Hi, I'm Paul Verschure and together with my colleague Jana Betnard,
we're speaking with Larry Kramer.
Until 2012, Larry was Professor of Law and the Dean of Stanford Law School,
after which he became the President of the William and Flora Hewlett Foundation.
Larry is concerned with political polarization and cybersecurity,
global climate change and the challenges to maintaining democracies in the 21st century.
Larry analyzes how effective philanthropy can be realized, including the collaboration
between funders and recipients.
Good morning. Hi, good morning. It's good to be here. Great that you could join us.
So now on the topic of collaboration, before we really delve in,
could you give us a little sketch of your professional trajectory that brought you with us today?
Sure. So most of my life I was an academic. I was a law professor.
I started at the University of Chicago. Then I was at the University of Michigan. Then I was at NYU.
I became an associate dean there and then moved and became the dean of Stanford Law School.
I was dean there from 2004 to 2012 and moved to the Hewlett Foundation in September
2012, where I have been ever since. Longest job I've had, I think.
So could you give us a very short sketch of the Hewlett Foundation?
It's a large, general-purpose foundation. It was started by Bill Hewlett.
He and Dave Packard, as you know, started the Hewlett-Packard Company,
and then each of them took most of their personal fortunes and started independent foundations.
So we've been operating since 1966. They professionalized the foundation in 1977.
At that point, they crystallized the sort of five core historical programs,
which are in environment education performing arts
at the time it was called population that's evolved into essentially women's
rights and then been melded in with global governance so um and then we have
begun a program in philanthropy and in u.s democracy so now we fund across a
broad array of things environment doing climate and conservation,
What we call gender equity and governance, which is women's family planning,
reproductive health, and women's economic empowerment, as well as various global
governance issues related to greater inclusion.
We do performing arts in the Bay Area. We do a variety of things in the education
space, cybersecurity, democracy, a new initiative called economy and society, and so on.
So it's very broad based. Indeed.
We give away around $600 million a year.
Okay. Great. Well, so maybe as a start, what is collaboration and what is it good for?
Sounds like a song. Absolutely nothing, except it's the opposite.
So, you know, I mean, in general, one could say, but certainly in philanthropy,
there's essentially nothing any of us wants to accomplish that we can accomplish
alone, except for, you know, really small things.
So if you have ambitions to achieve a goal that's really meaningful in philanthropy,
you can't do it by yourself.
So you have to collaborate with other funders. And then, of course,
the very nature of philanthropy is collaboration with your grantees.
You're giving money to organizations to accomplish something.
And if you do it badly, you tell them what to do or you just give it to them
and pay no attention to what happens after.
Really good philanthropy is effectively a partnership with all of the grantees
that you're working with.
So could you unpack this a little bit? Because now we're looking at two domains
where the collaboration takes place, right?
On the one hand, between philanthropic organizations, and on the other hand,
between a single philanthropic organization and its grantees.
Well, and also between the grantees. So one of the things that we facilitate
and encourage with our funding is for the grantees to also get to know each
other and work together.
Right. But let's start with one at a time, right?
For instance, if you look at your collaboration with your grantees,
what are the key features of making that successful? How does that work?
So I think the key feature is it's building trust.
And, you know, maintaining that balance so that you're not trying to exercise
control in ways that are going to be counterproductive to what you're doing,
but can still have input.
In a sense, it's having both partners recognize what their respective strengths are.
So the grantees are, you know, they're working on the issues that we're working
on on a daily basis in the field, on the front line, so to speak. week.
And that gives them a perspective on how best to accomplish the goals that we don't have.
You know, we have a little bit of it because most of our people came from those
organizations, but they haven't been there for a while and they're not there on the day-to-day.
On the other hand, we're working with, you know, dozens of organizations and
funders across the whole field, which gives us a perspective that most of our grantees don't get.
And so it's really finding a way to maximize the respective advantages each
of us has in a context where there's real respect.
The challenge then being, of course, letting the fact that we're giving them
money not become the main factor in shaping the relationship,
because it's all about relationships.
Okay, that's exactly what I was just wondering. Why does trust matter if you've got money?
The money is there making things happen.
So what does trust do to make a difference in the success or failure?
Of one of these granting relationships.
It does two things, although maybe it's the same thing from two angles.
If they're having difficulties or not necessarily achieving everything they
want to achieve, it enables them to be able to come to us and tell us and seek
our assistance in helping figure out how to solve that problem.
And on the flip side, if we're doing things in ways that are counterproductive
or unhelpful for them, similarly, it enables them to come to us and to be able
to say, look, this isn't working.
And if you don't have that kind of trust, if they're worried,
for instance, that if that we're some sort of thin-skinned prima donna who will
pull the money if they insult us, then we're not going to be able to work as
productively as if they can actually share their challenges and share ours.
And vice versa. Of course, it goes both ways also.
But Larry, that means also given that your organization is in this domain for
so long, I assume you have procedures or ways to, if you want,
shape or engineer trust.
So how does that work? Because someone applies. It might be an entity you're
completely unfamiliar with.
So how do you now engineer trust in that relationship?
Yeah, I don't know that I would use the verb engineering it.
You build it. I'm provoking you a bit, I know.
But it's mostly like it's not a process you can do from outside the relationship.
It really, at the end of the day, no matter how long you've been in the field,
it's relationship building.
Besides which, people are changing all the time. We have term limits.
Our staff are turning over.
The grantees similarly have people coming and going. So you still can't escape
at the end of the day that it's about relationships.
Now that said, yes, there are various techniques that we do use that run the
gamut from, for instance, we don't actually take unsolicited applications for grants.
What we do is we articulate a strategy which begins with a clear articulation
of the goal we're trying to achieve, of the causal story about how we think
our role can help achieve that goal,
and then some loose way in which we plan to keep track of whether we're achieving our larger goal.
That enables us then to go look for grantees or if grantees do approach us to
be able to say yes or no for some objective reason.
Like this is not consistent. this is a good thing you're doing,
but it's not consistent with our strategy.
And there's so many organizations out there, you know, it's,
we can't even fund all the ones that are consistent with our strategy. So that's a piece of it.
Then when you are funding with someone, they understand why you're funding them
and you understand, and you and they understand what it is that you're looking
for them to contribute to your shared goal.
So that's an important piece of it. And then the way you give them the money, right?
So we tend to have a very strong emphasis on giving people general operating support,
and for multi-year whenever possible, as opposed to narrowly tied project grants
in which we're supervising their budget and making sure like X percent goes
to Y and Z percent goes to B.
You build trust by saying, okay, we agree. Here's the money. Go do it.
Let's talk. Let us know if you're having problems. We'll keep in touch with
you. You keep in touch with us, but you've really sort of taken as much as possible
the control through money out of the equation.
Always trust different from just a contracting relationship.
Well, I mean, I guess in some sense, it's not. You can have arm's length contracting
in which there is or isn't trust.
So that is to say, a grant, it's not a formal contract, of course,
but it is a bilateral relationship in which there's expectations on each side.
So in that sense, it resembles a contract. contract and then
as with any contract you know if you've ever renovated a
house you have a contract with your contractor but it goes a lot better
if you and the contractor get along with each other understand each
other and trust each other right so it's not different in the sense that any
bilateral relationship with mutually shared goals works better if the parties
know and trust each other what's striking to me sometimes is is how unaware
people seem to sometimes be of that fact, right?
And they'll go into a contracted relationship in a way that would never go into
any other relationship, like a friendship or, you know, whatever,
when they still share those same essential company.
But you mentioned earlier that one of the steps that helps you and your organization
to maintain and build trust with the grantees is also to very carefully select
with whom you engage, right? Yeah.
But that's interesting, right? But there's a flip side to that because in some
sense you get a selection bias, right?
You might then also start to work with, let's say, a subset of possible grantees
that, let's say, adhere to your basic management principles as an example.
How do you assure that you still achieve your mission in sort of an even-handed way.
Despite this strong pre-selection of your grantees?
Yeah, that's a great question. So I think we have sort of, again,
at least three different mechanisms to try and assure that we're doing that.
So one is, as I said, we'll have an articulated goal and a story about how we
think the work we're going to do with grantees will achieve that goal,
but we do require for ourselves some way of measuring whether we're actually making progress.
Now, we do not do that on a grant-by-grant basis.
With each grantee, we'll say to them at the point where we're making the grant,
how do you want to measure whether this grant is successful?
And then we'll use that. But at the strategy level, we'll have measures that
are independent of the individual grantees, but that let us know if we're making progress.
So I don't care about selection bias if we're achieving our goal,
right? That's the purpose. But if we're not, that's a signal.
A second Second device for us is we also, at least once every five years and
often in between, we'll do independent evaluations where we'll bring in an independent
third party to evaluate and assess how we're doing.
And then the third, and in some ways the most important for us,
is as I mentioned earlier, we have term limits.
So the program staff are turning over and you've got fresh blood coming in all
the time that are taking a new look at the strategy, at the ways and the sub-strategies
that the grantees are choosing. They're developing new relationships with them.
They bring in their own networks and ideas and thoughts and so on.
We try and balance that. When you come in, it's not as though you come in to
wipe the slate clean and start over.
You don't. It's like you're supposed to pick it up and move from here,
but we do want you to put fresh eyes on it and see if there are issues there.
So all of those kinds of devices, particularly overlapping, we think work to
help us avoid the kind of, we're just dug in, we're used to doing something
this way, we're just going to keep doing it.
Right. But can you give an example of a project that really worked out marvelously
well beyond expectation following these rules? Sure.
Well, so again, these approaches are pervasive across the foundation.
So we use them in everything we do.
And so, yeah, I mean, I think I could point to almost anything that we've managed to be successful in.
Okay, I'll give you actually a really good example. Because oftentimes the changes
need to be signaled as much by changes in the outside world as by what happens internally.
So for instance, we've been doing Western conservation since 1966. 60 cents.
Our goal, it's a preserved biodiversity goal.
We identified essentially a long-term goal of trying to preserve half of the
lands west of the Rockies.
That's where our geographic focus is for some kind of conservation.
It doesn't have to be full, but some kind of conservation, depending on the
particular ecosystem, what's most appropriate.
During the Obama administration, we had these amazing opportunities to make
gains because the administration was was really, you know, eager to do all sorts of things.
We made a ton of gains, uh, national monuments, um, lots of conserved lands.
Then Trump got elected and they just immediately undid everything.
And for us, that was a realization that, well, it wasn't an instant realization.
We did a lot of talking and thinking, talking to our grantees,
evaluate all the kind of stuff that I've talked about doing.
And the lesson we learned of course, was that you, you need to build local support.
And the local support has to be across the political board.
So you need not just conservationists, you need the support of the farmers and
the ranchers and the native communities in the,
you know, and so we shifted our work up to begin much more local work,
to focus less on federal public lands and as much on private and state lands
as ways to achieve our goal, based on what we learned. And we've made enormous progress now.
And the idea was, Because anything you make will be more enduring that way. Sorry.
Right. They won't, when things change in Washington, if the local forces are
like, no, we want this, leave it where it is, you're much more likely to have it remain.
Yeah, this is fascinating. And so when you were first moving in,
I assume then, maybe I shouldn't assume, let me ask you, did you then start
recruiting some of these local groups to be your grantees?
Exactly. Huge shift in the grantee population.
And so what was that relationship like in the beginning?
Because I'm interested in trust, right?
And as you were reaching out to them and you're interested in conservation and
they might not see that immediately as being in their interests, right?
And so you have some divergence or perceived divergence in interest and not
yet an establishment of trust. So how do you build that relationship?
So as I say, it's so much the personal wealth.
First is the way in which you give the funding and the behaviors that you demonstrate in doing so.
What are we asking for by way of what we need to decide whether to fund you?
Are we putting you through the ringer for no particularly good reason?
Or are we asking for things that you can understand why we want them?
How are we talking to you? What are we looking to you to tell us as opposed
to us to tell you? We have a kind of implicit rule that you should be listening
at least as much as you're talking in any conversation with the grantee.
That's actually a formal principle.
We have this thing we call seven habits of excellent work with grantees. That's one of them.
Listening half the time. And then, of course, how do you build the ongoing relationship?
What kind of contact do you remain?
When do you listen? When do you tell? When you tell? How do you tell?
It's, again, like developing trust in any relationship. relationship here
was one of the interesting things though that we discovered as we made this
move from overwhelmingly supporting these
large national organizations to working much more locally
the local groups had all been
starved of funding of course they had not been getting much attention from funders
like us um and they were didn't trust each other um because they had all been
in competition with each other for the most part and so as big a part of that
process for us, maybe bigger,
has been helping build trust among the grantees we're now trying to get to agree
on what kind of conservation they want within their community.
And again, that can be really challenging and has been a big, big part of the work.
But so if you build trust with these local communities, you follow a specific procedure?
Are there certain things that you feel are absolutely necessary to deploy in
a certain order or communicate? No, it's not that scientific.
As I said, there's some general principles, as I said, listening,
trying to give general operating support, trying to make it multi-year,
letting them tell us how to think about measuring the success of the grant.
But it's not like a checklist.
It's really a way of approaching and working. Right.
But Larry, if we talk about this relation with the grantees,
do you have an example of a complete failure?
Um, I'm sure there are, no, I'm not, I'm not even, you know,
I mean, um, but I'm trying to think of a complete failure of a relationship
with grantees as opposed to, you know, we've had many grants that didn't work out.
Um, I can think of, uh, I can think of, uh, what would be regarded as a failure.
This is collaboration among funders example.
No, but I want to go to the funder funder relationship after this one.
First, I want to understand this use case of the relationship with the grantees
and why would the collaboration break down?
What are the reasons of that breakdown?
So I guess here's what I'd say. And in saying that I can't come up with one
off the top of my head, it's not because I don't think there is one.
I'm sure there are many, but they don't show up.
As I've been told, the way they will show up will be you've developed a relationship,
but the grantee feels they can't be honest with you.
And so they're not telling you. And then at some point you stop working with
them and then they think badly of you, but they don't say that.
It's really hard to ferret that out, I think.
So, you know, because it's not the case, you know, we get criticized,
but very seldom, even by our former grantees.
And that takes you back to the thing that potentially makes the dynamic so unhealthy,
which is their potential desire for funding in the future.
I've got 40, 50 program staff, and I'm sure they don't all follow all of this
and work perfectly well with all of their grantees all the time. It's just not possible.
And as I said, these are mostly interpersonal relationships,
and people don't always get along with each other.
So there's all sorts of things that I'm sure are showing up that way,
but they don't show up in any way that's really obvious.
So it's hard for me
to identify but but in no way am i suggesting that it
doesn't happen or if it does it's not making its way up the mile but do
you feel that the dependence between the organization and
the grantees the financial dependence builds a
layer of opaqueness in that relation that then
later pops out actually as a relationship that is not functional but hidden
yeah so yeah well what What I'd say is that potential layer or that dynamic
is the thing you're working to overcome always. That is the problem.
And then it can be exacerbated if there are interpersonal differences.
It can be alleviated if you manage it as a partnership well.
And then, as I say, when you haven't overcome it,
it doesn't necessarily show up in an obvious way other than the grantee relationship
doesn't work out and the partnership ends, but usually not with somebody sort
of sending in a complaint or telling me that so-and-so program officer acted really badly.
So it's hard for me to identify a grantee relationship that failed that way.
Not the case where that's where I went to funders, not the case with fellow
funders where there's equality built into the nature of the relationship.
So let's move to the relationship with other funders, right?
So how does that work? How do you maintain trust there?
Well, the building and maintenance of trust is very similar.
I mean, again, it's still just a matter of interpersonal relationships.
The dynamic or the problem is different because, so when you think about grantees,
The dynamic you're trying to overcome is the one where you and they assume that
you have power and they don't.
Now, I often say, and I actually believe this, it's not really true.
We need our grantees as much as they need us because we can't do anything but give away money.
And if we have goals to accomplish, if I'm choosing to give it to the organizations
that make the most sense for what we're trying to accomplish,
and if I blow that relationship, I have to go to another grantee who presumably
I don't think is as good, right?
But nevertheless, the dynamic is really constructed so that that's to be overcome.
When it comes to fellow funders, of course, that's not the dynamic.
Instead, the dynamic is, I don't need you at all. I can just do my own thing.
And so what you're really trying to build is some sense of, yeah,
but we'll accomplish more if we do it together, even if it requires both of
us to bend a little what we might do if we could do it by ourselves.
When I got into philanthropy, my first year, I wrote an article about collaboration
because I was surprised at how difficult it was to collaborate with fellow funders for this reason.
And now there's additional complications in the case of funders, which we can go into.
But, you know, the article was essentially that we needed to think more about
using, you know, in the international relations theory world,
there's this notion of specific reciprocity and diffuse reciprocity.
And the only collaboration that I saw and still see for the most part in philanthropy
was specific collaboration.
And we could use a lot more diffuse collaboration, just one hand washing the
others, doing things for other foundations that may not necessarily line up
with my strategy, but I know it'll help them.
And I know I'll get something back later on. And then we build the muscle.
And there's still very, very little of that. And so that's what you're trying
to overcome is that sense that I don't need you.
I'm happy to work with you if it lines up exactly with what I want to do.
But otherwise you do your thing, I'll do mine.
But Larry, there's a bit that I'm missing because in some sense,
what you didn't articulate, at least from my understanding, is why would you
even talk to each other, right?
Because you immediately stepped in by saying there might be this almost instinctual
response like, well, I don't need you.
But why then talk to each other at all, right? So what is the driver or the
force that still brings funders together to say, no, we have to collaborate?
Is it because of optimizing, let's say, resource or is it because of optimizing impact?
It's optimizing impact.
So as I say, I think all of us have goals that are bigger than what we can actually
accomplish by ourselves.
But the question is, and there's maybe a little bit of schizophrenia there.
The question is, how do I hold that while at the same time saying,
but this is how I I think it's to be accomplished.
And if you're willing to do it that way, I am willing to work with you.
But if you want to do it somewhat differently, then you do your thing and I'll do mine.
And those two things tend to coexist in the funder world.
The driver is we can get more done if we do it together, but I think I have the right way to do it.
And I'm not willing to bend that to do it your way.
But is the risk there the sense of identity and visibility that you don't want to diffuse refuse that?
Or is that the risk that you try to mitigate in that? Yeah.
So this is where you get into some of the additional complexities.
When I wrote the article my second year, I said, this is not about ego.
I don't think. Okay. I will say, having now been in the field for 10 years,
actually, that is definitely a component at the institutional level. We want credit.
We believe we have the right way to do things and so on. So there is some of that.
But the bigger issue, quite honestly, is within any foundation,
decision-making responsibility is diffused.
Typically, you've got a program officer, you've got a program director,
you've got a CEO, and you've got a board.
And all of them have to line up on this in order for it to go forward.
But they may have slightly different incentives and understandings about what they want to do.
The program officer is like, no, I really want to do it this way.
I don't want to give up some of my limited budget in order to do it the way
this other foundation wants to do it.
So I'm kind of opposed to this, even if my CEO and board are in favor.
Program director has a slightly different set of incentives.
One, keeping the program officer happy.
Two, keeping the overall program resources lined up, and so on.
So you can have slightly different understandings and incentives that all you
need is one veto to make it very difficult. So what has been the biggest success
of working between funders?
Um, so yeah, we have this, you know, this is at the same, I have,
again, my own divided feelings, but on the one hand, it's so difficult and so frustrating.
And sometimes it feels so hard. And I have projects that I think are so good
and I can't get anybody to go along, even when I'm willing to bend some, that's frustrating.
On the other hand, if I look across our programs, I realized we're actually
collaborating in every single thing that we do.
Um, so again, I could give lots of examples, but the easiest and best one,
because I think I think it's the biggest and in some sense, the most important
one has been around climate.
And that's, we've been at it a long time. It's such an important problem.
The collaboration is huge now, but there's a, I don't know if you want to hear
the story, but it was a long process of learning to collaborate.
So can I ask you, because so climate is going to be a big.
It's probably exactly where to take this, but in choice of partners for collaborating
with other institutions,
do you find that you tend to work with other granting agencies that share your
same goals more closely or ones where it's easier to build the relationship of trust?
Either or. Because it's so hard to do, for me, the general principle is,
Let's collaborate wherever we can. So if we share strategies,
that's a good potential.
If we share tactics, even though we have different strategies,
we can cooperate on the tactical level.
And so I'll take it where it goes. In general, it's easy when you share both.
And it's difficult when you don't.
But I don't think I can say it's more difficult because at that point,
Ben, a lot of other their factors enter in on a case-by-case basis,
including who the particular funders are.
Every funder has a different sort of taste for collaboration or not.
And so it gets really hard to say generally.
If you really want to do it, though, you can.
And as I say, the more you share in common at the strategy level,
at the tactical level, at the personal level, the easier it gets.
That much is a continuum, but it would look, rather than a continuum,
it would be more like a sphere where you could be at different places within it.
Yeah, I'm still trying to get a sense of what's necessary, what's efficient.
Is the shared goal really a shared mission?
What drives, makes it much easier to form a relationship?
Relationship or do you find that when there's just someone who's kind of sparks the imagination.
Um, because they also have a lot of enthusiasm for just making the world better
that you then find places where you can collaborate.
Yeah. Yeah. So here's, I think the correction I'd give to the way you're presenting it is collaboration.
Isn't an on off switch. It's a continuum.
So that's why it's hard. It depends on the thing.
There's so many different ways to collaborate that depending on how all those
kinds of factors play out, you may collaborate in different ways rather than
not collaborate or collaborate.
And, and so, as I say, I think it's a very messy, that's why I think about a
field at which you can, you know, there's multiple dimensions and you may share
different pieces of different ones that take you to different forms of collaboration.
Let me tell the climate story. Cause it's a good example. Cause we've gone through
all of the different stages.
So in some ways, the most powerful collaboration is when you can pool funding, right?
Everybody deposits the money in a shared pool, and then somebody just executes
a strategy with that funding.
And that was the original idea for climate. So in 2007, Hewlett and Packard
and McKnight pooled, it was a billion dollars over five years,
and created an organization called Climate Works that was then going to execute
a global strategy for solving, literally solving the climate problem.
And if you go back and look, it was kind of brilliant strategy.
At the time, it looked like great.
Five years later, we had to switch it up. Why? So first, the world had changed.
What had looked like a problem that governments were ready to act on climate
but just needed assistance on how to do it in different sectors had become deeply politicized.
So now you needed to do a whole lot of advocacy and you needed to understand
the different politics in different countries.
And the organization wasn't necessarily built for that.
But more importantly, the idea was other funders would join in and not a single
other funder was willing to pool their funding.
They all wanted to do their own thing. So they started making grants to the
organizations that this pool of funding had set up, but now they were all being
pulled in multiple different directions with different funders doing project
funding and so on. So it's like, okay, let's step back.
If no one's willing to pool, what's another way in which we can build the kind
of collaboration and cooperation that we need that will at least move us more
forward? And we came up with the idea of a funder table.
So the idea with the funder table was rather than pooling the money at ClimateWorks,
the The various funders would all meet on a regular basis, share their strategies.
And find ways to... Now, the original idea was we'll still develop a single global strategy.
Then we'll ask funders, what do you want to fund here? And we'll look at the way it played out.
And it's like, well, look, we have twice as much funding here as we need and
only half as much over here. So who's willing to shift?
Well, that didn't quite work either because again, it was too hard to come up
with a single strategy that everybody agreed on, on that complex of problem.
It was too hard to get people who wanted to fund an X to say,
nevertheless, I'll fund in why.
So we moved to the next stage, which was just building the relationships among
all of the funders and then finding places where you could get two or three
or four funders to work together on a particular thing.
Then we started expanding it again, bringing in other funders into this process.
We're now, what, 10 years into this new form, 10, 9, 10 years into this new
form of collaboration of the funder table is now there's a kind of core group,
but there's multiple side groups and many different projects that have different
groups collaborating together in different ways.
And the larger field has now become much more fluid in that way.
So that's what I mean. It was a process of adapting and adopting new practices
based on where funders were willing to go to get as much cooperation as we could to move forward.
That's a very complex process. And could you sketch the main obstacles you identified?
Because it sounds like you're moving around all sorts of obstacles so what are
these main obstacles and what are the dependencies the first and biggest obstacle was the fact that,
Funders wanted to make their own grants and keep control over the particular grants.
They didn't want to surrender the money to some central pool where other people
would be making the grant-by-grant decisions. That was one.
Then a second was, as we've talked about, they had different views about what
were the best or most important things to do to achieve the—there was a shared goal, right?
The shared goal was Paris, or before Paris, it was like, let's keep global warming
below low two degrees, a rise of two degrees.
But at that level of generality, there were so many different paths to take
and so much disagreement about what were the best ways to do it. So that was the second.
And then the third was, I think, different funders had not just different tastes
about what to do, but different competencies.
Actually, let me step back. On the different ideas about what to do,
there were also lots of funders had, this is where you get into the the complex
dispersed decision-making within had limitations on what they could do put on
by their board or by their structure.
So you had some funders like, we're only going to fund in Europe.
And you'd say to them, well, funding in China is funding in Europe when it comes
to climate because the consequences are going to be felt in Europe because of the emissions in China.
But it was like, nope, we fund in Europe or we fund it wherever.
Or others were like, we want to do technology. That's all we're going to do is technology.
So you had lots of those Those kinds of limitations that you also had to surmount
while trying to bring them into the fold, which then required other funders
to be, okay, you do technology.
That means we don't have to, and we'll do this thing over here.
But I can't do that unless I know what you're doing and why you're doing it. You know what I mean?
So those kinds of limitations played out.
And then, of course, then you get to the interpersonal level and just the extent
to which people really trust others, believe what they're saying,
which, by the way, led to huge benefits in the sense of climate's a super complex problem.
It's really helpful if I am working with another funder who I trust.
When I'll rely on their data and information about the nature of the problem
or the optimal opportunities that exist to advance it, where I don't have to
do that myself every single time, because we can all rely on each other.
So you get a lot of economies of scale built in that you wouldn't have even
when everybody's still doing their own grant for their own thing.
So Larry, the way you described this challenge.
So at times, I guess you might have felt,
that maybe some of the funders you were also talking with might face some sort
of discrepancy between the overall goal contribute to preventing the dramatic
impact of climate change and the identity and objectives of their own organization, right?
That appears there's a possible conflict here. Like you cannot say we only fund
in Europe if we face a global problem, right? You can with a problem like climate
because we know we're not going to say we're here because we know none of us.
We're not going to solve the whole problem ourselves.
So what's the chunk where we can help? Well, our chunk is going to be limited to you.
That's what we're going to find. I tried to see what your view is on this possible
discrepancy between the overall commons, the overall goal, right?
And often these philanthropic organizations have very ambitious altruistic goals,
but then the internal needs, if you want, and the internal constraints of the
organization itself change.
It sounds like there's a tension there. So I don't think we experience it that
way with climate funding.
As I said, what limitations they
have are limitations on the piece that they're going to contribute to.
Where we do experience some of that is with non-climate funders who nevertheless want to help.
So you get, I'm a health funder, right? And so, but I think climate's really important.
So where we can do something that advances our health goals,
that also helps with climate, we'll think about it. And maybe we'll do that.
Yeah, we'll work on having all hospitals built in ways that are green,
you know, or, you know, whatever it is.
There's all sorts of, when you think about the co-benefits and potential co-benefits
that come with other things that may actually contribute to climate.
So there, and it's sometimes a little frustrating because you want to go,
oh, that's such a marginal contribution.
You could do so, if you really care about climate, you could do so much more
if you just fund climate directly. But that's not what they want to do.
That's what I try to understand, the psychology, because let's look at the counterfactual,
right? I might have a philanthropic organization.
I might want to contribute to, let's say, climate, but also see that another
philanthropic organization is
way more efficient in translating money into impact than I will ever be.
So if I'm serious about my overall goals, I should just close down,
hand over the money to this other organization, and let them do it because they're
much better at it. Yeah, but this never happens.
Never happened. The only example I can think of is Warren Buffett gave his money
to Bill Gates, basically saying he seems to do philanthropy really well.
I'm just going to give it to him.
And that's because, again, most people, yes, they want to have impact,
but they want to have impact. They want to participate.
They want to be involved in doing this themselves.
And that's overwhelmingly true. I'm actually aware of one other foundation,
which I can't say because they're not public about it yet, that is now thinking
about, though, saying, okay, here's $150 million.
Foundations, pitch us. We'll just give it to the foundation that seems to be
having the most impact with that.
And that's an interesting… But Larry, what's important about this,
since this never happens, there are some internal dynamics, possible also psychological
aspects, economic aspects, that prevent that from happening,
even though it would be completely rational.
That's true for you guys, right? I mean, I'm sure if we sat down and looked
at the world and said, who would be the best people to do some work on collaboration?
There might be other. You don't even ask that question. None of us does because
we're doing the thing we want to do as best as we can do it.
And philanthropists are no different than anybody else in that respect.
So I'm not just giving my money to somebody else to give away because I want
to do philanthropy. Now, I want to do it well.
But doing it well, to me, isn't not doing it by just giving it to somebody else to do.
Yeah, but there's an interesting difference here, right? Because in our case
as academics, you would say we try to understand something with all our limitations.
We try to understand and we invite the best people we know about to help us with that.
But the philanthropic organization is tying itself to some large,
challenging comments that is critical to the human condition.
I don't see the difference.
You guys aren't just doing this to understand it better yourselves.
You're doing it to produce something that will help other people in the world understand it better.
And you don't even ask the question whether you're the best people in the world
to do that. Nor should you, by the way.
As I say, I don't think that, you know, that, you know, so, but all I'm saying
is it's not particularly different when it comes to philanthropy.
The people who do philanthropy want to do something to make the world a better
place, but they want to do it. Right. Yeah.
Also, I think a bit in diverse perspectives, in the sense of shaping,
having to compromise and changing a little bit the goal.
I was also wondering about the role that diversity played when you were talking
about how diffuse decision making is within the organization.
So can you talk a little bit about how important diversity is in your sphere
for effective collaboration?
So let me ask what you mean by diversity, right?
Because there would be, you know, like if you use that word now in most settings,
what people hear is you're talking about race or race and gender. Yeah.
Or do you mean it more broadly? No. Yeah. Thank you for the clarification.
Actually, in this sense, in this setting, I'm less interested in identity diversity,
than I am in cognitive diversity.
So diversity of perspectives, but it could show up in interest experiences.
Or when you were talking earlier about the local grantees, there was probably
some identity diversity that showed up there.
So in other words, identity diversity is a subset of the larger question of
diversity, at which point I think it's critical.
Um, and it critical as it would be for anything, at least in getting things going.
Right so there comes a point when you have to make decisions about what to do
and then you move forward but in the first in the first instance when you're
trying to figure out what to do so i think that is pluralism this may be a better
way to do it you need to really speak to a.
Pluralism of different views ideas thoughts approaches techniques and that can
cut along all sorts of dimensions all sorts of dimensions um identity ones race
ethnicity ideological ones ones, experiential ones,
location geographical ones. You know, there's tons.
You can't do them all, but trying to figure out what are the most appropriate
forms that we need to make sure we hear from, that's one.
Then in the implementation, you certainly want to have people,
again, you want, as you implement,
you want to have a diversity of views, nevertheless, generally aligned about
where you're trying to go, because you don't want to spend the whole time fighting
the original fight over and over again, right?
At a point, you make a decision about how to go, but implementation itself poses
challenges all the way along.
So they are both in terms of your staffing, the grantees you work with,
and most importantly, the people you're talking to and hearing from.
I think it's really important.
I published an essay a few years ago called I'm Listening to People Who Think
We're Wrong and then have tried to build into the foundation of process so that
we are on an ongoing basis,
always nevertheless listening to, hearing from, talking to the people who think
we're not doing this right, just in case we're missing a trick or two.
And since all the arguments are constantly evolving.
So I think that's what the outside evaluations are for.
You need always to be challenging yourself.
So how do you build a culture that sees diversity as a benefit within the organization
and then in the broader grant-making sphere?
Well, rather than seeing it as, as some, some constraint that you have to get over.
Yeah. So I don't, that's a hard answer.
That's how do you build a culture generally? Right. Cause it'd be so big part
of the answer would be, however you build a culture generally,
you do that with this question as well.
Um, you know, which means, um, as a, as, as the leader of an organization,
what am I signaling people?
What am I demonstrating in my own conduct and behavior? What am I asking my
senior team to demonstrate in their own conduct and behavior, right?
What do we talk about? What do we say are our values and do we live up to them?
So that's obviously the biggest piece as it is for any kind of cultural question
in any kind of organization.
Here, as I say, we've tried to build in some formal practices to ensure that we do it.
We were really working on the listening to people who think we're wrong when COVID hit.
We did a number on the ability to do that because it's not done well over Zoom.
If you want to bring in people who really think that you're just wrong,
you want to have them in a context where there's going to be more conversation,
not just the formal session. You're going to have lunch together.
You're going to talk. You're going to get to interact as people.
Otherwise, it's really hard for people to listen that way.
So we try to have various practices when we do that.
The Hewlett Foundation prides itself in all of its work, particularly along
ideological and what we called identity forms of diversity and really paying attention to that.
And, you know, if you look at our guiding principles, it's signaled as something
that's really important to the foundation, you know, and so on.
So it's an ongoing process that is done as much between the lines as,
you know, when I think about our guiding principles,
what I try and do is just refer to them, not all of them all the time,
but whenever as a way of just, they're important, you know, each time you talk
about one of them, it signals that they broadly are important and then, you know, and so on.
So it's all those kinds of processes that basically, you articulate a value
and you live the value is the best way to do it.
You want to go on, Jenna? Sorry, I had a little.
Well, I'm fascinated. I know we need to close, but I just want to say I'm fascinated
by these guiding principles. And you haven't said very much.
It came up a little bit earlier in the context of telling us that there's term
limits for your employees, but yet Hewlett maintains its mission,
despite turnover of personnel,
maintains collaboration within the organization and across, you know,
with other grant makers and with its grantees.
And I have this sense that those guiding principles are crucial.
Well, I think so. Some of it was the way we developed them and try and keep them going.
So most foundations, I think, have something like our guiding principles.
They may not call them. They have something guiding principles,
core principles, whatever it is.
We had them. They were articulated by the board back at the beginning.
And then they just sat there and nobody knew anything about them.
As we approached our 50th anniversary, I used it as an opportunity.
Actually, we spent a year engaging the staff.
The whole staff in in developing in reviewing reassessing re-articulating the guiding principle,
it was a multiple rounds thing we did it in various different
ways and we did more than just produce a guiding principle we produced an underlying
text that explained the principle and a set of examples and our behavior and
and then we review those as i say i try to talk about them in between but we
also have a process where every team once a year is supposed to just read Read
them over and make editorial suggestions.
Like, that example is a bad one. Here's a new one. Like, this text doesn't quite make sense.
Whatever it is, you know. And so it's a way of keeping them alive in people's minds.
Different departments have written papers on how the guiding principles apply in their work.
You know, and so they're a great reference point.
Can you get away without them? I think you can. The foundation,
as I say, sort of had them but didn't rely on them for its first 50 years,
in effect, but still ran pretty well.
But they're helpful. They're really helpful, I think, in establishing some lodestars.
Trust the common law professor to introduce a constitution. Yes,
exactly. Yeah, exactly.
But Larry, there's actually another channel of collaboration,
which is critical to your organization, which is the interaction with financial
institutions, because you have to also maintain, in some sense,
the endowment with which your foundation runs.
So do you see that as, indeed, a separate domain of collaboration with its own principles?
Well, I'm not sure I understand the question. I mean, we have a team that manages our endowment.
Do you mean, do we collaborate with them? Like, does the program side collaborate
with the investment side?
Or does the investment side collaborate with... Well, as an organization,
you must be deeply involved in all sorts of financial transactions. Yes.
With also external partners to maintain your endowment.
And of course, it's run by your own team, but this is a complex collaborative process.
It is. And of course, it's much more complex than the last few years because
prior to the last few years, nobody paid attention.
You ran your endowment, you sought to maximize your returns. That was what you did.
There had been historically, but now there's, no, you should invest your endowment
consistent with mission and you should invest your endowment in ways that itself
achieve impact and all sorts of questions like that.
And different foundations approach this differently. I would say one of the
really remarkable facts about philanthropy at this moment is we differ,
foundations, we differ enormously on what we think we should do.
I work on climate. Somebody else doesn't. They work on poverty.
In the fields we work, we have different views about how best to achieve our
goals, right? We're going to work through advocacy at the national level.
We're going to work through movement building at the local level.
Nobody inside philanthropy regards those as questions where,
unless you're doing it my way, there's something deeply wrong with who you are.
You're immoral. You're acting badly.
And for some reason, as these investment questions have emerged,
even though they themselves are also just tactical questions,
people tend to layer on a level of moral judgment that they don't apply to any
of the other differences between how we work, which is a big puzzle to me.
So the question, for instance, whether to divest from fossil fuels,
to me is a question of, we're trying to keep global warming below two degrees, okay?
I can divest. Now, unless I'm going to indulge in this, which for us is not
true, notion that I can divest and it has no effect on my returns, just not true.
It might might be true for some organizations, depending on how they invest,
but not for us, then it's a grant question.
Will divesting have more impact than the impact I can have by earning and spending?
Because that's what matters. And I don't judge anybody else who chooses to divest
because they think that's the right thing to do.
Okay. So that's all a long way of saying that our approach to our endowment
is itself tied to our assessment of impact.
What do we think will produce, will enable the Hewlett Foundation to have the
most impact for the things it's trying to do.
So we have very few screens, right? We screened out tobacco like everybody did
a few years ago, but that was a costless screen, to be honest,
because there were like three stocks and it was easy for everybody to do.
Most of the claims that people are making today require much more significant
changes in the way an endowment functions in order to do that.
Most of the people claiming that you should do it don't know anything about
how endowments work. And so just sort of assume it's like we're picking stocks
and we could just pick different stocks and we would earn the same amount of money.
And that's not remotely the way it works. So the questions are complex.
And the question of how to utilize
your endowment is a tactical one around impact is what I would say.
So it's not a question of collaboration or not.
It's just a question of like the question on which programs to go into,
which strategies to pursue and how to pursue them.
But I could have imagined that, for example, the collaboration between funders,
there would be some sort of discussion around, let's say, a code of conduct
or guidelines of investment or I don't know what.
No right but but
any more than there's the conversations that exist
between funders are on a more specific level right
we don't talk about whether we should all make grants or i don't
know you know do some other kind of so and it's no different on the investment
side there are conversations on the specifics like you know you should be investing
in clean energy or not and there you might want to talk with other funders about
how to do it for us the one place that comes up is impact investing.
So impact investing, clearly there are for-profit entities that can produce social impact.
That's obvious, right? The question is, does it make sense for us to invest in them?
That gets into a much harder set of questions about what our competency is,
what we would need to do internally to do that legally, how frequently it would
line up with our other goals and so on.
So my board decided a few years ago, given the way in which we work,
the kind of strategies in which we pursue, we don't see the likelihood of lots
of impact investing being worth the amount of internal change we'd have to make.
But they said at that time, if you see an opportunity, go get a partner,
find somebody who does that kind of work. And I have sometimes done trades.
Like if you'll invest in this, I'll do a grant for something that you want to
do where we're also in alignment.
And so that kind of collaboration takes place. We've We've done that in lots
of different contexts where I can do it that way. You can do it this way.
So you do that for us and we'll do this for you. And it actually is both of
us achieving our shared goal.
Right. So do you see this as one of the critical questions on your radar moving forward?
Which question? Which question? Impact investing, how you maintain your endowment,
the financial commitments you make, and how this might compromise,
let's say, credibility relative to your overall mission.
Is this a critical question or just one of the many things you have to deal with?
I guess I'd say both. It's one of the many things I have to deal with.
It's a critical question right now because there's so, again,
having paid no attention to it for so many years, there's so much attention
at the moment that it's coming largely from critics who I think don't really,
they haven't taken the time to really understand the complexities.
And so you're managing criticisms that it's not that they have nothing to that,
but it's it's really hard to engage in the conversation because most people
aren't willing to take the time to understand the issues well enough to appreciate
that, you know what, there are actually different answers to this question and
here's ours and here's why.
So it's critical in that sense.
And it's always critical because this is the pool of resources that we,
that's why you have to think this is our source of impact, right?
So we have to be smart and careful about how we use it, both directions.
Now, last point.
That's just one of many critiques of philanthropy that have emerged in the last 10 years.
So they're all both critical and one of the many things you have to manage.
And they all share this notion of they're often presented as this is the way to do philanthropy.
And for an organization like ours, which has so many different kinds of goals
and we're doing so many different things, none of them is the way to do philanthropy,
but they all have something from which we can learn and places in which we should use them.
And we just have to figure out how and when it makes sense.
So Larry, two questions to finish up. They're straightforward.
Like, do you believe also in the face of these big challenges you described,
climate change as an example, do you believe humanity will be able to deploy
employ sustainable collaboration to really respond in a significant way to these challenges.
Depends on which day of the week you ask me that question. I mean,
there are definitely days when it's like, we're just sunk. I feel so badly for my daughter.
And then there are days when I think, you know what, I think we can get there.
And to me, the three largest challenges globally that we face in these terms,
climate and biodiversity more broadly, because there are sources of the diminishing
biodiversity which are not climate-related, is one.
The future potential and survival of democracy or not is another.
And the general way in which we think about the relationship between government,
markets, and society is a third.
Almost all the other problems tie into those. And what I think is the question
is, again, not an on-off switch.
The question is, will we be able to adapt and adjust the way we have been approaching
those three problems well enough?
Or how well will we be able to stave off how much disaster, climate being the obvious one?
We're not the likely, I think we're doing well enough that extinction is not in the offing,
but anybody who thinks that we're not still at risk of seeing the collapse of
all of our government and social structures is deluding themselves,
but that doesn't have to happen.
But at the very least, the impacts are going to be enormous and impose serious
costs on everybody in the future.
The question is how far along that continuum are we going to slip?
And I would say that for all three.
Right. But then last question, Larry, if you could change one thing in humans by magic?
Just one feature of humans, one trait. If you could change one trait in order
to improve our ability to collaborate, what's the one thing you would change?
What I think actually is biologically built-in tendency to frame the world in us-them terms.
Right. I mean, that's what gets in the way. So think about, we have problems
now that require global governance, but almost nobody can embrace the idea of global governance.
We are so ground into a we, whether it's national or local or religious groups versus them,
you know, and at least my understanding from the sociobiological and archaeological
and anthropological people that I've talked to is that's kind of ground into our genetic structure.
And it would be like, if we didn't have that, we would certainly find it a lot
easier to collectively solve what our collective problem.
Larry Kramer, thank you very much for this conversation.
Hi, you listened to one of our podcasts in the series on collaboration.
Produced by the Ernst Trommel Forum and the Convergent Science Network.
You can find more episodes on our website.