New Chapter at a Storied Foundation

Carnegie’s Vartan Gregorian aims to put his stamp on philanthropy

Vartan Gregorian first learned about Andrew Carnegie in Iran, where, as a 14-year-old boy, he read — and relished — a short biography of the controversial Scottish-born steel magnate.

ALSO SEE:

Carnegie Foundation Announces New Grant-Making Priorities

‘What Are We Doing?’: Questions Posed by Carnegie’s President

How Carnegie Is Changing Its Grant-Making Distributions

At a Glance: The Carnegie Corporation of New York

What impressed Mr. Gregorian most, he recalls, was that Mr. Carnegie was a “self-made man” who educated himself and had great commercial and philanthropic foresight.

Fifty years later, Mr. Gregorian, who, like Mr. Carnegie, immigrated to the United States, is trying to apply his own insights about the future to carry the legacy of Carnegie’s philanthropy into the next millennium.

Since taking over as president of the $1.5-billion Carnegie Corporation of New York in June 1997, Mr. Gregorian says that he has been examining whether the foundation is doing all it can to fight ignorance — a problem that Andrew Carnegie frequently characterized as one of his most serious concerns about the future.

Last week, after an intensive review of Carnegie’s operating structure and grant-making programs — a process that involved interviews with more than 850 experts — Mr. Gregorian announced a sweeping overhaul of the 88-year-old foundation. The corporation is phasing out old programs so that by 2000, nearly half of Carnegie’s grant dollars will be devoted to its new grant-making programs.

As Carnegie decides how to distribute the $79-million it expects to give away this year, efforts to improve the training of schoolteachers will be a major goal. After a hiatus of almost two decades, the foundation will once again give money to higher education in the United States and overseas, and it plans to start financing projects that cater to the educational needs of the elderly.

In addition, Carnegie expects to finance an array of projects to help teach Americans more about the political system — and to encourage their involvement in civic activities. To insure that funds are available for such causes, some programs are being phased out, including those that financed projects dealing with health care for women in Africa and efforts to deter American adolescents from using drugs or committing violence. The Carnegie Commission on Preventing Deadly Conflict, which has been studying ways to avoid war, will be dissolved at year’s end.

Mr. Gregorian, a former president of Brown University and the New York Public Library, has made it clear not only that he is interested in taking Carnegie in new directions, but that he hopes to change the way all of philanthropy operates. Described by Carnegie’s board chairman as a “one-man think tank,” Mr. Gregorian is urging his fellow grant makers to become far more aggressive in the way they inform policy makers about the knowledge they and their grantees have accumulated. He also hopes to encourage foundations to overcome their unwillingness to speak openly about controversial topics and to work more closely on grant-making and other efforts.

Perhaps best known for his fund-raising prowess — he has helped bring in some $1.36-billion for non-profit institutions, an amount that nearly matches the Carnegie Corporation’s endowment — Mr. Gregorian has developed numerous close personal and professional relationships that extend his influence far beyond Carnegie’s walls.

He has served as a close adviser to two billionaires in their efforts to use their fortunes for good works: He was the chief academic consultant to Walter Annenberg when the philanthropist donated $500-million to improving public schools, and he is one of the six trustees of the $1.4-billion Gates Learning Foundation, which was started by Microsoft founder Bill Gates and his wife, Melinda.

Mr. Gregorian plans to use those ties to establish working partnerships for Carnegie. He hopes to involve the Learning Foundation in several collaborations, including one to strengthen libraries in Africa. With Mr. Annenberg’s philanthropies, he wants to work on school-improvement efforts in the United States. He is also lining up grant-making alliances with the Ford and John D. and Catherine T. MacArthur Foundations, as well as with the philanthropies operated by George Soros, to support programs in the former Soviet Union.

Mr. Gregorian expresses frustration that more foundations have not collaborated on projects. “We’ve been so overspecialized,” he says, “that we become insular, and we don’t see all the major connections and interplay among grants and projects.”

Mr. Gregorian’s powerful intellect, no-nonsense management style, and broad network of colleagues may well prove to be assets in Carnegie’s grant making. But the size of the foundation’s assets may be a challenge to Mr. Gregorian’s ambitions. Once listed regularly among the 10 wealthiest foundations, Carnegie has in recent years slid to a ranking in the top 30, as other foundations have benefited from the rising stock market and numerous big philanthropies have been created. Last year, Carnegie saw its endowment dip by $100-million before rising back up to $1.54-billion.

To improve the endowment’s investment performance — and make more dollars available for grants — Mr. Gregorian appointed a vice-president whose sole responsibility is to oversee the foundation’s investments. The foundation never previously had such a post.

While Mr. Gregorian is concerned about the endowment’s size, he says he has made many decisions about the foundation’s future based on his belief that change involves more than just spreading dollars around to needy causes.

“Carnegie’s strength is not its money,” Mr. Gregorian says. “It has always been ideas — and putting the major issues, important issues, timely issues on the nation’s agenda.” He adds: “We’re not an oxygen tank” that tries to keep non-profit institutions alive. “We’re an incubator for ideas.”

Mr. Gregorian devoted most of the past year to figuring out how Carnegie could best play on that strength. He met with foundation and non-profit leaders, educators, government officials, and others. Carnegie held 26 conferences, bringing together people from around the country and different parts of the globe for discussions about pressing issues and how the foundation could influence them.

During that time, Mr. Gregorian cut back spending on the foundation’s grant-making programs by $19-million. He also persuaded management consultants from McKinsey & Company to review the foundation’s operating structure pro bono so that once the grant-making priorities were put in place, he could be sure that Carnegie was poised to carry them out effectively.

During the review, says Mr. Gregorian, he read everything he could find on Andrew Carnegie and his corporation. While shaping the foundation’s grant making, he says, he tried to “consciously provide continuity while bringing some changes on the basis of all my discoveries, not just personal values.”

In talking about the Carnegie Corporation’s evolution, Mr. Gregorian likes to quote Gabriel Garcia Marquez’s book Love in the Time of Cholera: “Human beings are not born once and for all on the day their mothers give birth to them, but that life obliges them over and over again to give birth to themselves.”

He adds: “Foundations are like that, too, with constant renewal.”

Some of Mr. Gregorian’s priorities are based in the foundation’s historical roots. Higher education is a cause that was championed by Carnegie presidents John W. Gardner and Alan Pifer in the 1950s through the 1970s. David A. Hamburg, who took over in 1982, put more of Carnegie’s resources into projects dealing with adolescent development, and under his guidance, Carnegie became a leader in efforts to call attention to the importance of providing mental stimulation to babies and toddlers.

Now, Mr. Gregorian says, the best way to build on the achievements that the foundation has made in influencing young children is to make sure that the teachers in the nation’s elementary and secondary schools have strong skills. He says that if he could accomplish only one thing during his tenure at Carnegie — where, he says half-seriously, he plans to remain until he dies — it would be to overhaul the way schoolteachers are trained.

“You cannot do early-childhood work and school reform without teacher-education reform,” he says. “Coming from higher education, I have tried to provide that link.”

An estimated two million new teachers are expected to begin their careers in the next decade, Mr. Gregorian says. Most experts agree that teachers today need better understanding of the subjects they teach, proficiency in dealing with high technology, knowledge of child and adolescent development, and other skills, he says. But, he adds, a big obstacle is that schools of education are isolated from the world around them, and are not a primary concern for many university presidents. In addition, the schools of education have little or no contact with neighboring public schools. Mr. Gregorian says he plans to change that through conversations with his former university colleagues, and through Carnegie’s grants.

What’s more, the former university president is pursuing the creation of a fellowship program for budding scholars. He says he also plans to select two or three academic advisers for each of the foundation’s main grant-making programs. The advisers, he says, will visit the foundation regularly to discuss and analyze Carnegie’s work “so that we don’t become parochial, self-satisfied, or lazy.”

Another cause that is anchored in Carnegie’s past, as well as Mr. Gregorian’s: libraries. This year marks the 100th anniversary of Andrew Carnegie’s first gift to create branch libraries in New York City. Altogether, he and the Carnegie Corporation spent $56-million in the early part of the century to establish more than 2,500 libraries, more than half of them in the United States. To commemorate the library gifts, the foundation has earmarked $19-million to create the 21st Century Fund. Though details have yet to be decided, Carnegie plans to use the fund to make one-time grants to libraries and to support several other causes.

Carnegie is also developing new grant-making programs to support projects that help Americans develop a better understanding of people with differing ethnic, racial, and religious backgrounds, with a special focus on Islam.

Those efforts are a direct reflection of the interests of Mr. Gregorian, who is not only an immigrant himself but also a historian who specializes in the Middle East.

“America has to spend more time not only to appreciate its particularities, but also to find out what its common ground is,” he says. “My hope is that America be built on understanding — tolerance based on understanding, not on law alone.”

To build on Carnegie’s mission “to promote the advancement and diffusion of knowledge and understanding,” Mr. Gregorian wants foundations to increase their communication with the public and create valuable debate about the topics on which they are working.

He hopes that foundations can collaborate and issue reports at the same time on specific issues — whether it be racism, biological warfare, or other major concerns of the day. Then, he hopes, the foundations could hold a joint press conference to inform the public about the findings of their reports. That way, he says, they would all come to light at once and be debated, instead of trickling into the public eye at different times.

Mr. Gregorian concedes that “this kind of minimal cooperation will be revolutionary,” especially because the findings supported by each foundation may differ. But, he adds, foundation officials should not worry about who gets the credit for the findings or be afraid to differ with their colleagues or others in public.

“Life is not about orthodoxy, it’s about heterodoxy,” he says. “You have to be able to say: This is the way others think. This is the way we think.”

While Mr. Gregorian may have a tough time persuading his colleagues to join him in such outspoken debate, he has already been successful in recruiting partners to help him advance some of the foundation’s goals.

He persuaded the MacArthur Foundation, in Chicago, to provide half the money for a $100,000 grant to the Kennan Institute, a Washington think tank, for a study that will assess how best to preserve a cadre of scholars in the humanities and the social sciences in the former Soviet Union. Both the Ford Foundation and the philanthropies financed by George Soros are contemplating working with Carnegie to support such scholars.

If Mr. Gregorian succeeds in becoming a major influence on both the future of philanthropy and the future of the foundation, he will be following in a long tradition of Carnegie Corporation presidents who have left a major mark.

Carnegie’s presidents have been unusually influential in part because of the freedom they were given by the corporation’s founder to pursue whatever causes they believed to be most important. In documents setting up his foundation, Andrew Carnegie wrote: “Recognizing that no wise man will bind Trustees forever to certain paths, causes, or institutions, I disclaim any intention of doing so. On the contrary, I give my Trustees full authority to change policy or causes hitherto aided, from time to time, when this, in their opinion, has become necessary or desirable. They shall best conform to my wishes by using their own judgment.”

Mr. Gardner, who was president of the foundation from 1955 to 1967 before leaving to become Secretary of Health, Education, and Welfare under President Lyndon B. Johnson, says that Mr. Carnegie “left the door open for growth and change and new ideas.”

Another factor that allows Carnegie Corporation presidents a strong hand in shaping its programs is its small staff. Unlike foundations that have hundreds of employees, Carnegie will have 66 employees at the end of the year, after it phases out 14 positions that had been associated with special projects like the Commission on Deadly Conflict. In Mr. Gardner’s era, the staff consisted of 36 people, which he called his “cabinet of strategy.” Mr. Gardner says, “If you have that small an operation, the person that runs it is bound to have a lot of influence.”

In fact, when looking for a new leader, the foundation’s trustees wanted someone creative who could continue Carnegie’s history of turning relatively small amounts of money into influential projects, says the chairman of the foundation’s board, Thomas Kean, president of Drew University, in Madison, N.J., and the former Republican Governor of New Jersey. He says they found that person in Mr. Gregorian.

“I know very few people in this country who have more original ideas,” Mr. Kean says. “And that’s what a foundation needs.”