In keeping with well-established Foundation policy, I will retire as president of the Foundation at the Annual Meeting of the Trustees in March 2006. By then it will have been my privilege to serve as president for 18 years—an appreciably longer tour of duty than I anticipated when I arrived at the Foundation’s offices on 62nd Street in January 1988.
Serving in this position has been an endlessly fascinating and rewarding opportunity, and I am going to devote this report to reflections on the evolution of the Foundation over these years and to lessons I have learned—and relearned—along the way. (To save space for this discussion, I will not comment at any length on activities during 2004 within particular program areas, since information about them is available on the Foundation’s Web site and a complete list of grants approved during the year is also provided.) Finally, in concluding this report, I will describe the interim grant making strategy the Foundation has put in place to smooth the transition to new presidential leadership. It is important that grantees understand our intention to maintain momentum in key programmatic areas while also creating some “running room” for a new leadership team.
The Evolution of the Mellon Foundation since 1988
In mounting a search for a new president, the Trustees are looking for a leader of an organization that is in fundamental ways much the same as the one that I joined in 1988. Yet it is also different in certain respects, and I want now to sketch elements of continuity and of change. It is fair to say, I think, that the elements of continuity (and especially core programmatic objectives and basic principles of grant making) define a framework, an organizational philosophy, and even an organizational “personality” that has conditioned strongly what the Foundation does and how staff members think about their responsibilities. At the same time, the Trustees have given the staff considerable freedom to propose new ideas and to modify grant making emphases, grant making approaches, and staffing patterns in the service of these broad objectives and guiding principles. When I wrote my first Annual Report, in the winter of 1988, I was struck by how skillfully my predecessors had managed to pursue “flexibility within structure.” That phraseology continues to capture the way change occurs at the Foundation.
The Mellon Foundation’s financial resources are much greater today than they were in 1988 (even after taking account of changes in the price level): the endowment is up from $1.5 billion in January 1988 to $4.5 billion at the end of 2004. This is a major increase by anyone’s reckoning. Appropriations were running at an annual rate of about $70 million at the end of 1987; they were $186 million in 2004. Appropriations over this entire period have totaled $2.2 billion, and adding appropriations to growth in endowment implies a total return of 13 percent per year on average—over a period when the Consumer Price Index rose at an average annual rate of 3 percent (Note 1) This is not to say, however, that the Foundation’s financial resources have grown steadily at this rate. Indeed, one noteworthy event in 2004 was the substantial recovery in the market value of the Foundation’s endowment from $3.5 billion in December 2002 and $4.1 billion in December 2003 to the year-end value of $4.5 billion in 2004.
These impressive gains in resources notwithstanding, the Foundation’s place within the larger foundation world has remained much the same. Mellon was and is one of the “big national foundations,” even though the Gates Foundation and other new foundations have been created in recent years and the Hewlett Foundation and others have become much larger. In asset size, Mellon is appreciably larger than the Carnegie, Rockefeller, and Sloan Foundations, and about the same size as MacArthur; Ford remains the largest of the broad-purpose foundations.
Major Programmatic Emphases
If the growth in resources has been a major facilitator of change, Mellon’s focus on higher education and the humanities—defined broadly to include research libraries, centers for advanced study, art museums and art conservation, and the performing arts—has been a constant ever since The Andrew W. Mellon Foundation was formed in 1969. The fraction of total outlays devoted to higher education and the humanities is in fact higher now than it was in 1988, making Mellon more of a “humanities foundation” than ever before. In the pre-1988 period, the Foundation spent an average of just over 60 percent of its grant funds on higher education and the humanities, as compared with a nearly 80 percent share today (of a far larger appropriations total). (Note 2)
One factor explaining the Foundation’s ability to put increasing emphasis on its core commitments to the humanities and higher education is that it has exited broad fields in which its goals have been largely achieved. Population studies is one example. The Foundation was active in this field when there was far more concern about burgeoning population growth than there is today—a shift in attitudes due largely to dramatic reductions in fertility rates. Demography continues to be an extremely important field of study, but its most active areas of application are now in urbanization, public health, and aging. These are areas of unquestioned importance, but they are not fields in which this Foundation has invested or in which it can claim to have demonstrated competence. The Foundation has also ended its support of programs in reproductive biology and medical research because it lacked special expertise and because other large grant makers with more staff competence were supporting similar work. The Foundation has also been willing to move in and out of new fields when the time seemed right to do so. Eastern Europe is the clearest example. The Foundation invested heavily in rebuilding libraries and business infrastructure in the years immediately after Soviet domination ended, but that program was brought to an orderly conclusion after pressing needs had been met.
These decisions to conclude programs have freed up resources that the Foundation has redirected to core fields of continuing interest. More generally, as resources have grown, Mellon has followed a deliberate policy of “sharpening and deepening” commitments. The idea has been to find new ways to work ever more effectively within established program areas, rather than to spread out into entirely new areas. This is somewhat unusual. The more typical pattern in the foundation world is for growth in total resources to be accompanied by a broadening of programmatic interests. Some foundations have used growth in resources to extend their programmatic reach, often to the benefit of society at large. But as the Mellon Foundation’s Trustees weighed various strategies in September 2000, during the substantial run up in the equities markets, they concluded that—for Mellon—strengthening and deepening activities in core areas of interest would take fullest advantage of our capacities and would be especially beneficial to fields such as the humanities that were of less interest to many other donors.
Increasingly large investments have been made in higher education. In the early 1990s, under the leadership of Harriet Zuckerman, the Foundation took on active direction of a large-scale effort to improve doctoral programs in the humanities. This “Graduate Education Initiative,” begun by Neil Rudenstine and me shortly after we arrived at the Foundation, was intended to see if ways could be found to shorten time-to-degree and to reduce attrition within the humanities and related social sciences in major universities. The major innovation was the decision to focus on the department as the core organizational unit at the doctoral level. Participating departments were expected to rethink their graduate programs, reorganize financial aid, try out new approaches (such as providing summer support to graduate students who had completed their qualifying examinations within a specified time and were eager to get on with their dissertations) and keep careful records of students’ progress so that the value of these efforts could be evaluated. This initiative lasted 10 years and involved outlays of $80 million; its results are being analyzed now, utilizing a very large database that has been built for this purpose. This new program replaced only in part the program of portable predoctoral fellowships in the humanities that was launched in 1983 and has been administered by the Woodrow Wilson National Fellowship Foundation from its inception to the present day. This portable fellowship program was changed from a multiyear to an entry-year program, largely in response to the findings in the Bowen-Rudenstine study of doctoral education. (Note 3)
In more recent years, the emphasis within the Foundation’s research universities program has shifted. The heavy weight given to support of graduate education in the 1990s has yielded, at least in part, to greater concentration on faculty support. A full panoply of faculty fellowship programs in the humanities, covering successive stages in the careers of academics, has been launched over the last three years: namely, the Ryskamp Fellowships, the Burkhardt Fellowships, the Emeritus Fellowship Program, “New Directions,” and the Distinguished Achievement Awards. (Note 4) Other Foundation-sponsored faculty fellowship programs are managed by the American Philosophical Society and the American Council of Learned Societies. In addition, the Foundation has supported postdoctoral fellowship programs for aspiring faculty members at a number of colleges and universities. Taken together, these faculty fellowship programs involve average annual outlays of approximately $20 million, as compared with outlays of approximately $6 million per year for graduate fellowships. In addition, approximately $12-14 million per year is spent on a variety of other activities within research universities and other institutions that have scholarly objectives—including historical societies, independent research libraries, and centers of advanced study.
Strengthening the nation’s liberal arts colleges has been an important objective of the Foundation dating back to the 1970s, and a number of ideas tried out decades ago continue to have resonance: providing discretionary support for new presidents is a good example. The total amount of Foundation resources going to liberal arts colleges has increased markedly—from an average of $4 million per year in the pre-1988 period to approximately $20 million per year more recently. Curricular initiatives have continued to receive support, as has language study. Perhaps the most important change, pioneered by Pat McPherson, has been the far greater emphasis now given to institutional collaborations—in areas ranging from faculty career enhancements and faculty staffing to study abroad programs, fuller use of information technologies, and improved administrative support.
It has become clearer and clearer to our staff that these colleges cannot achieve their full potential unless they are helped to share resources and thereby to benefit from greater scale. The formation of “NITLE” (an acronym for the National Institute for Technology and Liberal Education that is pronounced “nightly”) is perhaps the best example of a promising opportunity of this kind that is still in a relatively early stage of development. The plan is to continue strengthening four regional centers that will serve the needs of liberal arts colleges in their respective geographic areas while allowing NITLE to benefit from coordination and leadership at the national level by operating as a part of Ithaka (a relationship explained in detail in last year’s Annual Report). It is imperative that liberal arts colleges take full advantage of the opportunities presented by advances in information technology, and it is highly unlikely that this goal can be achieved without close collaboration and some measure of central direction. The “Emeriti” plan to provide post-retirement health coverage in a cost-effective manner is a second example of a collaborative activity that has grown out of the expressed needs of colleges and that has required a considerable entrepreneurial effort as well as a substantial investment of funds. (Note 5)
The theme of institutional collaboration runs through every one of the Foundation’s program areas. In the performing arts, the Orchestra Forum, conceived and led by Catherine Maciariello, the Foundation’s program officer in the performing arts, is a highly collaborative effort to exchange ideas and try out new organizational models designed to break down old barriers and give musicians new opportunities to enhance the artistic quality of the work of symphony orchestras. (Note 6) More generally, the pattern of the Foundation’s investments in the performing arts has changed in one major respect: in the pre-1988 period, resources were concentrated on theater, dance, and opera; today, other forms of music also receive substantial support.
Art museums and art conservation have also been major interests of the Mellon Foundation (and of its predecessor foundations) from earliest days. In the pre-1988 period, substantial grants were made to the National Gallery to under gird the work of the Center for Advanced Study in the Visual Arts and the Patrons’ Permanent Fund for the purchase of art. During that period grants were also made to a number of other museums, primarily to develop educational programs and strengthen curatorial scholarship. Grants to endow curatorships and support scholarly publications have continued to be a priority for the Foundation, but its continuing, and greatly expanded, efforts in support of conservation deserve even more emphasis. One of the most noteworthy new initiatives undertaken by the Foundation, under the leadership of Angelica Rudenstine, is the investment in the conservation of photographs, both in advanced training of specialists in the field and in the establishment of positions in a number of different museums. Another is the renewed emphasis on the role of science in art conservation. (Note 7) Substantial grants have been made to establish new senior positions in science at several leading museums as well as at conservation training programs, and large commitments have also been made to enhance opportunities for postdoctoral scientists and other new entrants to the field.
One entirely unanticipated but most welcome event in 2004 was the receipt by the Foundation of a National Medal of Arts. Our chairman, Anne Tatlock, accepted this honor from President Bush, who presented the following citation: “For decades of outstanding service to the arts and cultural world, and especially for its civic leadership in the New York City arts community in the aftermath of the September 11 attacks.” This award was particularly meaningful because of its earlier association with Paul Mellon. In recognition of his signal contributions as a philanthropist in the arts, and especially his extraordinary support and leadership of the National Gallery, Paul Mellon received a National Medal of Arts in the first year that the award was given. Over the years, the Foundation has consistently supported both the performing arts and the visual arts, sometimes in traditional ways and sometimes in new ways (such as ARTstor), and we would like to think that Paul Mellon would have been pleased that, even as there are some changes in the specifics of how the Foundation works in a changing world, there is so much consistency in the core principles that the Foundation follows. The juxtaposition of the award of the Medal to Paul Mellon in 1985 and to the Foundation in 2004 symbolizes the Foundation’s continuing commitment to the arts.
In another program area, conservation and the environment, the Foundation originally emphasized efforts to acquire and preserve particularly valuable and vulnerable natural areas. The Foundation has continued to support the Trust for Public Land and has by now appropriated nearly $20 million for the use of this outstandingly effective organization. More recently, under the leadership of William Robertson, the Foundation’s focus has shifted to the support of collaborative research and training programs in ecology, including the work of the Organization for Tropical Studies (OTS) in Latin America and an important research and training program at the Kruger National Park in South Africa. Persistent—and highly successful—efforts have been made to connect these activities in conservation and ecology to other program areas at the Foundation, and especially to the provision of opportunities for students at liberal arts colleges to participate in research projects at places such as the Marine Biological Laboratory of Woods Hole, OTS, and Kruger National Park. Working closely with colleagues at Ithaka, Mr. Robertson is now actively engaged in creating a massive database of Type specimens and other materials pertaining to African plants. This resource is being created with contributions (thus far) from 31 herbaria in 18 countries. It already represents an international collaboration of unprecedented scale, and Mr. Robertson expects to add at least two more herbaria and two more countries in June 2005.
Libraries and scholarly communication has been a core area of Foundation activity for three decades, and Jack Sawyer, during his tenure as president of the Foundation, played a pivotal role in the formation of the Research Libraries Group (RLG). This area of activity has gained even greater prominence at the Foundation over the last 10 years. Led today by Donald Waters, this grant making program is an excellent example of the refocusing of traditional activities, such as support for archives and scholars using the archives, by encouraging the adoption of technological approaches that involve the creation of new kinds of repositories and new ways of assembling, organizing, “tagging,” and mining data. (Note 8) It would be a mistake, however, to believe that this emphasis on the application of technology to the work of libraries is new to the Foundation. The 1987 Annual Report describes pre-1988 activities as follows: “The Foundation’s principal concerns have been with building an adequate national computerized bibliographic system... [and] with trying to help libraries... to think about the consequences of the new technologies for research and teaching.”
Still, we should not understate the extent of recent efforts to extend the Foundation’s reach in this critically important area. Working in close collaboration with leaders in the university community, the Foundation has supported a number of information technology projects, including OpenCourseWare (OCW), an ambitious effort jointly supported by the Hewlett Foundation that aims to make freely available the instructional materials from all courses taught at MIT. Ira Fuchs, the Foundation’s vice president for research in information technology, has been especially active in promoting the development of open source software that has the potential to provide cost-effective solutions to a wide range of problems common to colleges and universities.
Through its libraries and scholarly communication program, the Foundation has played an especially important role in creating new organizations that have a capacity to serve students and scholars worldwide for many years to come. In response to the unprecedented changes that have occurred over the last decade in the ways that students and scholars can access, manipulate, and store data in electronic form, Mellon has taken the lead in creating JSTOR, ARTstor, and Ithaka—three signature programs that are described in detail in last year’s Annual Report. All of these organizations, now independent entities, benefit from outstanding leadership in the persons of Michael Spinella (JSTOR), James Shulman and Neil Rudenstine (ARTstor), and Kevin Guthrie (the founding president of JSTOR and now president of Ithaka).
The Foundation has not only supported the work of these “Affiliates,” (Note 9) it has also encouraged mutually beneficial interactions between their staff members and Mellon’s own staff. Space constraints have been a limiting factor. As those who have visited the Foundation in recent years are well aware, space in our 62nd Street buildings has been at a premium, with many staff working in extremely crowded quarters and a frequent lack of rooms for meetings. The “incubation” of ARTstor within the Foundation’s walls exacerbated this problem mightily, and it was clear that something had to be done. We did not want to give up the ambiance of our 62nd Street town houses, yet we also wanted to avoid dividing up our staff, separating Mellon from Affiliated organizations such as ARTstor, and losing both the intellectual and financial advantages of scale.
Fortunately, we found a solution to this vexing problem by acquiring three town houses on 61st Street which back up to the gardens of the 62nd Street buildings and which, collectively, contain almost as much space as do the houses on 62nd Street. Substantial renovation of this new space was required, in part to achieve programmatic purposes (including the efficient sharing of library resources and other infrastructure such as IT services) and in part to conform to code requirements. We were able to retain an outstanding architect, Charles Platt of Platt Byard Dovell White, and to work with an equally outstanding contractor, Robert Goldberg of Yorke Construction Company. Over the last few months, the project has been successfully completed, and ARTstor and Ithaka staff have now moved in. By the time of the Foundation’s Annual Meeting in March 2005, we expect that all of the space, including meeting rooms that will be shared by Mellon staff and the staff of the Affiliates, will be completed. The successful integration of the gardens between the two sets of buildings gives the complex a campus-like feeling and encourages collaborations and easy interactions among staff with shared interests that will, we believe, be highly productive in the years to come. (Note 10)
We estimate that, taken together, grants with a technological emphasis in the library and scholarly communication, research in information technology, and other programs, represent just over 20 percent of total Foundation grant making today. These activities have complemented, not replaced, traditional work in the humanities and related fields, and it has often been the most respected scholars who have embraced these initiatives enthusiastically. Harriet Zuckerman reports that one of the four most recent winners of the Foundation’s Distinguished Achievement Awards in the humanities has a strong interest in the use of electronic images to portray how the Japanese and Americans viewed one another when Perry entered Tokyo Bay and later in World War II. Another of the four winners intends to use electronic technology to link manuscripts of 19th-century Italian opera and other materials such as “paratext” of vocal scores so that they can be studied together.
Promoting collaborations and program crossovers have proven to be highly successful approaches and are two recurring themes of grant making at the Foundation today. A third theme is increased emphasis on “crossing borders”—not just allowing, but actively encouraging, international connections. The Foundation’s work in South Africa, which is led by Stuart Saunders, former vice-chancellor of the University of Cape Town, has helped that country’s educational institutions participate effectively in South Africa’s transition to a truly multiracial democracy. In addition, the close working relationships built up in South Africa since 1988 with universities and other entities such as national parks and herbaria have paved the way for new work in ecology and for collaborations with many Foundation programs (the African Plants Initiative cited earlier is one example, and the presence at the University of Cape Town of the MMUF program discussed below is another). In the last few years, more grants of various kinds have been made to leading institutions in the UK (especially), Western Europe more generally, and China. Today, the Foundation makes approximately 18 percent of its grants outside the US.
Moreover, the distribution of grants provides only a very partial picture of the international reach of the Foundation and its digital progeny. JSTOR’s collection of journal literature is now used by more than 2,300 libraries in 85 countries; more than 60 percent of new JSTOR participants joining in the last six months have been libraries, institutes, and research organizations outside the US. ARTstor is keenly interested in presenting images of art from many countries and in working closely with the world’s great museums. The mission of one of the entities being incubated by Ithaka called Aluka (a Zulu word meaning “to weave”) is to create, aggregate, and distribute scholarly content, much of it in the form of primary sources, from and about developing countries. Of course, the Foundation has supported area studies programs and foreign study programs from its earliest days, and recipients of faculty fellowships provided by the Foundation routinely study abroad and collaborate with colleagues outside the US. Today, more than ever before, it is difficult in the extreme to draw a clear line between “domestic” and “foreign” activities.
The last major programmatic area that I want to discuss is one of the most important: the Foundation has long had, and has today, a strong commitment to promoting opportunity in America, especially for members of minority groups but also for others who enjoy only limited access to educational resources. This is far from a new emphasis. Between 1980 and 1988, the Foundation appropriated $26 million for programs related directly or indirectly to educational opportunities for minority students and faculty members (including grants of over $11 million to leading private black colleges).
When I came to the Mellon Foundation in 1988, the first program that I initiated, in close collaboration with Henry Drewry, was called the Mellon Minority Undergraduate Fellowship program (MMUF); it is now, with the same acronym, called the Mellon Mays Undergraduate Fellowship program. Led originally by Mr. Drewry, MMUF now enjoys exceptional leadership from Lydia English, who continues to work closely with campus coordinators on more than 34 individual campuses and the consortium of 38 member institutions of the United Negro College Fund to encourage committed students to pursue doctoral work and consider careers in academia. In 2004, MMUF reached a milestone, when the cumulative number of PhDs awarded to its fellows exceeded 100. Many, many more will be awarded, as the large number of students in the long MMUF “pipeline” (that usually begins during sophomore year in college) complete their work. (Note 11) The Foundation also continues to provide institutional support to historically black colleges and universities (HBCUs), to members of the Appalachian College Association, and to institutions, especially Heritage University, that have a special commitment to the education of Native American students.
In the last few years, we have become increasingly conscious of other ways in which Foundation programs have benefited a wider range of institutions and scholars than might normally be the case. The most dramatic example, once again, is JSTOR, which is having a tremendous impact on educational opportunities at resource-poor institutions. The range of participating institutions is striking and extends, in the US, from all 60 of the major research universities that are members of the Association of American Universities to 147 community colleges. Outside the US, 150 participating institutions are in countries with a Gross National Income of $2,960 per capita or less, and JSTOR is actively exploring ways of reaching even more users in the poorest countries. The widespread use of this electronic resource has had a major “democratizing” effect at student, faculty, and research staff levels. Access to journal literature is no longer limited to those privileged to work at great libraries, as once was the case. Similarly, Appalachian colleges are among the most enthusiastic early users of ARTstor, which brings them both an array of high-quality images and the software needed to manipulate them that no one could have contemplated before.
Development of a Research Capacity
One entirely new development at Mellon since 1988 has been the creation of an in-house research capacity which, while modest in size, has had a considerable impact. (Note 12) This “capacity” is not a program initiative in the usual sense of the phrase, but it has had definite programmatic consequences. Mention has already been made of the role of the Bowen-Rudenstine study of PhD programs in leading to the Foundation’s Graduate Education Initiative. The publication in 1992 of a Mellon study authored by Anthony Cummings and others of worrisome trends affecting research libraries stimulated much of the thinking that led to JSTOR. Kevin Guthrie’s book on The New-York Historical Society and Jed Bergman’s follow-on study of independent research libraries have had a major impact on how both grantees and grant makers (including this Foundation) think about the sustainability of not-for-profit organizations. The Foundation’s research on race-sensitive admissions policies in academically selective colleges and universities, carried out with Derek Bok, the former president of Harvard University, was cited extensively in the US Supreme Court decisions on the legality of the University of Michigan’s affirmative action programs. (Note 13)
To give a very different example of the effects of this research capacity, the College Sports Project (CSP), established in June 2003, is an outgrowth of two Foundation-conducted studies of the impact of trends in college sports on educational values. (Note 14) CSP is a collaborative effort among a large number of the National Collegiate Athletic Association’s (NCAA) Division III colleges and universities that seek to achieve two critical objectives: (1) greater “representativeness”—athletes should be representative of their classmates in academic outcomes and should be actively engaged in multiple facets of campus life; and (2) greater “integration”—coaches and athletic staff should be more fully integrated into campus life and given greater opportunities to enhance the educational experiences of a wide range of students. (Note 15)
Finally, brief mention should be made of the impending publication of a new study of higher education, conducted by staff of the Foundation, that places special emphasis on the complementarities between the goals of “excellence” (educating large numbers of students to a high standard and advancing knowledge) and “equity” (extending opportunity). (Note 16) This study traces the nation’s efforts, going back to Colonial times, to balance a long-standing commitment to educational “excellence” with a still unfolding commitment to “equity.” The underlying research suggests that the US cannot be complacent about its standing as the preeminent system of higher education worldwide. Competition from rapidly expanding educational systems in other countries, including China and Korea, has to be taken into account, but we believe that even more serious long-term dangers derive from inadequate pre-collegiate preparation of students. This endemic problem, which affects students in general, is especially pronounced in the case of students from underrepresented racial minorities and from poor families and families with no prior experience of higher education. The resulting gap in college preparedness threatens both to hold down the overall level of educational attainment in the US (and thus the number of well-prepared graduates able to sustain the country’s economic growth in an era when trained intelligence matters more than ever before) and to challenge our historic belief in the promotion of democratic ideals through the mechanism of educational opportunity and social mobility.
A more surprising finding is that once students from modest backgrounds make it into what we call the “credible applicant pool,” they have no better chance of gaining admission to highly selective colleges and universities than their more privileged competitors whose credentials are equivalent—notwithstanding claims by these institutions that they give special “breaks” to applicants from low-socioeconomic backgrounds. This disjuncture between claims and realities is not due, in our opinion, to willful misrepresentation, but rather to a lack of data heretofore and to the absence in the admissions process of “champions” for applicants from these backgrounds as compared with applicants who are recruited athletes, underrepresented minorities, or legacies—three groups that enjoy substantial admissions advantages.
Since the data show that the odds of a student from a poor family getting into the “credible applicant pool” are one-sixth the odds of a student from a high-income family, colleges and universities need to consider whether the most privileged institutions—defined in terms of their financial resources and deep pools of well-qualified candidates—should put at least a modest-sized “thumb on the scale” when considering candidates from low-socioeconomic backgrounds. We wish to emphasize that such a policy (sometimes called “class-based affirmative action”) is no substitute for race-sensitive admissions. The results of one set of simulations reported in our study demonstrate that replacing race-sensitive admissions with policies favoring students from low-income families would reduce the share of minority students in the undergraduate populations of these institutions by roughly one-half. The effects on graduate and professional programs would be even more pronounced. Thus, we see the two sets of policies as complements, not as substitutes for one another.
The creation of the College & Beyond (C&B) database, which made possible several of the large-scale empirical studies mentioned above—including those that focus on race, athletic recruitment, and socioeconomic status—merits separate mention. This database, which now includes over 275,000 student records spanning four decades as well as information on applicants and on the career paths of some matriculants, has become widely recognized as a resource for scholars outside the Foundation who are interested in a broad range of outcomes associated with admission and enrollment at selective colleges and universities. New research concerning the highly charged subject of differences in career paths associated with gender will depend heavily on the C&B database and its possible extensions—to cite just that one additional example. Similarly, the Foundation’s database on graduate students and graduate programs, now being used to assess the Graduate Education Initiative, has many other potential uses for understanding aspects of graduate education in the humanities. These databases could never have come into existence without the active support of leaders and staff members at the participating colleges and universities; this is, then, another example of the power of institutional collaboration.
Principles of Grant making
Substantive decisions concerning how the Foundation invests its resources—these programmatic emphases—are themselves rooted in basic principles of grant making that have shaped the Foundation’s activities for many years. Let me articulate eight of these principles, most of which represent strong elements of continuity.
(1) From the days of Jack Sawyer and previous leaders of the Board of Trustees (William O. Baker, John C. Whitehead, and Hanna H. Gray) to the present, the Mellon Foundation has been unapologetic in its desire to identify and support excellence. The Foundation tries hard to support the best ideas, and the ablest intellectual leaders of fields, wherever they are located. It is the “leverage of uncommon ideas and uncommon individuals” that makes the most difference. Under this broad rubric, there is one change in policy that bears noting: the Foundation has moved resolutely away from permitting a sense of “entitlement” on the part of some grantees. Staff have raised the standard for approval of grant applications considerably and have been more willing just to say “no,” even when the prospective grantee is well known to us and is a center of unquestioned excellence. We have canceled grants when that has seemed necessary. Staff also work with grantees to end prolonged dependence on the Foundation.
(2) The Foundation makes grants to institutions, not directly to individuals—but it cares greatly about the quality of the individuals who lead programs and projects within the institutions it supports. Good leadership within the grantee organization is critical, and our most serious mistakes have been made when we paid inadequate attention to the quality and the commitment of the leadership of a prospective grantee. The grantee must genuinely want to do what the grant proposal says it will do—there can be no “reluctant dragons.”
(3) Grants continue to be made within rather well-defined program areas; the Foundation makes very few “out-of-program” grants. This approach allows for careful—and, we hope, fair—assessments of applications for grants. In general, it would be hard to be fair, or effective in putting grant money to the best uses, if staff were to respond spontaneously to one appeal of a new kind but then to be unprepared or unwilling to consider other appeals of a similar nature. The Foundation enters new areas, or adopts new program emphases, only after careful study and full consideration by the Trustees of the rationale for a proposed new initiative. At the same time, the Foundation has been willing—and quick—to respond to unusual situations and emergencies, as it did following 9/11, when performing arts organizations, museums, libraries, and parks in New York were in serious straits. These were, however, areas in which the Foundation’s staff had a considerable base of knowledge. The Foundation does not make grants in areas in which it lacks properly qualified staff—and the Foundation today is even more careful to follow this precept than it was in earlier years.
(4) The Mellon Foundation has long been known as an “institution builder” rather than as a source of narrowly defined “project grants.” The Foundation has never hesitated to make endowment grants, generally on a matching basis, or to provide general support when there was a persuasive case for doing so. Most recently, the Foundation’s response to 9/11 focused on steadying important institutions (including a number of small ones). On occasion the Foundation does make grants for particular projects, but almost always in the context of supporting broader goals of institutions important to the Foundation’s programs.
(5) The Foundation has always been comfortable with long time horizons—it has wanted to stay with initiatives long enough for them to have a good chance to succeed. The Trustees have not believed in “start-and-stop” grant making. They have been willing to invest enough funds, over an extended period, to accomplish the purpose at hand. Support for postdoctoral programs at liberal arts colleges and now at universities is one example. The 10-year Graduate Education Initiative (now concluded), the long-term support of the MMUF program, and the more recent investments in ARTstor and Ithaka are other examples. James Shulman, the executive director of ARTstor, has argued convincingly that users of ARTstor simply must be confident that this new resource will “be there” for a long enough period to justify major institutional decisions concerning how to implement systems that are to be used for creating and managing images in a variety of teaching and research contexts.
(6) Achieving “sustainability,” which is closely related to time horizons, has become an ever more important objective of the Foundation. In recent years, the Foundation has been more and more reluctant to support ideas, including promising ideas, in the absence of evidence that the projects in question will prove sustainable. This approach has been especially important in the libraries and scholarly communication area where it is so tempting to respond positively, even enthusiastically, to a proposal that is attractive on the surface but does not seem to have a promising future. Scholars are often better at thinking of exciting things to try out than they are at doing the mundane work needed to demonstrate that a project will have a suitable administrative home, will enjoy the infrastructure support that it will require, and can develop an understandable business plan that includes at least the potential ability to generate the resources that will be needed to have a lasting impact. It is the job of Foundation staff, we believe, to explain to potential grantees the importance of sustainability. Staff also try to point grantees to places where they can obtain assistance in, for example, developing business plans, and the creation of an advisory function within Ithaka may prove helpful in this regard. JSTOR is an outstanding, but hardly prototypical, example, of an entity started with grant funds that is now entirely self-sustaining—and libraries’ confidence in the staying power of JSTOR has been essential in allowing them to redeploy resources and redesign space.
(7) As explained in the earlier discussion of programmatic emphases, the Foundation encourages collaborations among institutions whenever working together is an effective way of pursuing shared objectives. Staff have also welcomed the opportunity to collaborate with other foundations in supporting initiatives which are too expensive for one foundation to advance on its own (cases in point include collaborations with Hewlett in supporting MIT’s OpenCourseWare project, with the Hewlett and Niarchos Foundations in creating Ithaka, with the Doris Duke Foundation in the performing arts, and with Atlantic Philanthropies in building the C&B database). Foundation collaborations of this kind often have the added advantage of stimulating valuable exchanges of viewpoints and allowing the Foundation to build on the work of other foundations. (Note 17) An offsetting danger is that the processes of consulting and collaborating can be time consuming and can lead to compromises and accommodations that are not always wise. Collaborations can also lead to some loss of a sense of accountability at the level of the individual foundation. As in all things, “best practices” depend on making careful choices—in this area, of both collaborators and projects that will be well served by collaborations.
(8) Finally, staff do their best to listen carefully to the leadership within the fields in which the Foundation works in order to benefit from the best thinking concerning pressing needs and new opportunities. For at least the last 30 years, the Foundation has regularly convened meetings of leaders in various fields, and, as a matter of course, staff consult closely with active scholars and practitioners as well as with presidents and senior administrators. When endemic problems are identified, efforts are made to find solutions such as the creation of the Emeriti program of post-retirement health care. Grantees are treated as partners in the grant making process, and staff try not to be overly prescriptive; much experience demonstrates the importance of respecting the far greater knowledge that grantees have of their own circumstances and constraints. One result of this approach is that the Foundation continues to support key needs identified by institutions (such as the endowment of curatorships in museums) that are appreciably less trendy and perhaps less “exciting” than many projects that may be good candidates for support from other sources.
In a similar spirit, staff seek to monitor grants carefully but not bureaucratically. No doubt lapses occur in all manner of situations, but a genuine effort is made to follow these long-established grant making principles. They have, we believe, served the Foundation well.
Organizational and Staffing Matters
Programmatic emphases and grant making principles take on life only through the work of individuals. From its inception, Mellon has maintained a lean staff and kept administrative expenses low. The overall size of the staff has grown over the years, but appreciably less rapidly than Foundation resources and the volume of grant making activity. Staff size has remained small relative to the Foundation’s resources and relative to practices at other large foundations. To cite one reference point, Mellon makes roughly $11 million in grants per program officer per year, as compared to a norm in much of the foundation world of about $5 million. Officers and key staff members have been expected to do many things, often combining administrative, grant making, and research roles. We have believed that integrating these functions can be valuable in and of itself, as well as economical. In this same spirit, program officers have been expected to be their own “communications” officers, and the Foundation has not had separate staff responsible for functions such as communications and public relations. The objective has been to focus attention on grantees and their accomplishments rather than on the Foundation itself.
As a result of these policies, Mellon has maintained one of the lowest ratios of administrative costs to assets and appropriations: about 0.2 of one percent of endowment and about 5 percent of appropriations. This attitude toward administrative costs is important not only because it allows more dollars to be available for grant making, but also because officers and senior program staff routinely deal directly with grantees; they cannot rely on layers of support staff. Still there are limits in the extent to which restraining growth in staff size is a wise practice, and in retrospect I think I have been, if anything, too slow to add staff when needs were apparent. Most recently, increases in compliance activities, including management of the Foundation’s benefit programs and careful attention to auditing obligations of various kinds, have increased administrative workloads substantially. It is only the timely development of the shared services concept (in collaboration with Ithaka and the other Affiliates) that has allowed us to limit increases in administrative costs and to keep administrative tasks from occupying far more time than would otherwise be the case.
When I first came to the Foundation, a major question on my mind was whether it would be possible to recruit the level of talent that seemed to me to be required to achieve the Foundation’s full potential. On that score, my highest expectations have been exceeded. The Foundation has been able to improve dramatically the quality (and the diversity) of its program staff by aggressively recruiting individuals who are themselves leaders in the fields for which they are responsible. The initial appointment of Neil Rudenstine signaled our level of aspiration, as did the subsequent appointments, as vice presidents, of Harriet Zuckerman, Pat McPherson, and Ira Fuchs; I would go on and mention the many outstanding program officers the Foundation has employed, were it not for the risk of leaving someone out. Suffice it to say that recruitment of an exceptionally talented program staff has been perhaps the most important single factor accounting for whatever success the Foundation has achieved. Another factor of great importance has been the quality and commitment of the Foundation’s Board of Trustees, and I intend to say more about the role of the Trustees in next year’s Annual Report, in the context of a broader discussion of governance.
The Foundation has followed the practice of balancing the need for continuity of staffing with the need to “refresh” the staff on a regular basis. After program staff serve for a reasonable period of time, they are encouraged (and helped) to find attractive positions elsewhere. This kind of progression is almost always in the interest of the program officer, and the Foundation benefits from having opportunities to recruit talented new colleagues. It has been particularly gratifying to see how many of the Foundation’s “alumni/ae” have gone on to occupy major leadership positions in other organizations. (Note 18)
Another key element of the staffing plan has been extensive use of “senior advisors”—outstanding individuals who serve specific functions without, in general, becoming full-time staff members at the Foundation. Examples include Richard Quandt (Eastern Europe), Stuart Saunders (South Africa), Phillip Griffiths (fellowship programs and Ithaka), J. Paul Hunter and Bernard Bailyn (humanities), and Susan Perry (libraries within liberal arts colleges).
The infrastructure of the Foundation has been strengthened markedly by hiring excellent staff in the Office of the General Counsel and Secretary (led by Michele Warman), the Office of the Financial Vice President (led by John Hull), and the library (led by Susanne Pichler); also we appointed a new vice president for operations and planning (Patricia Irvin) and a new controller (Thomas Sanders). As already noted, the capacity of the Foundation to benefit from other forms of infrastructure support, including information technology and human services, has been enhanced by means of “shared services” arrangements with the Affiliates that are largely managed by Ithaka staff. In the legal area, where we have had to learn to cope with a plethora of new issues, especially those associated with intellectual property rights, we have been successful in recruiting several highly qualified assistant general counsels (first Gretchen Wagner, who went on to become general counsel for ARTstor, and now Jacqueline Ewenstein, who came to the Foundation from Debevoise and Plimpton). The combination of Mellon’s own in-house legal staff and the legal resources of the Affiliates gives us far more competence in these areas than the Foundation enjoyed before.
The addition of research associates, who spend a year or two at the Foundation before going on to graduate school or to other careers, has also made a considerable difference to the overall intellectual vitality of the Foundation. This has been an important staffing innovation. Kevin Guthrie, Thomas Nygren, and James Shulman all came to the Foundation initially to work on research projects, and all three now play major leadership roles in Ithaka and ARTstor; other research associates have been valuable contributors to the research program at Mellon before pursuing careers elsewhere. (Note 19) In addition to working on particular projects, these staff members have participated actively and effectively in staff meetings and corridor conversations—they have brought fresh ideas and stimulating new perspectives to the work of the Foundation.
In concluding this report, I want to step back and summarize as succinctly as I can the main lessons that I think I have learned along the way. What, specifically, are they?
First, that it is imperative to stay in close touch with the best people in key fields—or big mistakes will be made. This proposition follows from a number of comments made earlier in this report and it applies to all the fields in which the Foundation is active. Our contacts with leading scholars in the humanities, and with leaders in the library community, in museums and art conservation, in the performing arts, and in conservation and ecology help staff stay abreast of new thinking and new institutional developments. As one of my wisest professors, Jacob Viner, used to say: “There is no limit to the amount of nonsense you can think, if you think too long alone.” The Foundation’s officers and staff need to be perceived as active members of the communities that they serve, rather than as professional grant makers. Being “of the community” is the only way to stay truly informed, to gain access to new ideas, and to have a reliable basis for making judgments about people and programs.
The need to “stay in touch” is perhaps most evident in areas affected by fast-changing technologies. An example from the history of JSTOR: in 1994 (just 10 years ago), the most common way of storing and accessing digital information was via CDs. It was Ira Fuchs who kept JSTOR and Mellon from starting down that path. Ira saw networking growing rapidly and CDs as a fading approach. Mellon cannot afford to be left behind as technology advances, and it cannot allow the institutions that it supports to be left behind—especially those with few resources of their own.
More generally, “learn, learn, learn” is the essential mantra. In this regard:
- International exposure is very helpful; we learn so much from those who have had experiences very different from our own, such as colleagues in South Africa and China.
- Bright, interested staff members, with a variety of experiences and viewpoints, willing to exchange ideas in an open way, make all the difference.
- Publishing helps learning—the discipline of writing down what we think and having ideas peer-reviewed is invaluable; it stimulates our thought processes and encourages exchanges of ideas and criticisms from others.
Our experience also persuades us that it is wise to place some number of big bets, to nurture some number of what Laurance Rockefeller liked to call “tall trees.” In earlier days, the National Gallery was one such “tall tree.” Today, the Foundation’s tall trees include its signature graduate, faculty, and postdoctoral fellowship programs; MMUF; the Foundation’s digital progeny, including JSTOR, ARTstor, and Ithaka (including NITLE); the strengthening of science within art conservation; the C&B database; and, if the project is successful, the Emeriti post-retirement health program. A reasonable share of the Foundation’s grants should have at least a possibility of being truly transformative, even if they are far from risk free.
It is desirable to maintain a “balanced portfolio” of programs, grantees, and areas of emphasis. The “balances” that we monitor include: projects that involve technology versus those that depend on more traditional pencil and paper approaches; support for universities versus support for liberal arts colleges; international versus domestic commitments; and, increasingly, support for well-established institutions of unquestioned standing versus support for other institutions that have great promise (often newer ones or ones on a steep trajectory).
The key is to seek not just balance, but complementarities. Program officers at Mellon work well together, and knowledge in one area often spills over and benefits other areas. Recent work in ecology is a case in point. It is not only important in and of itself, it also assists study-abroad programs of liberal arts colleges, supports the Ithaka initiative, and provides increased opportunities for minority students to enter fields from which they have been largely absent.
As already noted, it would be hard to exaggerate the power of successful collaborations. In recent years, especially, the Foundation has been urged by presidents of colleges and universities to continue to serve a catalytic function by helping to organize and lead, as well as fund, collaborative, system-wide approaches when new opportunities arise and when there are wide-ranging problems common to many institutions. Examples range from the mass digitization of content in libraries in ways that will be beneficial to scholarship, to improvements in language instruction, to the potential of technical and organizational approaches such as open source software, to the building of archives and the sharing of archival content across institutions. Success in such efforts depends on assembling the right set of participants and identifying good leadership from the field. Such success in turn often depends on having a reputation for sponsoring work of high quality and getting things done; otherwise, it is difficult to garner the good will and respect that permit effective collaborations. We know that the rewards of ambitious “team” efforts can be very high, especially when they lead to the creation of “public goods” that provide spill-over benefits which extend well beyond individual institutions.
In thinking back over programs that have been especially successful, I am struck by the importance of judging, as best one can, the broader potential implications of projects that at one level may be rather narrowly focused. To cite one example, the Foundation’s substantial investment in digitizing the cave art at Dunhuang, at the edge of China’s Gobi desert, has proved to be not only valuable in its own right but highly beneficial in stimulating international collaborations, in prompting fresh thinking about intellectual property rights and ways of balancing the needs of owners of content and of users of content, and in encouraging the Foundation to press ahead with the development of ARTstor. In a very different arena, the research that the Foundation has conducted on highly specific issues such as the long-term consequences of race-sensitive admissions and the effects of athletic recruitment on educational values, has led to a much broader awareness within the academic community of the importance of looking candidly at educational outcomes of all kinds. Similarly, the MMUF program has had a series of reverberating effects on our understanding of how to structure programs designed to build talent pools. To be sure, not all grants can be expected to have such broad impact. But I am far more conscious than I used to be of the importance of imagining such results and of “aiming high” when designing programs.
Finally, I want to pay tribute to the Foundation’s history, to the contributions of successive groups of Trustees, to institutional continuity, and to the virtues of effective “baton passing.” My predecessor, Jack Sawyer, did so much to set a tone for the Mellon Foundation that has continued to have powerful effects on the Foundation’s ability to recruit outstanding people and to do good work. In addition, President Sawyer took pains to be sure that when I arrived it was possible for me to embark without delay on some activities to which I attached special importance—such as the creation of the MMUF program and the reshaping of the Foundation’s support of doctoral education. In that same spirit, the Foundation is now pursuing an interim grant making strategy that staff and Trustees believe will promote another healthy transition in leadership. Let me outline its main features.
The Foundation’s Grant making Strategy during the Transition in Presidential Leadership
A starting point is the recognition that, while the 2004 recovery in the market value of the endowment is of course good news for potential grantees, thoughts of instant gratification need to be discouraged. Since 2003, the Foundation has been pursuing a three-pronged grant making strategy related directly to our plan to sustain program momentum at the same time that we provide enough “free resources” to allow a new president to get off to an excellent start.
First, sufficient funding is provided annually to allow each program area to continue its core activities, thereby maintaining momentum. The Mellon Foundation has always taken seriously what might be termed “implied commitments” (the understood expectation in some instances of renewed support if projects go well), and it has never believed in imposing sudden changes in direction. Thus, the Trustees have continued to provide support for fellowship programs for faculty and graduate students, the MMUF program, libraries and digital technology initiatives, art museums and art conservation, the performing arts, conservation and ecology, and a variety of special initiatives in South Africa.
Second, we do not want to create either “funding cliffs” for grantees or large future obligations that would limit the capacity of a new president of the Foundation to pursue his or her own ideas. Thus, since 2003, we have been systematically reducing standard grant making budgets in each major program area by approximately 5 percent per year so that, by the end of 2006, a new president will have substantial budgetary “running room.” That is, we have wanted to reduce in a gradual way the volume of recurring grants so that a new leadership team would have the opportunity to launch new initiatives without having to wait for ongoing grant commitments to be terminated (and without the onus of having to insist on prompt terminations). Program officers have understood fully the reasons for this discipline and their docket recommendations have been consistent with this plan. As a result of the combination of these planned reductions in recurring grants and the rise in the endowment, we project that those responsible for framing budgets for 2007 will have at their disposal totally uncommitted annual grant making capacity of perhaps $75 million—as well as, needless to say, the opportunity to work with program staff in defining the future shape of the appreciably larger (recurring) part of the annual grant making budget.
Third, to fill at least some considerable part of the gap created by the difference between annual IRS pay-out requirements (roughly 5 percent of the average value of the endowment in each year) and the recurring program budgets (as they have been affected by the planned reductions in recent years), the Trustees have endorsed a transition plan whereby staff are encouraged to propose worthy “special” grants that are almost always one-time in nature. These grants, which are explicitly designed to carry no continuing obligations, fall into various categories. Some are designed to facilitate an orderly continuation of programs that have been successful but can no longer expect to receive regular grant renewals—an objective that is frequently served by offering to provide “tie-off” endowment grants on a matching basis. Support for highly successful postdoctoral fellowships that have been renewed several times is a good example. Other one-time grants are intended to help not-for-profit organizations active in the fields in which the Foundation has a special interest to “reposition” themselves in light of new fiscal realities or new opportunities. Most of these grants are made to organizations based in New York, including especially cultural organizations and libraries (examples include the Martha Graham Center of Contemporary Dance and the New York Public Library). Finally, some special grants are made to launch new initiatives, which will then need to be self-sustaining (such as the Emeriti post-retirement health program), or to provide a stronger funding base for organizations in which the Foundation expects to have a continuing interest (such as ARTstor, Ithaka, the American Council of Learned Societies, and the Center for Advanced Study in the Behavioral Sciences).
This description of our interim grant making strategy and its rationale will, we hope, correct any possible misimpression that the recent gradual reductions in recurring grant budgets reflect decisions to curtail support for core programs on a continuing basis. Not at all. The purpose is rather to provide flexibility and immediate freedom of action for a new leadership team.
* * * *
As I hope is evident from what I have written, I am persuaded that the Mellon Foundation is only at the beginning of what will prove to be a period of extraordinary contributions. I am so grateful for having had a part in its continuing evolution. My own time at the Foundation can best be described as wonderfully instructive and rewarding. It has been a privilege, beyond recounting, to have had the opportunity to spend so many years on an extended, unhurried Cavafy-like journey (“hope the voyage is a long one, full of adventure, full of discovery”) in the company of so many able colleagues and good friends with whom I have shared the pleasure of entering “harbors seen for the first time.” (Note 20)
William G. Bowen