What are funders and nonprofits' expectations of each other, and what are the public's expectations of our sector? Susan V. Berresford, President of the Ford Foundation, spoke on this topic at the 33rd Annual Members + Forum Partners Luncheon on June 20, 2007. We are pleased to reprint her remarks here:

Philanthropy + the Nonprofit Community: Interdependent. . .Accountable. . .Effective

I am very happy to be here to help celebrate your 33rd anniversary and to pay tribute to my friend Valerie Lies who has been your leader for 20 years. I admire her keen intelligence, humor, and her dedication to the non-profit sector's excellence and effectiveness. Valerie has worked fearlessly and tirelessly for these aims.

Anniversaries offer opportunities to look backwards and forwards. For Ford 2006 was a 70 year milestone and for me - a year capping my nearly 40 years in philanthropy. In that time, Ford's values and mission remained constant but strategies changed, reflecting larger trends. For example, in the beginning when Ford worked overseas, we helped newly post-colonial societies build governmental capacity and establish new universities. And we supported professional training for hundreds of men and women who became national leaders. Much later, when China and Vietnam opened up, we did the same. All of these societies had enormous confidence in what their new governments could do. But over time, it became apparent that government could not do everything, and in fact people began to believe that counter pressure from citizens for transparency and accountability was important. Ford's emphasis then shifted to strengthening the voice of citizens - civil society, as we call it today.

In the US, Ford's work in the early years fostered social science research and the creation of think tanks and new disciplines like demography. Later, around when I joined, other disciplines like women's studies and/or new fields like reproductive health emerged. Ford assisted with community mobilizations for minority civil rights, women's rights, the concerns of gays, lesbians and transgender individuals. In recent decades we funded policy work and advocacy to help sort out issues generated by migrants seeking opportunity and safety. I recount this not so much to tell a Ford story, but rather to say that like you, the Ford Foundation moved with the times, as all healthy organizations do.

Anniversaries prompt us to look back but also to discern what might be coming. In that spirit, I want to do a little forecasting today and I will do this with a worried tone.

In the U.S., we see a shrinking middle class and fewer of the jobs that made our middle class. In past eras, we had many people who worked at decently paying blue collar jobs. Often with just a little help, they sent their kids to college, got healthcare, and saved for retirement. In part, this success grew out of individual effort and grit on the job. But it also grew out of public investments in people and communities. The GI Bill, federal home mortgage programs, community colleges, grants for low-income students, assistance for industrial expansion, anti-discrimination measures that opened training and jobs all played important roles. They put opportunity structures in place. And although we failed shamefully to always ensure benefits for minority populations, we saw real gains in the broader society. That idealism inspired my generation and drew may of us into public service. We wanted to continue the building process and fill in where we had failed to deliver.

Now, it seems government can't easily foot the bills for such sweeping opportunity creating systems. And the job market is bifurcating into education-dependent, high-value jobs and low-value jobs for less well schooled men and women. Too often today our schools are weak and far fewer dollars than are needed now go to education grants. The prospect of huge debts from education loans keeps many from college and university training. So we are failing at educational access just when education is especially important.

Moreover, while we have admirable aims and rhetoric regarding opportunity for all, we have never delivered on that promise. In most of our major, national opportunity enhancing programs, minorities were at a disadvantage, as I noted earlier. While housing or education loans may have been widely available, neighborhoods and colleges were closed.

And today many minority family members still experience overt and covert discrimination. We see this clearly in paired testing of rental housing or job selection processes. And just talk to parents of minority male youths and learn how they are often treated by police - not always as it should be. And, newcomer populations are often shunned and excluded, and individuals who are gay, lesbian, or transgender still often suffer from exclusion and violence. If we continue to drift, these trends will continue. They will exclude some of the very groups we need to engage in order to have a healthy and competitive society.

This is very serious. If these trends of marginalization and economic bifurcation continue, we could risk losing our democracy. Diverse democracies like ours, for example in India, Brazil, and South Africa, are equally challenged. Our countries must create successful and open economies and inclusive democratic governance that delivers benefits to all. Otherwise people will lose faith in the principles of democratic participation and market mechanisms and look for strong-arm leaders.

These challenges will be particularly daunting because of another new development. In two years, according to UN estimates, more than half of the world's population will be living in urban centers. The growth of and migration towards these mega-cities will concentrate opportunity (that is the magnetic pull) but they also concentrate disadvantage. Large conglomerations of people with compound disadvantages can foster restless, angry, and combustible communities.

No easy answers and solutions will appear for us. No single ideology, no individual leader, and no single set of ideas will get us through. We will need to stretch the social fabric, abandon some traditions, combine and adopt ideas, and innovate.

I believe that the non-profit sector can be a significant player in that effort and already is beginning to show its capacities. But the sector needs to be a more forceful voice asking fundamental questions. Where are we going? What kind of a country do we want to be? How we can adapt and change? And what is most urgent?

Civil society has traditionally been a leader in the U.S. - churches and synagogues leading activism around civil rights, women's associations fighting for equal pay and benefits, gay organizations forcing attention to HIV/AIDS and the need for faster delivery of medical breakthroughs and an end to discrimination. Isn't it curious that we don't yet see widespread mobilizations and urgent popular debate about the need for decent wages, health care for the 40 million uninsured, and the best ways to balance protection against terrorism with protection of liberty. It's pretty quiet! And where is the social conscience and the voice of concern about so many minority males in jail and headed away from opportunity? So we have a big job ahead of us, reigniting the voice of our national conscience and finding practical solutions.

Our sector will need to be more and more bifocal - on the one hand analyzing and addressing our local problems, and simultaneously scanning the horizon for ideas and solutions regionally or even nationally and globally. For example, we will need to perceive where the larger economies are moving and what influence those movements have on local opportunities. We will need to see how clever leaders include formerly marginalized groups, and end discrimination. We will need to work together across the non-profit sector and with government and business.

Like many of you, I have recent experience with this and know how hard it can be. The Ford Foundation has been working with other donors in Detroit, responding to the decline in the US auto industry and the resulting crisis in employment and withering of community support systems. For decades Detroit had depended on the jobs, benefits, and philanthropy of the big American car companies. With their current dramatic decline, the community has for some time seemed at a loss for where to turn and failed to face reality.

After some serious suffering and soul searching, the civic and business community is finally rethinking and they are rethinking in a regional and national frame. They are examining the experience of other US midsized cities with changing economies, and bringing in national and international urban experts. They plan to invest in job generation built upon regional strength in higher education, design innovation, health services and culture to name just a few areas of regional strength. They will also foster entrepreneurial experimentation. They will need to do all of this with the understanding that the rising tide does not lift all boats. Special attention must be given to equity principles and getting equitable results. The non-profit community will have to be a steadfast advocate for the poor and disadvantaged minorities, shining a light on equity issues.

A civil society group, the local community foundation has been one of the drivers of one of the new initiatives. It has pooled money from a dozen in and out-of-state donors, applied its local knowledge of key decision makers and thought leaders, brought in national experts with knowledge of "turnaround" cities. The community foundation has also kept an eye on new thinking emerging from the Southeast Michigan business community and the state government. It will work in a cross-sector fashion.

This new initiative that puts together donors, governmental and private non-profit agencies, think tanks, business leaders and entrepreneurs is quintessentially American. It assumes that some portion of the responsibility to rebuild a failing economy lies in the third sector.

We need more of this kind of third sector leadership. But do we have the structures and people of stature and vision to do this? How many troubled cities or rural areas that you know well have large, strong, widely respected civil society organizations with convening power that can pull across all three sectors and support the disenfranchised and marginalized? How many communities have civil society organizations with credibility across diverse communities and high levels of public trust? You clearly have it here in Chicago, but others are still struggling with this challenge. We have a build up task ahead.

Public trust comes not only from a track record of achievement but also from continual demonstration of openness, and transparency. So as we get better at cross-sector, bi-focal activity, we will also need to find ways to raise our field's standards of governance and effectiveness. Ineffective organizations need to reform or close and we need to work with regulators to address outliers who flaunt the law. We cannot keep the public's trust for our expanding role in society if we have too many mediocre performers, "rotten apples" or irresponsible renegades.

As many of you know, large segments of our non-profit field have clear standards of practice and accountability. Some are very formal and regulatory such as those for hospital and university accreditation. Others are informal, more like terms of membership, such as those promulgated by the Council on Foundations, state or local associations like yours, and other membership groups. Your Forum's standards grew from an admirable statewide effort that others ought to emulate. And you may know that the Independent Sector is soon going to issue standards that express a broad national perspective about governance of non-profits. Valerie has been a key part of the effort, helping us to think about how the state and national standards will relate to each other.

Standards are one thing. Using them is another. It is our responsibility to vigorously promote standards. They need to be so clear to the general public that outliers have to explain themselves. This won't happen automatically. That requires a huge effort to educate the public about what good practice means, and insist on adherence to most norms.

And we must help regulators address those who are clearly ignoring the basic laws and norms. First, the non-profit sector needs to react quickly and locally when we see abuse in our own community. If we fail to persuade our colleagues to act properly, we will need to align with regulatory authorities. Non-profit groups are not enforcers but we can act as concerned ambassadors for our field. We can be partners now and then with public agencies overseeing our field. You are already doing this with your state Attorney General. I think others will soon follow your lead.

The third new behavior we must develop springs from the growing body of professional knowledge our sector generates every day. Let me take the subset of our field - philanthropy. Philanthropy is a do it yourself business for sure. We all give money, or write checks, or volunteer time. We are guided by our hearts and minds and take satisfaction from our giving. But we also increasingly recognize that grantmakers have a lot of knowledge about what works and does not. We are not yet very good at distilling and sharing this knowledge.

I see two ways in which this can change. Ford has so far focused on one aspect - knowledge about the generic profession of grantmaking. We have tried to distill wisdom from our and other donors' experiences. Many of you know the results of this effort as GRANTCRAFT. Available on the web and through the Ford Foundation, it offers guides to various kinds of common challenges grantmakers face. Philanthropic organizations can do a lot more along these lines.

But we also all fund comprehensive evaluations to measure the effectiveness of our programs or philanthropic investments. This research generates knowledge. Can we do a better job of sharing that knowledge?

Whether our findings demonstrate impact or disappointment, we need to better communicate what we are learning. Posting lengthy academic studies on our web sites is not sufficient if we are trying to reach key audiences such as regulators, the media and yes, the average person living in the communities. Perhaps providing summaries of evaluations that convey clearly why strategies and tactics worked or did not work. Some foundations are doing just that. In the redesign of our web site we at Ford are taking this into account. We expect to have such strategic and impact evaluations on line in digestible form. Foundations are not the only ones with useful impact evaluation and cautionary stories to tell. All non-profits have this potential - as yet unrealized.

So to summarize, I see an urgent need for the third sector to step up to the plate. We need to help put together cross-sector alliances to spur economic growth, to ensure inclusion of diverse and marginalized groups, and to prompt innovation in democratic governance. We need vigorous third sector standard setting, peer oversight, and collaboration with responsible regulators. And I see a need for greatly enhanced efforts to offer a variety of specialist and non-specialist audiences what we know about what works and what doesn't, what's right and wrong in our programs.

You here at the Forum are doing just the right thing. You increasingly emphasize your role as a statewide alliance of grantees and grantors. Your statewide stretch will bring benefits - broadening your knowledge base, raising the power of your voice, and making you more authoritative.

Your move to be cross sector grantors and grantees means that you can help refine, promote and responsibly apply standards of governance and best practices widely in this region. You can mirror the growing diversity across your state. You can also reach into local communities and explain, give examples, provide guidance, and insist on good practice, as colleagues do with each other. And, when you are frustrated and aren't getting results, you can work with regulators to make things right, and also possibly head off regulatory overreaction.

Finally, as a statewide, sector-wide alliance, you can gather and share know-how and experience from a wide swath of actors. More experience ensures multiple perspectives. You have more models, more ideas, more leaders to draw on. No single ideology or perspective is sufficient to support all that we need to do.

You are pioneering in this restructuring, but I believe you are making a pathway others will follow. So on your 33rd birthday I say congratulations and sincerely wish that you will shine through many, many more to come.

-- Susan V. Berresford
President, The Ford Foundation