October 13, 2017; New York Times
In philanthropy, we often celebrate the lone individual philanthropist, be that person Andrew Carnegie, John Rockefeller, Henry Ford, or modern-day equivalents like Mark Zuckerberg. Love them or hate them, the vision of the great philanthropist with a singular vision looms large.
But there is another model of giving that is more group-oriented—one in which individual philanthropists subordinate their egos for common benefit. Such is the model profiled by Paul Sullivan in the New York Times, who writes about some of the inner workings of Blue Meridian Partners, a billion-dollar-plus fund created by the Edna McConnell Clark Foundation.
Blue Meridian was capitalized by a dozen very large donors who each contributed between $50 and $250 million. The fund itself provides very large grants (up to $200 million) to nonprofit organizations that work on issues affecting poor children.
With the ante level set at a cool $50 million, this is clearly not your neighborhood lending circle, but the principles of mutual support and consensus-building still obtain.
One member of Blue Meridian Partners is hedge fund manager Stanley Druckenmiller, who has an estimated net worth of $4.7 billion. Druckenmiller, who has been a longtime donor to the Harlem Children’s Zone, a group well known for its work with poor children and families in New York, decided that he would be more effective in his giving—and his goal of disrupting patterns of generational poverty—if he joined with others. Says Druckenmiler “I’m not rich enough to do it alone. If I was worth $50 billion or $60 billion, I’d go this alone, but I’m not.”
Steven Ballmer, the former chief executive of Microsoft, and his wife Connie have an even larger net worth of $34 billion and do run their own foundation. But they also decided to ante up $50 million for Meridian as a way “to team up with others to have a greater impact.”
Part of the attraction of joining with others isn’t just the pooling of funds, but the access to greater expertise. “People don’t want to hear this from me,” Connie Ballmer says, “but it’s really hard to give money away [to organizations seeking to reduce childhood poverty]. It’s not as easy as picking a university or hospital to give to. You have to do a lot of research.”
Nancy Roob is chief executive of Blue Meridian Partners and the president of the Edna McConnell Clark Foundation which took the lead on the effort. She explains the philosophy behind the fund:
We start with the belief that it’s actually possible to solve significant social problems confronting the children and youth living in poverty today. What brings people together and what makes it work are the opportunities to invest in leaders and strategies. It’s the opportunity to together solve problems that none of us would be able to do on our own.
For Druckenmiller, what makes this approach work is the role the Meridian team plays in vetting organizations:
They’re the stock pickers. They bring the ideas and the organizations. We all talk together about the potential and evaluate them. So far there’s been a remarkable consensus.
Connie Ballmer notes that she greatly values this process of sharing opinions:
If you’re going to make bets, it’s nice to be surrounded by those individuals at the table. They present the organizations that are in the pipeline. They present the upsides, downsides and the risks.
Of course, like any group process, the upside of accessing the wisdom of experts and that of fellow partners does come with the common potential downside of group conflict. It is important, notes Sullivan, to be sure the group works in a cohesive way.
“There’s a limit not to the amount of capital we can bring in, but there is a limit to what makes an effective decision-making body,” Roob observes.
But all strategies have roots. In a way, the program has taken a familiar model used by some community foundations to address critical community issues and brought that to a far higher scale.—Steve Dubb