2005 Conference for Community Foundations
September 20, 2005
Prepared remarks by William H. Gates Sr., co-chair
Thank you, Phyllis for that introduction. Phyllis was kind enough to mention our friendship. What she didn’t mention was our rivalry.
You see, I attended—and now serve as a regent of—the University of Washington. Phyllis attended—and later served as a regent of—our rival: Washington State University.
During football season, the two schools play each other in the final regular-season game. When I was at the University of Washington, the joke was that if you wanted to keep a Washington State football player out of your front yard, the surest way was to put up goalposts.
Today, with Washington State undefeated and the University of Washington, un…feated, Phyllis has been getting the better of me in our intercollegiate razzing.
The truth is, I’m happy to put up with the grief she’s been giving me, because Phyllis and the Seattle Foundation have done so much to strengthen this great city.
I also want to thank Ben Johnson for chairing this conference, and Cole Wilbur for his leadership of the Council on Foundations at this time of transition. I also want to congratulate Steve Gunderson on becoming president of the Council.
Finally, I want to thank all of you for the work you do in bridging the gap between the America we live in, and the America we seek.
Today, we’re seeing that work most visibly in the ravaged Gulf Coast. Like all of you, I have been horrified by the images coming out of that region. It is as if the scope of the devastation is so wide that any attempt to encompass it all requires us to draw further away.
From that distant perspective, railroad tracks become ribbons, boats are reduced to the scale of bath toys, and homes become just rows of rooftops, surrounded by water.
Of course, we know that each mangled train track represents dozens of vanished jobs, each boat was a livelihood or a life savings, each house is a family that has been uprooted.
Tragic events like these rivet our attention and call us to concerted action. However, it is often when the waters recede and tragedies leave the headlines that the work of folks like you really begins.
Every national or regional tragedy is actually hundreds or thousands of individual tragedies, and one of the great strengths of community foundations is that you know—as only a neighbor can—the unique needs of the people you serve.
The motto of the Baton Rouge Area Foundation is: “A neighbor in need is an opportunity for service.” In the months and years ahead, local knowledge about what their “neighbors need” is going to be increasingly vital as the work in the Gulf Coast moves from rescue, to recovery, to rebuilding.
What is true for the Gulf Coast as we confront this disaster is just as true for communities across America as we seek to meet a whole host of local challenges. Your organizations are playing a larger role than ever before.
Community foundations represent the fastest-growing segment of American philanthropy today. On top of that, according to one study, the next 40 years will see more than 10 trillion dollars transferred from my generation to the postwar baby boomers.
There is no doubt that a significant share of this money will be given to your foundations.
That trend is being complemented by another trend: more donations from younger donors.
A friend once joked to me that there are three stages of life: youth, middle age, and “you look great.” In the past, most giving was done by folks in the “you look great” stage. Now we are starting to see a shift to giving from people who are middle-aged—people who made their money in strategic ways, want to see it distributed in strategic ways, and want to be involved in their philanthropy.
This presents a tremendous opportunity not only for community foundations, but for all the people you serve.
Your growing expertise in grantmaking, your ability to evaluate various programs, and your role in advising and engaging philanthropists on giving will help you attract more assets, and expand your influence further.
I do not want to overdo this emphasis on the growing entrepreneurial base of clients you are serving.
I do recognize that a large segment of your clientele has pretty well fixed objectives and designate their giving quite consistently to the same recipients. This more traditional segment of your customers does not typically look for your guidance in directing their philanthropy.
The fact however remains that a major fraction of people who are your clients are looking for, or are at least open to, well informed advice. Witness, for example, the presence—I think growing presence—of men and women who have hung out their shingle advertising availability to give professional counsel to philanthropists.
You have been doing this for years, and have so much to offer your clients including:
- a high level of knowledge about local problems and local agencies;
- sophistication about the techniques of grant making—including such important mechanisms as matching fund grants, last dollar grants and benchmarked grants; and
- sensitivity to your client’s interests and some continuity of contact with them.
In fact, your regular newsletter has enormous potential for playing to your funders’ concerns about being a smart philanthropist.
Having heard this, some of you may be saying to yourselves: “he is exaggerating our expertise.” If that is the case, then you should regard my remarks as a call to action to develop the kind of expertise that an increasing number of your donors will seek in the years to come.
I’d like to talk for a moment as a fellow student of philanthropy about how we at the Gates Foundation approach the challenge of strategic giving, and how I think community foundations can capitalize on these growing trends to make the greatest impact.
When it comes to strategic giving, the only reason I have advice to share is because over the past several years, I’ve had a lot to learn.
I have to admit: As a father, I never imagined that the argumentative, young boy who grew up in my house, eating my food, and using my name would be my future employer. But that’s what happened.
While Bill’s company always had a charitable arm, he had hundreds of personal requests from local leaders and others seeking assistance that were just piling up.
Given the volume of requests, and the fact that my law practice was winding down, I suggested that Bill and Melinda just send me the mail and I would help them respond to it. They thought that was a good idea.
And so the Bill & Melinda Gates Foundation began as a collection of boxes in my basement, and I embarked on the journey of learning more about philanthropy.
The base of my philanthropic experience came from membership and board work in a number of agencies including the United Way. That experience always focused on the question of agency competence.
Yet, Bill and Melinda came at the enterprise of philanthropy from a different angle than I had experienced.
Rather than thinking about conduits for giving, they thought first about end results. They decided what they would like to see changed—and then they started thinking about how best to do it. This is a direct example of my earlier reference to entrepreneurial, strategic philanthropy.
I remember early in our foundation’s life, Bill sending me an article he and Melinda had read about the millions of children who were dying every year in poor countries from diseases like tuberculosis, malaria and diarrhea—diseases that we had largely eliminated in this country.
He had attached to the article a note that read, simply: “Dad, maybe we can do something about this.”
We soon identified a dual challenge that was at the bottom of this egregious disparity in health care. First, existing vaccines, medication and interventions were not getting to people in poor countries who needed them; and
Second, market and government forces were not providing either the investment or the incentive that would lead to new approaches to these long standing conditions. Responding to those two challenges is what now guides our global health strategy.
Ultimately, a strategic approach to giving recognizes that the inequities in the world and in our own city far outstrip the resources we have to deal with them.
Therefore, the ambition we all share to reduce inequity and improve lives leads to the inevitable question: if we cannot solve these needs alone, how can we leverage the resources that we have to still make a difference?
That is where community foundations add tremendous value. By pairing your donors’ strategic interests with your knowledge of the community’s needs, you can work to combine the investments of many to make an impact far beyond what one donor could do alone.
I think of you not as pass-throughs, but as multipliers, and THAT makes a difference.
Another great contribution of community foundations is that in addition to knowing—as only a neighbor can—the needs of the people in your communities, you also have the ability to find the approaches that work best. That ability is honed by years of experience and dedication.
When you look at the average age of the foundations you represent—28 years—the Bill & Melinda Gates Foundation is still a babe in the woods. In our current form, we’re really only five years old. We have a lot to learn.
Our foundation also believes strongly in the value of learning from the practices of others in our fields of work. For example, as we began looking into the area of early childhood development, we spent a day visiting Geoff Canada and his staff to see the work they’re doing in the Harlem Children’s Zone.
That program has the broad goal of changing young people’s experiences in day care, in school, and in the neighborhood at large—so that they will enter adulthood conditioned to be constructive citizens. From what we saw, this may be the most successful effort of this kind ever undertaken in our country.
It was a great learning experience for us to make that visit—and there was a specific element of this learning that was particularly impressive to me.
I have harbored for some time a concern that programs, even the most effective programs designed to move kids away from becoming dysfunctional adults, have not successfully enlisted the children who most need help.
I suspect that kids already turned-off by society are not motivated or are not comfortable signing up, and its likely that their parents are either indifferent or antagonistic toward these types of programs.
However, at the Harlem Children’s Zone, they’ve learned how to get these kids AND their parents in the door. First, the staff are called upon to know about every single youngster in the neighborhood: to know where the child lives and to have some knowledge of that kid’s circumstances.
These workers then go door to door encouraging the parents to enlist their children in the programs offered at HCZ. But it is not just the kids who are requested to show up. They also ask the parents to attend the Saturday morning neighborhood meetings—where the challenges of child raising are carefully studied and good techniques are promoted.
This sounds like a good strategy, but they quickly realized that families were skeptical, so they developed an incentive to get them in the door. For the birth to three programs, all of the families who attend are given free diapers! This, for a low-income family in Harlem, is worth showing up for...and the end result of parent education is achieved.
However, they don’t just want to have the families come one time. They usually have a 10-week session planned, and although the free diapers might get them in the door once or twice, they found that their families were falling off after a few sessions, and not making it to the end—which then diminishes the effect of the parenting education.
So they added an additional incentive for the families that make all 10 sessions. Their names were put in a drawing to receive a monetary prize in the amount of one month’s rent. We were told that attendance improved significantly in the later sessions.
I am not unmindful that the very intensive, hands on recruitment the Harlem Children’s Zone does is expensive, requiring significant resources. But it is clear that Harlem Children’s Zone has definitely figured out what works in their community, and we learned a lot from their experience.
It is this kind of learning from other organizations—who do what we do—that makes us all better philanthropists, but more importantly, better at getting the results that are impacting the lives of the families we serve.
I want to add one final comment, and it concerns the current tension some of you may be feeling between your roles and the role of the United Way operating in your area.
I know that a number of you have just attended a session on this very topic, and no doubt have some opinions as a result of that discussion. I’d like to make one more point for you and the rest of the audience: Your missions may be converging, but that doesn’t diminish the need for vibrant community foundations and a vibrant United Way.
My view of this subject fits in squarely with my views already stated—the best thing that could happen to community charitable activity for you folks and the United Way folks is to increase and make known your expertise about local social welfare activities.
I have no doubt that if this occurred, more charitable giving would be stimulated and better results achieved from that giving.
My judgment is that any overlap between your work and that of your United Way organization is, at the worst, very, very slight. I expect that United Way leadership givers, who also decide to initiate a fund with you, do not terminate their United Way giving.
On the other hand there is the fundamental fact that the missions of community foundations and United Way organizations are fully overlapping and consistent. They both:
- increase money available for local charities; and
- develop a real understanding of the local community needs.
Yet, neither your organizations nor United Way organizations have the resources for unlimited staff. If you chose to collaborate, your people would learn what the United Way people know about what’s happening in your charitable world and vice versa.
For example, the United Way is continuing to develop a better basis for its allocation activities, and you are increasingly better informed to give your clientele advice they would value. By sharing this expertise, both organizations could achieve greater credibility and ultimately, more community impact.
In the end, we can’t forget that the act of changing a community is really the act of changing one life, and then replicating that act over and over.
That is true today in New Orleans, and it is true nationally.
That point was powerfully brought home to me several years ago when I was the Campaign Chair for our United Way.
We wanted our division campaign leaders to see the impact of their work. So we took them out to look at some of the agencies which the campaign was supporting.
One morning we visited an agency called Transitional Resources. They provide housing and support for people who have just come out of institutions as they looked to find jobs and get their lives back on track.
When we pulled up in our little bus, I thought: “this is such an ordinary sized house it couldn’t be providing help for more than a dozen people!” I worried that this place would appear insignificant compared to the efforts we were trying to get our campaigners to make.
As we went into the living room we were introduced to a young woman waiting there. She was dressed very neatly and my first assumption was that she worked for the agency. She didn’t. She was a resident. Her name was Irma.
She stood up nervously to speak and told us about the ugly life she had led as a young woman with mental health problems. She had spent some time in an institution and been discharged as ready to take her place in the normal world. Now, to the credit of Transitional Resources, she had a job and was rebuilding her life.
She was exulting in something she had lost years ago—a belief in possibilities.
Her job did not give her liberal time off and yet, when she learned we were coming, she took her own time off so that she could be there when we arrived—simply to thank us.
She did not know us. She did not care whether we were from the United Way or the community foundation. She did know that we had something to do with someone making an investment in her and her future, and she was movingly grateful.
I left there confident that the campaign team had been deeply affected…I was deeply affected.
I could not help thinking how easy it would be to raise money if those being asked could feel that sense of deep satisfaction that grows from direct exposure to the human impact that charity delivers, if they could have been there in that room listening to Irma.
The ultimate lesson is really simple: Your donor’s dollars are delivering these results. The better job you do, the more Irma’s there will be.
Keep up the good work!