USC Price School of Public Policy

MacArthur Foundation president Julia Stasch on risk-taking, big bets in philanthropy

April 21, 2017

The USC Center on Philanthropy & Public Policy welcomed Julia Stasch, president of the John D. and Catherine T. MacArthur Foundation, as part of its Distinguished Speakers Series luncheon on April 4. Moderated by Fred Ali, Weingart Foundation CEO and chair of the center’s Board of Advisors, Stasch discussed MacArthur’s approach to public problem solving and the need for risk-taking and collaboration in philanthropy, particularly in these politically charged times.

Stasch’s views on philanthropy were honed by her experience in public education, private business and government. Early in her career, she volunteered for VISTA and taught in the Chicago school system. She also served in the Clinton administration and worked in banking and real estate development before joining the administration of Chicago Mayor Richard M. Daley.

The field of philanthropy marked a big change for her, Stasch admitted. “I have been with the MacArthur Foundation since 2001,” she said. “I left the job of chief of staff of a dynamic mayor – a job that was filled with urgency – to go to a place where you often have to create the urgency needed to accomplish what our work demands.”

MacArthur Foundation President Julia Stasch

Stasch called it both a privilege and a challenge to head a significant philanthropy at this critical moment. “I wake up every day thinking: ‘Do I know enough to lead an organization in a world that is changing as rapidly and in as confusing a manner as we find ourselves in today?’”

The public’s loss of trust in major institutions is an overarching challenge, according to Stasch, and philanthropy is not exempt. She noted the importance of transparency, responsiveness and collaboration in maintaining it. “Trust is at the center of philanthropic effectiveness,” she said. “It has to be built, nurtured and sustained.”

One of her prescriptions is for funders to listen more to those they are trying to help. Another is to not only “think big,” but also be “more agile and experimental.”

The MacArthur Foundation operates using a design-build approach in which they pursue ideas and initiatives with just enough information to get started, and then learn, reflect and change as they are moving ahead, constantly challenging the underlying assumptions to ensure they remain valid. “I’ve challenged everybody that works at the foundation to get comfortable with ambiguity because the world isn’t amenable anymore to the notion of plan, execute, evaluate. You actually have to do all those things at the same time.”

Such notions have led the MacArthur Foundation to shift away from working in many areas to focusing on a few “big bets,” which include reforming the criminal justice system, mitigating climate change, reducing nuclear risk and significantly increasing financial capital for the social sector.

The most recent bet being made by the foundation is its 100&Change program, a competition for a single, $100 million grant aimed at achieving measurable progress toward solving a critical problem facing the world today. By funding at an ambitious level, MacArthur is trying to address problems and support solutions, proposed by others, that are significant in scale, scope and complexity.

When 100&Change was announced, Stasch said they were worried about getting even 100 applications. The foundation ended up receiving 1,904.

Supported by a roster of more than 400 expert judges, the MacArthur team and Board of Directors selected eight semi-finalists. They include projects returning children in orphanages to family settings, fighting malnutrition through nutritionally enhanced crops, eliminating blindness in developing countries, providing online access to medical specialists for people who would otherwise not receive such care, and meeting the educational needs of refugee children. Up to five finalists will be announced in September 2017.

Even with these changes in focus, Stasch reaffirmed the foundation’s commitment to its famed MacArthur Fellows program. Popularly known as “genius grants,” the fellowships provide individuals who have demonstrated significant creative achievements and show the potential for further contributions with awards of $625,000 each. The grants carry no requirements, which, Stasch said, harkens back to the importance of trust and flexibility.

“Every single use is really on the table,” Stasch said. “I love the idea that we’re supporting others’ ambitions and their talents. I think that’s a wonderful antidote and balance to the drive toward strategic philanthropy that many, including MacArthur, have embraced.”

While strategies are important, they should not limit the possibilities of openness and collaboration, she said. “Nothing can be done by philanthropy alone, nothing can be done by government alone, and nothing can be done by the social sector alone,” Stasch observed. Instead, urgent issues ranging from social equality and criminal justice to climate change and nuclear risk require “all hands on deck.”

Such intractable challenges also require the tools made possible by the MacArthur Foundation’s impact investing. Over the years, the foundation has awarded $500 million to bolster programs that support its mission.

As impressive as that is, Stasch said she is more excited about using assets from its current $500 million allocation for impact investing as catalytic capital that, along with such capital from other philanthropies and investors, would be used to draw in even more investors and accelerate the flow of capital throughout the global impact investment marketplace — with a special goal of providing capital to organizations working on some of the world’s toughest problems.

“So I have all your names,” she quipped to attendees.

The center’s Distinguished Speakers Series provides a venue for leading policymakers, foundation executives, and philanthropists to share their views from different vantage points, stimulating conversations about the changes occurring in philanthropy and the implications for public problem solving.