For 30 years, Elizabeth J. McCormack has helped guide the philanthropy of some of the world’s wealthiest donors, including the Rockefeller family. During that time, she has worked discreetly, preferring any attention to be focused on the individuals and organizations she serves.
But last month, when the Asian Cultural Council held a black-tie gala to honor her leadership as chairwoman of its board, the 82-year-old Ms. McCor-mack decided she wanted to speak out about the state of philanthropy today.
In her outspoken and forthright manner, the former Roman Catholic nun expressed her skepticism about what foundations can accomplish, saying too often their goals are too lofty to be met. “They cannot remove major problems,” she said.
In addition, she gave her advice to newcomers to grant making, which can be summed up this way: Prepare to be lied to by people seeking money.
Her opinions come from experience. In 1974, after eight years as the president of Manhattanville College, in Purchase, N.Y., Ms. McCormack became the first philanthropic adviser to the Rockefeller family, a role she continues today.
In addition to helping the Rockefellers, she has served on the boards of two of the largest grant makers in the world -- the John T. and Catherine D. MacArthur Foundation and Atlantic Philanthropies -- and as a trustee at several prominent nonprofit institutions, including the Juilliard School and the Population Council.
Her vast knowledge of philanthropy and candid personality have placed her in high regard with other nonprofit leaders.
“Elizabeth McCormack has been an incubator of ideas and individuals, but has always remained behind the scenes because the Rockefellers are very private people,” said Vartan Gregorian, president of the Carnegie Corporation of New York, who has known Ms. McCormack for almost 25 years. “She has been a good mentor to me and others.”
Following are excerpts from Ms. McCormack’s recent discussion with The Chronicle.
How did your experience raising money as a college president influence your role as a philanthropic adviser?
To give it away is much easier than it is to raise it. I stand by that. But people don’t say it. And the reason they don’t say it is because to do it very well is not easy. To use your money to make a difference is something one has to learn. Many current philanthropic advisers believe, and they’re probably right, that there’s a science to this. Personally, I don’t think it’s a science, it’s an art.
How should foundations approach their work?
During my speech at the gala, I said, “If a man from Mars visited the board of many foundations and listened to the talk of the board on whatever subject was being discussed -- the environment, peace, poverty -- the Martian would go back to Mars and say, ‘Don’t worry about planet Earth; the foundations are taking care of it.’”
There were people at the gala who thought, when the Martian said that, he was right, foundations are taking care of planet Earth. But I thought it was a funny remark because foundations can do a little good about the environment, about poverty, but they cannot remove major problems.
To give away money well, you have to focus what you do, like public health, the environment, or scientific research. Then within that big area, you have to say, OK, I want to alleviate poverty, therefore I’ll do this, which is very limited. You have to be able to think broadly, and in my opinion, give narrowly.
What’s your opinion of the recent Congressional scrutiny of foundations?
Part of this scrutiny is basically a conservative stance because foundations are known for having a liberal agenda. The most successful philanthropy in the last 25 years is not liberal philanthropy, but conservative philanthropy. The creation of conservative think tanks has changed the thinking in this country.
On the other hand, should foundations be scrutinized? I think they should. After all, it’s tax-free money.
What about the controversy over board compensation at foundations? Were you compensated for your work at MacArthur, for example?
Yes. Some boards do it, and some boards don’t. There’s a lot of difference of opinion on this. But I believe people take the responsibility very seriously when they’re being paid for it.
What concerns do you have about grant making today?
The most significant way to give money is general operating funds. [A grant maker should] say to the organization, I’d be interested to know how you’re going to use this money, but use it as you see fit. That is less and less true in foundations. Foundations and even some individuals don’t like to lose control. And the more you focus, not just on an area, but exactly on what the money is going to do, the more you’re controlling, which I just don’t believe in. I don’t believe in hands-off philanthropy, but I believe in control-off.
What are the consequences of being too controlling?
Well, one is that people who say they’re doing what you want them to do aren’t doing it. If you give money for a specific project to a small, struggling organization and they don’t have enough money to pay for the telephone and the rent, and you give them money, how are they going to use it?
That’s one problem. The other is the money isn’t as well spent. If you believe in the organization and its leadership, doesn’t it follow that they will know better than what an outsider knows about what programs should be developed? Now, often an organization will come to a foundation and be very specific and say, What we want to do is this, and this is important for our future, it’s the next step in our development, and without income or whatever, we can’t do it; we’re asking you for money to do this very specific thing. That’s great, that’s fine. But not when the institution tells the grantee, rather than the grantee telling the institution.
Are things like venture philanthropy, which advocates more donor involvement with grantees, a negative development then?
It’s certainly different. I admire the Rockefellers, for example, who pick where they give their money very carefully, with advice. And then they don’t try and run the organization. I believe these new billionaires want to give the way they made money. It worked, they made billions, therefore they’ll create institutions and get right in there. That’s okay. But I wouldn’t want to be an executive director at an institution where the major donor was calling all the shots.
What should foundations focus on next?
One fact foundations have to deal with is that during the next decade nonprofit institutions will get less government support. The common reaction is going to be that the foundations must take the place of government funding. That’s not possible. But one could hope that foundations could influence policy to the point that the poor won’t be deprived of what they now receive. That is going to be the future of foundations. How are they going to react to the fact that the country is going to expect them to step up to the problems caused by government cutbacks?
What’s the one thing you wish you had known before entering philanthropy?
The most important thing to know, which I tell people moving into this arena, is that no one will ever tell you the real truth again. One fact about giving away money is nobody ever tells you the truth. Grantees may tell you the truth about their organization, but they won’t tell a donor if she is talking nonsense to them. They don’t say, You know, Elizabeth, you really don’t know what you’re talking about. They say, That’s so interesting; tell us more of what you’re thinking. They don’t dare because they’re afraid to insult you.
If a foundation or an individual has something they want to give money to, and it’s significant money, and it really doesn’t fit what you as a president of an organization wants to do or it’s not really part of your mission, good leadership says, We can’t take your money. Often, they take it and kind of twist what they’re doing to make it fit.