| Balance 12/31/07 | $6,467.19 | |||||
| CY 2008 | ||||||
| Income | ||||||
| Dues, donations, interest | $6,916.19 | |||||
| Expenses | ||||||
| Newsletters | $5,154.00 | |||||
| Secretarial services | 1,972.18 | |||||
| Supplies | 184.59 | |||||
| Website | 846.00 | |||||
| Sub-total | 8,166.77 | |||||
| Income/expenses | -1,250.58 | |||||
| Balance 12/31/08 | $5,216.61 | |||||
| Nellie Toma | ||||||
| Secretary/Treasurer | ||||||
|
THE STATE OF ACCESS Success and Failure of Democracies to Create Equal Opportunities Jorrit de Jong and Gowher Rizvi, Editors |
Democracies are judged by whether their citizens have equal
access to public services, economic opportunities, justice, and, of
course, participation in the democratic process. Rules and regula-
tions may guarantee this access in theory, but in reality the picture
is often very different.
Malfunctioning of institutions in democratic governance creates
inequalities of access for a number of reasons, including exclu-
sionary policymaking, insufficient attention to minorities, rationing
strategies due to inadequate funding, and inflexible delivery and
enforcement systems. The access paradox bedevils democracies:
the citizens who most depend on the state to guarantee equal
access are often least able to use the proper channels to have their
entitlements enforced. The State of Access, edited by Jorrit de
Jong and Gowher Rizvi, documents the worrisome gap between
principles and practice in democratic governance and presents
ideas designed to narrow that gap.
The State of Access is an international collaboration of scholars
with diverse expertise. Together they take a cross-disciplinary
approach to determining why democracies fail or succeed in creat-
ing equal opportunities for all their people. They identify where and
why democracies have failed while at the same time recommending
steps that may improve the state of access, thus bringing the prom-
ise of true democratic governance closer to realization.
Jorrit de Jong is a research fellow with the Ash Institute for Democratic
Governance and Innovation at the Harvard Kennedy School and cofounder
of the Kafka Brigade, an action research organization investigating exces-
sive bureaucracy. Gowher Rizvi is vice provost for international programs
and professor of global affairs at the University of Virginia. He was formerly
the director of the Harvard Kennedy School’s Ash Institute for Democratic
Governance and Innovation.
Contributors
Bina Agarwal (Delhi University), Maurits Barendrecht (Tilburg University),
Jorrit de Jong (Harvard Kennedy School), Peter Kasbergen (Utrecht Uni-
versity), Albert Jan Kruiter (independent researcher), Maaike de Langen
(United Nations Development Programme), Michael Lipsky (Georgetown
University), Deborah L. Rhode (Stanford University), Susan Rose-Acker-
man (Yale University), Gowher Rizvi (University of Virginia), Alexander
Schellong (Goethe University), Anwar Shah (World Bank), Guy Stuart
(Harvard Kennedy School), and Arre Zuurmond (Delft University).
Anticipating many of today’s environmental and workplace issues, the 41-year-old Ford Foundation Building, by Kevin Roche John Dinkeloo and Associates, remains a remarkably prescient piece of civic architecture.
I’m talking about the Ford Foundation, 12 stories of glass, rusted steel, and pink-flecked Canadian granite designed by Kevin Roche John Dinkeloo and Associates (KRJDA) between 1963 and 1967. More than four decades after its completion, the Foundation is still a remarkably prescient piece of architecture. It excels in several areas where many architects continue to struggle: how to integrate natural light and decent views into the workplace; how to provide privacy to workers without sacrificing a feeling of community (or sequestering them in bland cubicles); and how to create a daring, iconic form that is a good neighbor and a true contribution to the city. Visiting the Foundation today is still a unique and thrilling experience, one of those New York moments that should not be missed.
To compensate for the meagerness of exterior views in midtown Manhattan—where most offices look out, depressingly, on the windows of other offices—the architects turned the building inside out. Instead of facing the neighborhood’s dull commercial architecture, many of the offices look inward to a soaring 160-foot-tall atrium stocked with a lush subtropical garden and a small, burbling pool. Two ten-story glass walls and a glass ceiling pour light into the atrium; beyond the east wall sits one of Tudor City’s stately little parks. It’s a magical space, a building that represents a remarkably humanistic view of the workplace.
The Ford Foundation was one of the first projects completed by KRJDA, the firm that evolved out of Eero Saarinen and Associates after Saarinen’s sudden death from a brain tumor in 1961. One morning in September, I met Kevin Roche, now 86, at his Hamden, Connecticut, office, which occupies a handsome 1906 mansion just outside New Haven. This is where Eero Saarinen and Associates was in the midst of relocating to (from its headquarters in Bloomfield Hills, Michigan) when Saarinen died, leaving Roche and John Dinkeloo (who died in 1981) to complete the move and realize the firm’s 12 major projects already under way—including not only the CBS Building but also the St. Louis Gateway Arch and the TWA terminal at JFK International Airport.
Dressed in black corduroys and a black sweater over a black button-down shirt, Roche projected a soft-spoken, gentlemanly presence. His sentences carry a slight Irish lilt, a remnant of his first 26 years, spent in Dublin, which he left in 1948 to do postgraduate work at the Illinois Institute of Technology with Mies van der Rohe. (“Mies just sat there smoking his cigar, never said anything,” Roche recalls. “And when he did, occasionally, he would say, ‘You could do that…but I would not do that.’”) After about a semester and a half, Roche ran out of money and moved to New York, where he briefly worked at the United Nations planning office before joining the Saarinens in 1950, the year Eliel died. At Eero Saarinen and Associates, he gradually took on the role of organizer of the master’s freewheeling creative chaos (see “Team Eero,” November 2008). “He was always very contemplative, always very intense, always wanted to research the project to its ultimate point,” Roche says.
This research-exhaustive approach was firmly ingrained in Roche by the time he got to the Ford Foundation in 1963. In Hamden he showed me a PowerPoint version of the slide show he presented to the clients at the time, which briskly reviews the challenges of the program and the site. “I started off talking about ‘What is the nature of the office environment?’” he says, showing slides of a typical office plan, where “all the chieftains get to sit on the outside wall.” That was the case with the Foundation’s temporary digs, which spanned several floors of an office building on Madison Avenue. “The only way people would meet each other is if they happened to be in the elevator or if they were going to the toilet,” Roche says. “What I was trying to say was that in an organization, if you don’t develop a sense of community, you don’t have a real, working organization.”
But how do you do that in an office building housing 400 employees working in about a dozen different divisions? This is where the presentation picks up: Roche shows a series of six models, depicting all the various forms that could work on the site. You could build a low-slung building with windows lining the exterior; a ten-story rectangle with a courtyard plaza; a skinny 16-story tower with a park to one side. But then, what if you put the courtyard inside, and opened it up so that it looked out onto Tudor City? And put the main entrance on East 43rd Street, away from the noise and banality of 42nd? Roche arrives at a model that looks remarkably like the building now standing. “They accepted it,” he says. “They liked it because it wasn’t another office building. They liked it because it was a special identity. They liked it because we weren’t relating to 42nd Street. And they liked it because its intent was to create a community.”
Even before it opened, the Ford Foundation was a critical success. When the design was unveiled in 1964, Ada Louise Huxtable wrote in the New York Times that it was “an object lesson in the possibilities opened by fresh thought and a creative approach to the city’s most important commercial building problem: the provision of ample and impressive headquarters for large corporations or equivalent organizations, in structures that have some civic conscience as well.” And just prior to the project’s completion in December 1967, Huxtable gave it a rave review, praising its “original, highly romantic beauty” and calling the atrium “a horticultural spectacular and probably one of the most romantic environments ever devised by corporate man.”
That same month, the New Yorker published a Talk of the Town piece on the new building, tagging along with Roche, Charles Eames, Florence Knoll Bassett, and others as they visited it shortly before Christmas. The author, Alan Temko, called the Foundation a “resplen dent and generous” work of architecture and “an altogether new kind of urban environment.”Architectural Record concurred, describing it as a “new kind of urban space.” But the building had its detractors too. Architectural Review wrote: “It is another instance of the firm’s preoccupation with the sim plified structural statement leading to a kind of gigantism in architecture.” One year later, in his book Amer ican Architecture and Urbanism, Vincent Scully crit icized Saarinen’s late work and KRJDA’s early work for “the willful forcing of the structure, the total abstraction of the scale, and the science-fiction character of the image.” He added, “The Ford Foundation in New York is more complex but no less ominous: military scale on the street, sultanic inner garden.”
Since then, the Foundation has mostly been the object of reverence; it was awarded an American Institute of Architects Twenty-five Year Award and, in 1997, granted landmark status—then largely for gotten. So why is it worth a second look now? In one important regard, it is still an anomaly in New York City: an office building that uses less space than the site’s zoning allows. Reached on the telephone recently, Huxtable remembers the Foundation largely for this reason. “We were still fighting the battle with developers of that stupid mantra: ‘Highest and best use of the land’—which simply means the most money you can wring out of it,” she says. “It was simply accepted that there was no other way to build. We were still fighting that, and for Ford to do this was just magnificent. And I must say, when it opened it was so beautiful.”
It remains beautiful today, thanks in part to a dedicated building-management department that works to keep the Foundation as faithful to the original design as possible. Walking its floors today is like stepping into another era: the generously sized offices are still stocked with the original furniture by Warren Platner—mahogany desks, wall-mounted bookshelves and cabinetry—which prompted Huxtable, in her 1967 review, to call the interiors “a virtual hothouse of suave, standardized elegance.”
The handsome, light-filled offices; the 11th-floor dining room looking out at the United Nations and the East River; the plush auditorium and grand conference rooms—all are gorgeous spaces that convey a feeling of seriousness about work, and the sense that there is an organizational intelligence behind the scenes. To find out what it’s actually like to work there, I talked to a few of the Foundation’s current employees, who had nothing but praise for the architecture and space planning. “I’m very positive about the place,” says David Chiel, the deputy vice president of program management. “When I used to come in from working overseas, I always felt a sense of home and welcoming. I never found it overwhelming or austere or too august or whatever—some people sometimes talk about it that way. But even though it’s a big building with a big soaring atrium, I still felt it was a certain kind of human scale that they captured well.”
KRJDA also struck a rare balance between privacy and openness in the interiors, which the firm designed itself. Despite all the recent improvements in workplace design, it often seems that the American worker is buffeted by a limited number of subpar options: the totally open office, now the au courant mode in workplace design, is a poor fit for many types of work (and many types of workers). Cubicles provide some welcome privacy, but they’re often ugly and can create a rat-maze effect. At the Ford Foundation, workers can close their doors and have almost total sound isolation. Yet being able to see others across the atrium really does foster a sense of community and an instant, intuitive feeling for the size and scope of the organization. Paul Goldberger, the architecture critic of the New Yorker, notes that the effect goes beyond simple visibility. “The fact that there is a kind of ambiguity between public and private is really interesting,” he says. “There certainly was nothing before that that had quite that quality. And not that much after, either.”
This ambiguity extends from individual offices to the entire building. Designers love to talk about context-sensitive architecture, but rarely has anyone achieved this level of urban integration. From the corner of 42nd Street and Second Avenue, the only part of the Foundation you see is a blank granite wall, positioned to match the first setback line of a neighboring tower. On approach, the glass walls and the garden within are gradually revealed, but by the time you get to Tudor City, the 12-story building is hardly noticeable. Seen through the glass, the atrium garden blends in with the adjacent park, and this massive corporate headquarters practically disappears.
Ultimately, it may not be entirely fair to hold up the Ford Foundation as a model for contemporary architects. In many respects, the building was the result of a once-in-a-lifetime alignment of conditions: an enlightened and adventurous cli ent, a plum site, and a young firm just coming into its own, full of confidence and ambition. Yet at the heart of the program is a refreshingly basic concern: a fundamental interest in the people who work in the building, from the chieftains in the executive offices all the way down to the lowliest clerk. “I’ve been accused of being a corporate architect, but I think that’s unfair because, really, my interest is in the people, not the corporation,” Roche says. “My interest is in bringing some interest to the lives of the people who work eight hours a day in this dulling, dulling, dulling office work of most businesses. I think Ricky Gervais makes a wonderful comedy out of it, but it’s all too true, you know? It’s this dumb, dumb, dumb work, there’s no relief, and, you know, what can you do to make these environments better for people?” Even if no project is likely to match the Ford Foundation’s uniquely innovative solution, this is a question that one wishes would trouble more architects, interior designers, and corporations today.
Jonathan Marvel on the Architecture
Architects today are as much involved in designing the environment within which their buildings fit as they are the buildings themselves. There’s a real dialogue between architecture and landscape, when the two disciplines were once completely separate. That’s exactly what interests me about this building. Because of its tiny footprint, it sits on the ground delicately. Many of the programmatic parts of the building actually float over either the garden or the walkways. You feel the entire building is a landscape. The offices feel like part of the garden. From the cafeteria, you feel part of the roofscape, and the fact that the president’s office literally floats above a curtain wall of glass without any space below it is just wonderful. When you’re inside the garden and look up, you see four red-granite columns rising up like the trunks in a redwood forest, with the Cor-Ten steel and the glass branches coming off of the trunks. It’s like a tree house.
The building is one of the first green buildings in New York. It was designed in the sixties, when we were thinking of alternative lifestyles, like living on houseboats or in geodesic domes, and alternative practices that were getting close to issues of sustainability that we’re incorporating in our buildings and landscapes today. To have this kind of building take on a corporate character is a reminder of how early it tries to deal with issues like passive solar energy—with the whole south wall of glass, the collection of rain water on the roofs that then create a pond and irrigate the garden, and the borrowing of natural light for the interior spaces so you don’t have to turn on electric lights. All these issues were clearly there as a model for how to build in the twentieth century.�
—As told to Paul Makovsky
Shashi Caan on the Interiors
In graduate school, I made the argument that the three core design fundamentals are light, color, and form making. While my two decades of design experience have confirmed this, the interior of the Ford Foundation is living proof. Its neutral color palette is intimately related to the materials. Too frequently, interior designers who must relate to trees and foliage will seek patterns ‘inspired by nature,’ often resulting in literal translations. Here the result is far more subtle, with its very careful balance of light, medium, and dark tonal values. They’re warm and neutral and work exceptionally well. The interior color and textures accent what’s happening out in the atrium with the trees and the earthy color of the weathering Cor-Ten steel. It’s all very organic and cohesive, as if the atrium could have been designed by an interiors person. This is why I don’t think of that space as a conventional atrium but as the dominant room—the primary reception room—for the Ford Foundation.
The building also has an abundance of natural light, which, seen in today’s perspective, is progressive and was ahead of its time. But it’s more than that. I am really struck by the visual connections. Because people have their own offices, they have a sense of place, a sense of belonging within their own space, but visually they have a sense of a larger community. With the transparency of the atrium, they have the ability to connect with colleagues, so much a part of the organization’s institutional culture. It is those issues—the balance between acoustical and visual privacy—that we’re still trying to resolve in our open-office planning. Some forty years earlier, the Ford Foundation building came pretty close to resolving them perfectly.�
—As told to Martin C. Pedersen
Peter Walker on the Landscape
Dan Kiley and Kevin Roche had worked on a number of projects together, and there was a certain amount of trust between them. I don’t think you could do a building that was so interdependent if you didn’t have a certain amount of trust in the landscape architect, because the garden was so important to the building. Except for the Oakland Museum [also by Kiley and Roche], I don’t know of another building where the interaction between landscape and building is so integrated. You can’t really see the one without the other. I think these two projects are very important to the history of landscape architecture and architec ture. They both exhibit a kind of faith between building and landscape.
Up until the Ford Foundation, Dan would either do formal expressions, or what I would call softening or decorating. In this one, though, Dan produced a forest. And if you knew him, you know that he was a mountain man and a skier. If you ever heard him talk about moving through the forest, he would use the idea of an Indian moving through the forest and not touching anything, not being heard. He felt strongly about the woods, not just the ecology but the complexity of it. I don’t know if there’s another project of Dan’s where he used this complexity as the primary design idea for the garden. This is not a formal garden, though I know he loved the work of Le Nôtre and even the more formal aspects of Olm sted. But this was clearly not that. It was playing the wildness of the landscape against the precision of the building. In Oakland it was very architectonic. The plants softened but extended the architecture. Here it’s a play of opposites, and I think it’s a very sophisticated move, one that would not have suggested itself to too many landscape architects of the time.�
—As told to Martin C. Pedersen
Sheila Hicks on the Textiles
Warren Platner, who worked on the furniture and interiors for the building, asked me to look over the plans. He had two commissions in mind, so he visited me in Paris, and we came up with lots of designs and possibilities. I took him to the Vorwerk factory in Germany, but the ideas became too complex to make in that factory without having someone continually oversee them. Warren pushed me to open my first studio, so I hired people and oversaw the whole thing.
I rented space from the Parisian architect Henri Tranquoy, and we constructed fifteen-foot-wide embroidery racks to make the two pieces. We stretched Belgian linen on these racks that revolved from top to bottom so that you could roll, then embroider, and then roll down. Since it was relief, it had to go into shipping crates in an accordion-style construction so that the faces of the embroidery wouldn’t touch each other. In the end, we had to lift the plate-glass windows out of the building in order to get the shipping crates out. They hang now in the boardroom and the auditorium of the Ford Foundation.
I think it was the first time that someone conceived of a contemporary textile tapestry as an entire wall—not as a tapestry hung on the wall. This was a real breakthrough. The Bauhaus always defined textile as a “pliable plane.” This one became a pliable plane that was then brought into tension and became the actual wall. I call it a bas-relief in linen and silk. Later, when Monique Lévi-Strauss wrote a monograph on my work, she called it macrobroderie.�
—As told to Paul Makovsky
David Smock (International 1964-1980) has co-authored a new book entitled “Managing a Mediation Process” which gives guidance to international mediators on how to make their work more effective. It is Smock’s tenth book.�
An interesting article: President of the Ford Foundation Discusses Trends in Philanthropy
December 11, 2008 — The recent terrorist incidents in Mumbai, India, greatly saddened Gowher Rizvi, the University of Virginia’s vice provost for international programs, professor of global affairs and a son of South Asia. But he wasn’t surprised.
Evidence and intelligence reports indicated some attack would take place in India, said Rizvi, whose 30-year career reflects his commitment to study and promote innovation in democracy worldwide, with an emphasis on South Asia. And though 150 were killed at 10 sites in Mumbai, all of South Asia is no stranger to terrorist attacks.
He expressed the hope that the Mumbai attacks will serve as a wake up call and drive the nations of South Asia closer together, rather than further apart. He envisions a region drawn tighter by shared interests and cultures, rather than split by national rivalries.
Rizvi’s understanding of the shared culture and history that links the South Asian countries and the need for governments to solve problems together has roots in his own life. His ancestral home is in Murshidabd in India; he was born in Bangladesh, raised in India’s West Bengal region and has friends and relatives throughout South Asia.
“If countries move away from confrontational relations, all the problems they desire to solve will be easier to solve,” he said.
While the Mumbai attacks drew the world’s attention to India, Rizvi said terrorism is a problem throughout the region.
“The greatest number of victims and the greatest amount of terrorist deaths have occurred in Pakistan, as well as numerous attacks in India,” Rizvi said. “Pakistan has to deal with the terrorists and needs all the help India and the U.S. can offer.”
Rizvi pointed out that already there is a positive side to the events, with the interests of the three countries converging.
“India needs a stable Pakistan so that it does not become a training ground for militants. The U.S. needs Pakistan, as does India, to fight Al Qaeda on the western front, and Pakistan needs its hands free so it can fight terrorists, of which it has been the main victim,” Rizvi said.
From Rizvi’s perspective, the terrorist incidents provide an opportunity for the U.S. to change course in its relationship with Pakistan, moving from a policy of strengthening Pakistan’s military forces toward one of providing economic assistance to its social sector.
Education and health issues are devastating South Asia, Rizvi said. In India, which is poised to become one of the three great economic powers by mid-century, 40 percent of the population lives below the poverty line and 50 percent are illiterate.
The co-author of “The State of Access: Success and Failure of Democracies to Create Equal Opportunities” (with Jorrit De Jong), Rizvi has written about disadvantaged groups and the need to build an understanding of common cultural heritage in the region.
Among the poor of all the South Asian countries, the disadvantaged are the least healthy, educated and employed and have little, if any, political power. The main issue, in India and the other South Asian countries, is that they need to “carry the poorest and give them a share of the wealth. If India wants to be an economic superpower, it needs to carry its neighbors with it,” Rizvi said.
Building on shared cultural and historical backgrounds is the key to an economically successful and peaceful South Asia, he said.
“The world and the people of South Asia see each other as separate states and through a government lens,” Rizvi said. “All the people have a shared history, culture and aspirations. Their problems and successes are alike.
“Each country, as it develops, needs to develop a stake in their neighbor’s prosperity,” and promote regional cooperation in South Asia.
A passion for social justice, an interest in institution-building and a commitment to support developing human resources through higher education has driven Rizvi’s career.
In addition to numerous academic appointments, he has worked to manage conflict and strengthen democratic institutions in Asia. Before coming to U.Va. Sept. 1, he developed a worldwide executive training program on “Innovations in Governance” at Harvard University’s John F. Kennedy School of Government. During a time at the Ford Foundation, his work focused on supporting efforts to promote social and economic development of historically disadvantaged groups in South Asia. He was responsible for a national education program in the U.S. to lead educational programs dealing with contemporary issues in Asian politics, economics, society and international relations during a one-year stint at the Asia Society in New York. He has also served as special assistant to the United Nations coordinator in Afghanistan.
His most recent major accomplishment was working with the government of India to establish the South Asian University, supported by eight countries in the region — India, Pakistan, Afghanistan, Bangladesh, Nepal, Sri Lanka, Batan and Maldives.
The goal of the new university is to “produce a new generation of leaders who will see themselves as leaders of South Asia and have a South Asian outlook and create a shared South Asian vision,” Rizvi said. “The next generation will bring that vision back home and work in their countries to achieve common goals with their neighbors.”
Learning to share different perspectives is also Rizvi’s goal in his work at U.Va.
“All students at U.Va. need to become global citizens. They need to understand the global complexities and learn to work in a multicultural context,” he said.
The underlying key, he added, is learning that not all people “have shared assumptions.”
My first encounter with Jim Armsey, who died in November (see obituary in the January issue of the LAFF newletter) came through a mutual friend who had served with Jim in the Army, Bill Simmons. I had worked with Bill on the Dayton (Ohio) Daily News. He was a photographer; I was a reporter. I had returned to New York hoping to break into television. I didn’t. After a couple of so-so jobs I was in the market when I ran into Bill. He mentioned that there was a public relations job at New York University. He suggested I apply for it, which I did.
The job was controlled by Jim, who was assistant to the president NYU and chief public relations honcho. The interview went well, and he offered me the job. I had been at work for two days (on NYU’s Bronx campus) when Jim’s secretary phoned and asked me to come to his office, at the main campus in Washington Square.
Jim said that when he offered me the job, he was not aware that I was a New Yorker. He had assumed that because I knew Simmons in Ohio I was a midwesterner. He had not asked for geographical background during the interview, but it came to light when I filled out personnel forms a few days later.
It was clear that Jim was cool to New Yorkers. He and Henry T. Heald, the president he had served at the Illinois Institute of Technology and now president of NYU, had come into New York with a chip on each shoulder and an attitude that they were not going to let New Yorkers put anything over on them. Chroniclers of the period claim that they excercised this suspicion by firing a lot of the NYU staff.
Although I had been born in New Haven and lived there just a few days, I told Jim I had been raised in the Bronx. Clearly he was not thrilled, but he had made a commitment and stuck with it. All went well from there on in. I worked for Jim for four years, part of a talented PR team he assembled (mainly New Yorkers!). He was tough but fair.
In 1957, Heald was named president of the Ford Foundation, and Jim moved with him. I ran into Jim one day and he asked whether I would be interested in joining him at the Foundation. I was satisfied with my job at NYU. In fact, I was on my way to becomeing the chief science PR person for the entire university, but I thanked him and said I would think it over. I knew next to nothing about the Foundation, and all I could find about it was Dwight Macdonald’s trenchant New Yorker profile turned into the book, The Ford Foundation: The Men and the Millions.
The Foundation was in its infancy but it had acquired some zany ideas and some characters with gandiose plans for changing the world, all of which were spoofed in the book. I told Jim I declined. “I really don’t want to work in a zoo like that,” I pontificated. He said he and Heald were changing things, but I stuck to my guns.
Some months later conditions in my job at NYU had changed and I called Jim and asked whether the job was still open. It was, and I accepted.Over more than a decade I ran the Office of Reports, now the Communications Office. In addition to public information work, we helped Jim write speeches for President Heald. Heald was an austere fellow who, it appeared, consciously or otherwise modeled himself after Lincoln.He looked like Lincoln and had a picture of him on the wall. But in spite of our best efforts he did not have Lincoln’s oratorical genius. One of the problem was that he accepted too many speaking invitations. One year there was so many that one of my staff (Will Hertz)wrote a speech that Heald gave on the East Coast and in the West, without change. Another impediment was that Heald was conservative and did not allow much zing in his talks.
Jim kept us on our toes, and he was mentor was well as a boss. We missed him when he broke with Heald and undertook a brilliant grantmaking career. That career was faded when McGeorge Bundy beame president. For example, Jim’s portfolio in public broadcasting was diminished by Fred Friendly’s steamroller.
Sadly, Jim was embittered when he left the Foundation. His memories were soured. For example he declined to participate in the Foundations’s oral history project and he left most of his papers at Notre Dame.
Jim and I kept in touch throughout the years after he left Ford. Despite his initial attitude toward New York, he had become a denizen of the city. NYU had been given him a wonderful town house in Washington Mews and he and his wife saw more theatre and musical events than most New Yorkers. But when he retired he seemed to have cooled toward the city again. The Armseys moved to Olney, Illinois where he had been raised. He wrote of how friendly and down to earth his nw surroundings were (”Swell talk with the boys at coffee in the local diner,” for example.) But two years later they moved to Urbana, near the University of Illinois campus. I asked Jim about the wonders of down-home Olney. “It was stultifying,” he said, “and a more bigoted bunch you never saw.”
�
A Message to Grantees
As 2008 draws to a close, the volatile economic climate continues to define the environment in which we work. We have heard from many of you about how this crisis is affecting your endowments and fundraising efforts. The communities we serve are facing even greater hardships. I am writing to share our plans for meeting these challenges and to reaffirm our strong commitment to the work of our grantees.
For more than 70 years, the Ford Foundation has worked to advance opportunity and improve the lives of those in the most vulnerable and marginalized communities. Our partnerships with courageous grantees have spurred fundamental change across the legal, economic and social fabric of our communities, helping to create a world in which more people have the chance to achieve their full potential.
The heart of our work has always been the steady commitment to our long-term vision. We believe that this farsighted approach is critical, especially in difficult times. While the foundation’s endowment portfolio has been affected by volatility in the financial markets, our first priority is to ensure that our grantees have the resources necessary to continue the fight for social justice.
In keeping with that commitment, I want you to know about the actions we are taking to manage through this downturn as effectively as possible:
1. In 2009 and 2010, we plan to increase the percentage of our endowment that is paid out in grants, our “payout rate”.
2. The foundation instituted a series of aggressive internal cost controls early in 2008 to ensure that more funds would be available for grant making during this downturn. We know that every dollar saved is a dollar that can be devoted to grant making on behalf of the poor and marginalized.
3. Entering the economic downturn, our portfolio was highly liquid, ensuring that we have the capacity to continue making grants without disruption.
4. These actions will allow us to continue to honor all outstanding grants and, going forward, safeguard our core grant making budget.
All of these efforts are designed for a central purpose: to ensure that our grantees have the resources necessary to support their work.
This time of economic uncertainty underscores the critical importance of our work together to advance fairness, opportunity and equality for all people. Managing effectively through these economic challenges is difficult but critical to our ability to achieve our mission today and far into the future. Please do not hesitate to contact us to discuss any questions or concerns.
With warm regards for the holiday season,
Luis A. Ubiñas
President
Ford Foundation
(Submitted by Willard Hertz)
by Peter Ruof
We asked Peter Ruof, president of the Blackwood Capital Group, a transatlantic merger and acquisition advisory organization with offices in New York, London and Zurich, to comment on the international dimensions of the financial meltdown. Peter was a program officer in the Ford Foundation’s European/International Affairs program from 1973 to 1982.
Today, we find ourselves in the worst economic and financial crisis in two generations, and we do not yet see the outlines or extent of this crisis. It may well become known as the “World economic crisis of 2007 to 2010”. What were the decisive elements that led us into the eye of this needle?
Internationally, we were looking at a rapidly expanding global boom in economic activity generated by abundant liquidity and a transfer of production of industrial and consumer goods from Europe, Japan and North America to low-wage countries like China, India and Brazil. The increase in oil prices taxed consumption of wealthy countries and transferred billions of dollars to the oil and gas producers.The resulting rapid financial expansion did not lead to high inflationary pressures because of the compensation through low and steady prices guaranteed by low wage earners in the emerging markets. China with real growth rates of over 10%, India, Brazil and Russia with growth rates greater than 6% became major engines for international economic expansion. In parallel, we witnessed a devil-may-care attitude in the US and Europe about the rapid expansion of financial markets and their growing divorce from the real economy and from their underlying assets.
Parallel to the creation of an unimaginable hedge fund and private equity industry with billions of dollars being transferred from creditor countries to debtor countries, a new cockiness spread in the financial services industry which overshadowed any and all real economy developments. During the period of 2002 and 2008 the hedge fund industry grew from about 2000 funds to over 10,000 funds. Hedge funds could never have grown so fast if on the one hand, large investment funds had not been available to them, both in the form of equity and of lines of credit, and if new financial instruments had not been created for their use.
Examples were the expansion of CDO’s (Collateralized Debt Obligations) and CDS (Credit Default Swap) instruments as well as the development of real estate based debt instruments that were packaged by mortgage wholesalers into debt instruments permitting easy arbitrage for the hedge funds and other market players.
The crisis of the mortgage defaults began with the rapid increase in the value of real estate of all types and the aggressive behavior of banks in the US to lend against housing assets whose nominal value had increased because of the housing inflation. While 2007 was already a crisis year for many mortgage owners and banks who saw increasing numbers of defaults on mortgages, both the industry and the government did not take the first signals seriously enough to act decisively. A lot of blame goes around, particularly to governmental authorities including the Treasury and the Federal Reserve. What was eventually undertaken as measures to counteract the deteriorating situation in the mortgage area was too little and too late.
The accelerating tightening of the financial markets demonstrated that the contraction was not reserved only for the housing and mortgage industry. It now extended to the whole banking system involved in financing huge takeovers initiated by the equity funds. The financial crisis deepened because we were suddenly faced with astronomical billions of dollars worth of defaults on account of misjudged and overvalued transactions in many fields.
When the stock markets began to soften and then weaken over the last 12 months, the message suddenly hit home that this was no longer a crisis reserved for the housing and mortgage industry, but it now began to embrace every aspect of both the national and increasingly of the international economy. Belt tightening became the buzz word on Main Street and began to bite on Wall Street.
Luckily, the Federal Government began to ignore inflation targets and began to dole out many billions of dollars to banks, insurance companies and other intermediaries that the government needed to keep alive in order to save “the system”. To define what “the system” actually means is a major undertaking. However, it must be realized that it includes the key pillars of the national economy. Increasingly, they also include the key players in other countries.
Inter-related, yet sometimes independent of the US economy, because of greater interaction and globalization, Government subsidies such as the Paulson Plan for $700 billion and the bailout of institutions like AIG and major banks in this country found their parallel in most European countries. Many foreign banks have been active buyers of over-valued US real estate related paper (CDO’s). They, too, began to feel the pain of domestic slowdown due to an accelerating decrease of demand for their own industry.
The dismal picture painted here is not yet behind us. In fact, we are in the midst of the economic catastrophe of 2008. The authorities, politicians and economists as well as financial experts have not yet found a middle ground of how to cope with the problems and resolve the crisis. While it is agreed that creating liquidity through state intervention in the economic process is a good thing to do at this time, it is certainly not yet clear where the main support for the economy should be placed (finance sector, mortgages, infrastructure, special industries, such as automotive, or simply undertaking another round of tax rebates to the consumer). As a confidence building measure, this strategy moves us in the right direction.
The chain reaction originating with the housing industry, leading to hedge funds, private equity funds, the insurance industry and the banking system as we knew it, has not yet found one solution which guarantees us an exit from this mess. Recent lack of clarity of the intent of the Treasury and the Federal Reserve, uncertain supervisory roles being exercised by governmental institutions and rating agencies and growing criticism of international institutions, such as the International Monetary Fund and OECD as well as the European Central Bank, all are cause for uncertainty. Participants in this process are looking for leadership with a solid political backing.
One bright spot in this whole dismal scenario is the election with a solid majority of a new President in the United States of America. While President-elect Obama cannot yet play a decisive role in leading the charge to bring this economic crisis behind us, he at least has the political backing and mandate from every major economic player in this world to reset the signals of economic management and to lead the world out of the depression.
The task before him is monumental, requiring fresh thinking and decisive action and importantly, a review of all aspects of globalization. The Bretton Woods system, established after 1945 and based on the pre-eminence of the US economy, is no longer a sufficient structure to manage the world economy. It may well be that new bodies will have to be created with a much fairer and much more diversified membership and a majority power structure that is expanded to include new economic leaders.
World economy decision makers will need to evolve in light of the threat that emanated from failures from supervision in the US economy. It behooves us to invent new agents who will be able to understand better the world’s commodity markets, the world’s export nations, the interest of importers and the role to be played by those who control intellectual property and the most advanced technology.
The different economic actors need to be integrated into an evolving world economic system for which the US obviously will want to and will have a major role to play.
I believe that the crisis will work itself out over the next 18 months. It will produce positive results even though the world had to undergo a depression and an increase in poverty, but as an optimist I believe that we have the brains and the instruments to remedy the failures of the last decade. I suspect that once clarity is being created in the process of governmental subsidization and certain signals have been sent, that the stock markets will anticipate a turnaround and will begin to strengthen during the course of 2009.
Barring any unforeseen circumstances and particularly no increase in international conflicts, it would be macro economically highly desirable to continue the belt tightening process, produce greater savings and to reduce military expenditures in favor of infrastructure investments everywhere. Long term investment by governments in infrastructure, energy, climate control, health care, poverty programs and education will bear the most fruits and could well represent the pillars for a new platform from which the international economy will find its own greater potential.
Having been involved in the field of international economics all my life and as an investment banker active in the field of mergers and acquisitions, I have found that he innovation in investment banking has been driven by “greed and fear” with outstanding financial results for many individual bankers.
At the same time the economics profession with the exception of a few leaders such as Paul Krugman, Jagdish Bhagwati, Peter Galbraith, Dean Baker, Joseph Stiglitz and a few others has not subjected policy makers and activists to the proper value-neutral intellectual scrutiny and therefore have not been able to prevent this crisis from happening. Many of the institutional economists as well as academic economists will need to revisit their work to serve the international economic community more effectively and with better tangible results.
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