A Conversation with
Rien van Gendt
The first international winner of the Council on Foundations Distinguished Grantmaker Award discusses his cross-sector approach.
It is befitting that Rien van Gendt, executive director of the Van Leer Group Foundation, is the first international winner of the Council on Foundations' Distinguished Grantmaker Award. He has consistently reached across borders to champion a holistic, global approach to philanthropy.
Having earned a doctorate in economic studies from the University of Amsterdam, Van Gendt was formerly head of programs at the Organization for Economic Cooperation and Development in Paris. His career path has traversed all sectorshe's worked in academia as a lecturer on the University of Amsterdam's economics faculty, in the public sector as deputy secretary of the Scientific Council for Government Policy and deputy director of the State Administration Limburg, and in the private sector as executive director of Wilma Vastgoed B.V., all before joining the philanthropic sector as executive director of the Bernard Van Leer Foundation in 1988. Currently, Van Gendt serves on the board of the European Foundation Centre (EFC) in Brussels and on the supervisory boards of several corporations and foundations in the Netherlands and the United States.
At the Van Leer Group Foundation, he's pushed discussions on legacy and succession and encouraged forging relations with multilateral organizations like the World Bank, the United Nations, the European Commission and the European Bank for Reconstruction and Development. Throughout the world at large, he's worked tirelessly to increase the appreciation, respect and promotion of indigenous philanthropy, as well as encourage the understanding of international grantmaking the world over.
Ever a proponent for accountability and ethics, Van Gendt spearheaded efforts toward the first Code of Conduct for Foundations in the Netherlands, as well as chaired the EFC's committee to revise the European Code of Conduct of Foundations.
Foundation News & Commentary caught up with 2005 Distinguished Grantmaker Rien van Gendt to talk about all of that and then some.
You've accomplished the Triple Crownworking in academia, the public sector and the private sector before joining the Van Leer Foundation. With the foundation forming relationships with public, private and community-based groups, how has that cross-sector experience helped you as executive director?
I've learned that grantmakers are not just writing checks, but adding value by using grants as an instrument to an end product. It's important to be able to distill findings, be a learning organization and contribute to a knowledge base. We should use findings to influence agendas not solely on a microor projectlevel, but also on a macroor policylevel. And, although foundations are private and nonprofit, I understand that they should still apply business principles in managing financial flows and measuring outcomes.
Evaluation is often a hard sell to foundation boards. What are your thoughts?
It may look like a hard sell, because at first sight it increases the administrative expenses of a foundation. But it is incorrect if a board would just regard it as an increase in administrative expenses and overhead. At the end of the day, expenses for evaluation are about having impact; it becomes an investment instead of something to be avoided or minimized. My board does not consider evaluating overhead if we can demonstrate that we are effectively using resources to have impact on the system.
Is there an easy way to explain the organizational structure of the Van Leer subsidiaries? What is Crecor?
The Van Leer Group Foundation is the holding of an entity that always symbolized the inextricable relationship between earning money and spending it for philanthropy. In the past, the main earning source for the Van Leer Group Foundation was the company (Royal Packaging Industries Van Leer). As a matter of fact, the foundation owned the company. The revenues of the company would flow through the Van Leer Group Foundation to the three charities on the spending side: the Bernard Van Leer Foundation, the Van Leer Jerusalem Institute and the Jerusalem Film Center. Since the company went public and was subsequently sold, the Van Leer Group Foundation still balances the relationship between earning and spending. The difference with the past is that on the earning side there is an endowment and a private equity company that works in Israel, under the name of Crecor (which stands for the Credo Corporation). Crecor invests in start-up companies, mainly in the high-tech sector. It also operates an incubator of small enterprises that is located on the premises of the Hebrew University in Jerusalem.
What are the challenges and opportunities for a giving entity in the Netherlands that crosses the fields of earning money and philanthropy?
The advantage of a visible link between earning money and spending it for philanthropy is that it motivates both sides. For the Van Leer company, with factories in 40 countries, it meant that its workers in, let us say, India would be proud to be associated with a company that was not shipping away profits to the Netherlands but would somehow keep them in the country to be used for purposes workers could identify with, like disadvantaged children. For the staff on the philanthropy side of Van Leer, the close link with the company meant that they realized how difficult it is to earn a dollar and therefore they would spend it more cost effectively.
The downside of the relationship between company and philanthropy could have been that the company would have used the foundation for its own marketing purpose or vice versa. In Van Leer, this was not done. Oscar van Leer used the analogy of a coin. Just like a coin with two sides, one cannot see the other. One side earned the money and the other side spent the money. In 1996, the company went to the stock exchange and now there is no link between the foundation and the corporate world. It's the same as there being no Ford Foundation linked to Ford Motors. Our endowment is the equivalent of US$1 billion. We have no obligatory payout, but we maintain a self-imposed 4.5 percent payout which means that we have an active investment policy to exist in perpetuity.
You've been called a "linking pin" between American and European organized philanthropy. How is the role of private foundations perceived in Europe?
I've personally learned a lot from exposure to U.S. foundations, grantmaking and organized philanthropy. You are people with passion and an interest in emerging public policy issues. There is more scope and space for philanthropy in the United States than in Europe. The U.S. is more a "free market economy" and foundations profile themselves in a wide variety of areas and activities, including social welfare, education and international development. In Europe, as a "social market economy" with a traditionally dominant role of government, philanthropy played a strong role in areas where the hands of government were seen as less essentiallike science and culture. In Europe, private philanthropy is more limited in orientation but this is changing and growing rapidly due to the retreat of government from the public sector. People are beginning to realize that being involved in the community to which they belong makes them a stakeholder.
One positive difference in Europe is that there are many different countries, cultures and systems. There is a good feeling for diversitythere is never one solution to a particular problem. In the early nineties, The Van Leer Foundation brought U.S. foundations to Van Leer projects in the U.S. to look at them through the eyes of a European foundation. We traveled to Montgomery, Alabama, throughout the Midwest and to Boston. We were like a traveling seminar bringing our experience with evaluation and the long-term approach to an audience of U.S. foundations. They loved it and profited from exposure to our international perspective in their own country.
What are some of the greatest lessons exchanged from both sides?
In the U.S., foundations are much larger. Sometimes they take over responsibilities that must be left with the government. In Europe, we try to be more of a catalyst. If you go beyond being a catalyst you let the government off the hook too easily. I would like to emphasize that we have learned a great deal from U.S. foundations, often through the activities of the Council, in terms of the craft of grantmaking. Also the support to new and emerging philanthropy by sharing best practices is well developed in the U.S. For example, the way in which Rockefeller Philanthropy Advisors is setting the standard for the field of philanthropic advisory services ought to be applauded and we should draw lessons from this in Europe.
How would you describe the culture of giving in the Netherlands, with lottery funding as well as public monies funneled through private foundations?
In the Netherlands, the largest lot of private giving is individual giving to churches and charities. However, there is an emerging sector of organized philanthropy, in corporate, private, family and community foundations. In the case of family and private foundations, sometimes it is money inherited and sometimes it is money earned in the corporate sector. In addition to organized philanthropy through foundations, lotteries are an important source for grantmaking, as the revenues do not go to the treasury but to foundations working in the fields of culture, social welfare or international development. Yet another form is that public money (from the government) is spent by private foundations. The combination of public money and private governance is an essential feature of resources allocation in the Netherlands.
You were instrumental in preparing the first code of conduct for foundations in the Netherlands. What parallels or differences do you see between that and the Council's current Building Strong and Ethical Foundations initiative?
The U.S. foundation community and the Council are further ahead in terms of professionalization and self-regulation. The Dutch Association of Foundations has 200 members and I was involved in the formulation of its Code of Conduct. Many foundations did not understand why they needed such a thing. Why are you accountable if you spend "your own money" for charitable purposes? I emphasized that the issue of being tax exempt implied an accountability not only to the foundation board but also to the society at large. The Dutch Code of Conduct actually came at the right moment, because the government is prepared to create a more liberal climate for foundations and to provide fiscal incentives for private giving and the creation of foundations. At this moment, there is no zero tax tariff on bequests or donations but an 11 percent tariff. The government is prepared to decrease that in steps toward a zero tariff but in return wants to see that there are rules in play, for instance with respect to governance and transparency. It is clear to me that the Council is encouraging adherence to high ethical standards in grantmaking and takes a proactive stance. That is commendable.
How do you see the war on terrorism affecting international grantmaking presently and in the long term?
The Voluntary Treasury Guidelines on terrorism could easily have a negative effect on international grantmaking. They may hinder the larger foundations in the U.S. but are more likely to hinder the mid-sized and smaller foundations that often are engaged in wonderful work outside the U.S., particularly in the developing world. For them, these regulations may be so cumbersome that it prohibits international giving. I find that worrying, as philanthropy would become more domestic at the moment that there is the greatest need for international relations, cooperation and dialogue. Furthermore, international grantmaking may contribute to the alleviation of poverty and thereby may remove one of the root causes for terrorism. Another concern I have is that the Treasury Guidelines may result in U.S. foundations becoming more interested in compliance than in performance. If due diligence combined with becoming liable and with sanctions gets so much attention, it will be at the cost of what is essential for foundations: taking risks and not only supporting the larger established NGOs that at first sight seem risk-free and thereby could be overfunded.
You've been at the helm of the Van Leer Foundation's presence in such turbulent and troubled countries as South Africa, Colombia, Nigeria, Chile, Pakistan, Israel and Egyptat times all at once. What are some lessons learned?
Most important is to stick to your mandate. The Bernard Van Leer Foundation focuses on disadvantaged kids 08 years old. We are non-partisan and we can do whatever we set out to do because no government is against helping disadvantaged children. However, people don't realize the way we do this goes beyond the children to community-based work with parents. Involving parents means that they not only provide services to their children but also are on the receiving side. They grow up with their children and become empowered. Potentially, this could be threatening to governments. Some of our most rewarding work has been building bridges between cultures and countries through children's activities. A good example is our support to the Children's Television Workshop, in conjunction with the Charles H. Revson Foundation, to produce a Sesame Street program jointly for Israel and the West Bank, with characters both Israeli and Arab kids could identify with.
How did you go about convincing the World Bank to make a loan to Kenya, blending public and private money and foundation expertise in community-based approaches to reach local grassroots organizations more effectively?
We did this together with the Aga Khan Foundation. The essence was that we were not grantseekers in approaching the World Bank. We could convince them that, if they would make available to us part of the loan to the Kenyan Government that was meant for community-based development, we would do three thingsmatch the amount in financial terms, bring in our joint expertise as two foundations with a long track record in Kenya and reach out to small community-based local organizationssince we would be in a better position than the Kenyan Government to make those connections.
You also helped initiate the first meetings between World Bank, international foundations, national governments and local philanthropies in Thailand, almost prophetically, in 2004. How have relationships established in that meeting played a part in the relief efforts in response to the devastating tsunami?
In 2004, when I was still chair of the International Committee of the European Foundation Centre, we agreed with the World Bank that we would take the cooperation with the Bank a step further, namely from the headquarters in Washington, DC, to its representative offices. Three countries were identified that were of interest to the bank and the foundation community in Europe and the U.S.: Thailand, Brazil and Kenya. In October 2004, the first mission to Thailand took place. An important issue discussed was how the bank, foundations and the Thai government could promote local philanthropy, like community foundations. The bank, with special support from the Ford and Mott foundations, had started a community foundations project, and one of the outcomes of the October 2004 meeting was to initiate a few community foundations as pilot projects.
When the tsunami struck Southeast Asia, my first thought was to refocus that initiative and see to it that at least one of the pilots would be created in the region most affected by the tsunamiSouth Thailand. At this moment Van Leer and Synergos are working together in Thailand on this project. Other European and U.S. foundationsas well as the World Bankwill join this partnership. The advantage of a community foundation in relation to the tsunami is that it can act as a trust and take the pressure off in spending too much money in a short period of time.
You led the first delegation of European and U.S. foundations to Russia in 2002 to meet with government officials to discuss creating an enabling legal/fiscal environment for foundations there. What are some of your reflections?
Dario Disegni of the Compagnia di San Paolo Foundation and I did this together. He was chairman of the EFC, and I was chairman of the International Committee of the EFC. The purpose was to meet with the government about issues like how to stimulate private giving and, at the same time, regulate it to avoid misuse and abuse. We met with Russian foundations like the Potanin Foundation and the Dynasty Foundation to discuss best practices and to learn from their approaches. We also met with local grant recipients, NGOs working in culture and social services. The East-West Institute played a crucial role in organizing this mission. Half a year later, I organized a counter visit by Russian foundations with an interest in culture and the arts to the Netherlands. They were interested in the Dutch system of lottery philanthropy and public/private partnerships in funding cultural activities.
You've pushed discussion on legacy and succession. What advice do you have for other family foundations struggling with honoring donor intent?
You have to strike a balance between having trust in future generations of trustees and formulating basic values and beliefs that are timeless. In our case, this is important as there are no family members serving on the Van Leer Board anymore, and the generation of trustees that knew the Van Leer family personally is rotating off the board. That is why I am involved in identifying the Van Leer's basic values and beliefs and translating them in contemporary terms. Some of these values are: do not scatter but have focus and impact, take a long-haul approach, be flexible and have respect for diversity.
So, my advice is, don't turn a legacy into something rigid, but stay close to your fundamental values and norms, and induct new board and staff members into that legacy. Don't try to be too specific. Show trust in future generations. Bring in those who know where the organization comes from and how to take it forward with respect for the underlying values.
Photos by Foto Niek Visser
Allan R. Clyde is executive editor of Foundation News & Commentary.