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How Judith Rodin Created A New Model for Philanthropic Funding At The Rockefeller Foundation

During her tenure, the outgoing president has created innovative ways to use philanthropic dollars to unlock corporate donations, because–while philanthropy has a lot of money–it’s not enough to solve the world’s problems on its own.

How Judith Rodin Created A New Model for Philanthropic Funding At The Rockefeller Foundation
[Photo: Leigh Vogel/Getty Images]

In June 2016, Rockefeller Foundation president Judith Rodin announced that she’d be stepping down after more than a decade of leadership. She’s planning on staying until a successor is named, but finding someone with the right résumé might be tricky: The philanthropic agency she leaves behind barely resembles the one she once took over–or how traditional philanthropic funders act.

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Over the last century, Rockefeller, originally founded by Standard Oil tycoon John D. Rockefeller, has given money toward groups and institutions advancing public health, disease control and eradication, agricultural advancements, and even better urban planning. The stated mission: “promoting the well-being of humanity throughout the world.”

But during her 11-year tenure at the helm, Rodin has added two more complex overriding priorities. That communities should be designed for more resilience–the ability to survive and thrive in the face of increasingly unpredictable natural or manmade disasters, often spurred by climatic change or hiccups in the global economy. And that Rockefeller shouldn’t be alone in writing checks to fund that, or really any other pressing cause: Why not structure grants that encourage the investment and participation from other foundations, governments, or businesses who see payoffs (both social and at times profitable) in social change?

It’s all driven by a basic calculation: Rockefeller has a $4.2 billion total endowment and gave out $196 million in grants in 2015. But even if they emptied their coffers over the next decade, it would take far more to eradicate the world’s shifting problems. “Philanthropy only has billions altogether and solving these problems is going to take trillions,” Rodin says. “That is the future realization that philanthropy has to have. How do we use our philanthropy capital to unlock more capital?”

Of course, Rodin has been a trailblazer. In 2005, she became the foundation’s first female president. Before that, she was the first female president to lead an Ivy League school at the University of Pennsylvania. And before that, as a research psychologist, she pioneered scientific breakthroughs that helped inform everything from the women’s health movement to the obesity epidemic, and how the elderly can lead better, happier lives.

Today, she’s a powerbroker with deep political and corporate connections, which she’s not afraid to leverage when required. A few years ago, she co-chaired the World Economic Forum in Davos. She’s reportedly both called the heads of major companies directly, and held roundtables for leaders from places like Walmart and Coca-Cola to discuss how their businesses can be restructured to help save the world. “There isn’t a president or prime minister I can’t talk to,” she recently told the Wall Street Journal.

She even appeared on Hillary Clinton’s short list of vice presidential running mates, according to hacked campaign emails published by WikiLeaks. While flattered, Rodin remains noncommittal about whether she would have accepted. After all, Rockefeller has its own power and piggybank, and new strategies to change the world.

RETHINKING THE WAY FOUNDATIONS WORK

Rodin joined Rockefeller shortly before Hurricane Katrina, and seeing the devastation in New Orleans drove home the importance of resilience strategies for communities around the globe. In the aftermath, the group invested heavily in ways that drew more federal funding and corporate money into the New Orleans area. The group has since spent over $150 million to expand their idea of resilience-building to other cities, creating a 100 Resilient Cities Network, which includes local governments hiring chief resilience officers to help them plan and strategize what civic pinch points most need to be addressed.

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In some cases, the solutions can be transferred from one place to another. The real coup, as the WSJ story has made clear, was convincing outside experts and corporations like Palantir, a data analytics company, to work with those who signed on. For many, it means taking their tools or trades into an entirely new market.

Over the last decade, Rockefeller has spent $500 million to leverage $25 billion in total resilience funding in cities around the U.S. but also in places in Northern Ireland, Mexico, Myanmar, New Zealand, Serbia, India, Portugal, Ghana, and Lebanon. Success with 100RC has spawned other kinds of fortification programs, like the Global Resilience Challenge for the world’s most vulnerable places (with key partners like USAID and the Swedish International Development Agency), and the National Disaster Resilience Competition to improve places once declared major disaster areas (alongside the U.S. Department of Housing and Urban Development).

“We said look at this, the 21st century is crazy, everything moves faster and is much more interconnected and globalized,” Rodin says about the group’s willingness to experiment. “These problems hit everywhere and, candidly, they don’t land on the ground in convenient little packages that have the same labels as Rockefeller program areas, so why don’t we recognize that?”

Another benefit of holding challenges or open competitions to solve problems is that it encourages partners to suggest creative solutions to their own problems, compared to funders dictating what might work without a proper understanding of reality on the ground. Many foundation leaders are beginning to talk more openly about this big-wallet blind spot: Even bad ideas may still get a golf clap from grantees, who don’t want offend the person handing over the cash.

CHASING OTHER WORLD-CHANGING GOALS

Rodin explains her own leadership philosophy with a childhood anecdote. “Growing up, I remember scoring a 94% on a school test and showing my father, to which he responded: ‘What happened to the other six points?’” she writes in an email to Co.Exist. “So, for my entire life–and in every aspect of my life–I believe that I have, in some shape or form, continued to pursue ‘the other six points.’” Hard work, she says, is the key ingredient to being successful at anything. To that end, she’s set up Rockefeller to continue working hard on another huge slate of issues.

The organization is trying to create what it dubs “inclusive economies” in the places that need it the most. Rockefeller recently launched Smart Power for Rural Development, an $80 million program to develop localized mini power grids in 1,000 currently unplugged villages in rural India. The addition of that key resource–electricity–would improve how businesses work, farmers operate, and give children better-lit places to learn and live. Investors see a social good and sustainable return. About 1.3 billion people worldwide still don’t have electricity.

Within the U.S., Rockefeller has supported 100,000 Opportunities, a initiative being led by FSG and the Aspen Institute’s Forum for Community Solutions to help young people in impoverished areas find work with 45 corporate partners in different sectors, like Starbucks, Target, Chipotle, and also CVSHealth, FedEx, and Uber.

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Right now an estimated one in seven young people are out of school but not working, in part because they haven’t learned the semi-professional art getting hired. At the same time, companies have millions of open entry-level jobs but can’t find qualified candidates, which costs them in terms of lost productivity when slots go unfilled or people quit unexpectedly. The Opportunities plan creates a coalition of companies, nonprofits, and community groups, which work together to host job fairs and ensure that people learn the skill sets necessary to get and keep those jobs, so participants avoid employment gaps and managers gain ever-more qualified people to promote. After expanding to a handful of cities, the program met its initial hiring goal; they’re now shooting for 1 million by 2021.

Beyond jobs, perhaps the most valuable intangible investment Rockefeller is making are deals with inspiring young people to become more involved in the world around them. The group has done that with their Hamilton project, which finds ways for teachers to incorporate the play into classrooms, and ensures that those who want to see it can do so at a non-scalper ticket price. The goal, says Rodin is to make sure the next generation of leaders can envision themselves as empowered future leaders.

Taken one step further, Rockefeller is testing new ways for millennials to potentially participate in philanthropy. For their Future Cities Accelerator with Unreasonable Institute, the foundation opened the field to all applicants, both for- and nonprofit. The catch: This time even the civic problem they were trying to solve was left undefined.

The idea was for participants themselves to share their own concerns and find solutions. “The ability to be open to more ideas from more places in the world is critically important to Rockefeller and I think the future of philanthropy,” Rodin says. “And it is not always typical of philanthropy in general–for us that really meant opening ourselves to as many different ideas and voices as possible.”

The broader goal is to avoid the groupthink that can happen, especially to top leaders, if they trap themselves inside a “reinforced echo chamber” of their own creation. Even if it takes sponsoring a crazy cross-country trip by rail to make that happen.

BANKING ON MORE CREATIVE FINANCING

Rockefeller is also trying to be even more radical in their investments. The group has debuted what it calls its Zero Gap portfolio, investing in solutions that help bring private and public capital to bear on major problems. Many of these take the form of social impact bonds, in which private capital gets returns from the savings governments earn when innovative solutions work. In California, for instance, Rodin’s team created a forest resilience impact bond. Essentially, investors who finance underbrush clearing will be paid back the savings water and electric companies see when things aren’t going up in flames, knocking out services and draining reservoirs for containment.

“You can see how you create this perfect virtuous cycle where everything gets a benefit and the community gets an outsized social good,” says Rodin, who notes that this is just one of 17 pilots the group is trying. She hopes at least 10 work well enough to yield at least $10 billion in previously untapped private capital.

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Rockefeller has also leveraged corporate partnerships with Coca-Cola and Cargill to help African farmers broker harvests to supply food that might otherwise spoil, a move that reduces waste while upping profits. The more food that’s readily available, the cheaper it can be, which works toward another sustainable development goal.

She’s not concerned if these acts are seen as too publicity-seeking or corporate-minded. “Einstein once said that insanity was doing the same thing over and over and expecting a different result. I wanted a different result. And that meant changing our thinking,” she writes.

Internally, Rockefeller has invested heavily to be able to better track and monitor the risks and rewards of each investment they make. Many of their projects require continuous check-ins from grantees to figure out what’s working and whether strategy should be adjusted. Such helicopter funding, as the WSJ reported, resulted in a low ranking from the Center for Effective Philanthropy.

“We think that real failure is spending money and staying in for a long time without knowing that things aren’t going well,” Rodin counters. In her view, being able to better see where things are working or coming up short makes mistakes more tolerable. There’s still time to adjust. “Success isn’t the brass ring. It’s learning and scaling and failing because in failing there are a lot of good lessons, too.”

Rodin won’t speculate about what’s next for her or the current timeline on that replacement. Whatever occurs, she says she’s interested in working with more tech entrepreneurs driven by “disruptive innovation.” That’s what will be required for major social change.

About the author

Ben Paynter is a senior writer at Fast Company covering social impact, the future of philanthropy, and innovative food companies. His work has appeared in Wired, Bloomberg Businessweek, and the New York Times, among other places.

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