US Private Giving Field Trip 2014: Day Three

Jenny Wheatley from the Vincent Fairfax Family Foundation is reminded that all things in the USA are bigger and meets a unique Australian businessmen, Olympic fencer and cello player who understands the glue family philanthropy provides. Happily too, it seems working in philanthropy keeps you looking young…

Discussions over breakfast with Chuck Harris and “Woody” McCutchen of the Edna McConnell Clark Foundation (EMCF) introduced the group to collaborative capital funding, New York Style. The group exchanged a wiry smile when with a corpus of $1b, Chuck described EMCF as a “small foundation”. Three years ago a strategic review resulted in agreement by the Trustees, which include two nephews of Ms McConnell, to make big bets for the long term. From making 100’s of small grants EMCF now partner closely with 18 to 20 organisations. They take on a role similar to the lead funder in a private equity deal and source capacity building funding for ambitious growth targets. EMCF have a rigorous assessment process focusing on leadership capability, operational viability, financial strength, evidence, data and fit with EMCF strategy. An initial grant of circa $250,000 is provided for an external consultant to undertake a detailed business planning exercise with a focus on growth. If the plan as developed retains its alignment with ECMF, the Foundations will then seek partners to joint fund the strategy that implements the plan. This funding may be in the order of $50m to $100m – so it’s not just the coffee cups that are bigger. Careful skilled management ensures Program Officers do not “cross the line” when working with the organisation and dealing with conflicts that arise as ECMF acts as an advocate for the organisation when dealing with funding partners.  Woody’s energy and enthusiasm amazed the group, particularly when we discovered that he was 70 years young (and looked no more than 55).

The corpus of the F.B. Heron Foundation is 63% invested in impact and under the continued guidance of Clara Miller and Dana Pancrazi is moving towards 100%. Questions from the floor helped with understanding the maize of terminology that surrounds social impact investment. We confirmed that you do not need to accept below market returns on mission aligned investments; social investments could be made across all asset classes; social alpha may and should be measured; investments with impact could be made through for profit entities -  you just need to follow what the money does. Dana gave examples of low interest loans made during the financial crisis through mortgage brokers that assisted those in crisis who would otherwise have lost their homes. In 2013 a return of 11% was achieved on $300m.       

A delicious lunch at the very trendy Locande Verde in Greenwich Street was followed by a visit to the 9/11 memorial where we heard from Michael Bloomberg’s philanthropy manger stories of those honoured which touched all hearts. Antony Bugg-Levine enhanced our understanding of different ways finance may be extended to not for profits. As we gazed up Fifth Avenue in peak hour, Anthony provided the sobering insight that the divide between the wealthy and the poor in NYC was wider than ever.

 This day of key learnings was followed by a very elegant dinner  hosted by Sir James Wolfensohn. “Jim” an 83 year old Australian-American lawyer, investment banker and economist, was the ninth president of the World Bank Group, a member of the 1956 Olympian team  and an accomplished cellist, taking up this hobby at 42 years young. Sir James warned us that Australia may fall out of the top 50 countries in the world in economic terms if we do not improve our focus on Asia and education.  Of great relevance to a group representing family foundations, Sir James spoke with great humility of how philanthropy provided the glue that bound his four children together and introduced him to people he would otherwise not have known. An exceptional discussion with an exceptional man.   

Oct. 29, 2014

 Tags: us private giving field trip 2014

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