1 00:00:03,240 --> 00:00:07,600 Speaker 1: This is Masters in Business with Barry Ridholts on Bloomberg Radio. 2 00:00:08,080 --> 00:00:11,320 Speaker 1: This week on the podcast, I have Ford Foundation President 3 00:00:11,400 --> 00:00:14,320 Speaker 1: Darren Walker, and I have to tell you you probably 4 00:00:14,520 --> 00:00:18,080 Speaker 1: have never heard of this gentleman, and that's unfortunate because 5 00:00:18,520 --> 00:00:22,320 Speaker 1: he's really a fascinating guy. And this was a really 6 00:00:22,360 --> 00:00:28,240 Speaker 1: really interesting conversation. I found him kind of randomly reading 7 00:00:28,360 --> 00:00:32,800 Speaker 1: something about another project I was working on in philanthropy, 8 00:00:32,840 --> 00:00:35,680 Speaker 1: and I ended up coming across something he had written, 9 00:00:36,040 --> 00:00:39,199 Speaker 1: and I was very much enchanted by it, and I 10 00:00:39,320 --> 00:00:43,560 Speaker 1: had the folks here reach out to him, and apparently 11 00:00:44,159 --> 00:00:47,159 Speaker 1: he's very well known to everybody here. He runs a 12 00:00:47,240 --> 00:00:52,880 Speaker 1: huge philanthropic organization. Other people in the Bloomberg family run 13 00:00:53,400 --> 00:00:57,240 Speaker 1: uh philanthropic organizations, and so I meet him, thinking, I'm 14 00:00:57,280 --> 00:01:00,240 Speaker 1: gonna sneak this guy in who no one's ever heard of, 15 00:01:00,840 --> 00:01:03,720 Speaker 1: and it will be quite a coup to to find 16 00:01:03,760 --> 00:01:07,119 Speaker 1: somebody that people are not familiar with. I'm not exaggerating 17 00:01:07,120 --> 00:01:09,880 Speaker 1: when I say from the elevator to the studio, which 18 00:01:09,920 --> 00:01:14,080 Speaker 1: is really not all that far, dozens of people stopped him, Darren, 19 00:01:14,120 --> 00:01:16,880 Speaker 1: how are you? And it's it was just fascinating, and 20 00:01:17,360 --> 00:01:20,080 Speaker 1: people looked at me, how do you know this guy. 21 00:01:20,680 --> 00:01:22,759 Speaker 1: I read something you wrote. I thought it was really interesting. 22 00:01:23,080 --> 00:01:27,320 Speaker 1: So if you're at all interested in philanthropy and how 23 00:01:27,360 --> 00:01:31,360 Speaker 1: a twelve billion dollar foundation decides where it's gonna put 24 00:01:31,480 --> 00:01:33,720 Speaker 1: its money, how it's gonna measure it, how it's gonna 25 00:01:33,760 --> 00:01:36,199 Speaker 1: stay on top of it, um, I think you'll find 26 00:01:36,200 --> 00:01:39,560 Speaker 1: this to be an absolutely fascinating conversation. So, without any 27 00:01:39,600 --> 00:01:47,240 Speaker 1: further ado, my chat with Ford Foundations Darren Walker. This 28 00:01:47,480 --> 00:01:51,400 Speaker 1: is Masters in Business with Barry Ridholts on Bloomberg Radio. 29 00:01:52,000 --> 00:01:55,040 Speaker 1: My special guest this week is Darren Walker. He is 30 00:01:55,080 --> 00:01:59,680 Speaker 1: the president of the nearly thirteen billion dollar Ford Foundation. 31 00:02:00,200 --> 00:02:04,240 Speaker 1: A little background about Mr Walker, formerly an attorney with 32 00:02:04,320 --> 00:02:09,280 Speaker 1: Cleary Gottlieb and an investment banker at UBS. He is 33 00:02:09,400 --> 00:02:13,400 Speaker 1: running this massive foundation, but he hails from humble beginnings. 34 00:02:13,440 --> 00:02:17,960 Speaker 1: Born in a charity hospital in Lafayette, Louisiana, raised by 35 00:02:18,000 --> 00:02:23,440 Speaker 1: a single mom, he became one of the first children 36 00:02:23,560 --> 00:02:27,079 Speaker 1: to benefit uh from the head Start program. And let 37 00:02:27,080 --> 00:02:30,720 Speaker 1: me tell you, he has certainly accomplished a lot in 38 00:02:30,720 --> 00:02:33,600 Speaker 1: a relatively short period of time. In addition to being 39 00:02:33,680 --> 00:02:36,320 Speaker 1: president of the Ford Foundation, he is on the boards 40 00:02:36,360 --> 00:02:39,760 Speaker 1: of Carnegie Hall, the New York City Ballet, the High 41 00:02:39,760 --> 00:02:43,440 Speaker 1: Line Park, the Council on Foreign Relations, and many American 42 00:02:43,480 --> 00:02:46,639 Speaker 1: Academy of Arts and Sciences. He is the co chair 43 00:02:46,680 --> 00:02:50,240 Speaker 1: of the New York Public Library Council and Vice chairman 44 00:02:50,320 --> 00:02:54,360 Speaker 1: of the New York City Ballet. Darren Walker, Welcome to Bloomberg. 45 00:02:54,520 --> 00:02:56,880 Speaker 1: Thank you, Verry. Happy to be here. I'm excited to 46 00:02:56,919 --> 00:02:59,320 Speaker 1: talk to you about a lot of things. But before 47 00:02:59,360 --> 00:03:02,240 Speaker 1: we get into the details of the Ford Foundation and 48 00:03:02,320 --> 00:03:07,280 Speaker 1: its portfolio, you're really a real, live Horatio algia story. 49 00:03:07,760 --> 00:03:12,200 Speaker 1: How does one go from relatively humble beginnings too on 50 00:03:12,240 --> 00:03:17,080 Speaker 1: the board of all these prestigious institutions I just named, well, 51 00:03:17,200 --> 00:03:19,880 Speaker 1: first one is lucky enough to be born in America, 52 00:03:20,120 --> 00:03:23,680 Speaker 1: doesn't hurt. I was born in America, and that meant 53 00:03:23,720 --> 00:03:26,920 Speaker 1: that I was born in a country where even a 54 00:03:27,040 --> 00:03:31,639 Speaker 1: poor African American kid could have dreams and those dreams, 55 00:03:32,200 --> 00:03:36,760 Speaker 1: those aspirations could be realized. That's the country that we 56 00:03:36,840 --> 00:03:40,880 Speaker 1: have lived in, and at the Ford Foundation, we're asking 57 00:03:40,960 --> 00:03:45,000 Speaker 1: that question, can we continue to be a land of 58 00:03:45,040 --> 00:03:49,760 Speaker 1: opportunity where little Darren Walker's and lots of others like 59 00:03:49,920 --> 00:03:53,680 Speaker 1: me can dream and have those dreams be realized. So 60 00:03:53,920 --> 00:03:57,000 Speaker 1: let's get into the realization of that dream. And I'm 61 00:03:57,000 --> 00:03:59,880 Speaker 1: gonna pull some quotes that that I've found in various 62 00:04:00,000 --> 00:04:03,360 Speaker 1: fightings of yours. You once said a teacher to you, 63 00:04:03,440 --> 00:04:09,240 Speaker 1: the value of quote learning self control? What does that mean? Well, 64 00:04:09,280 --> 00:04:13,920 Speaker 1: at the time, I was a fleling, rather undisciplined third 65 00:04:14,000 --> 00:04:19,200 Speaker 1: grader who was constantly getting into trouble. Familiar my third 66 00:04:19,200 --> 00:04:23,080 Speaker 1: grade teacher, Mrs Majors, took me aside after class and 67 00:04:23,160 --> 00:04:25,560 Speaker 1: she sat me down and she gave me a stern 68 00:04:26,200 --> 00:04:29,719 Speaker 1: talking to as we say back home. She said, little 69 00:04:29,760 --> 00:04:34,960 Speaker 1: boys like you who get in trouble too often end 70 00:04:35,040 --> 00:04:39,360 Speaker 1: up not succeeding. And I worry that you are going 71 00:04:39,440 --> 00:04:41,640 Speaker 1: to get in trouble and are going to end up 72 00:04:42,160 --> 00:04:46,360 Speaker 1: not succeeding in life, and you can succeed. And it 73 00:04:46,440 --> 00:04:49,599 Speaker 1: was having her tell me that I could succeed, but 74 00:04:49,640 --> 00:04:52,680 Speaker 1: that in order for me to succeed, I needed to 75 00:04:53,400 --> 00:04:58,960 Speaker 1: gain control of my emotions, my temper, dealing with issues 76 00:04:59,000 --> 00:05:03,240 Speaker 1: I was dealing with that home in the classroom and 77 00:05:03,600 --> 00:05:07,880 Speaker 1: manifesting a lot of bad behavior. But your third grade 78 00:05:07,880 --> 00:05:09,640 Speaker 1: what are you eight years old at the time? Is 79 00:05:09,640 --> 00:05:13,200 Speaker 1: that about right? Who makes a life choice? To gee, 80 00:05:13,240 --> 00:05:16,360 Speaker 1: I really have to get my act together when they're eight. Well, 81 00:05:16,480 --> 00:05:19,640 Speaker 1: I understood because I saw some of my cousins what 82 00:05:19,680 --> 00:05:22,000 Speaker 1: was happening to them as early as the third grade, 83 00:05:22,240 --> 00:05:26,160 Speaker 1: for example, being put in special education. Some of my 84 00:05:26,279 --> 00:05:29,160 Speaker 1: cousins who I played with as a little boy, by 85 00:05:29,240 --> 00:05:34,159 Speaker 1: high school were already in juvenile centers. And sadly, seven 86 00:05:34,200 --> 00:05:37,080 Speaker 1: of my cousins ended up in prison, and and one 87 00:05:37,120 --> 00:05:41,880 Speaker 1: of my cousins committed suicide in a Paris jail in Louisiana. 88 00:05:42,680 --> 00:05:46,200 Speaker 1: And you were aware of the risks of not being 89 00:05:46,200 --> 00:05:49,560 Speaker 1: in control, even at that early age, at least after 90 00:05:49,600 --> 00:05:52,159 Speaker 1: the teacher brought this to your attention. Absolutely, I was 91 00:05:52,200 --> 00:05:55,120 Speaker 1: aware of it, and I was aware of the consequences 92 00:05:55,240 --> 00:05:58,200 Speaker 1: because it was right in front of me. I would 93 00:05:58,240 --> 00:06:00,680 Speaker 1: hear my mother talk about stories of what was happening 94 00:06:00,680 --> 00:06:03,600 Speaker 1: in our family. I'd see it in our community, and 95 00:06:03,640 --> 00:06:06,560 Speaker 1: I hear about it from others. So I was aware 96 00:06:06,720 --> 00:06:09,920 Speaker 1: that if you are a bad boy, bad things happened 97 00:06:09,920 --> 00:06:12,719 Speaker 1: to you. So less fast forward a couple of years, 98 00:06:12,760 --> 00:06:15,200 Speaker 1: you go to college, go to law school. How does 99 00:06:15,279 --> 00:06:19,960 Speaker 1: one make the transition from bad kid to good lawyer 100 00:06:20,240 --> 00:06:24,960 Speaker 1: to philanthropy A lot of luck, a lot of hard work, 101 00:06:25,560 --> 00:06:29,400 Speaker 1: and a lot of people cheering me on along the way. 102 00:06:29,720 --> 00:06:33,479 Speaker 1: That's a theme that in the various other eighty or 103 00:06:33,520 --> 00:06:36,839 Speaker 1: so interviews we've done here, hard work and a little 104 00:06:36,839 --> 00:06:40,080 Speaker 1: bit of luck comes up over and over again. So, 105 00:06:40,080 --> 00:06:43,960 Speaker 1: so you're a practicing attorney, what tell me what the 106 00:06:44,000 --> 00:06:46,960 Speaker 1: transition is like? How does how do you decide I'm 107 00:06:46,960 --> 00:06:50,080 Speaker 1: going to give up the law librarian and and move 108 00:06:50,200 --> 00:06:53,720 Speaker 1: towards a different focus with my life. Well, one thing 109 00:06:53,760 --> 00:06:56,159 Speaker 1: happened for me. I have to be honest, I didn't 110 00:06:56,200 --> 00:07:00,000 Speaker 1: find my way into the nonprofit sector, the charitable sector 111 00:07:00,000 --> 00:07:03,440 Speaker 1: early in my career. I was very clear with myself 112 00:07:03,560 --> 00:07:06,120 Speaker 1: when I was in college and law school that I 113 00:07:06,440 --> 00:07:11,200 Speaker 1: never again wanted to be poor. I feared, more than 114 00:07:11,240 --> 00:07:15,160 Speaker 1: anything else, being poor. And so because of that, I 115 00:07:15,320 --> 00:07:21,280 Speaker 1: used my my my law degree, I went into business. UM, 116 00:07:21,320 --> 00:07:24,480 Speaker 1: I had a good run on Wall Street. But for me, 117 00:07:24,800 --> 00:07:28,200 Speaker 1: it was never about piling up money. It was about 118 00:07:28,360 --> 00:07:32,720 Speaker 1: comfort and finding myself in a position so that I could, 119 00:07:32,760 --> 00:07:35,600 Speaker 1: for example, take care of my mother, UM support my 120 00:07:35,680 --> 00:07:38,520 Speaker 1: sisters as they were going to college. And I was 121 00:07:38,560 --> 00:07:41,120 Speaker 1: able to do that, and for me, that was enough. 122 00:07:41,520 --> 00:07:45,840 Speaker 1: But what I didn't have was passion. I didn't have 123 00:07:46,480 --> 00:07:50,239 Speaker 1: the day to day excitement about doing good in the world. 124 00:07:50,720 --> 00:07:53,080 Speaker 1: And that's what I was yearning for. And I was 125 00:07:53,160 --> 00:07:56,160 Speaker 1: lucky enough to meet a man named Calvin Butts, who 126 00:07:56,200 --> 00:07:59,560 Speaker 1: was the minister of the Abyssinian Baptist Church in Harlem. 127 00:08:00,000 --> 00:08:02,480 Speaker 1: I'm Barry Ridhults. You're listening to Masters in Business on 128 00:08:02,560 --> 00:08:06,480 Speaker 1: Bloomberg Radio. My special guest today is Darren Walker. He 129 00:08:06,640 --> 00:08:10,200 Speaker 1: is the president of the Ford Foundation. And for those 130 00:08:10,240 --> 00:08:15,200 Speaker 1: of you who may not be familiar with this philanthropic enterprise. 131 00:08:15,800 --> 00:08:20,040 Speaker 1: Founded in nineteen thirty six by Edsel and Henry Ford 132 00:08:20,120 --> 00:08:24,160 Speaker 1: with a twenty five thousand dollar gift from Exel Ford. 133 00:08:24,880 --> 00:08:30,640 Speaker 1: By n seven, the Foundation owned of the non voting 134 00:08:30,720 --> 00:08:35,600 Speaker 1: shares of Ford Motor Company thanks to additional gifts. Right 135 00:08:35,600 --> 00:08:37,880 Speaker 1: now the foundation is about twelve and a half billion 136 00:08:37,920 --> 00:08:41,520 Speaker 1: dollars in assets and gives out over five million dollars 137 00:08:41,559 --> 00:08:46,000 Speaker 1: per year in grant So let's talk about the mission 138 00:08:46,120 --> 00:08:50,840 Speaker 1: of the Ford Foundation, which is an advancing human welfare. 139 00:08:51,280 --> 00:08:54,000 Speaker 1: That's a little broad. What does that mean. What it 140 00:08:54,080 --> 00:09:02,400 Speaker 1: means is encouraging human achievement, reducing poverty, allowing the poor, 141 00:09:03,000 --> 00:09:06,960 Speaker 1: the marginalized in all parts of the world to have 142 00:09:07,080 --> 00:09:13,040 Speaker 1: their dreams, realized through education, through livelihoods, through human and 143 00:09:13,120 --> 00:09:17,800 Speaker 1: civil rights, and participation in governance through the environment. These 144 00:09:17,800 --> 00:09:22,760 Speaker 1: are all areas where the Ford Foundation programs. So how 145 00:09:22,800 --> 00:09:26,760 Speaker 1: do you decide specifically what's a fund because again, these 146 00:09:26,760 --> 00:09:30,920 Speaker 1: are such broad topics. Do do you fly over at 147 00:09:30,960 --> 00:09:35,040 Speaker 1: thirty thousand feet and and try and affect how people 148 00:09:35,120 --> 00:09:38,080 Speaker 1: perceive different areas? Or is it more up close and 149 00:09:38,280 --> 00:09:42,320 Speaker 1: personal you're rolling up your sleeves and really doing uh 150 00:09:42,480 --> 00:09:44,800 Speaker 1: land campaign, a door to door campaign. How do you 151 00:09:44,840 --> 00:09:48,920 Speaker 1: decide how micro or macro you want to get, how 152 00:09:49,000 --> 00:09:52,640 Speaker 1: granular with any of the projects you're working on. Well, 153 00:09:52,760 --> 00:09:56,120 Speaker 1: today we work in eleven regions of the world, including 154 00:09:56,120 --> 00:10:00,400 Speaker 1: the United States, so we work in place based strategy. 155 00:10:00,520 --> 00:10:04,160 Speaker 1: But we start by asking the question, what's the greatest 156 00:10:04,200 --> 00:10:08,360 Speaker 1: threat to human welfare? What's the greatest threat to our 157 00:10:08,480 --> 00:10:13,640 Speaker 1: objective of a more just, fair and peaceful world. We 158 00:10:13,720 --> 00:10:19,520 Speaker 1: believe the greatest threat is growing inequality in the world now. 159 00:10:19,760 --> 00:10:24,840 Speaker 1: Of course, climate change and insecurity these are major threats 160 00:10:24,840 --> 00:10:27,800 Speaker 1: of our time. But the threat that we have chosen 161 00:10:27,840 --> 00:10:32,040 Speaker 1: to focus on is growing inequality because in many ways 162 00:10:32,559 --> 00:10:38,439 Speaker 1: it represents the greatest threat to opportunity because without opportunity, 163 00:10:38,880 --> 00:10:44,160 Speaker 1: it's impossible to have social mobility and human achievement, and 164 00:10:44,400 --> 00:10:49,800 Speaker 1: that's our north star. Now, within that, we ask who 165 00:10:49,800 --> 00:10:54,600 Speaker 1: are the populations of people who traditionally have had the 166 00:10:54,679 --> 00:11:00,160 Speaker 1: least opportunity and who whose welfare have been more ATSK 167 00:11:00,679 --> 00:11:04,559 Speaker 1: And we begin with girls and women because around the world, 168 00:11:04,640 --> 00:11:09,559 Speaker 1: girls and women have traditionally been excluded and marginalized. We 169 00:11:10,240 --> 00:11:17,719 Speaker 1: talk about minorities, ethnic, religious, racial minorities, UH, rural communities, 170 00:11:18,440 --> 00:11:23,720 Speaker 1: urban communities, people who in the United States, for example, 171 00:11:24,160 --> 00:11:27,600 Speaker 1: are isolated in prisons and in a criminal justice system 172 00:11:27,679 --> 00:11:30,840 Speaker 1: that isn't serving our country at all. These are the 173 00:11:30,880 --> 00:11:36,280 Speaker 1: populations we focus on. These are the people whose lives 174 00:11:36,360 --> 00:11:40,000 Speaker 1: we seek to improve, because when their lives are improved, 175 00:11:40,280 --> 00:11:45,079 Speaker 1: they contribute to a better society. So let me ask 176 00:11:45,120 --> 00:11:49,880 Speaker 1: you this question because I saw some fascinating data. Obviously, UH, 177 00:11:49,920 --> 00:11:53,360 Speaker 1: since Picketty's book came out on Capitalism, there's been a 178 00:11:53,400 --> 00:11:56,760 Speaker 1: whole lot of talk about income inequality. But some of 179 00:11:56,760 --> 00:12:01,760 Speaker 1: the data I've seen has suggested the while income inequality 180 00:12:01,840 --> 00:12:05,360 Speaker 1: is expanding in countries like the United States and parts 181 00:12:05,400 --> 00:12:08,880 Speaker 1: of Europe, when you look at the entire world, thanks 182 00:12:09,160 --> 00:12:12,000 Speaker 1: partly to people in China and India rising up out 183 00:12:12,000 --> 00:12:17,160 Speaker 1: of poverty, Global income inequality is actually contracting. How does 184 00:12:17,200 --> 00:12:22,080 Speaker 1: that impact the way you um look to focus your efforts, 185 00:12:22,120 --> 00:12:25,840 Speaker 1: your money's and your key focus. Well, I don't think 186 00:12:25,840 --> 00:12:29,720 Speaker 1: we should be distracted by aggregate numbers. We have to 187 00:12:29,800 --> 00:12:34,760 Speaker 1: look within countries and society. So China has certainly had 188 00:12:35,200 --> 00:12:40,720 Speaker 1: poverty reduced, but income inequality there is at its greatest level. 189 00:12:41,120 --> 00:12:45,080 Speaker 1: From India is the same the US, much of the 190 00:12:45,240 --> 00:12:48,520 Speaker 1: Latin American countries, and of course in Africa we're seeing 191 00:12:48,520 --> 00:12:52,240 Speaker 1: seeing a widening gap. So we should be alarmed by this. 192 00:12:52,720 --> 00:12:56,960 Speaker 1: Now the question is how do we help reduce inequality? 193 00:12:57,040 --> 00:13:00,120 Speaker 1: And we believe we've got to focus on those drivers 194 00:13:00,160 --> 00:13:04,600 Speaker 1: of inequality, and we believe those drivers include a few 195 00:13:05,040 --> 00:13:09,439 Speaker 1: a few profound elements in our society. Give us a 196 00:13:09,480 --> 00:13:14,120 Speaker 1: few examples. So one driver is what we call entrenched 197 00:13:14,200 --> 00:13:19,800 Speaker 1: cultural narratives, and these are narratives that undermine fairness, tolerance, 198 00:13:19,920 --> 00:13:24,360 Speaker 1: and inclusion. And those narratives could be narratives, for example, 199 00:13:24,400 --> 00:13:28,160 Speaker 1: in the India context, that dullut the lower cast are 200 00:13:28,200 --> 00:13:31,080 Speaker 1: in fact supposed to be the lower cast, or in 201 00:13:31,120 --> 00:13:34,800 Speaker 1: the United States that the fact that most of the 202 00:13:34,960 --> 00:13:40,040 Speaker 1: people in American prisons are African, American and Latino. That 203 00:13:40,200 --> 00:13:43,080 Speaker 1: maybe that's the way it's supposed to be. So we 204 00:13:43,200 --> 00:13:49,720 Speaker 1: allow narratives to justify why injustice exists in our society 205 00:13:49,960 --> 00:13:52,760 Speaker 1: and to validate that it's okay. How do you push 206 00:13:52,760 --> 00:13:55,480 Speaker 1: back at a narrative like, well, you have a lot 207 00:13:55,480 --> 00:13:57,960 Speaker 1: of minorities in American prison, but they're they're because they 208 00:13:58,000 --> 00:14:00,920 Speaker 1: did something wrong. That's a that's a prety common belief. 209 00:14:01,040 --> 00:14:03,400 Speaker 1: How do you push back against the narrative these guys 210 00:14:03,440 --> 00:14:05,800 Speaker 1: are there because they did something wrong. Well, first of all, 211 00:14:05,800 --> 00:14:09,480 Speaker 1: the American people are fair. They want the evidence. And 212 00:14:09,559 --> 00:14:12,400 Speaker 1: so when we start to produce the evidence, for example, 213 00:14:12,679 --> 00:14:19,760 Speaker 1: through films, through media, through evidence and good research that demonstrates, 214 00:14:19,880 --> 00:14:24,800 Speaker 1: for example, that there is a differential prejudice in treatment 215 00:14:25,000 --> 00:14:29,080 Speaker 1: of h of people who are arrested for marijuana or 216 00:14:29,400 --> 00:14:33,560 Speaker 1: powder cocaine and people who are primarily white, and people 217 00:14:33,560 --> 00:14:37,200 Speaker 1: who are arrested for crack who are primarily black, That 218 00:14:37,280 --> 00:14:41,080 Speaker 1: there is a differential treatment in our judicial system, and 219 00:14:41,160 --> 00:14:45,400 Speaker 1: that one example is manifest across the entire criminal justice 220 00:14:45,400 --> 00:14:48,320 Speaker 1: system in this country. I'm Barry Reholts. You're listening to 221 00:14:48,400 --> 00:14:51,880 Speaker 1: Masters in Business on Bloomberg Radio. My special guest today 222 00:14:52,080 --> 00:14:55,480 Speaker 1: is Darren Walker. He is the president of the Ford Foundation, 223 00:14:55,560 --> 00:14:59,000 Speaker 1: a twelve and a half billion dollar endowment that gives 224 00:14:59,040 --> 00:15:02,200 Speaker 1: away about half of billion dollars a year in special 225 00:15:02,240 --> 00:15:07,240 Speaker 1: grants working on improving the human condition. I know that's broad, 226 00:15:07,880 --> 00:15:10,760 Speaker 1: but it's true. Let's talk a little bit about the 227 00:15:10,800 --> 00:15:15,480 Speaker 1: mechanism that you guys use to spread a little um 228 00:15:16,120 --> 00:15:19,680 Speaker 1: good work around the world, and that's the portfolio of 229 00:15:19,680 --> 00:15:23,120 Speaker 1: of the foundation twelve point five billion. Is that a 230 00:15:23,160 --> 00:15:26,800 Speaker 1: bullpark more or less correct? And so what is your 231 00:15:26,920 --> 00:15:31,400 Speaker 1: role in terms of overseeing the foundation's management of its 232 00:15:31,440 --> 00:15:35,960 Speaker 1: own capital. Well, I'm ut ultimately accountable to our trustees 233 00:15:36,160 --> 00:15:40,479 Speaker 1: for UH the enterprise of the Ford Foundation, which includes 234 00:15:40,680 --> 00:15:44,880 Speaker 1: our investment portfolio. But I'm very lucky because we have 235 00:15:45,320 --> 00:15:49,480 Speaker 1: one of the best people working UH in investment management today, 236 00:15:49,600 --> 00:15:55,160 Speaker 1: Eric Dobstat, as our ce IO. Eric is aided by 237 00:15:55,200 --> 00:16:00,480 Speaker 1: a terrific team of staff who are professionals, have come 238 00:16:00,560 --> 00:16:05,360 Speaker 1: from all walks of life and from the public and 239 00:16:05,400 --> 00:16:10,280 Speaker 1: private sector, and bring a remarkable capacity to make smart investments, 240 00:16:10,480 --> 00:16:15,520 Speaker 1: to choose high impact managers, and to do very very well. 241 00:16:16,360 --> 00:16:19,320 Speaker 1: So how much that that raises an interesting question. How 242 00:16:19,400 --> 00:16:22,920 Speaker 1: much of the portfolio you guys running in house and 243 00:16:22,960 --> 00:16:25,400 Speaker 1: how much goes to outside managers, and what sort of 244 00:16:25,440 --> 00:16:29,280 Speaker 1: managers are these hedge funds, venture capitalist, private equity, etcetera. 245 00:16:29,520 --> 00:16:33,360 Speaker 1: We don't manage any of our investment in house. We 246 00:16:33,480 --> 00:16:39,120 Speaker 1: have a traditional mix of asset classes, primarily hedge funds 247 00:16:39,160 --> 00:16:45,800 Speaker 1: and private equity. But we've got a long term investment horizon. 248 00:16:46,600 --> 00:16:51,160 Speaker 1: We aren't looking to beat the market in any short 249 00:16:51,280 --> 00:16:55,680 Speaker 1: term way. Um our investment strategy is very much like 250 00:16:55,720 --> 00:17:00,800 Speaker 1: our grant making strategy. We are long term investor because 251 00:17:00,800 --> 00:17:06,199 Speaker 1: we believe over the long term, by not being slavish 252 00:17:06,480 --> 00:17:12,560 Speaker 1: too near term concerns were able to generate more value, 253 00:17:12,960 --> 00:17:18,080 Speaker 1: more stability, less volatility, and better returns. So I've always 254 00:17:18,119 --> 00:17:24,600 Speaker 1: wondered about this. You have a a terrible year like oh, 255 00:17:24,760 --> 00:17:29,560 Speaker 1: eight oh nine with the financial crisis, a fund that's 256 00:17:29,640 --> 00:17:32,840 Speaker 1: running twelve billion dollars or so, I'm assuming it might 257 00:17:32,840 --> 00:17:35,639 Speaker 1: have been a little less before the crisis. What's it 258 00:17:35,760 --> 00:17:39,080 Speaker 1: like on the ramparts when suddenly the tide goes out 259 00:17:39,160 --> 00:17:42,560 Speaker 1: and the market is cut in half and then some Well, 260 00:17:42,640 --> 00:17:45,600 Speaker 1: we've got to also give credit to our trustees. We 261 00:17:45,720 --> 00:17:51,160 Speaker 1: have an outstanding group of trustees who manage with Eric 262 00:17:51,280 --> 00:17:55,239 Speaker 1: our portfolio from a governance perspective, So we have a 263 00:17:55,400 --> 00:18:00,760 Speaker 1: very clearly articulated investment policy. UH. Those sidelines of that 264 00:18:00,920 --> 00:18:07,040 Speaker 1: policy establish the guardrails UH within which Eric and his 265 00:18:07,119 --> 00:18:12,800 Speaker 1: team can invest. And we don't panic. We don't become 266 00:18:12,880 --> 00:18:17,080 Speaker 1: overly concerned about what's happened today or tomorrow or even 267 00:18:17,160 --> 00:18:20,159 Speaker 1: next month. Necessarily what we are concerned about or what 268 00:18:20,240 --> 00:18:23,840 Speaker 1: are the long term trends, what are the implications over 269 00:18:24,240 --> 00:18:30,040 Speaker 1: multiple quarters of FED policy, UM, of what's happening in 270 00:18:30,640 --> 00:18:35,360 Speaker 1: UH emerging markets UH and and we have great managers, 271 00:18:35,400 --> 00:18:40,200 Speaker 1: so we listen to those managers. We synthesize and harmonize 272 00:18:40,840 --> 00:18:45,879 Speaker 1: their input, their counsel, their wisdom and UM. They have 273 00:18:46,040 --> 00:18:49,640 Speaker 1: done very well UM with us and UM and so 274 00:18:49,680 --> 00:18:52,840 Speaker 1: we continue to stick with them. So the foundation is 275 00:18:52,880 --> 00:18:56,040 Speaker 1: eighty years old, one would assume it has a longer 276 00:18:56,160 --> 00:19:00,320 Speaker 1: term perspective and doesn't get caught up in the week 277 00:19:00,359 --> 00:19:03,439 Speaker 1: to week, month to month volatility that we see. But 278 00:19:03,880 --> 00:19:07,640 Speaker 1: even the most staid and rational people in No. Eight 279 00:19:07,720 --> 00:19:09,399 Speaker 1: or nine, there was a little bit of panic in 280 00:19:09,400 --> 00:19:13,320 Speaker 1: the streets UH when people thought the entire financial system 281 00:19:13,359 --> 00:19:16,000 Speaker 1: was going to freeze, and who knows if if g 282 00:19:16,240 --> 00:19:19,960 Speaker 1: E or McDonald's was going to meet their payroll. Inside 283 00:19:20,040 --> 00:19:23,960 Speaker 1: the hallowed walls of the Ford Foundation, you're telling me, Gee, 284 00:19:24,000 --> 00:19:26,800 Speaker 1: this is rough, but not a lot of panic. Well, 285 00:19:27,440 --> 00:19:31,560 Speaker 1: I think it's fair to say that we were very, 286 00:19:31,720 --> 00:19:36,399 Speaker 1: very distressed by what happened UM during that period, but 287 00:19:36,880 --> 00:19:42,280 Speaker 1: it was a slow, thoughtful, deliberative process that led us 288 00:19:42,320 --> 00:19:48,119 Speaker 1: to our rebalancing of the portfolio. UM. We have a 289 00:19:48,200 --> 00:19:52,919 Speaker 1: policy that ensures that we at all times have sufficient liquidity, 290 00:19:52,920 --> 00:19:55,720 Speaker 1: so there was never a question as to our being 291 00:19:55,760 --> 00:19:59,359 Speaker 1: able to meet our obligations for grants or operations, and 292 00:19:59,440 --> 00:20:03,240 Speaker 1: so could look for the long haul. And over these 293 00:20:03,320 --> 00:20:08,480 Speaker 1: last six to seven years we have had outstanding performance. 294 00:20:09,000 --> 00:20:12,440 Speaker 1: And I'm proud to say that Eric and his team 295 00:20:12,520 --> 00:20:17,560 Speaker 1: continue to deliver great results, which means we have more 296 00:20:17,600 --> 00:20:20,240 Speaker 1: money to give away. I'm Barry rid Hilts. You're listening 297 00:20:20,240 --> 00:20:23,600 Speaker 1: to Masters in Business on Bloomberg Radio. My special guest 298 00:20:23,640 --> 00:20:26,919 Speaker 1: today is Darren Walker. He is the president of the 299 00:20:26,960 --> 00:20:31,800 Speaker 1: Ford Foundation, a twelve point five billion dollar endowment that 300 00:20:31,960 --> 00:20:36,359 Speaker 1: gives away a half a billion dollars per year to 301 00:20:36,560 --> 00:20:41,400 Speaker 1: advance human Wealthare So, so let's get into the specifics 302 00:20:41,440 --> 00:20:44,200 Speaker 1: of that. What does that look like in the real 303 00:20:44,280 --> 00:20:47,960 Speaker 1: world where the rubber meets the road. You're giving away 304 00:20:47,960 --> 00:20:51,239 Speaker 1: a half a billion dollars a year, is that you know? 305 00:20:51,480 --> 00:20:55,440 Speaker 1: Five million dollar grants? Is it lots of small grants? 306 00:20:55,520 --> 00:20:58,480 Speaker 1: And take us through a typical grant. What do you 307 00:20:58,480 --> 00:21:03,840 Speaker 1: hope to accomplish with any specific grants? Well, we have 308 00:21:04,240 --> 00:21:07,360 Speaker 1: large grants and we have smaller grants. And for us, 309 00:21:07,359 --> 00:21:10,920 Speaker 1: a large grant would be one that we made last year, 310 00:21:11,280 --> 00:21:15,679 Speaker 1: a hundred and twenty five million dollars towards the Grand 311 00:21:15,720 --> 00:21:21,359 Speaker 1: Bargain to help resolve Detroit's bankruptcy, the largest municipal bankruptcy 312 00:21:21,359 --> 00:21:25,240 Speaker 1: in the history of America, and it was a it 313 00:21:25,320 --> 00:21:30,280 Speaker 1: was a daunting task, but ultimately the bankruptcy was resolved 314 00:21:30,320 --> 00:21:34,480 Speaker 1: because a group of foundations and the Governor of Michigan 315 00:21:34,520 --> 00:21:38,359 Speaker 1: came together with the Detroit Institute of the Arts to 316 00:21:38,920 --> 00:21:41,600 Speaker 1: raise eight hundred million dollars that made it possible for 317 00:21:41,640 --> 00:21:47,199 Speaker 1: the city to pay its retirees their pensions and to 318 00:21:47,800 --> 00:21:52,000 Speaker 1: help the museum which owned um which was owned by 319 00:21:52,000 --> 00:21:56,080 Speaker 1: the city uh to keep its art on its walls, 320 00:21:56,160 --> 00:21:59,440 Speaker 1: which it was and at risk of having to sell. 321 00:21:59,720 --> 00:22:02,280 Speaker 1: So that was a hundred and twenty million dollars towards 322 00:22:02,280 --> 00:22:06,679 Speaker 1: an eight hundred million dollar UH pool of money, So 323 00:22:06,720 --> 00:22:09,320 Speaker 1: that's a large grant for big impact. Who were the 324 00:22:09,359 --> 00:22:12,520 Speaker 1: co investors and that the co investors were the Kellogg Foundation, 325 00:22:12,640 --> 00:22:18,560 Speaker 1: Night Foundation, Kresky Foundation, um UH, the Fisher Foundation locally, 326 00:22:19,280 --> 00:22:24,160 Speaker 1: UM the Mott Foundation. These are national foundations and local 327 00:22:24,160 --> 00:22:29,320 Speaker 1: philanthropies together that came rescue Detroit. Essentially, is that dead 328 00:22:29,359 --> 00:22:32,320 Speaker 1: rim possession financing or is it just to shore up 329 00:22:32,840 --> 00:22:34,760 Speaker 1: the art museum because there was going to be a 330 00:22:34,760 --> 00:22:37,359 Speaker 1: fire cell auction if that that wasn't resolved. It was 331 00:22:37,440 --> 00:22:42,439 Speaker 1: to shore up the museum and to allow the city 332 00:22:42,480 --> 00:22:46,280 Speaker 1: to have the money to in turn pay UH the pension, 333 00:22:46,440 --> 00:22:49,080 Speaker 1: which which raises an interesting question. Do we run the 334 00:22:49,240 --> 00:22:55,160 Speaker 1: risk of having taxpayers abdicate their responsibility to municipalities If 335 00:22:55,160 --> 00:22:58,199 Speaker 1: foundations are coming in and really doing what what the 336 00:22:58,240 --> 00:23:02,760 Speaker 1: state itself should be doing, well, philanthropy could never play 337 00:23:02,800 --> 00:23:06,040 Speaker 1: the role of government. We're a rounding error in the 338 00:23:06,080 --> 00:23:09,800 Speaker 1: federal government's budget. All of our assets together is a 339 00:23:09,880 --> 00:23:13,240 Speaker 1: rounding era in the federal government's budget. So let's be 340 00:23:13,359 --> 00:23:18,080 Speaker 1: real about the potential. What we can do is catalyze, innovate, 341 00:23:18,560 --> 00:23:22,880 Speaker 1: demonstrate solutions. So I've given you an example of a 342 00:23:23,000 --> 00:23:27,560 Speaker 1: large grant. Let's talk about a smaller grant, a grant 343 00:23:27,760 --> 00:23:35,399 Speaker 1: for five thousand dollars, and that grant supports investigative journalism 344 00:23:35,560 --> 00:23:38,560 Speaker 1: through our media program, because we believe that in a 345 00:23:38,640 --> 00:23:44,280 Speaker 1: democracy we need strong media. Well, a recent grant led 346 00:23:45,119 --> 00:23:49,119 Speaker 1: to UH much of the public knowledge around what's happening 347 00:23:49,119 --> 00:23:53,280 Speaker 1: in Flint, Michigan. We supported UH. This was the a 348 00:23:53,400 --> 00:23:58,040 Speaker 1: c l U grant. A c LU made it possible 349 00:23:58,080 --> 00:24:02,880 Speaker 1: for them to hire a journal who blogged about issues 350 00:24:02,920 --> 00:24:06,320 Speaker 1: of governance and started covering what was going on in Flint. 351 00:24:07,320 --> 00:24:10,200 Speaker 1: He was among the first to bring to the public's 352 00:24:10,200 --> 00:24:13,520 Speaker 1: attention what was happening in Flint, Michigan. And that's one 353 00:24:13,520 --> 00:24:17,840 Speaker 1: of the great tragedies of recent years. App talking about 354 00:24:17,840 --> 00:24:21,800 Speaker 1: abdication of governmental responsibility. While and this is one of 355 00:24:21,840 --> 00:24:25,119 Speaker 1: the drivers of inequality, which is this idea that we 356 00:24:25,160 --> 00:24:31,080 Speaker 1: are failing to invest and protect vital public goods. A 357 00:24:31,240 --> 00:24:37,440 Speaker 1: vital public good like infrastructure, our water system is essential. 358 00:24:37,760 --> 00:24:41,480 Speaker 1: It's vital to the very operations of a city of 359 00:24:41,520 --> 00:24:46,440 Speaker 1: a civilization in fact, and yet this city of a 360 00:24:46,520 --> 00:24:51,359 Speaker 1: hundred thousand people does not have a decent infrastructure because 361 00:24:51,520 --> 00:24:57,479 Speaker 1: a decision was made to switch systems cheaper, cheaper, system 362 00:24:57,560 --> 00:25:03,720 Speaker 1: less reliable, less reliable, technically uh ineffective, and what it 363 00:25:03,840 --> 00:25:05,639 Speaker 1: is yielded, of course, we know, is one of the 364 00:25:05,640 --> 00:25:11,240 Speaker 1: greatest calamities and greatest embarrassed embarrassments UH in this country 365 00:25:11,280 --> 00:25:14,080 Speaker 1: in many, many years. The fascinating thing is, I've heard 366 00:25:14,080 --> 00:25:18,000 Speaker 1: people refer to Flint as a one off, but I 367 00:25:18,040 --> 00:25:21,680 Speaker 1: bet there and I've read and heard about that this 368 00:25:21,760 --> 00:25:24,399 Speaker 1: is in a unique situation, and there are lots of 369 00:25:24,880 --> 00:25:30,560 Speaker 1: Flint like infrastructure problems on the verge of busting out 370 00:25:30,600 --> 00:25:34,520 Speaker 1: onto the public eye. We've ignored our infrastructure for decades, 371 00:25:34,560 --> 00:25:39,440 Speaker 1: haven't we. Well. In fact, our public infrastructure represents an 372 00:25:39,440 --> 00:25:45,000 Speaker 1: investment in public goods, whether it's public libraries, public transportation, 373 00:25:45,240 --> 00:25:51,199 Speaker 1: public schools, public parks, public housing. All of this together 374 00:25:51,720 --> 00:25:59,159 Speaker 1: undergirds our democracy, our society, American civilization, and we have 375 00:25:59,640 --> 00:26:05,000 Speaker 1: con assistently been under investing and in fact disinvesting in 376 00:26:05,040 --> 00:26:08,400 Speaker 1: the very infrastructure that we depend on for our democracy 377 00:26:08,440 --> 00:26:12,400 Speaker 1: to work. We see certain politicians talking about China and 378 00:26:12,480 --> 00:26:16,639 Speaker 1: say what you will about their economic competition. They have 379 00:26:16,800 --> 00:26:21,560 Speaker 1: made massive infrastructure investments and it's paying off for them. Well, 380 00:26:21,600 --> 00:26:26,320 Speaker 1: you only have to return from the sparkling new airport 381 00:26:26,359 --> 00:26:31,080 Speaker 1: in Beijing and land at JFK or even worse, La 382 00:26:31,119 --> 00:26:35,800 Speaker 1: Guardia to to understand what it feels like to go 383 00:26:35,960 --> 00:26:41,080 Speaker 1: from walking in a public facility and being uplifted to 384 00:26:41,240 --> 00:26:47,399 Speaker 1: walking into a public facility and feeling despair. It's amazing. 385 00:26:47,880 --> 00:26:51,360 Speaker 1: We were the leaders for the longest time, and we 386 00:26:51,400 --> 00:26:54,639 Speaker 1: stopped making those investments, and everybody else's leap frogged us. 387 00:26:55,119 --> 00:26:57,280 Speaker 1: They are leap progging us, but it's not too late, 388 00:26:57,640 --> 00:27:02,320 Speaker 1: because the American people want to pest in public infrastructure. 389 00:27:02,400 --> 00:27:08,440 Speaker 1: They want better public transportation, better public parks, they want 390 00:27:08,480 --> 00:27:11,680 Speaker 1: our public housing to work for the people who live 391 00:27:11,800 --> 00:27:17,000 Speaker 1: within those communities. And without investing in public goods and 392 00:27:17,040 --> 00:27:22,040 Speaker 1: public infrastructure, our democracy simply won't be effective. And at 393 00:27:22,080 --> 00:27:24,639 Speaker 1: the end of the day, this is why inequality has 394 00:27:24,680 --> 00:27:29,639 Speaker 1: to be a rallying cry, because at the core of 395 00:27:29,840 --> 00:27:36,480 Speaker 1: the American experience is opportunity, our aspiration to be a 396 00:27:36,560 --> 00:27:45,720 Speaker 1: better society and a better people, and growing inequality reduces opportunity. 397 00:27:46,000 --> 00:27:51,200 Speaker 1: It squelches our aspirations and our ambitions, and it makes 398 00:27:51,280 --> 00:27:56,520 Speaker 1: us cynical and angry, and it affects our politics, no doubt. 399 00:27:56,600 --> 00:27:59,880 Speaker 1: You see a lot of anger amongst certain people who 400 00:28:00,080 --> 00:28:03,439 Speaker 1: want to make America great again. That's how it manifests 401 00:28:03,440 --> 00:28:08,960 Speaker 1: itself because these basic infrastructures have been ignored for so long. Well, 402 00:28:09,000 --> 00:28:14,360 Speaker 1: it also manifests because another driver of inequality is the 403 00:28:14,440 --> 00:28:20,000 Speaker 1: rules of the economy, that that people don't have confidence 404 00:28:20,480 --> 00:28:24,960 Speaker 1: that our economy actually works in a way that delivers 405 00:28:25,000 --> 00:28:31,439 Speaker 1: shared prosperity. Most Americans, unfortunately, according to polls, believe that 406 00:28:31,480 --> 00:28:38,360 Speaker 1: our system is increasingly rigged, rigged for the wealthy or 407 00:28:38,600 --> 00:28:45,040 Speaker 1: political elites, and that our historic notion of shared prosperity 408 00:28:45,200 --> 00:28:48,320 Speaker 1: is slipping away from us as a nation. That's partly 409 00:28:48,480 --> 00:28:52,040 Speaker 1: why many Americans are angry. Makes sense to me, let 410 00:28:52,080 --> 00:28:54,719 Speaker 1: me mix this up a little bit with you and 411 00:28:54,720 --> 00:28:58,520 Speaker 1: and ask you this question. What can't money do? You're 412 00:28:58,560 --> 00:29:02,120 Speaker 1: giving away half a billion knows a year. What have 413 00:29:02,160 --> 00:29:04,480 Speaker 1: you looked at that you've said, Gee, I'd love to 414 00:29:04,480 --> 00:29:08,560 Speaker 1: fix this, but money isn't going to help this. Well, 415 00:29:08,600 --> 00:29:14,600 Speaker 1: I think there are situations where we have to recognize 416 00:29:14,720 --> 00:29:22,920 Speaker 1: that culture, that behavior, that what is normative in a 417 00:29:23,080 --> 00:29:27,040 Speaker 1: society has to be hit head on and that can't 418 00:29:27,080 --> 00:29:31,840 Speaker 1: necessarily be fixed with money. Um the fact, it is 419 00:29:31,840 --> 00:29:37,000 Speaker 1: true that we can invest in girls education, but that 420 00:29:37,080 --> 00:29:39,320 Speaker 1: will only go so far if you live in a 421 00:29:39,440 --> 00:29:45,000 Speaker 1: culture where men demean women as a matter of belief. 422 00:29:45,680 --> 00:29:49,800 Speaker 1: How do we get at those belief structures that hold 423 00:29:50,040 --> 00:29:54,240 Speaker 1: us back, that hold women down in those cultures? And 424 00:29:54,360 --> 00:29:58,120 Speaker 1: money alone won't solve that problem. So how do you 425 00:29:58,240 --> 00:30:01,200 Speaker 1: how do you pursue that? How do we apply pressure? 426 00:30:01,240 --> 00:30:05,000 Speaker 1: You apply pressure in that instant by going to the 427 00:30:05,080 --> 00:30:09,000 Speaker 1: people who are the carriers of culture. So it may 428 00:30:09,040 --> 00:30:14,760 Speaker 1: be a religious leader, it may be a senior elder 429 00:30:15,320 --> 00:30:18,960 Speaker 1: of the rural village on the community, and you've got 430 00:30:18,960 --> 00:30:23,040 Speaker 1: to influence them to see that women have to be valued, 431 00:30:23,080 --> 00:30:25,840 Speaker 1: that girls have to be valued and shouldn't be married 432 00:30:25,880 --> 00:30:28,720 Speaker 1: off at age nine or ten. To get them out 433 00:30:28,720 --> 00:30:33,640 Speaker 1: of the way, We've got to attack root cause issues 434 00:30:34,040 --> 00:30:37,680 Speaker 1: and sometime money alone isn't enough. We've been speaking with 435 00:30:37,760 --> 00:30:40,800 Speaker 1: Darren Walker, he's the president of the Ford Foundation. If 436 00:30:40,800 --> 00:30:43,360 Speaker 1: people want to learn more about the foundation, where's the 437 00:30:43,360 --> 00:30:45,440 Speaker 1: best place for them to go to to get some 438 00:30:45,480 --> 00:30:49,040 Speaker 1: more info? To go to our website w w board 439 00:30:49,280 --> 00:30:53,720 Speaker 1: Foundation dot org. If you enjoy this conversation. Be sure 440 00:30:53,720 --> 00:30:56,680 Speaker 1: and stick around. We keep the tape rolling and continue chatting. 441 00:30:57,120 --> 00:31:00,760 Speaker 1: Be sure and check out any of our prior interviews. 442 00:31:00,800 --> 00:31:04,400 Speaker 1: You can find them on iTunes and on Bloomberg dot com. 443 00:31:04,520 --> 00:31:07,960 Speaker 1: Check out my daily column on Bloomberg View dot com, 444 00:31:08,120 --> 00:31:12,120 Speaker 1: or follow me on Twitter at rid Holts. I'm Barry Ridholts. 445 00:31:12,120 --> 00:31:15,840 Speaker 1: You're listening to Masters in Business on Bloomberg Radio. You're 446 00:31:15,880 --> 00:31:18,960 Speaker 1: listening to the podcast half of the show where I 447 00:31:19,000 --> 00:31:23,240 Speaker 1: just throw my arms out for no no good reason. So, Darren, 448 00:31:23,280 --> 00:31:25,080 Speaker 1: I have to ask you a question that you said 449 00:31:25,120 --> 00:31:29,400 Speaker 1: something that's astonishing to me. Why would the Ford Foundation 450 00:31:29,520 --> 00:31:35,719 Speaker 1: have to support elite universities in the nineteen fifties and sixties, Harvard, Yale, 451 00:31:35,920 --> 00:31:40,040 Speaker 1: all the big schools. They've had a huge endowment for 452 00:31:40,200 --> 00:31:42,720 Speaker 1: years and years and years. Why do they need help 453 00:31:42,720 --> 00:31:46,120 Speaker 1: from little old Ford Foundation. Well, in the nineteen fifties, 454 00:31:46,240 --> 00:31:51,080 Speaker 1: their endowments weren't so large, really, indeed, UH, And in 455 00:31:51,080 --> 00:31:56,400 Speaker 1: the nineteen fifties they didn't have departments, for example, in 456 00:31:56,560 --> 00:32:02,000 Speaker 1: a various studies. UH, there were certain academic areas, for example, 457 00:32:02,840 --> 00:32:09,440 Speaker 1: business schools before the nineteen fifty business degrees were UH. 458 00:32:09,480 --> 00:32:14,640 Speaker 1: In some ways technical degrees, they weren't quote unquote professional degrees. 459 00:32:15,280 --> 00:32:20,400 Speaker 1: The professional Masters of Business Administration really came into the 460 00:32:20,440 --> 00:32:23,479 Speaker 1: four in the nineteen fifties in part because of Ford 461 00:32:23,600 --> 00:32:31,880 Speaker 1: and Carnegie corporations investments in professionalizing business administration and business 462 00:32:32,080 --> 00:32:35,840 Speaker 1: UH learning. In part because the belief was and I 463 00:32:35,880 --> 00:32:41,200 Speaker 1: think ultimately was proven that that we needed to UH, 464 00:32:41,360 --> 00:32:47,200 Speaker 1: we needed to generate a a generation of business leaders 465 00:32:47,280 --> 00:32:53,040 Speaker 1: who needed UH to be professionally educated about business business administration. 466 00:32:53,440 --> 00:32:57,880 Speaker 1: New disciplines of finance and accounting were created during this period. 467 00:32:58,400 --> 00:33:01,040 Speaker 1: So what we think of today the m b a 468 00:33:01,840 --> 00:33:05,959 Speaker 1: UM with not what it is today in the nineteen fifties. 469 00:33:06,280 --> 00:33:09,600 Speaker 1: That's fascinating. Course, in my head one my mind's I 470 00:33:09,800 --> 00:33:13,480 Speaker 1: when I hear the lead institutions needing help, I'm thinking 471 00:33:13,640 --> 00:33:17,200 Speaker 1: Harvard is almost forty billion, Stanford is right behind them. 472 00:33:17,400 --> 00:33:19,320 Speaker 1: M I t L. You go down the list, University 473 00:33:19,320 --> 00:33:23,800 Speaker 1: of Pennsylvania that's you know, to three billion dollars. If 474 00:33:23,840 --> 00:33:26,920 Speaker 1: you take the top ten twenty schools, and then everybody 475 00:33:26,960 --> 00:33:31,040 Speaker 1: after them is is not nearly as as successful. But 476 00:33:31,080 --> 00:33:35,080 Speaker 1: that's fascinating how that shift happened. So one of the 477 00:33:35,120 --> 00:33:38,560 Speaker 1: questions I didn't ask you is during the broadcast portion 478 00:33:38,680 --> 00:33:42,600 Speaker 1: is how do you measure success? Clearly on the on 479 00:33:43,040 --> 00:33:45,320 Speaker 1: the example you give from the fifties, there's a measure 480 00:33:45,360 --> 00:33:49,400 Speaker 1: of success because the United States has turned out and 481 00:33:49,560 --> 00:33:53,600 Speaker 1: is thought of as a leader in business business management. 482 00:33:54,240 --> 00:33:57,440 Speaker 1: So something a little more esoteric and a little more challenging, 483 00:33:58,240 --> 00:34:02,920 Speaker 1: like inequality or are like I'm trying to think of 484 00:34:03,760 --> 00:34:07,440 Speaker 1: you mentioned the number of people of color in prison? 485 00:34:07,920 --> 00:34:14,080 Speaker 1: How do you measure success of your brands to like 486 00:34:14,400 --> 00:34:16,440 Speaker 1: it's such a I'm having a hard time spinning out 487 00:34:16,440 --> 00:34:21,160 Speaker 1: the work. It's an overwhelming societal issue. How do you 488 00:34:21,200 --> 00:34:24,080 Speaker 1: measure progress in that? So let's just take the example 489 00:34:24,160 --> 00:34:27,000 Speaker 1: you gave. Let's talk about the criminal justice system and 490 00:34:27,080 --> 00:34:31,560 Speaker 1: reforming that system. So we would say there are two 491 00:34:31,600 --> 00:34:36,280 Speaker 1: things we want to reform. One is the rehabilitation process 492 00:34:36,360 --> 00:34:40,640 Speaker 1: to ensure that prisoners actually have a chance for education 493 00:34:40,719 --> 00:34:44,520 Speaker 1: and rehabilitation. Right now, that's terrible because the recidivious rates 494 00:34:44,560 --> 00:34:47,279 Speaker 1: are like eight plus percent. Well, it's terrible in part 495 00:34:47,400 --> 00:34:52,480 Speaker 1: because prisoners are no longer eligible for federal education support 496 00:34:52,560 --> 00:34:57,160 Speaker 1: while incarcerated. Yes, that makes sever most Americans don't know that, 497 00:34:57,200 --> 00:34:59,080 Speaker 1: but that is in fact the law. How did that 498 00:34:59,200 --> 00:35:02,800 Speaker 1: become law. It was part of the War on drugs, 499 00:35:02,920 --> 00:35:05,400 Speaker 1: which is a huge part of the problem. And that 500 00:35:05,719 --> 00:35:10,360 Speaker 1: those policies, which were promulgated by both Republican and Democratic 501 00:35:10,400 --> 00:35:15,200 Speaker 1: administrations have in fact contributed to these high rates of recidivism. 502 00:35:15,280 --> 00:35:20,800 Speaker 1: So let's change that policy to ensure that more people 503 00:35:20,920 --> 00:35:26,000 Speaker 1: while incarcerated get educated and rehabilitative services. So that's one thing. 504 00:35:26,040 --> 00:35:30,200 Speaker 1: So when President Obama said that he wishes to change 505 00:35:30,200 --> 00:35:36,920 Speaker 1: that policy, and and he named various programs like the 506 00:35:36,960 --> 00:35:40,400 Speaker 1: barred Prison initiatives, which the Forward Foundation, Open Society and 507 00:35:40,440 --> 00:35:44,760 Speaker 1: others fund, that's an example. If we can get those 508 00:35:44,840 --> 00:35:49,960 Speaker 1: kinds of programs demonstrated, the efficacy of them demonstrated, and 509 00:35:50,040 --> 00:35:54,840 Speaker 1: replicated in prisons across America, we in turn will contribute 510 00:35:54,880 --> 00:35:58,239 Speaker 1: to reducing recidivism. So that's one example. Let me stop 511 00:35:58,239 --> 00:36:00,520 Speaker 1: you there. You go into a specific and and you 512 00:36:00,600 --> 00:36:05,520 Speaker 1: fund one prisons program because the FEDS can't, you demonstrate 513 00:36:05,560 --> 00:36:08,120 Speaker 1: its success, and then you go back to Congress and 514 00:36:08,160 --> 00:36:11,760 Speaker 1: say we did it in one program. Your entire penal 515 00:36:11,800 --> 00:36:15,799 Speaker 1: system has an eight six failure rate or recidivism rate, 516 00:36:16,040 --> 00:36:19,600 Speaker 1: but people coming out of our program has at recidivism rate. 517 00:36:20,000 --> 00:36:23,200 Speaker 1: Use our program, and you'll lower your costs going forward. 518 00:36:23,280 --> 00:36:26,640 Speaker 1: So the organizations we support, like the Barred Prison Initiative, 519 00:36:26,960 --> 00:36:30,319 Speaker 1: in fact do just that. They build the evidence. They 520 00:36:30,360 --> 00:36:33,120 Speaker 1: work with research firms like M d r C and 521 00:36:33,160 --> 00:36:36,840 Speaker 1: the Urban Institute to demonstrate the efficacy, and they in 522 00:36:36,920 --> 00:36:42,239 Speaker 1: turn speak to policymakers, decision makers, editorial boards about the 523 00:36:42,280 --> 00:36:44,960 Speaker 1: need to change policy. I have so many questions, and 524 00:36:45,000 --> 00:36:46,759 Speaker 1: I know they're gonna come kick us out of the 525 00:36:46,760 --> 00:36:50,399 Speaker 1: studio quickly, So let me just go to my three 526 00:36:50,480 --> 00:36:54,560 Speaker 1: favorite questions. So first, UM, not this one. I don't 527 00:36:54,560 --> 00:36:55,920 Speaker 1: even need to look at it. So who are your 528 00:36:55,920 --> 00:36:59,479 Speaker 1: early mentors? You mentioned a pastor from from one group. 529 00:36:59,480 --> 00:37:04,520 Speaker 1: Who else were important mentors in your professional career? Well, 530 00:37:04,600 --> 00:37:08,040 Speaker 1: my my mother was a great mentor because my mother 531 00:37:09,280 --> 00:37:14,440 Speaker 1: did not have UH formal education beyond high school. UM 532 00:37:14,600 --> 00:37:22,680 Speaker 1: had a horrific childhood in rural Louisiana and overcame UH 533 00:37:22,920 --> 00:37:30,840 Speaker 1: domestic violence, UH, a very dysfunctional home life, and I 534 00:37:30,880 --> 00:37:36,400 Speaker 1: think UH always had courage and determination. The other person 535 00:37:36,560 --> 00:37:40,680 Speaker 1: was my grandfather, who was in some ways not my grandfather. 536 00:37:40,760 --> 00:37:43,040 Speaker 1: He was my great uncle, but it's too complicated to 537 00:37:43,080 --> 00:37:46,600 Speaker 1: go into. However, he only had a third grade education. 538 00:37:47,760 --> 00:37:50,880 Speaker 1: And yet he had so much wisdom and knowledge, and 539 00:37:50,960 --> 00:37:55,560 Speaker 1: I learned from him the need to be focused, um, 540 00:37:55,600 --> 00:37:58,279 Speaker 1: and the need to be disciplined as well, because he 541 00:37:58,320 --> 00:38:02,160 Speaker 1: was a very disciplined person. He was also angry. He 542 00:38:02,280 --> 00:38:06,439 Speaker 1: was angry that America had not lived up to its 543 00:38:06,480 --> 00:38:11,040 Speaker 1: obligations to him because in his little racist town in 544 00:38:11,160 --> 00:38:15,400 Speaker 1: rural Louisiana, school for negroes ended at the third grade. 545 00:38:15,920 --> 00:38:19,320 Speaker 1: Because after the third grade, the boys and girls picked cotton, 546 00:38:19,960 --> 00:38:24,600 Speaker 1: and and so he never had an opportunity to get 547 00:38:24,600 --> 00:38:27,760 Speaker 1: a formal education. He has every right to be angry. UM, 548 00:38:27,880 --> 00:38:31,160 Speaker 1: let me, let me change topics and ask you about books. 549 00:38:31,200 --> 00:38:34,280 Speaker 1: What are some of your favorite books? Fiction, non fiction, finance, 550 00:38:34,360 --> 00:38:37,920 Speaker 1: doesn't matter. What what? What books have been influential? I 551 00:38:37,960 --> 00:38:44,680 Speaker 1: am right now reading Evicted. Uh. This is a remarkable book. 552 00:38:44,800 --> 00:38:48,000 Speaker 1: I actually actually say I just ordered it because it 553 00:38:48,040 --> 00:38:53,279 Speaker 1: was on back order on a group of people who 554 00:38:53,360 --> 00:38:58,440 Speaker 1: have been evicted in Milwaukee, Wisconsin. Uh. And it's it. 555 00:38:58,440 --> 00:39:02,919 Speaker 1: It crystallizes for us the challenge of housing and the 556 00:39:03,080 --> 00:39:06,480 Speaker 1: distorted housing marketplace we have in this country, and particularly 557 00:39:06,560 --> 00:39:08,439 Speaker 1: if you're a low income and of course we see 558 00:39:08,440 --> 00:39:10,000 Speaker 1: it here in New York City with a number of 559 00:39:10,080 --> 00:39:14,760 Speaker 1: people on the streets. The homeless situation here much worse, 560 00:39:14,920 --> 00:39:16,799 Speaker 1: not just in New York but across the country. I 561 00:39:16,960 --> 00:39:20,320 Speaker 1: was just in Houston and it seemed that on every 562 00:39:20,360 --> 00:39:25,160 Speaker 1: street corner there were people uh congregating um. And clearly 563 00:39:25,200 --> 00:39:27,880 Speaker 1: there are people, many of whom have mental health issues. 564 00:39:28,520 --> 00:39:33,839 Speaker 1: Mental health issues, but housing and shelter us have got 565 00:39:33,880 --> 00:39:37,640 Speaker 1: to be addressed. I assume you've followed the experiment in Utah, 566 00:39:37,680 --> 00:39:41,600 Speaker 1: which by all appearances appear to have been a huge success, 567 00:39:42,239 --> 00:39:45,719 Speaker 1: taking people and essentially taking homeless and giving them a 568 00:39:45,719 --> 00:39:49,880 Speaker 1: place to live at no cost, which allows them to 569 00:39:50,080 --> 00:39:53,759 Speaker 1: access mental health counseling, to actually have a place so 570 00:39:53,840 --> 00:39:57,640 Speaker 1: they can get meds to treat whatever whatever it happens 571 00:39:57,640 --> 00:40:01,640 Speaker 1: to be. Of all places, Utah has been tremendously innovative, 572 00:40:02,120 --> 00:40:04,680 Speaker 1: and it appears that this is a huge success. It 573 00:40:04,840 --> 00:40:07,839 Speaker 1: is a huge success. But let us not forget that 574 00:40:08,000 --> 00:40:11,520 Speaker 1: in New York City, Roseanne Haggarty Common Ground in the 575 00:40:11,600 --> 00:40:16,000 Speaker 1: nineteen eighties and nineties demonstrated the efficacy of supportive housing, 576 00:40:16,080 --> 00:40:19,160 Speaker 1: which is what you're describing in Utah. Have we forgotten 577 00:40:19,200 --> 00:40:21,960 Speaker 1: about that here? We have not invested enough in it. 578 00:40:22,360 --> 00:40:26,360 Speaker 1: That's the issue. We know what works. The issue is 579 00:40:26,400 --> 00:40:29,240 Speaker 1: do we have the will to invest in what works. 580 00:40:29,640 --> 00:40:34,360 Speaker 1: Often people say our problems in this country are just intractable. 581 00:40:35,160 --> 00:40:38,759 Speaker 1: They are not intractable. We know that many of our 582 00:40:38,800 --> 00:40:43,080 Speaker 1: problems can be solved, and we've in fact demonstrated solutions. 583 00:40:43,440 --> 00:40:46,719 Speaker 1: We have not been willing to invest in those solutions. 584 00:40:48,000 --> 00:40:51,840 Speaker 1: Fascinating My last two questions, So are millennial or someone 585 00:40:51,920 --> 00:40:55,640 Speaker 1: coming out of college grabs Darren Walker on the at 586 00:40:55,680 --> 00:40:59,360 Speaker 1: some events and says, I'm really interested in a career 587 00:40:59,400 --> 00:41:03,279 Speaker 1: in philanthrop p What sort of advice would you give them? 588 00:41:03,520 --> 00:41:09,080 Speaker 1: Don't come to a philanthropy would be my advice, because 589 00:41:09,120 --> 00:41:14,600 Speaker 1: a young person should be working in a nonprofit, working 590 00:41:15,320 --> 00:41:20,319 Speaker 1: in government, working in the private sector, and getting a 591 00:41:20,520 --> 00:41:26,920 Speaker 1: very deep understanding of the problems at the ground level. UM. 592 00:41:26,960 --> 00:41:30,880 Speaker 1: Sometimes being in a foundation can be be in uh 593 00:41:31,160 --> 00:41:34,480 Speaker 1: put you in rarefied air, and I think it's uh. 594 00:41:34,560 --> 00:41:37,360 Speaker 1: It would be a mistake for a young person to 595 00:41:37,600 --> 00:41:40,400 Speaker 1: go right into a foundation and and start their career 596 00:41:40,440 --> 00:41:44,160 Speaker 1: and stay in a foundation without working in the rural 597 00:41:44,280 --> 00:41:47,160 Speaker 1: villages of Africa or the streets of the South side 598 00:41:47,160 --> 00:41:51,279 Speaker 1: of Chicago, or in a health clinic. UM in a 599 00:41:51,360 --> 00:41:55,600 Speaker 1: low income community in Oakland, California, to understand the lack 600 00:41:55,640 --> 00:41:58,960 Speaker 1: of access that people have to health in this country. 601 00:41:59,200 --> 00:42:02,920 Speaker 1: So these are all the things that I think prepare 602 00:42:03,000 --> 00:42:05,919 Speaker 1: you when you're young. Doing that kind of work makes 603 00:42:05,920 --> 00:42:08,480 Speaker 1: it possible for you to be better when you actually 604 00:42:08,520 --> 00:42:11,640 Speaker 1: come into philanthropy. And my final question, I wish we 605 00:42:11,680 --> 00:42:15,319 Speaker 1: had more time. I have listened lists. What is it 606 00:42:15,360 --> 00:42:19,359 Speaker 1: that you know about the world of philanthropy today that 607 00:42:19,440 --> 00:42:22,959 Speaker 1: you wish you knew twenty or so years ago when 608 00:42:23,000 --> 00:42:27,839 Speaker 1: you when you moved into this That philanthropy has a 609 00:42:28,000 --> 00:42:35,680 Speaker 1: role in influencing and shaping public opinion and public perceptions 610 00:42:36,280 --> 00:42:43,080 Speaker 1: and hopefully building uh narrative about the solutions for our society. 611 00:42:43,120 --> 00:42:46,799 Speaker 1: That philanthropy has an R and D role to play 612 00:42:46,840 --> 00:42:49,840 Speaker 1: in developing solutions. I like to say that at the 613 00:42:49,880 --> 00:42:54,240 Speaker 1: Fourth Foundation, we're in the business of hope because America 614 00:42:54,400 --> 00:42:58,359 Speaker 1: is a nation that depends on hope and we need 615 00:42:58,440 --> 00:43:02,440 Speaker 1: it now more than ever. Fascinating, fascinating stuff. We've been 616 00:43:02,480 --> 00:43:05,480 Speaker 1: speaking with Darren Walker. He is the president of the 617 00:43:05,520 --> 00:43:08,200 Speaker 1: Ford Foundation. Darren, thank you so much for being so 618 00:43:08,320 --> 00:43:12,480 Speaker 1: generous with your time. I have another hour's worth of questions, 619 00:43:12,480 --> 00:43:14,560 Speaker 1: but I know we have to uh, we have to 620 00:43:14,640 --> 00:43:17,920 Speaker 1: move along. If you've enjoyed this conversation, be sure and 621 00:43:18,000 --> 00:43:20,560 Speaker 1: look Upward Down an Inch on iTunes and you can 622 00:43:20,600 --> 00:43:24,719 Speaker 1: see any of the eighty or so other such podcasts 623 00:43:24,719 --> 00:43:28,400 Speaker 1: that we've had. UH. Be sure and follow me on 624 00:43:28,440 --> 00:43:31,480 Speaker 1: Twitter at rid Holtz, or check out my daily column 625 00:43:31,800 --> 00:43:35,359 Speaker 1: on Bloomberg View dot com. I'm Barry rid Holtz. You've 626 00:43:35,400 --> 00:43:38,200 Speaker 1: been listening to Masters and Business on Bloomberg Radio.