2017 President's Report

ocean"As intellectual venture capitalists, foundations can successfully trouble the waters for potentially lasting and significant change," writes Earl Lewis, president emeritus, in his final annual report essay. (Photo by NejroN/iStock.)

Troubling the Waters: Philanthropy as Intellectual Venture Capital

During the first of my years as president of The Andrew W. Mellon Foundation, I was invited to keynote a lunchtime session at the annual meeting of the Association of American Colleges and Universities. I chose as my organizing principle the chorus from the spiritual “Wade in the Water.” The song, forged in the crucible of North American slavery, made popular by the Fisk Jubilee Singers at the close of the nineteenth century, and reclaimed by the Ramsey Lewis Trio and others in the 1960s, including in Alvin Ailey’s highly acclaimed dance Revelations. The chorus goes:

Wade in the water
Wade in the water, children
Wade in the water
God’s gonna trouble the water

On the afternoon of the speech, I reminded the gathered audience of college and university leaders that turbulent days awaited American higher education, and they needed to do more than simply navigate the headwinds and choppy seas. As leaders, they needed to trouble the waters.

Here is where this spiritual serves as a guide. Scholars of African American life and history have long noted the multivalent meanings of the words to the song. Some have proposed that the words were a code to help pursued runaways successfully evade recapture. Others have noted the temporal flexibility of the words, and their applicability in many settings. Clearly, either way, to wade in the water is both an invitation and a directive. As an invitation, the song asks the listener to take a chance on themselves, to try something new—to wade in the water. Wading conjures a different image from stepping or tiptoeing into the water; to wade is to take definite action, dedicated steps, and to do so with the intent of getting wet, of moving beyond the immediate shore. If “God’s gonna trouble the water,” wading is more than a casual, inconsequential act. Troubled waters signal change in the offing. Now that change might be little more than a ripple on an otherwise placid surface. But we can also imagine a storm coming, one that is dark, threatening, and potentially cataclysmic. Such a storm could alter shorelines, lay waste to old landmarks, and demand a reorientation.

The Importance of College Education Today

I gave the talk before the Mellon Foundation settled on the final form of its “Continuity and Change” strategic plan. Yet, what I said that afternoon had a prescient quality. Worry had already surfaced that the highly democratic nature of American higher education (4,000-plus postsecondary institutions and an equal number of stories) had clouded the narrative about the value of a college degree. Notwithstanding a mountain of economic evidence about the long-term benefits of higher education, a vocal minority had begun to ask if college was “worth it.” They, of course, argued, “Not necessarily.” But in a knowledge-based economy, informed by disruptive digital technologies, the divide between the high school-only graduate and the college graduate is widening, which should be a source of grave concern. Education and training are not to be confused. Many predict future work will discard the trained in favor of the educated, assuming the latter are equipped to handle rapid successions of change and disruption.

Others complained about the rising costs of attending college, without an informed critique of contemporary social policy that substantively reduced governmental support for higher education. In the face of fewer state and federal dollars, universities and colleges passed costs on to families—even though in many instances those costs were heavily discounted. Nonetheless, the higher education marketplace remains today mired in the difficulty of explaining price versus cost, of distinguishing between merit and need, and of ensuring that an open and inclusive community is also a safe and welcoming community.

During that same talk, I highlighted other opportunities and challenges. With advances in neuroscience, the academy stood to benefit from a prolonged examination of how students learn. If the twentieth century had been about selecting students to ensure proper access, the twenty-first century promised to become about selecting students with a focus on success. This required a new and innovative focus on pedagogy by faculty and schools at all levels. And, as my colleague Eugene Tobin was quick to note, such a refocus opened a range of new partnerships, not just between similar institutions, but increasingly among dissimilar ones. We at Mellon envisioned private liberal arts colleges partnering with research universities and state comprehensive universities, community colleges working with four-year institutions, and well-resourced schools finding common cause with less well-endowed places. All along we reasoned that intellectual talent was more evenly distributed than access to opportunity. Colleges and universities needed to redouble their efforts to attract, retain, and graduate an ever more diverse pool of students for the benefit of the nation.

The Role of Philanthropy

Such an approach demanded a new appetite for risk taking. I noted that higher education had to prepare itself for getting it wrong before it got it right. This meant being prepared to experiment, succeed, fail—and to learn from both kinds of outcomes. This seems an odd point to have to make given the culture of a college. Students take exams; some pass, and others fail. Researchers experiment in labs, knowing the success rate pales in comparison to the failure rate. Yet this same culture had produced an overriding sense that failure was not tolerated. That success and only success was tolerable.

This story of higher education, its opportunities and challenges, serves as a kind of allegory for the not-for-profit sector and the role of philanthropy. After serving as Mellon’s president for more than a year, I asked Bradford K. Smith, the president and CEO of the Foundation Center and a longtime student of American philanthropy, what he perceived as the greatest threat to the world of private foundations. After pausing and reflecting for a moment, he surprised me with his response: “Not being considered important. Losing influence.” Smith hinted at a fate equal to social purgatory: existing but no longer mattering. His words guided the next years of my presidency and should haunt all of us assigned the task of placing bets on social change for the common good.

Much has been written in foundation circles about new forms of philanthropy. There are many ways to conceptualize what we do, among them “charitable giving,” “philanthropic investment,” “strategic philanthropy,” and “social entrepreneurism.”[1] We plot projects that measure social impact, raise questions about sustainable initiatives, and fathom ways of liberating individuals to design solutions to problems in their communities. No matter what we call our efforts, they center on a central understanding that philanthropy is doing its best when it frees others to do their best.

Reflecting on these last five years at Mellon, I would say that no one approach should define a given foundation, let alone the whole philanthropic sector. Yet perhaps there should be some idea that threads through the various emphases. Returning to the theme of troubling the waters, what if philanthropy thought of its grantmaking in the same way it thinks about its investment strategy? All of the foundations built to exist in perpetuity have some form of a diversified investment strategy, because they are designed for decent returns over the long haul. Volatile markets and global disruptions, as occurred in 2008, can prove jarring, even if, as we learned a decade ago, historic downturns are followed by upswings. So we design our investment strategies with volatility in mind. Public equities, private equities, hedge funds, cash, bonds, and derivatives come with ranges, sensitivity indexes, and other tools for assessing and managing risk and opportunity. Oftentimes the private equity firms include venture capital funds. These funds are created because analyses suggest that an early-stage venture has the potential of taking off, and risk is mitigated by the potential for success.

Is there any value to similarly constructing a program portfolio?

An immediate challenge to answering that question is the difference in the time horizon. The typical grant is for fewer than five years rather than for ten, fifteen, or more years. Increasingly, grantees are called on to demonstrate impact, which is not necessarily the same as proving success. Often a board will ask about the theory of change that undergirds the effort rather than the contours of success that will define an improved set of outcomes. As I observed in an earlier annual report, in 1988, when Henry Drewry and William (Bill) Bowen created the Mellon Mays Undergraduate Fellowship (MMUF) program to increase the numbers of underrepresented students who went on to graduate school, earned doctorates, and entered the professoriate, they considered timing, compounding, and scaling. Had they ended the program after five, ten, or even twenty years, it might have been ruled a failure or at best a modest success. Thirty years in, the program has produced 5,307 fellows, 771 with PhDs, 406 with faculty appointments, and another 698 in the graduate school pipeline. Drewry and Bowen, without saying so, functioned as intellectual venture capitalists, betting that progress could be made if their plan was given time, support, and direction.

Graph illustrating future projections for Mellon Mays Undergraduate Fellows who will successfully complete the PhD.

Continuity and Change

Mellon has made similar bets over the last five years in almost every program area. Invariably, if we have structured our portfolio of risks appropriately, some of the efforts will produce fantastic returns, others none at all. As a through line, we labeled the approach “Continuity and Change.” The title hints at the dynamic interplay between stasis and disruption, old and new.

At the meta level this entailed refashioning the program areas, ranging from the retirement of Conservation and the Environment to the integration of Liberal Arts Colleges and Research Universities into Higher Education and Scholarship in the Humanities (HESH); to the morphing of a South African program into International Higher Education and Special Projects (IHESP); to the creation of Arts and Cultural Heritage (ACH) from the formerly parallel work in performing arts and art conservation and museums. And while Diversity and Scholarly Communications largely retained their names, other features of their work changed significantly.

Programmatic integration and reorganization sparked other considerations, too. In 2016, we launched the Mellon Research Forum (MRF) on the Value of Liberal Arts Education, which brings together independent researchers, guided by an external advisory board, to research and report on the value (or not) of a liberal arts education on overall well-being, civic engagement, economic prosperity, ability to analyze conflicting information, empathy, and other factors. Envisioned as an eight-to-ten-year effort, this MRF project portends a new direction, one that has the Foundation initiating possible long-term research on key questions that align with Mellon priorities.

Mellon has long been a forward-looking foundation and an outward-facing philanthropy, but not always a public spokesperson for the arts and humanities. True to its origins and the founders’ beliefs, we invested in able people from capable institutions and gave them the resources to do the work, while getting out of the way. By late 2013 we had come to sense this point of view needed updating, which a subsequent Center for Effective Philanthropy survey confirmed. Grantees noted that while they cherished our money, they also desired our symbolic capital. They asked us to use our standing and broad perspective to tackle issues of concern in the arts, humanities, and higher education, to move from the shadows into the light.

We hired the first-ever director of communications—Laura Washington, formerly vice president for communications at the New-York Historical Society—and built out a communications operation. After Laura’s arrival, a strategic communications plan evolved. That plan centered on two salient features: showcasing the work of our grantees and by extension the strategic priorities of the Foundation, and finding ways to use communications to advance strategic initiatives.

Our Compelling Interests

Allow me to present an example. Early in 2014 we launched Our Compelling Interests (OCI). This initiative, co-led by Nancy Cantor, chancellor of Rutgers University-Newark, and myself, and steered by a stellar advisory board, aims to make the best research on diversity and its benefits for a prosperous democracy available to a broader set of publics. It includes a book series, published by Princeton University Press, which comprises two volumes to date. The first serves as a general introduction to both the series and the overarching initiative and bears the name of this multiyear project. It drives home three key points: first, diversity is not merely a theoretical concept. All the demographic projections point to a nonwhite majority by midcentury. Second, numbers are not destiny. Unless we carefully define what we mean by diversity, in a manner that moves beyond the old binaries without running away from their hold on the American imagination, we will never be in a position to leverage diversity fully for the benefit of most. A leveraged understanding of diversity means we can explain that individuals may bond because they share similar backgrounds, perspectives, and views on the world, but if those bonds cannot also be bridged to others who differ in origin or worldview, the full value of our social, racial, ethnic, religious, and economic diversity will be missed. Third, even if we can define and leverage diversity, we must still value diversity for it to make a difference.

The second volume in the series, by Scott E. Page, appeared in September 2017. The Diversity Bonus: How Great Teams Pay Off in the Knowledge Economy argues that the more complicated the problem to be solved, the greater bonus you get from enlisting a diverse set of actors to tackle that problem. Here the emphasis is on cognitive diversity. Page understands, however, that cognitive diversity maps onto identity characteristics such as gender, religious background, race, cultural heritage, social class, sexual orientation, and more. He is careful, moreover, in asserting that diversity may not matter in every arena. Problems that require brawn to complete monotonous tasks may not achieve a bonus from adding a diverse team of performers. In such instances the biggest and strongest may always prevail. The OCI series necessitated town-hall style meetings, infographics, interviews, and a plethora of short treatments intended for a varied set of audiences.

Grantmaking Programs

A singular focus on special projects was never the aim, however. As we set about crafting the first Foundation-wide strategic plan, we led with a key understanding: talent is evenly distributed across the nation and the globe, but access to opportunity is not. This basic belief, informed by thorough analyses, led us to take additional risks once we had made programmatic adjustments. HESH, under the watchful eye of Mariët Westermann, created a new community college-research university partnership program. Data show that in several strong public universities up to 50 percent of humanities majors originated at two-year schools. Beginning as a pilot between Cuyahoga Community College and Case Western Reserve University, the program has grown to embrace partnerships in eight regions. Those early successes have left us wondering what might be the value of a fifty-state strategy.

At the same time, colleagues in HESH came to understand that the carceral state had become not only a topic of scholarly investigation but a fruitful area for philanthropic investment. Prior to the war on drugs associated with the 1980s, states and prisons worked to rehabilitate the incarcerated. Inmates could take college-level courses and in some instances actually earn a college degree. Such rehabilitation efforts eventually succumbed to an emphasis on retribution and deterrence, which left no place for education. Yet research consistently shows education reduces recidivism. The tide has now shifted again, and Mellon, as an intellectual venture capitalist, has worked with schools and social agencies to decrease recidivism by promoting education for prisoners. Like any prudent investor, we see this as a long-only strategy, meaning results should be measured in decades rather than months or years. Only the charlatan claims quick results and speedy returns here. Competing impulses vie for hegemony. Even as some champion penal reform, including access to education, private companies profit from the status quo, powerful forces believe in incarceration rather than rehabilitation, and change in this space is not sufficiently linear.

The underlying theme, nevertheless, is viable experimentation. It is one thing to expand our pool of grantees, which we consciously did across program areas over the last five years; it is another to invite experimentation openly. Conceptually, and perhaps even philosophically, foundations find themselves asking how much experimentation is too little and will hardly make a difference, and how much is too much, and may unsettle all that we believe we know? These are appropriate and worthy questions at all times.

As intellectual venture capitalists, foundations can successfully trouble the waters for potentially lasting and significant change. Returning to the portfolio approach referenced earlier, we should ask: what might be the value of an intellectual portfolio risk ratio? For every four grants that comfortably fit within prescribed boundaries, is there an appetite for one grant that comes with higher risk but potentially greater return? Without making an explicit commitment, we have inched ever so carefully in this direction across the Foundation. For example, last year we made a grant to Bard College. Bard is partnering with the Brooklyn Public Library to bring college to members of the community seeking easy access to a high quality, college-level education. While both a pilot and an experiment, the proposal seeks to help Brooklyn residents earn a two-year degree through a structured curriculum delivered at the library. If successful and scalable, it might lead to a new way to educate and train millions of Americans either already on the margins of the economy or recently displaced by changes in work.

Two adults standing in conversationCraig Wilder, senior fellow at Brooklyn Public Library (BPL) and professor of history at MIT, speaks with a prospective student about the new BPL-Bard microcollege. (Photo courtesy of Brooklyn Public Library.)

Meanwhile, the Scholarly Communications program pondered an immense problem that went to the heart of the academic enterprise. For decades, scarcely more than one hundred university presses carried the load for the entire American academy, more than 4,000 institutions. Early in my Mellon tenure, one press director openly predicted that as many as half of all university presses could disappear in a decade or so because the economic models were no longer tenable. A confluence of factors conspired to make this so: consortial arrangements; the price of science serials; the freeloader problem, with many universities and schools relying upon the good graces of a few schools for publishing (and thereby validating) scholarly work; a precipitous and now prolonged drop in sales per title; ever-changing markets; and no scalable plan. Some have suggested that smart faculty will “innovate” if left without options. Perhaps. In the interim, an entire generation of scholars could be sacrificed, in particular those outside the best-resourced institutions. Heretofore, however, the publishing system accommodated scholars across the academic archipelago we call American higher education. Mellon has cared about the entire ecosystem, even when we didn’t directly support certain islands. In the future we must ask: can solutions be tested and perfected fast enough to match the predicted turn of conditions? Elsewhere in this annual report you can read about experiments undertaken in the spirit of matching risk with suitable solutions. These experiments are a valiant effort to trouble the waters for the common good.

Across the ocean we placed a different bet. Out of the fabric of a South African program birthed by Bill Bowen and Stuart Saunders, and HESH-supported efforts in Egypt and Lebanon, we have now developed a supportive role in higher education across Africa that includes Ghana and Uganda, and reaches across North and sub-Saharan Africa. Bowen and Saunders collaborated in the hopes of sustaining a new democracy by educating successive generations of leaders. Looking ahead, one can clearly see that education in this country and beyond sorts the haves from the have-nots. The African continent is predicted to become home to more than 2.5 billion people by midcentury. More than ever, the world’s philanthropies need to trouble the waters by investing in human talent, with the expectations that said talent will improve the lot of individuals across the continent. This is a big bet, one in its infancy, but the IHESP program initiative is worth supporting and evaluating because of what we stand to learn.

Grantees and Mellon leaders standing togetherUniversity of Ghana administrators with Mellon grantmaking program leaders. (Photo courtesy of the University of Ghana.)

Given the OCI initiative, one can be misled into believing everything in Mellon’s last five years was focused on diversity. At a programmatic level, it was not. The portfolio was indeed varied and balanced. Yet, what OCI instantiated was a deeper appreciation of the place and value of diversity as a framework for venture capital. We should undertake steps now to leverage the pending demographic and social change for the benefit of all. As such, new efforts to support Latinx students, shore up support for Historically Black Colleges and Universities (HBCUs) as well as Hispanic-Serving Institutions (HSIs), and new ventures to promote college-going among first-generation students marked an ongoing evolution of our work on behalf of diversity, and enabled us to overcome an occasional internal and external wariness about such work. After all, we were there in the beginning when Diversity 1.0 focused organizations on improving their numbers; we worked with some who responded to Diversity 2.0’s interest in combining numeric diversity with inclusion. Ahead (Diversity 3.0) is the much more difficult work of developing and implementing a multicontextual framework for achieving equity.

Colleagues in ACH repeatedly asked penetrating questions about the future of the cultural arts zone. Pioneering surveys revealed the lack of diversity in the museum world, especially among curators and directors.  Sector-specific and cross-sectoral convenings continue to produce key insights into how best to trouble the waters. That information has fueled new strategies across the nation. Concern for audience development has led cultural organizations to approach us for support for younger artists from more varied communities, aid for audience expansion, and guidance about building and sustaining a healthy business. Here, too, as Jesse Rosen, president and CEO of the League of American Orchestras would attest, the call for diversity is being heard with a new intensity.

Behind the Scenes

While much of what we attempted over the last five years has been more visibly curated than has been true in the past, some change appropriately occurs behind the screen. The architecture of our data management system demanded a complete replacement. After a thorough vetting process we settled on Fluxx. Like any complex contemporary organization, we needed a new focus on risk management. To that end, we developed a comprehensive risk management protocol. One of the risks we identified early was an underinvestment in personnel or human capital. Appropriately, albeit still lean by industry standards, we set about increasing the staff size from seventy-five to a little over one hundred. In that time, besides communications, we added an information technology unit and an internal research unit, grew the program and grants management staffs, and added a role for an events coordinator. Reflecting the values espoused in the strategic plan, we took steps to support the philanthropic infrastructure; aid the integration of Mellon-created enterprises such as Artstor with Ithaka; and invite leaders in transition to sit among us, challenge our assumptions, and complete worthy projects. We also concluded we could not ask others to champion diversity if we were unprepared to examine ourselves. The result: a diversity, equity, and inclusion committee, which I chaired.

Troubling the waters signals a willingness among philanthropies to place bets. Mellon has done so in the past and will inevitably find itself invited to do so in the future. Key opportunities await. The humanities and social sciences have a keen role to play in securing a shared future for all in an age of profound technological change. As I suggested last year, if future work is the province of colleagues in science, technology, engineering, and math alone, we risk diagnosing the wrong problem and developing incomplete solutions. Similarly, any number of so-called “Grand Challenges” demand leadership, which I am sure my successor, noted poet and scholar Elizabeth Alexander, is poised to provide.

As for me, after five years of placing philanthropic bets on others, I am taking a chance on myself for one last venture. I am returning to the University of Michigan as a professor of history and Afroamerican and African studies, a position I vacated in 2004 to serve as provost of Emory University. At Michigan, I will be founding and directing a Center for Social Solutions (CSS). For the next decade, CSS will seek solutions to problems pertaining to diversity and race, the transfer of water from flood-prone areas to drought stricken areas, and the dignity of labor in an automated world. This means that the OCI initiative that I lead with Nancy Cantor will move with me to the University of Michigan and exist as a Mellon-supported initiative. That initiative and all of the proposed projects underscore my intention of wading into the water in the decade ahead.

There are a number of ways of imagining Mellon’s continued influence and impact. At their best, private foundations have license to trouble the waters. Taking a long view entails spending the time needed to make lasting impact. So I depart from the world of philanthropy and leave these words of guidance: boldly wade into the water. Seek to trouble those waters with the intent of creating a better world. Do so as intellectual venture capitalists.

Thank you.

Earl Lewis
President Emeritus


1. Sean Stannard-Stockton, “The Four Core Philanthropy Approaches,” Tactical Philanthropy (blog), March 4, 2011, http://www.tacticalphilanthropy.com/2011/03/the-four-core-philanthropy-approaches/.