WEBVTT - Interview With Darren Walker: Masters in Business (Audio) 0:00:03.240 --> 0:00:07.600 This is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:00:08.080 --> 0:00:11.320 This week on the podcast, I have Ford Foundation President 0:00:11.400 --> 0:00:14.320 Darren Walker, and I have to tell you you probably 0:00:14.520 --> 0:00:18.080 have never heard of this gentleman, and that's unfortunate because 0:00:18.520 --> 0:00:22.320 he's really a fascinating guy. And this was a really 0:00:22.360 --> 0:00:28.240 really interesting conversation. I found him kind of randomly reading 0:00:28.360 --> 0:00:32.800 something about another project I was working on in philanthropy, 0:00:32.840 --> 0:00:35.680 and I ended up coming across something he had written, 0:00:36.040 --> 0:00:39.199 and I was very much enchanted by it, and I 0:00:39.320 --> 0:00:43.560 had the folks here reach out to him, and apparently 0:00:44.159 --> 0:00:47.159 he's very well known to everybody here. He runs a 0:00:47.240 --> 0:00:52.880 huge philanthropic organization. Other people in the Bloomberg family run 0:00:53.400 --> 0:00:57.240 uh philanthropic organizations, and so I meet him, thinking, I'm 0:00:57.280 --> 0:01:00.240 gonna sneak this guy in who no one's ever heard of, 0:01:00.840 --> 0:01:03.720 and it will be quite a coup to to find 0:01:03.760 --> 0:01:07.119 somebody that people are not familiar with. I'm not exaggerating 0:01:07.120 --> 0:01:09.880 when I say from the elevator to the studio, which 0:01:09.920 --> 0:01:14.080 is really not all that far, dozens of people stopped him, Darren, 0:01:14.120 --> 0:01:16.880 how are you? And it's it was just fascinating, and 0:01:17.360 --> 0:01:20.080 people looked at me, how do you know this guy. 0:01:20.680 --> 0:01:22.759 I read something you wrote. I thought it was really interesting. 0:01:23.080 --> 0:01:27.320 So if you're at all interested in philanthropy and how 0:01:27.360 --> 0:01:31.360 a twelve billion dollar foundation decides where it's gonna put 0:01:31.480 --> 0:01:33.720 its money, how it's gonna measure it, how it's gonna 0:01:33.760 --> 0:01:36.199 stay on top of it, um, I think you'll find 0:01:36.200 --> 0:01:39.560 this to be an absolutely fascinating conversation. So, without any 0:01:39.600 --> 0:01:47.240 further ado, my chat with Ford Foundations Darren Walker. This 0:01:47.480 --> 0:01:51.400 is Masters in Business with Barry Ridholts on Bloomberg Radio. 0:01:52.000 --> 0:01:55.040 My special guest this week is Darren Walker. He is 0:01:55.080 --> 0:01:59.680 the president of the nearly thirteen billion dollar Ford Foundation. 0:02:00.200 --> 0:02:04.240 A little background about Mr Walker, formerly an attorney with 0:02:04.320 --> 0:02:09.280 Cleary Gottlieb and an investment banker at UBS. He is 0:02:09.400 --> 0:02:13.400 running this massive foundation, but he hails from humble beginnings. 0:02:13.440 --> 0:02:17.960 Born in a charity hospital in Lafayette, Louisiana, raised by 0:02:18.000 --> 0:02:23.440 a single mom, he became one of the first children 0:02:23.560 --> 0:02:27.079 to benefit uh from the head Start program. And let 0:02:27.080 --> 0:02:30.720 me tell you, he has certainly accomplished a lot in 0:02:30.720 --> 0:02:33.600 a relatively short period of time. In addition to being 0:02:33.680 --> 0:02:36.320 president of the Ford Foundation, he is on the boards 0:02:36.360 --> 0:02:39.760 of Carnegie Hall, the New York City Ballet, the High 0:02:39.760 --> 0:02:43.440 Line Park, the Council on Foreign Relations, and many American 0:02:43.480 --> 0:02:46.639 Academy of Arts and Sciences. He is the co chair 0:02:46.680 --> 0:02:50.240 of the New York Public Library Council and Vice chairman 0:02:50.320 --> 0:02:54.360 of the New York City Ballet. Darren Walker, Welcome to Bloomberg. 0:02:54.520 --> 0:02:56.880 Thank you, Verry. Happy to be here. I'm excited to 0:02:56.919 --> 0:02:59.320 talk to you about a lot of things. But before 0:02:59.360 --> 0:03:02.240 we get into the details of the Ford Foundation and 0:03:02.320 --> 0:03:07.280 its portfolio, you're really a real, live Horatio algia story. 0:03:07.760 --> 0:03:12.200 How does one go from relatively humble beginnings too on 0:03:12.240 --> 0:03:17.080 the board of all these prestigious institutions I just named, well, 0:03:17.200 --> 0:03:19.880 first one is lucky enough to be born in America, 0:03:20.120 --> 0:03:23.680 doesn't hurt. I was born in America, and that meant 0:03:23.720 --> 0:03:26.920 that I was born in a country where even a 0:03:27.040 --> 0:03:31.639 poor African American kid could have dreams and those dreams, 0:03:32.200 --> 0:03:36.760 those aspirations could be realized. That's the country that we 0:03:36.840 --> 0:03:40.880 have lived in, and at the Ford Foundation, we're asking 0:03:40.960 --> 0:03:45.000 that question, can we continue to be a land of 0:03:45.040 --> 0:03:49.760 opportunity where little Darren Walker's and lots of others like 0:03:49.920 --> 0:03:53.680 me can dream and have those dreams be realized. So 0:03:53.920 --> 0:03:57.000 let's get into the realization of that dream. And I'm 0:03:57.000 --> 0:03:59.880 gonna pull some quotes that that I've found in various 0:04:00.000 --> 0:04:03.360 fightings of yours. You once said a teacher to you, 0:04:03.440 --> 0:04:09.240 the value of quote learning self control? What does that mean? Well, 0:04:09.280 --> 0:04:13.920 at the time, I was a fleling, rather undisciplined third 0:04:14.000 --> 0:04:19.200 grader who was constantly getting into trouble. Familiar my third 0:04:19.200 --> 0:04:23.080 grade teacher, Mrs Majors, took me aside after class and 0:04:23.160 --> 0:04:25.560 she sat me down and she gave me a stern 0:04:26.200 --> 0:04:29.719 talking to as we say back home. She said, little 0:04:29.760 --> 0:04:34.960 boys like you who get in trouble too often end 0:04:35.040 --> 0:04:39.360 up not succeeding. And I worry that you are going 0:04:39.440 --> 0:04:41.640 to get in trouble and are going to end up 0:04:42.160 --> 0:04:46.360 not succeeding in life, and you can succeed. And it 0:04:46.440 --> 0:04:49.599 was having her tell me that I could succeed, but 0:04:49.640 --> 0:04:52.680 that in order for me to succeed, I needed to 0:04:53.400 --> 0:04:58.960 gain control of my emotions, my temper, dealing with issues 0:04:59.000 --> 0:05:03.240 I was dealing with that home in the classroom and 0:05:03.600 --> 0:05:07.880 manifesting a lot of bad behavior. But your third grade 0:05:07.880 --> 0:05:09.640 what are you eight years old at the time? Is 0:05:09.640 --> 0:05:13.200 that about right? Who makes a life choice? To gee, 0:05:13.240 --> 0:05:16.360 I really have to get my act together when they're eight. Well, 0:05:16.480 --> 0:05:19.640 I understood because I saw some of my cousins what 0:05:19.680 --> 0:05:22.000 was happening to them as early as the third grade, 0:05:22.240 --> 0:05:26.160 for example, being put in special education. Some of my 0:05:26.279 --> 0:05:29.160 cousins who I played with as a little boy, by 0:05:29.240 --> 0:05:34.159 high school were already in juvenile centers. And sadly, seven 0:05:34.200 --> 0:05:37.080 of my cousins ended up in prison, and and one 0:05:37.120 --> 0:05:41.880 of my cousins committed suicide in a Paris jail in Louisiana. 0:05:42.680 --> 0:05:46.200 And you were aware of the risks of not being 0:05:46.200 --> 0:05:49.560 in control, even at that early age, at least after 0:05:49.600 --> 0:05:52.159 the teacher brought this to your attention. Absolutely, I was 0:05:52.200 --> 0:05:55.120 aware of it, and I was aware of the consequences 0:05:55.240 --> 0:05:58.200 because it was right in front of me. I would 0:05:58.240 --> 0:06:00.680 hear my mother talk about stories of what was happening 0:06:00.680 --> 0:06:03.600 in our family. I'd see it in our community, and 0:06:03.640 --> 0:06:06.560 I hear about it from others. So I was aware 0:06:06.720 --> 0:06:09.920 that if you are a bad boy, bad things happened 0:06:09.920 --> 0:06:12.719 to you. So less fast forward a couple of years, 0:06:12.760 --> 0:06:15.200 you go to college, go to law school. How does 0:06:15.279 --> 0:06:19.960 one make the transition from bad kid to good lawyer 0:06:20.240 --> 0:06:24.960 to philanthropy A lot of luck, a lot of hard work, 0:06:25.560 --> 0:06:29.400 and a lot of people cheering me on along the way. 0:06:29.720 --> 0:06:33.479 That's a theme that in the various other eighty or 0:06:33.520 --> 0:06:36.839 so interviews we've done here, hard work and a little 0:06:36.839 --> 0:06:40.080 bit of luck comes up over and over again. So, 0:06:40.080 --> 0:06:43.960 so you're a practicing attorney, what tell me what the 0:06:44.000 --> 0:06:46.960 transition is like? How does how do you decide I'm 0:06:46.960 --> 0:06:50.080 going to give up the law librarian and and move 0:06:50.200 --> 0:06:53.720 towards a different focus with my life. Well, one thing 0:06:53.760 --> 0:06:56.159 happened for me. I have to be honest, I didn't 0:06:56.200 --> 0:07:00.000 find my way into the nonprofit sector, the charitable sector 0:07:00.000 --> 0:07:03.440 early in my career. I was very clear with myself 0:07:03.560 --> 0:07:06.120 when I was in college and law school that I 0:07:06.440 --> 0:07:11.200 never again wanted to be poor. I feared, more than 0:07:11.240 --> 0:07:15.160 anything else, being poor. And so because of that, I 0:07:15.320 --> 0:07:21.280 used my my my law degree, I went into business. UM, 0:07:21.320 --> 0:07:24.480 I had a good run on Wall Street. But for me, 0:07:24.800 --> 0:07:28.200 it was never about piling up money. It was about 0:07:28.360 --> 0:07:32.720 comfort and finding myself in a position so that I could, 0:07:32.760 --> 0:07:35.600 for example, take care of my mother, UM support my 0:07:35.680 --> 0:07:38.520 sisters as they were going to college. And I was 0:07:38.560 --> 0:07:41.120 able to do that, and for me, that was enough. 0:07:41.520 --> 0:07:45.840 But what I didn't have was passion. I didn't have 0:07:46.480 --> 0:07:50.239 the day to day excitement about doing good in the world. 0:07:50.720 --> 0:07:53.080 And that's what I was yearning for. And I was 0:07:53.160 --> 0:07:56.160 lucky enough to meet a man named Calvin Butts, who 0:07:56.200 --> 0:07:59.560 was the minister of the Abyssinian Baptist Church in Harlem. 0:08:00.000 --> 0:08:02.480 I'm Barry Ridhults. You're listening to Masters in Business on 0:08:02.560 --> 0:08:06.480 Bloomberg Radio. My special guest today is Darren Walker. He 0:08:06.640 --> 0:08:10.200 is the president of the Ford Foundation. And for those 0:08:10.240 --> 0:08:15.200 of you who may not be familiar with this philanthropic enterprise. 0:08:15.800 --> 0:08:20.040 Founded in nineteen thirty six by Edsel and Henry Ford 0:08:20.120 --> 0:08:24.160 with a twenty five thousand dollar gift from Exel Ford. 0:08:24.880 --> 0:08:30.640 By n seven, the Foundation owned of the non voting 0:08:30.720 --> 0:08:35.600 shares of Ford Motor Company thanks to additional gifts. Right 0:08:35.600 --> 0:08:37.880 now the foundation is about twelve and a half billion 0:08:37.920 --> 0:08:41.520 dollars in assets and gives out over five million dollars 0:08:41.559 --> 0:08:46.000 per year in grant So let's talk about the mission 0:08:46.120 --> 0:08:50.840 of the Ford Foundation, which is an advancing human welfare. 0:08:51.280 --> 0:08:54.000 That's a little broad. What does that mean. What it 0:08:54.080 --> 0:09:02.400 means is encouraging human achievement, reducing poverty, allowing the poor, 0:09:03.000 --> 0:09:06.960 the marginalized in all parts of the world to have 0:09:07.080 --> 0:09:13.040 their dreams, realized through education, through livelihoods, through human and 0:09:13.120 --> 0:09:17.800 civil rights, and participation in governance through the environment. These 0:09:17.800 --> 0:09:22.760 are all areas where the Ford Foundation programs. So how 0:09:22.800 --> 0:09:26.760 do you decide specifically what's a fund because again, these 0:09:26.760 --> 0:09:30.920 are such broad topics. Do do you fly over at 0:09:30.960 --> 0:09:35.040 thirty thousand feet and and try and affect how people 0:09:35.120 --> 0:09:38.080 perceive different areas? Or is it more up close and 0:09:38.280 --> 0:09:42.320 personal you're rolling up your sleeves and really doing uh 0:09:42.480 --> 0:09:44.800 land campaign, a door to door campaign. How do you 0:09:44.840 --> 0:09:48.920 decide how micro or macro you want to get, how 0:09:49.000 --> 0:09:52.640 granular with any of the projects you're working on. Well, 0:09:52.760 --> 0:09:56.120 today we work in eleven regions of the world, including 0:09:56.120 --> 0:10:00.400 the United States, so we work in place based strategy. 0:10:00.520 --> 0:10:04.160 But we start by asking the question, what's the greatest 0:10:04.200 --> 0:10:08.360 threat to human welfare? What's the greatest threat to our 0:10:08.480 --> 0:10:13.640 objective of a more just, fair and peaceful world. We 0:10:13.720 --> 0:10:19.520 believe the greatest threat is growing inequality in the world now. 0:10:19.760 --> 0:10:24.840 Of course, climate change and insecurity these are major threats 0:10:24.840 --> 0:10:27.800 of our time. But the threat that we have chosen 0:10:27.840 --> 0:10:32.040 to focus on is growing inequality because in many ways 0:10:32.559 --> 0:10:38.439 it represents the greatest threat to opportunity because without opportunity, 0:10:38.880 --> 0:10:44.160 it's impossible to have social mobility and human achievement, and 0:10:44.400 --> 0:10:49.800 that's our north star. Now, within that, we ask who 0:10:49.800 --> 0:10:54.600 are the populations of people who traditionally have had the 0:10:54.679 --> 0:11:00.160 least opportunity and who whose welfare have been more ATSK 0:11:00.679 --> 0:11:04.559 And we begin with girls and women because around the world, 0:11:04.640 --> 0:11:09.559 girls and women have traditionally been excluded and marginalized. We 0:11:10.240 --> 0:11:17.719 talk about minorities, ethnic, religious, racial minorities, UH, rural communities, 0:11:18.440 --> 0:11:23.720 urban communities, people who in the United States, for example, 0:11:24.160 --> 0:11:27.600 are isolated in prisons and in a criminal justice system 0:11:27.679 --> 0:11:30.840 that isn't serving our country at all. These are the 0:11:30.880 --> 0:11:36.280 populations we focus on. These are the people whose lives 0:11:36.360 --> 0:11:40.000 we seek to improve, because when their lives are improved, 0:11:40.280 --> 0:11:45.079 they contribute to a better society. So let me ask 0:11:45.120 --> 0:11:49.880 you this question because I saw some fascinating data. Obviously, UH, 0:11:49.920 --> 0:11:53.360 since Picketty's book came out on Capitalism, there's been a 0:11:53.400 --> 0:11:56.760 whole lot of talk about income inequality. But some of 0:11:56.760 --> 0:12:01.760 the data I've seen has suggested the while income inequality 0:12:01.840 --> 0:12:05.360 is expanding in countries like the United States and parts 0:12:05.400 --> 0:12:08.880 of Europe, when you look at the entire world, thanks 0:12:09.160 --> 0:12:12.000 partly to people in China and India rising up out 0:12:12.000 --> 0:12:17.160 of poverty, Global income inequality is actually contracting. How does 0:12:17.200 --> 0:12:22.080 that impact the way you um look to focus your efforts, 0:12:22.120 --> 0:12:25.840 your money's and your key focus. Well, I don't think 0:12:25.840 --> 0:12:29.720 we should be distracted by aggregate numbers. We have to 0:12:29.800 --> 0:12:34.760 look within countries and society. So China has certainly had 0:12:35.200 --> 0:12:40.720 poverty reduced, but income inequality there is at its greatest level. 0:12:41.120 --> 0:12:45.080 From India is the same the US, much of the 0:12:45.240 --> 0:12:48.520 Latin American countries, and of course in Africa we're seeing 0:12:48.520 --> 0:12:52.240 seeing a widening gap. So we should be alarmed by this. 0:12:52.720 --> 0:12:56.960 Now the question is how do we help reduce inequality? 0:12:57.040 --> 0:13:00.120 And we believe we've got to focus on those drivers 0:13:00.160 --> 0:13:04.600 of inequality, and we believe those drivers include a few 0:13:05.040 --> 0:13:09.439 a few profound elements in our society. Give us a 0:13:09.480 --> 0:13:14.120 few examples. So one driver is what we call entrenched 0:13:14.200 --> 0:13:19.800 cultural narratives, and these are narratives that undermine fairness, tolerance, 0:13:19.920 --> 0:13:24.360 and inclusion. And those narratives could be narratives, for example, 0:13:24.400 --> 0:13:28.160 in the India context, that dullut the lower cast are 0:13:28.200 --> 0:13:31.080 in fact supposed to be the lower cast, or in 0:13:31.120 --> 0:13:34.800 the United States that the fact that most of the 0:13:34.960 --> 0:13:40.040 people in American prisons are African, American and Latino. That 0:13:40.200 --> 0:13:43.080 maybe that's the way it's supposed to be. So we 0:13:43.200 --> 0:13:49.720 allow narratives to justify why injustice exists in our society 0:13:49.960 --> 0:13:52.760 and to validate that it's okay. How do you push 0:13:52.760 --> 0:13:55.480 back at a narrative like, well, you have a lot 0:13:55.480 --> 0:13:57.960 of minorities in American prison, but they're they're because they 0:13:58.000 --> 0:14:00.920 did something wrong. That's a that's a prety common belief. 0:14:01.040 --> 0:14:03.400 How do you push back against the narrative these guys 0:14:03.440 --> 0:14:05.800 are there because they did something wrong. Well, first of all, 0:14:05.800 --> 0:14:09.480 the American people are fair. They want the evidence. And 0:14:09.559 --> 0:14:12.400 so when we start to produce the evidence, for example, 0:14:12.679 --> 0:14:19.760 through films, through media, through evidence and good research that demonstrates, 0:14:19.880 --> 0:14:24.800 for example, that there is a differential prejudice in treatment 0:14:25.000 --> 0:14:29.080 of h of people who are arrested for marijuana or 0:14:29.400 --> 0:14:33.560 powder cocaine and people who are primarily white, and people 0:14:33.560 --> 0:14:37.200 who are arrested for crack who are primarily black, That 0:14:37.280 --> 0:14:41.080 there is a differential treatment in our judicial system, and 0:14:41.160 --> 0:14:45.400 that one example is manifest across the entire criminal justice 0:14:45.400 --> 0:14:48.320 system in this country. I'm Barry Reholts. You're listening to 0:14:48.400 --> 0:14:51.880 Masters in Business on Bloomberg Radio. My special guest today 0:14:52.080 --> 0:14:55.480 is Darren Walker. He is the president of the Ford Foundation, 0:14:55.560 --> 0:14:59.000 a twelve and a half billion dollar endowment that gives 0:14:59.040 --> 0:15:02.200 away about half of billion dollars a year in special 0:15:02.240 --> 0:15:07.240 grants working on improving the human condition. I know that's broad, 0:15:07.880 --> 0:15:10.760 but it's true. Let's talk a little bit about the 0:15:10.800 --> 0:15:15.480 mechanism that you guys use to spread a little um 0:15:16.120 --> 0:15:19.680 good work around the world, and that's the portfolio of 0:15:19.680 --> 0:15:23.120 of the foundation twelve point five billion. Is that a 0:15:23.160 --> 0:15:26.800 bullpark more or less correct? And so what is your 0:15:26.920 --> 0:15:31.400 role in terms of overseeing the foundation's management of its 0:15:31.440 --> 0:15:35.960 own capital. Well, I'm ut ultimately accountable to our trustees 0:15:36.160 --> 0:15:40.479 for UH the enterprise of the Ford Foundation, which includes 0:15:40.680 --> 0:15:44.880 our investment portfolio. But I'm very lucky because we have 0:15:45.320 --> 0:15:49.480 one of the best people working UH in investment management today, 0:15:49.600 --> 0:15:55.160 Eric Dobstat, as our ce IO. Eric is aided by 0:15:55.200 --> 0:16:00.480 a terrific team of staff who are professionals, have come 0:16:00.560 --> 0:16:05.360 from all walks of life and from the public and 0:16:05.400 --> 0:16:10.280 private sector, and bring a remarkable capacity to make smart investments, 0:16:10.480 --> 0:16:15.520 to choose high impact managers, and to do very very well. 0:16:16.360 --> 0:16:19.320 So how much that that raises an interesting question. How 0:16:19.400 --> 0:16:22.920 much of the portfolio you guys running in house and 0:16:22.960 --> 0:16:25.400 how much goes to outside managers, and what sort of 0:16:25.440 --> 0:16:29.280 managers are these hedge funds, venture capitalist, private equity, etcetera. 0:16:29.520 --> 0:16:33.360 We don't manage any of our investment in house. We 0:16:33.480 --> 0:16:39.120 have a traditional mix of asset classes, primarily hedge funds 0:16:39.160 --> 0:16:45.800 and private equity. But we've got a long term investment horizon. 0:16:46.600 --> 0:16:51.160 We aren't looking to beat the market in any short 0:16:51.280 --> 0:16:55.680 term way. Um our investment strategy is very much like 0:16:55.720 --> 0:17:00.800 our grant making strategy. We are long term investor because 0:17:00.800 --> 0:17:06.199 we believe over the long term, by not being slavish 0:17:06.480 --> 0:17:12.560 too near term concerns were able to generate more value, 0:17:12.960 --> 0:17:18.080 more stability, less volatility, and better returns. So I've always 0:17:18.119 --> 0:17:24.600 wondered about this. You have a a terrible year like oh, 0:17:24.760 --> 0:17:29.560 eight oh nine with the financial crisis, a fund that's 0:17:29.640 --> 0:17:32.840 running twelve billion dollars or so, I'm assuming it might 0:17:32.840 --> 0:17:35.639 have been a little less before the crisis. What's it 0:17:35.760 --> 0:17:39.080 like on the ramparts when suddenly the tide goes out 0:17:39.160 --> 0:17:42.560 and the market is cut in half and then some Well, 0:17:42.640 --> 0:17:45.600 we've got to also give credit to our trustees. We 0:17:45.720 --> 0:17:51.160 have an outstanding group of trustees who manage with Eric 0:17:51.280 --> 0:17:55.239 our portfolio from a governance perspective, So we have a 0:17:55.400 --> 0:18:00.760 very clearly articulated investment policy. UH. Those sidelines of that 0:18:00.920 --> 0:18:07.040 policy establish the guardrails UH within which Eric and his 0:18:07.119 --> 0:18:12.800 team can invest. And we don't panic. We don't become 0:18:12.880 --> 0:18:17.080 overly concerned about what's happened today or tomorrow or even 0:18:17.160 --> 0:18:20.159 next month. Necessarily what we are concerned about or what 0:18:20.240 --> 0:18:23.840 are the long term trends, what are the implications over 0:18:24.240 --> 0:18:30.040 multiple quarters of FED policy, UM, of what's happening in 0:18:30.640 --> 0:18:35.360 UH emerging markets UH and and we have great managers, 0:18:35.400 --> 0:18:40.200 so we listen to those managers. We synthesize and harmonize 0:18:40.840 --> 0:18:45.879 their input, their counsel, their wisdom and UM. They have 0:18:46.040 --> 0:18:49.640 done very well UM with us and UM and so 0:18:49.680 --> 0:18:52.840 we continue to stick with them. So the foundation is 0:18:52.880 --> 0:18:56.040 eighty years old, one would assume it has a longer 0:18:56.160 --> 0:19:00.320 term perspective and doesn't get caught up in the week 0:19:00.359 --> 0:19:03.439 to week, month to month volatility that we see. But 0:19:03.880 --> 0:19:07.640 even the most staid and rational people in No. Eight 0:19:07.720 --> 0:19:09.399 or nine, there was a little bit of panic in 0:19:09.400 --> 0:19:13.320 the streets UH when people thought the entire financial system 0:19:13.359 --> 0:19:16.000 was going to freeze, and who knows if if g 0:19:16.240 --> 0:19:19.960 E or McDonald's was going to meet their payroll. Inside 0:19:20.040 --> 0:19:23.960 the hallowed walls of the Ford Foundation, you're telling me, Gee, 0:19:24.000 --> 0:19:26.800 this is rough, but not a lot of panic. Well, 0:19:27.440 --> 0:19:31.560 I think it's fair to say that we were very, 0:19:31.720 --> 0:19:36.399 very distressed by what happened UM during that period, but 0:19:36.880 --> 0:19:42.280 it was a slow, thoughtful, deliberative process that led us 0:19:42.320 --> 0:19:48.119 to our rebalancing of the portfolio. UM. We have a 0:19:48.200 --> 0:19:52.919 policy that ensures that we at all times have sufficient liquidity, 0:19:52.920 --> 0:19:55.720 so there was never a question as to our being 0:19:55.760 --> 0:19:59.359 able to meet our obligations for grants or operations, and 0:19:59.440 --> 0:20:03.240 so could look for the long haul. And over these 0:20:03.320 --> 0:20:08.480 last six to seven years we have had outstanding performance. 0:20:09.000 --> 0:20:12.440 And I'm proud to say that Eric and his team 0:20:12.520 --> 0:20:17.560 continue to deliver great results, which means we have more 0:20:17.600 --> 0:20:20.240 money to give away. I'm Barry rid Hilts. You're listening 0:20:20.240 --> 0:20:23.600 to Masters in Business on Bloomberg Radio. My special guest 0:20:23.640 --> 0:20:26.919 today is Darren Walker. He is the president of the 0:20:26.960 --> 0:20:31.800 Ford Foundation, a twelve point five billion dollar endowment that 0:20:31.960 --> 0:20:36.359 gives away a half a billion dollars per year to 0:20:36.560 --> 0:20:41.400 advance human Wealthare So, so let's get into the specifics 0:20:41.440 --> 0:20:44.200 of that. What does that look like in the real 0:20:44.280 --> 0:20:47.960 world where the rubber meets the road. You're giving away 0:20:47.960 --> 0:20:51.239 a half a billion dollars a year, is that you know? 0:20:51.480 --> 0:20:55.440 Five million dollar grants? Is it lots of small grants? 0:20:55.520 --> 0:20:58.480 And take us through a typical grant. What do you 0:20:58.480 --> 0:21:03.840 hope to accomplish with any specific grants? Well, we have 0:21:04.240 --> 0:21:07.360 large grants and we have smaller grants. And for us, 0:21:07.359 --> 0:21:10.920 a large grant would be one that we made last year, 0:21:11.280 --> 0:21:15.679 a hundred and twenty five million dollars towards the Grand 0:21:15.720 --> 0:21:21.359 Bargain to help resolve Detroit's bankruptcy, the largest municipal bankruptcy 0:21:21.359 --> 0:21:25.240 in the history of America, and it was a it 0:21:25.320 --> 0:21:30.280 was a daunting task, but ultimately the bankruptcy was resolved 0:21:30.320 --> 0:21:34.480 because a group of foundations and the Governor of Michigan 0:21:34.520 --> 0:21:38.359 came together with the Detroit Institute of the Arts to 0:21:38.920 --> 0:21:41.600 raise eight hundred million dollars that made it possible for 0:21:41.640 --> 0:21:47.199 the city to pay its retirees their pensions and to 0:21:47.800 --> 0:21:52.000 help the museum which owned um which was owned by 0:21:52.000 --> 0:21:56.080 the city uh to keep its art on its walls, 0:21:56.160 --> 0:21:59.440 which it was and at risk of having to sell. 0:21:59.720 --> 0:22:02.280 So that was a hundred and twenty million dollars towards 0:22:02.280 --> 0:22:06.679 an eight hundred million dollar UH pool of money, So 0:22:06.720 --> 0:22:09.320 that's a large grant for big impact. Who were the 0:22:09.359 --> 0:22:12.520 co investors and that the co investors were the Kellogg Foundation, 0:22:12.640 --> 0:22:18.560 Night Foundation, Kresky Foundation, um UH, the Fisher Foundation locally, 0:22:19.280 --> 0:22:24.160 UM the Mott Foundation. These are national foundations and local 0:22:24.160 --> 0:22:29.320 philanthropies together that came rescue Detroit. Essentially, is that dead 0:22:29.359 --> 0:22:32.320 rim possession financing or is it just to shore up 0:22:32.840 --> 0:22:34.760 the art museum because there was going to be a 0:22:34.760 --> 0:22:37.359 fire cell auction if that that wasn't resolved. It was 0:22:37.440 --> 0:22:42.439 to shore up the museum and to allow the city 0:22:42.480 --> 0:22:46.280 to have the money to in turn pay UH the pension, 0:22:46.440 --> 0:22:49.080 which which raises an interesting question. Do we run the 0:22:49.240 --> 0:22:55.160 risk of having taxpayers abdicate their responsibility to municipalities If 0:22:55.160 --> 0:22:58.199 foundations are coming in and really doing what what the 0:22:58.240 --> 0:23:02.760 state itself should be doing, well, philanthropy could never play 0:23:02.800 --> 0:23:06.040 the role of government. We're a rounding error in the 0:23:06.080 --> 0:23:09.800 federal government's budget. All of our assets together is a 0:23:09.880 --> 0:23:13.240 rounding era in the federal government's budget. So let's be 0:23:13.359 --> 0:23:18.080 real about the potential. What we can do is catalyze, innovate, 0:23:18.560 --> 0:23:22.880 demonstrate solutions. So I've given you an example of a 0:23:23.000 --> 0:23:27.560 large grant. Let's talk about a smaller grant, a grant 0:23:27.760 --> 0:23:35.399 for five thousand dollars, and that grant supports investigative journalism 0:23:35.560 --> 0:23:38.560 through our media program, because we believe that in a 0:23:38.640 --> 0:23:44.280 democracy we need strong media. Well, a recent grant led 0:23:45.119 --> 0:23:49.119 to UH much of the public knowledge around what's happening 0:23:49.119 --> 0:23:53.280 in Flint, Michigan. We supported UH. This was the a 0:23:53.400 --> 0:23:58.040 c l U grant. A c LU made it possible 0:23:58.080 --> 0:24:02.880 for them to hire a journal who blogged about issues 0:24:02.920 --> 0:24:06.320 of governance and started covering what was going on in Flint. 0:24:07.320 --> 0:24:10.200 He was among the first to bring to the public's 0:24:10.200 --> 0:24:13.520 attention what was happening in Flint, Michigan. And that's one 0:24:13.520 --> 0:24:17.840 of the great tragedies of recent years. App talking about 0:24:17.840 --> 0:24:21.800 abdication of governmental responsibility. While and this is one of 0:24:21.840 --> 0:24:25.119 the drivers of inequality, which is this idea that we 0:24:25.160 --> 0:24:31.080 are failing to invest and protect vital public goods. A 0:24:31.240 --> 0:24:37.440 vital public good like infrastructure, our water system is essential. 0:24:37.760 --> 0:24:41.480 It's vital to the very operations of a city of 0:24:41.520 --> 0:24:46.440 a civilization in fact, and yet this city of a 0:24:46.520 --> 0:24:51.359 hundred thousand people does not have a decent infrastructure because 0:24:51.520 --> 0:24:57.479 a decision was made to switch systems cheaper, cheaper, system 0:24:57.560 --> 0:25:03.720 less reliable, less reliable, technically uh ineffective, and what it 0:25:03.840 --> 0:25:05.639 is yielded, of course, we know, is one of the 0:25:05.640 --> 0:25:11.240 greatest calamities and greatest embarrassed embarrassments UH in this country 0:25:11.280 --> 0:25:14.080 in many, many years. The fascinating thing is, I've heard 0:25:14.080 --> 0:25:18.000 people refer to Flint as a one off, but I 0:25:18.040 --> 0:25:21.680 bet there and I've read and heard about that this 0:25:21.760 --> 0:25:24.399 is in a unique situation, and there are lots of 0:25:24.880 --> 0:25:30.560 Flint like infrastructure problems on the verge of busting out 0:25:30.600 --> 0:25:34.520 onto the public eye. We've ignored our infrastructure for decades, 0:25:34.560 --> 0:25:39.440 haven't we. Well. In fact, our public infrastructure represents an 0:25:39.440 --> 0:25:45.000 investment in public goods, whether it's public libraries, public transportation, 0:25:45.240 --> 0:25:51.199 public schools, public parks, public housing. All of this together 0:25:51.720 --> 0:25:59.159 undergirds our democracy, our society, American civilization, and we have 0:25:59.640 --> 0:26:05.000 con assistently been under investing and in fact disinvesting in 0:26:05.040 --> 0:26:08.400 the very infrastructure that we depend on for our democracy 0:26:08.440 --> 0:26:12.400 to work. We see certain politicians talking about China and 0:26:12.480 --> 0:26:16.639 say what you will about their economic competition. They have 0:26:16.800 --> 0:26:21.560 made massive infrastructure investments and it's paying off for them. Well, 0:26:21.600 --> 0:26:26.320 you only have to return from the sparkling new airport 0:26:26.359 --> 0:26:31.080 in Beijing and land at JFK or even worse, La 0:26:31.119 --> 0:26:35.800 Guardia to to understand what it feels like to go 0:26:35.960 --> 0:26:41.080 from walking in a public facility and being uplifted to 0:26:41.240 --> 0:26:47.399 walking into a public facility and feeling despair. It's amazing. 0:26:47.880 --> 0:26:51.360 We were the leaders for the longest time, and we 0:26:51.400 --> 0:26:54.639 stopped making those investments, and everybody else's leap frogged us. 0:26:55.119 --> 0:26:57.280 They are leap progging us, but it's not too late, 0:26:57.640 --> 0:27:02.320 because the American people want to pest in public infrastructure. 0:27:02.400 --> 0:27:08.440 They want better public transportation, better public parks, they want 0:27:08.480 --> 0:27:11.680 our public housing to work for the people who live 0:27:11.800 --> 0:27:17.000 within those communities. And without investing in public goods and 0:27:17.040 --> 0:27:22.040 public infrastructure, our democracy simply won't be effective. And at 0:27:22.080 --> 0:27:24.639 the end of the day, this is why inequality has 0:27:24.680 --> 0:27:29.639 to be a rallying cry, because at the core of 0:27:29.840 --> 0:27:36.480 the American experience is opportunity, our aspiration to be a 0:27:36.560 --> 0:27:45.720 better society and a better people, and growing inequality reduces opportunity. 0:27:46.000 --> 0:27:51.200 It squelches our aspirations and our ambitions, and it makes 0:27:51.280 --> 0:27:56.520 us cynical and angry, and it affects our politics, no doubt. 0:27:56.600 --> 0:27:59.880 You see a lot of anger amongst certain people who 0:28:00.080 --> 0:28:03.439 want to make America great again. That's how it manifests 0:28:03.440 --> 0:28:08.960