprise.
8:15
Speaker 1: Founded in nineteen thirty six by Edsel and Henry Ford
8:20
Speaker 1: with a twenty five thousand dollar gift from Exel Ford.
8:24
Speaker 1: By n seven, the Foundation owned of the non voting
8:30
Speaker 1: shares of Ford Motor Company thanks to additional gifts. Right
8:35
Speaker 1: now the foundation is about twelve and a half billion
8:37
Speaker 1: dollars in assets and gives out over five million dollars
8:41
Speaker 1: per year in grant So let's talk about the mission
8:46
Speaker 1: of the Ford Foundation, which is an advancing human welfare.
8:51
Speaker 1: That's a little broad. What does that mean. What it
8:54
Speaker 1: means is encouraging human achievement, reducing poverty, allowing the poor,
9:03
Speaker 1: the marginalized in all parts of the world to have
9:07
Speaker 1: their dreams, realized through education, through livelihoods, through human and
9:13
Speaker 1: civil rights, and participation in governance through the environment. These
9:17
Speaker 1: are all areas where the Ford Foundation programs. So how
9:22
Speaker 1: do you decide specifically what's a fund because again, these
9:26
Speaker 1: are such broad topics. Do do you fly over at
9:30
Speaker 1: thirty thousand feet and and try and affect how people
9:35
Speaker 1: perceive different areas? Or is it more up close and
9:38
Speaker 1: personal you're rolling up your sleeves and really doing uh
9:42
Speaker 1: land campaign, a door to door campaign. How do you
9:44
Speaker 1: decide how micro or macro you want to get, how
9:49
Speaker 1: granular with any of the projects you're working on. Well,
9:52
Speaker 1: today we work in eleven regions of the world, including
9:56
Speaker 1: the United States, so we work in place based strategy.
10:00
Speaker 1: But we start by asking the question, what's the greatest
10:04
Speaker 1: threat to human welfare? What's the greatest threat to our
10:08
Speaker 1: objective of a more just, fair and peaceful world. We
10:13
Speaker 1: believe the greatest threat is growing inequality in the world now.
10:19
Speaker 1: Of course, climate change and insecurity these are major threats
10:24
Speaker 1: of our time. But the threat that we have chosen
10:27
Speaker 1: to focus on is growing inequality because in many ways
10:32
Speaker 1: it represents the greatest threat to opportunity because without opportunity,
10:38
Speaker 1: it's impossible to have social mobility and human achievement, and
10:44
Speaker 1: that's our north star. Now, within that, we ask who
10:49
Speaker 1: are the populations of people who traditionally have had the
10:54
Speaker 1: least opportunity and who whose welfare have been more ATSK
11:00
Speaker 1: And we begin with girls and women because around the world,
11:04
Speaker 1: girls and women have traditionally been excluded and marginalized. We
11:10
Speaker 1: talk about minorities, ethnic, religious, racial minorities, UH, rural communities,
11:18
Speaker 1: urban communities, people who in the United States, for example,
11:24
Speaker 1: are isolated in prisons and in a criminal justice system
11:27
Speaker 1: that isn't serving our country at all. These are the
11:30
Speaker 1: populations we focus on. These are the people whose lives
11:36
Speaker 1: we seek to improve, because when their lives are improved,
11:40
Speaker 1: they contribute to a better society. So let me ask
11:45
Speaker 1: you this question because I saw some fascinating data. Obviously, UH,
11:49
Speaker 1: since Picketty's book came out on Capitalism, there's been a
11:53
Speaker 1: whole lot of talk about income inequality. But some of
11:56
Speaker 1: the data I've seen has suggested the while income inequality
12:01
Speaker 1: is expanding in countries like the United States and parts
12:05
Speaker 1: of Europe, when you look at the entire world, thanks
12:09
Speaker 1: partly to people in China and India rising up out
12:12
Speaker 1: of poverty, Global income inequality is actually contracting. How does
12:17
Speaker 1: that impact the way you um look to focus your efforts,
12:22
Speaker 1: your money's and your key focus. Well, I don't think
12:25
Speaker 1: we should be distracted by aggregate numbers. We have to
12:29
Speaker 1: look within countries and society. So China has certainly had
12:35
Speaker 1: poverty reduced, but income inequality there is at its greatest level.
12:41
Speaker 1: From India is the same the US, much of the
12:45
Speaker 1: Latin American countries, and of course in Africa we're seeing
12:48
Speaker 1: seeing a widening gap. So we should be alarmed by this.
12:52
Speaker 1: Now the question is how do we help reduce inequality?
12:57
Speaker 1: And we believe we've got to focus on those drivers
13:00
Speaker 1: of inequality, and we believe those drivers include a few
13:05
Speaker 1: a few profound elements in our society. Give us a
13:09
Speaker 1: few examples. So one driver is what we call entrenched
13:14
Speaker 1: cultural narratives, and these are narratives that undermine fairness, tolerance,
13:19
Speaker 1: and inclusion. And those narratives could be narratives, for example,
13:24
Speaker 1: in the India context, that dullut the lower cast are
13:28
Speaker 1: in fact supposed to be the lower cast, or in
13:31
Speaker 1: the United States that the fact that most of the
13:34
Speaker 1: people in American prisons are African, American and Latino. That
13:40
Speaker 1: maybe that's the way it's supposed to be. So we
13:43
Speaker 1: allow narratives to justify why injustice exists in our society
13:49
Speaker 1: and to validate that it's okay. How do you push
13:52
Speaker 1: back at a narrative like, well, you have a lot
13:55
Speaker 1: of minorities in American prison, but they're they're because they
13:58
Speaker 1: did something wrong. That's a that's a prety common belief.
14:01
Speaker 1: How do you push back against the narrative these guys
14:03
Speaker 1: are there because they did something wrong. Well, first of all,
14:05
Speaker 1: the American people are fair. They want the evidence. And
14:09
Speaker 1: so when we start to produce the evidence, for example,
14:12
Speaker 1: through films, through media, through evidence and good research that demonstrates,
14:19
Speaker 1: for example, that there is a differential prejudice in treatment
14:25
Speaker 1: of h of people who are arrested for marijuana or
14:29
Speaker 1: powder cocaine and people who are primarily white, and people
14:33
Speaker 1: who are arrested for crack who are primarily black, That
14:37
Speaker 1: there is a differential treatment in our judicial system, and
14:41
Speaker 1: that one example is manifest across the entire criminal justice
14:45
Speaker 1: system in this country. I'm Barry Reholts. You're listening to
14:48
Speaker 1: Masters in Business on Bloomberg Radio. My special guest today
14:52
Speaker 1: is Darren Walker. He is the president of the Ford Foundation,
14:55
Speaker 1: a twelve and a half billion dollar endowment that gives
14:59
Speaker 1: away about half of billion dollars a year in special
15:02
Speaker 1: grants working on improving the human condition. I know that's broad,
15:07
Speaker 1: but it's true. Let's talk a little bit about the
15:10
Speaker 1: mechanism that you guys use to spread a little um
15:16
Speaker 1: good work around the world, and that's the portfolio of
15:19
Speaker 1: of the foundation twelve point five billion. Is that a
15:23
Speaker 1: bullpark more or less correct? And so what is your
15:26
Speaker 1: role in terms of overseeing the foundation's management of its
15:31
Speaker 1: own capital. Well, I'm ut ultimately accountable to our trustees
15:36
Speaker 1: for UH the enterprise of the Ford Foundation, which includes
15:40
Speaker 1: our investment portfolio. But I'm very lucky because we have
15:45
Speaker 1: one of the best people working UH in investment management today,
15:49
Speaker 1: Eric Dobstat, as our ce IO. Eric is aided by
15:55
Speaker 1: a terrific team of staff who are professionals, have come
16:00
Speaker 1: from all walks of life and from the public and
16:05
Speaker 1: private sector, and bring a remarkable capacity to make smart investments,
16:10
Speaker 1: to choose high impact managers, and to do very very well.
16:16
Speaker 1: So how much that that raises an interesting question. How
16:19
Speaker 1: much of the portfolio you guys running in house and
16:22
Speaker 1: how much goes to outside managers, and what sort of
16:25
Speaker 1: managers are these hedge funds, venture capitalist, private equity, etcetera.
16:29
Speaker 1: We don't manage any of our investment in house. We
16:33
Speaker 1: have a traditional mix of asset classes, primarily hedge funds
16:39
Speaker 1: and private equity. But we've got a long term investment horizon.
16:46
Speaker 1: We aren't looking to beat the market in any short
16:51
Speaker 1: term way. Um our investment strategy is very much like
16:55
Speaker 1: our grant making strategy. We are long term investor because
17:00
Speaker 1: we believe over the long term, by not being slavish
17:06
Speaker 1: too near term concerns were able to generate more value,
17:12
Speaker 1: more stability, less volatility, and better returns. So I've always
17:18
Speaker 1: wondered about this. You have a a terrible year like oh,
17:24
Speaker 1: eight oh nine with the financial crisis, a fund that's
17:29
Speaker 1: running twelve billion dollars or so, I'm assuming it might
17:32
Speaker 1: have been a little less before the crisis. What's it
17:35
Speaker 1: like on the ramparts when suddenly the tide goes out
17:39
Speaker 1: and the market is cut in half and then some Well,
17:42
Speaker 1: we've got to also give credit to our trustees. We
17:45
Speaker 1: have an outstanding group of trustees who manage with Eric
17:51
Speaker 1: our portfolio from a governance perspective, So we have a
17:55
Speaker 1: very clearly articulated investment policy. UH. Those sidelines of that
18:00
Speaker 1: policy establish the guardrails UH within which Eric and his
18:07
Speaker 1: team can invest. And we don't panic. We don't become
18:12
Speaker 1: overly concerned about what's happened today or tomorrow or even
18:17
Speaker 1: next month. Necessarily what we are concerned about or what
18:20
Speaker 1: are the long term trends, what are the implications over
18:24
Speaker 1: multiple quarters of FED policy, UM, of what's happening in
18:30
Speaker 1: UH emerging markets UH and and we have great managers,
18:35
Speaker 1: so we listen to those managers. We synthesize and harmonize
18:40
Speaker 1: their input, their counsel, their wisdom and UM. They have
18:46
Speaker 1: done very well UM with us and UM and so
18:49
Speaker 1: we continue to stick with them. So the foundation is
18:52
Speaker 1: eighty years old, one would assume it has a longer
18:56
Speaker 1: term perspective and doesn't get caught up in the week
19:00
Speaker 1: to week, month to month volatility that we see. But
19:03
Speaker 1: even the most staid and rational people in No. Eight
19:07
Speaker 1: or nine, there was a little bit of panic in
19:09
Speaker 1: the streets UH when people thought the entire financial system
19:13
Speaker 1: was going to freeze, and who knows if if g
19:16
Speaker 1: E or McDonald's was going to meet their payroll. Inside
19:20
Speaker 1: the hallowed walls of the Ford Foundation, you're telling me, Gee,
19:24
Speaker 1: this is rough, but not a lot of panic. Well,
19:27
Speaker 1: I think it's fair to say that we were very,
19:31
Speaker 1: very distressed by what happened UM during that period, but
19:36
Speaker 1: it was a slow, thoughtful, deliberative process that led us
19:42
Speaker 1: to our rebalancing of the portfolio. UM. We have a
19:48
Speaker 1: policy that ensures that we at all times have sufficient liquidity,
19:52
Speaker 1: so there was never a question as to our being
19:55
Speaker 1: able to meet our obligations for grants or operations, and
19:59
Speaker 1: so could look for the long haul. And over these
20:03
Speaker 1: last six to seven years we have had outstanding performance.
20:09
Speaker 1: And I'm proud to say that Eric and his team
20:12
Speaker 1: continue to deliver great results, which means we have more
20:17
Speaker 1: money to give away. I'm Barry rid Hilts. You're listening
20:20
Speaker 1: to Masters in Business on Bloomberg Radio. My special guest
20:23
Speaker 1: today is Darren Walker. He is the president of the
20:26
Speaker 1: Ford Foundation, a twelve point five billion dollar endowment that
20:31
Speaker 1: gives away a half a billion dollars per year to
20:36
Speaker 1: advance human Wealthare So, so let's get into the specifics
20:41
Speaker 1: of that. What does that look like in the real
20:44
Speaker 1: world where the rubber meets the road. You're giving away
20:47
Speaker 1: a half a billion dollars a year, is that you know?
20:51
Speaker 1: Five million dollar grants? Is it lots of small grants?
20:55
Speaker 1: And take us through a typical grant. What do you
20:58
Speaker 1: hope to accomplish with any specific grants? Well, we have
21:04
Speaker 1: large grants and we have smaller grants. And for us,
21:07
Speaker 1: a large grant would be one that we made last year,
21:11
Speaker 1: a hundred and twenty five million dollars towards the Grand
21:15
Speaker 1: Bargain to help resolve Detroit's bankruptcy, the largest municipal bankruptcy
21:21
Speaker 1: in the history of America, and it was a it
21:25
Speaker 1: was a daunting task, but ultimately the bankruptcy was resolved
21:30
Speaker 1: because a group of foundations and the Governor of Michigan
21:34
Speaker 1: came together with the Detroit Institute of the Arts to
21:38
Speaker 1: raise eight hundred million dollars that made it possible for
21:41
Speaker 1: the city to pay its retirees their pensions and to
21:47
Speaker 1: help the museum which owned um which was owned by
21:52
Speaker 1: the city uh to keep its art on its walls,
21:56
Speaker 1: which it was and at risk of having to sell.
21:59
Speaker 1: So that was a hundred and twenty million dollars towards
22:02
Speaker 1: an eight hundred million dollar UH pool of money, So
22:06
Speaker 1: that's a large grant for big impact. Who were the
22:09
Speaker 1: co investors and that the co investors were the Kellogg Foundation,
22:12
Speaker 1: Night Foundation, Kresky Foundation, um UH, the Fisher Foundation locally,
22:19
Speaker 1: UM the Mott Foundation. These are national foundations and local
22:24
Speaker 1: philanthropies together that came rescue Detroit. Essentially, is that dead
22:29
Speaker 1: rim possession financing or is it just to shore up
22:32
Speaker 1: the art museum because there was going to be a
22:34
Speaker 1: fire cell auction if that that wasn't resolved. It was
22:37
Speaker 1: to shore up the museum and to allow the city
22:42
Speaker 1: to have the money to in turn pay UH the pension,
22:46
Speaker 1: which which raises an interesting question. Do we run the
22:49
Speaker 1: risk of having taxpayers abdicate their responsibility to municipalities If
22:55
Speaker 1: foundations are coming in and really doing what what the
22:58
Speaker 1: state itself should be doing, well, philanthropy could never play
23:02
Speaker 1: the role of government. We're a rounding error in the
23:06
Speaker 1: federal government's budget. All of our assets together is a
23:09
Speaker 1: rounding era in the federal government's budget. So let's be
23:13
Speaker 1: real about the potential. What we can do is catalyze, innovate,
23:18
Speaker 1: demonstrate solutions. So I've given you an example of a
23:23
Speaker 1: large grant. Let's talk about a smaller grant, a grant
23:27
Speaker 1: for five thousand dollars, and that grant supports investigative journalism
23:35
Speaker 1: through our media program, because we believe that in a
23:38
Speaker 1: democracy we need strong media. Well, a recent grant led
23:45
Speaker 1: to UH much of the public knowledge around what's happening
23:49
Speaker 1: in Flint, Michigan. We supported UH. This was the a
23:53
Speaker 1: c l U grant. A c LU made it possible
23:58
Speaker 1: for them to hire a journal who blogged about issues
24:02
Speaker 1: of governance and started covering what was going on in Flint.
24:07
Speaker 1: He was among the first to bring to the public's
24:10
Speaker 1: attention what was happening in Flint, Michigan. And that's one
24:13
Speaker 1: of the great tragedies of recent years. App talking about
24:17
Speaker 1: abdication of governmental responsibility. While and this is one of
24:21
Speaker 1: the drivers of inequality, which is this idea that we
24:25
Speaker 1: are failing to invest and protect vital public goods. A
24:31
Speaker 1: vital public good like infrastructure, our water system is essential.
24:37
Speaker 1: It's vital to the very operations of a city of
24:41
Speaker 1: a civilization in fact, and yet this city of a
24:46
Speaker 1: hundred thousand people does not have a decent infrastructure because
24:51
Speaker 1: a decision was made to switch systems cheaper, cheaper, system
24:57
Speaker 1: less reliable, less reliable, technically uh ineffective, and what it
25:03
Speaker 1: is yielded, of course, we know, is one of the
25:05
Speaker 1: greatest calamities and greatest embarrassed embarrassments UH in this country
25:11
Speaker 1: in many, many years. The fascinating thing is, I've heard
25:14
Speaker 1: people refer to Flint as a one off, but I
25:18
Speaker 1: bet there and I've read and heard about that this
25:21
Speaker 1: is in a unique situation, and there are lots of
25:24
Speaker 1: Flint like infrastructure problems on the verge of busting out
25:30
Speaker 1: onto the public eye. We've ignored our infrastructure for decades,
25:34
Speaker 1: haven't we. Well. In fact, our public infrastructure represents an
25:39
Speaker 1: investment in public goods, whether it's public libraries, public transportation,
25:45
Speaker 1: public schools, public parks, public housing. All of this together
25:51
Speaker 1: undergirds our democracy, our society, American civilization, and we have
25:59
Speaker 1: con assistently been under investing and in fact disinvesting in
26:05
Speaker 1: the very infrastructure that we depend on for our democracy
26:08
Speaker 1: to work. We see certain politicians talking about China and
26:12
Speaker 1: say what you will about their economic competition. They have
26:16
Speaker 1: made massive infrastructure investments and it's paying off for them. Well,
26:21
Speaker 1: you only have to return from the sparkling new airport
26:26
Speaker 1: in Beijing and land at JFK or even worse, La
26:31
Speaker 1: Guardia to to understand what it feels like to go
26:35
Speaker 1: from walking in a public facility and being uplifted to
26:41
Speaker 1: walking into a public facility and feeling despair. It's amazing.
26:47
Speaker 1: We were the leaders for the longest time, and we
26:51
Speaker 1: stopped making those investments, and everybody else's leap frogged us.
26:55
Speaker 1: They are leap progging us, but it's not too late,
26:57
Speaker 1: because the American people want to pest in public infrastructure.
27:02
Speaker 1: They want better public transportation, better public parks, they want
27:08
Speaker 1: our public housing to work for the people who live
27:11
Speaker 1: within those communities. And without investing in public goods and
27:17
Speaker 1: public infrastructure, our democracy simply won't be effective. And at
27:22
Speaker 1: the end of the day, this is why inequality has
27:24
Speaker 1: to be a rallying cry, because at the core of
27:29
Speaker 1: the American experience is opportunity, our aspiration to be a
27:36
Speaker 1: better society and a better people, and growing inequality reduces opportunity.
27:46
Speaker 1: It squelches our aspirations and our ambitions, and it makes
27:51
Speaker 1: us cynical and angry, and it affects our politics, no doubt.
27:56
Speaker 1: You see a lot of anger amongst certain people who
28:00
Speaker 1: want to make America great again. That's how it manifests
28:03
Speaker 1: itself because these basic infrastructures have been ignored for so long. Well,
28:09
Speaker 1: it also manifests because another driver of inequality is the
28:14
Speaker 1: rules of the economy, that that people don't have confidence
28:20
Speaker 1: that our economy actually works in a way that delivers
28:25
Speaker 1: shared prosperity. Most Americans, unfortunately, according to polls, believe that
28:31
Speaker 1: our system is increasingly rigged, rigged for the wealthy or
28:38
Speaker 1: political elites, and that our historic notion of shared prosperity
28:45
Speaker 1: is slipping away from us as a nation. That's partly
28:48
Speaker 1: why many Americans are angry. Makes sense to me, let
28:52
Speaker 1: me mix this up a little bit with you and
28:54
Speaker 1: and ask you this question. What can't money do? You're
28:58
Speaker 1: giving away half a billion knows a year. What have
29:02
Speaker 1: you looked at that you've said, Gee, I'd love to
29:04
Speaker 1: fix this, but money isn't going to help this. Well,
29:08
Speaker 1: I think there are situations where we have to recognize
29:14
Speaker 1: that culture, that behavior, that what is normative in a
29:23
Speaker 1: society has to be hit head on and that can't
29:27
Speaker 1: necessarily be fixed with money. Um the fact, it is
29:31
Speaker 1: true that we can invest in girls education, but that
29:37
Speaker 1: will only go so far if you live in a
29:39
Speaker 1: culture where men demean women as a matter of belief.
29:45
Speaker 1: How do we get at those belief structures that hold
29:50
Speaker 1: us back, that hold women down in those cultures? And
29:54
Speaker 1: money alone won't solve that problem. So how do you
29:58
Speaker 1: how do you pursue that? How do we apply pressure?
30:01
Speaker 1: You apply pressure in that instant by going to the
30:05
Speaker 1: people who are the carriers of culture. So it may
30:09
Speaker 1: be a religious leader, it may be a senior elder
30:15
Speaker 1: of the rural village on the community, and you've got
30:18
Speaker 1: to influence them to see that women have to be valued,
30:23
Speaker 1: that girls have to be valued and shouldn't be married
30:25
Speaker 1: off at age nine or ten. To get them out
30:28
Speaker 1: of the way, We've got to attack root cause issues
30:34
Speaker 1: and sometime money alone isn't enough. We've been speaking with
30:37
Speaker 1: Darren Walker, he's the president of the Ford Foundation. If
30:40
Speaker 1: people want to learn more about the foundation, where's the
30:43
Speaker 1: best place for them to go to to get some
30:45
Speaker 1: more info? To go to our website w w board
30:49
Speaker 1: Foundation dot org. If you enjoy this conversation. Be sure
30:53
Speaker 1: and stick around. We keep the tape rolling and continue chatting.
30:57
Speaker 1: Be sure and check out any of our prior interviews.
31:00
Speaker 1: You can find them on iTunes and on Bloomberg dot com.
31:04
Speaker 1: Check out my daily column on Bloomberg View dot com,
31:08
Speaker 1: or follow me on Twitter at rid Holts. I'm Barry Ridholts.
31:12
Speaker 1: You're listening to Masters in Business on Bloomberg Radio. You're
31:15
Speaker 1: listening to the podcast half of the show where I
31:19
Speaker 1: just throw my arms out for no no good reason. So, Darren,
31:23
Speaker 1: I have to ask you a question that you said
31:25
Speaker 1: something that's astonishing to me. Why would the Ford Foundation
31:29
Speaker 1: have to support elite universities in the nineteen fifties and sixties, Harvard, Yale,
31:35
Speaker 1: all the big schools. They've had a huge endowment for
31:40
Speaker 1: years and years and years. Why do they need help
31:42
Speaker 1: from little old Ford Foundation. Well, in the nineteen fifties,
31:46
Speaker 1: their endowments weren't so large, really, indeed, UH, And in
31:51
Speaker 1: the nineteen fifties they didn't have departments, for example, in
31:56
Speaker 1: a various studies. UH, there were certain academic areas, for example,
32:02
Speaker 1: business schools before the nineteen fifty business degrees were UH.
32:09
Speaker 1: In some ways technical degrees, they weren't quote unquote professional degrees.
32:15
Speaker 1: The professional Masters of Business Administration really came into the
32:20
Speaker 1: four in the nineteen fifties in part because of Ford
32:23
Speaker 1: and Carnegie corporations investments in professionalizing business administration and business
32:32
Speaker 1: UH learning. In part because the belief was and I
32:35
Speaker 1: think ultimately was proven that that we needed to UH,
32:41
Speaker 1: we needed to generate a a generation of business leaders
32:47
Speaker 1: who needed UH to be professionally educated about business business administration.
32:53
Speaker 1: New disciplines of finance and accounting were created during this period.
32:58
Speaker 1: So what we think of today the m b a
33:01
Speaker 1: UM with not what it is today in the nineteen fifties.
33:06
Speaker 1: That's fascinating. Course, in my head one my mind's I
33:09
Speaker 1: when I hear the lead institutions needing help, I'm thinking
33:13
Speaker 1: Harvard is almost forty billion, Stanford is right behind them.
33:17
Speaker 1: M I t L. You go down the list, University
33:19
Speaker 1: of Pennsylvania that's you know, to three billion dollars. If
33:23
Speaker 1: you take the top ten twenty schools, and then everybody
33:26
Speaker 1: after them is is not nearly as as successful. But
33:31
Speaker 1: that's fascinating how that shift happened. So one of the
33:35
Speaker 1: questions I didn't ask you is during the broadcast portion
33:38
Speaker 1: is how do you measure success? Clearly on the on
33:43
Speaker 1: the example you give from the fifties, there's a measure
33:45
Speaker 1: of success because the United States has turned out and
33:49
Speaker 1: is thought of as a leader in business business management.
33:54
Speaker 1: So something a little more esoteric and a little more challenging,
33:58
Speaker 1: like inequality or are like I'm trying to think of
34:03
Speaker 1: you mentioned the number of people of color in prison?
34:07
Speaker 1: How do you measure success of your brands to like
34:14
Speaker 1: it's such a I'm having a hard time spinning out
34:16
Speaker 1: the work. It's an overwhelming societal issue. How do you
34:21
Speaker 1: measure progress in that? So let's just take the example
34:24
Speaker 1: you gave. Let's talk about the criminal justice system and
34:27
Speaker 1: reforming that system. So we would say there are two
34:31
Speaker 1: things we want to reform. One is the rehabilitation process
34:36
Speaker 1: to ensure that prisoners actually have a chance for education
34:40
Speaker 1: and rehabilitation. Right now, that's terrible because the recidivious rates
34:44
Speaker 1: are like eight plus percent. Well, it's terrible in part
34:47
Speaker 1: because prisoners are no longer eligible for federal education support
34:52
Speaker 1: while incarcerated. Yes, that makes sever most Americans don't know that,
34:57
Speaker 1: but that is in fact the law. How did that
34:59
Speaker 1: become law. It was part of the War on drugs,
35:02
Speaker 1: which is a huge part of the problem. And that
35:05
Speaker 1: those policies, which were promulgated by both Republican and Democratic
35:10
Speaker 1: administrations have in fact contributed to these high rates of recidivism.
35:15
Speaker 1: So let's change that policy to ensure that more people
35:20
Speaker 1: while incarcerated get educated and rehabilitative services. So that's one thing.
35:26
Speaker 1: So when President Obama said that he wishes to change
35:30
Speaker 1: that policy, and and he named various programs like the
35:36
Speaker 1: barred Prison initiatives, which the Forward Foundation, Open Society and
35:40
Speaker 1: others fund, that's an example. If we can get those
35:44
Speaker 1: kinds of programs demonstrated, the efficacy of them demonstrated, and
35:50
Speaker 1: replicated in prisons across America, we in turn will contribute
35:54
Speaker 1: to reducing recidivism. So that's one example. Let me stop
35:58
Speaker 1: you there. You go into a specific and and you
36:00
Speaker 1: fund one prisons program because the FEDS can't, you demonstrate
36:05
Speaker 1: its success, and then you go back to Congress and
36:08
Speaker 1: say we did it in one program. Your entire penal
36:11
Speaker 1: system has an eight six failure rate or recidivism rate,
36:16
Speaker 1: but people coming out of our program has at recidivism rate.
36:20
Speaker 1: Use our program, and you'll lower your costs going forward.
36:23
Speaker 1: So the organizations we support, like the Barred Prison Initiative,
36:26
Speaker 1: in fact do just that. They build the evidence. They
36:30
Speaker 1: work with research firms like M d r C and
36:33
Speaker 1: the Urban Institute to demonstrate the efficacy, and they in
36:36
Speaker 1: turn speak to policymakers, decision makers, editorial boards about the
36:42
Speaker 1: need to change policy. I have so many questions, and
36:45
Speaker 1: I know they're gonna come kick us out of the
36:46
Speaker 1: studio quickly, So let me just go to my three
36:50
Speaker 1: favorite questions. So first, UM, not this one. I don't
36:54
Speaker 1: even need to look at it. So who are your
36:55
Speaker 1: early mentors? You mentioned a pastor from from one group.
36:59
Speaker 1: Who else were important mentors in your professional career? Well,
37:04
Speaker 1: my my mother was a great mentor because my mother
37:09
Speaker 1: did not have UH formal education beyond high school. UM
37:14
Speaker 1: had a horrific childhood in rural Louisiana and overcame UH
37:22
Speaker 1: domestic violence, UH, a very dysfunctional home life, and I
37:30
Speaker 1: think UH always had courage and determination. The other person
37:36
Speaker 1: was my grandfather, who was in some ways not my grandfather.
37:40
Speaker 1: He was my great uncle, but it's too complicated to
37:43
Speaker 1: go into. However, he only had a third grade education.
37:47
Speaker 1: And yet he had so much wisdom and knowledge, and
37:50
Speaker 1: I learned from him the need to be focused, um,
37:55
Speaker 1: and the need to be disciplined as well, because he
37:58
Speaker 1: was a very disciplined person. He was also angry. He
38:02
Speaker 1: was angry that America had not lived up to its
38:06
Speaker 1: obligations to him because in his little racist town in
38:11
Speaker 1: rural Louisiana, school for negroes ended at the third grade.
38:15
Speaker 1: Because after the third grade, the boys and girls picked cotton,
38:19
Speaker 1: and and so he never had an opportunity to get
38:24
Speaker 1: a formal education. He has every right to be angry. UM,
38:27
Speaker 1: let me, let me change topics and ask you about books.
38:31
Speaker 1: What are some of your favorite books? Fiction, non fiction, finance,
38:34
Speaker 1: doesn't matter. What what? What books have been influential? I
38:37
Speaker 1: am right now reading Evicted. Uh. This is a remarkable book.
38:44
Speaker 1: I actually actually say I just ordered it because it
38:48
Speaker 1: was on back order on a group of people who
38:53
Speaker 1: have been evicted in Milwaukee, Wisconsin. Uh. And it's it.
38:58
Speaker 1: It crystallizes for us the challenge of housing and the
39:03
Speaker 1: distorted housing marketplace we have in this country, and particularly
39:06
Speaker 1: if you're a low income and of course we see
39:08
Speaker 1: it here in New York City with a number of
39:10
Speaker 1: people on the streets. The homeless situation here much worse,
39:14
Speaker 1: not just in New York but across the country. I
39:16
Speaker 1: was just in Houston and it seemed that on every
39:20
Speaker 1: street corner there were people uh congregating um. And clearly
39:25
Speaker 1: there are people, many of whom have mental health issues.
39:28
Speaker 1: Mental health issues, but housing and shelter us have got
39:33
Speaker 1: to be addressed. I assume you've followed the experiment in Utah,
39:37
Speaker 1: which by all appearances appear to have been a huge success,
39:42
Speaker 1: taking people and essentially taking homeless and giving them a
39:45
Speaker 1: place to live at no cost, which allows them to
39:50
Speaker 1: access mental health counseling, to actually have a place so
39:53
Speaker 1: they can get meds to treat whatever whatever it happens
39:57
Speaker 1: to be. Of all places, Utah has been tremendously innovative,
40:02
Speaker 1: and it appears that this is a huge success. It
40:04
Speaker 1: is a huge success. But let us not forget that
40:08
Speaker 1: in New York City, Roseanne Haggarty Common Ground in the
40:11
Speaker 1: nineteen eighties and nineties demonstrated the efficacy of supportive housing,
40:16
Speaker 1: which is what you're describing in Utah. Have we forgotten
40:19
Speaker 1: about that here? We have not invested enough in it.
40:22
Speaker 1: That's the issue. We know what works. The issue is
40:26
Speaker 1: do we have the will to invest in what works.
40:29
Speaker 1: Often people say our problems in this country are just intractable.
40:35
Speaker 1: They are not intractable. We know that many of our
40:38
Speaker 1: problems can be solved, and we've in fact demonstrated solutions.
40:43
Speaker 1: We have not been willing to invest in those solutions.
40:48
Speaker 1: Fascinating My last two questions, So are millennial or someone
40:51
Speaker 1: coming out of college grabs Darren Walker on the at
40:55
Speaker 1: some events and says, I'm really interested in a career
40:59
Speaker 1: in philanthrop p What sort of advice would you give them?
41:03
Speaker 1: Don't come to a philanthropy would be my advice, because
41:09
Speaker 1: a young person should be working in a nonprofit, working
41:15
Speaker 1: in government, working in the private sector, and getting a
41:20
Speaker 1: very deep understanding of the problems at the ground level. UM.
41:26
Speaker 1: Sometimes being in a foundation can be be in uh
41:31
Speaker 1: put you in rarefied air, and I think it's uh.
41:34
Speaker 1: It would be a mistake for a young person to
41:37
Speaker 1: go right into a foundation and and start their career
41:40
Speaker 1: and stay in a foundation without working in the rural
41:44
Speaker 1: villages of Africa or the streets of the South side
41:47
Speaker 1: of Chicago, or in a health clinic. UM in a
41:51
Speaker 1: low income community in Oakland, California, to understand the lack
41:55
Speaker 1: of access that people have to health in this country.
41:59
Speaker 1: So these are all the things that I think prepare
42:03
Speaker 1: you when you're young. Doing that kind of work makes
42:05
Speaker 1: it possible for you to be better when you actually
42:08
Speaker 1: come into philanthropy. And my final question, I wish we
42:11
Speaker 1: had more time. I have listened lists. What is it
42:15
Speaker 1: that you know about the world of philanthropy today that
42:19
Speaker 1: you wish you knew twenty or so years ago when
42:23
Speaker 1: you when you moved into this That philanthropy has a
42:28
Speaker 1: role in influencing and shaping public opinion and public perceptions
42:36
Speaker 1: and hopefully building uh narrative about the solutions for our society.
42:43
Speaker 1: That philanthropy has an R and D role to play
42:46
Speaker 1: in developing solutions. I like to say that at the
42:49
Speaker 1: Fourth Foundation, we're in the business of hope because America
42:54
Speaker 1: is a nation that depends on hope and we need
42:58
Speaker 1: it now more than ever. Fascinating, fascinating stuff. We've been
43:02
Speaker 1: speaking with Darren Walker. He is the president of the
43:05
Speaker 1: Ford Foundation. Darren, thank you so much for being so
43:08
Speaker 1: generous with your time. I have another hour's worth of questions,
43:12
Speaker 1: but I know we have to uh, we have to
43:14
Speaker 1: move along. If you've enjoyed this conversation, be sure and
43:18
Speaker 1: look Upward Down an Inch on iTunes and you can
43:20
Speaker 1: see any of the eighty or so other such podcasts
43:24
Speaker 1: that we've had. UH. Be sure and follow me on
43:28
Speaker 1: Twitter at rid Holtz, or check out my daily column
43:31
Speaker 1: on Bloomberg View dot com. I'm Barry rid Holtz. You've
43:35
Speaker 1: been listening to Masters and Business on Bloomberg Radio.