The following is a conversation between Dr. Rajiv Shah, President of The Rockefeller Foundation, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer WNYM in New York City.
Dr. Rajiv Shah, President of The Rockefeller Foundation
Denver: There is no more venerable institution in the world of philanthropy than The Rockefeller Foundation. But venerable institutions need to evolve and constantly reinvent themselves to remain relevant in a fast-changing world. That is what Rockefeller has done and is doing now more than ever under the leadership of our next guest. He is Dr. Rajiv Shah, the President of The Rockefeller Foundation.
Good evening, Raj, and welcome to The Business of Giving!
Dr. Rajiv Shah: Thank you, Denver, for having me.
Denver: Everyone listening knows of The Rockefeller Foundation but may not be aware of its history and notable achievements. And I thought it was really interesting that when you assumed this role a couple of years ago, you went straight to the archives, really digging to fully understand and appreciate The Rockefeller Foundation. Share with us some of what you found out.
Dr. Rajiv Shah: Well, I did try to immerse myself in the archives and just learn about this extraordinary idea and commitment that John D. Rockefeller had really from when he was in his teens, that with opportunity comes a responsibility to give back and reshape society.
That took its boldest form in 1913 when they created The Rockefeller Foundation. And remember, they did so at a time when there was no income tax and, therefore, no income tax deduction, when the federal government, and public governance in particular, didn’t really focus on poverty alleviation, health, wellness, education – these were local community attributes.
They did it at a time when our country was being transformed by this explosion of science and industry, and that, of course, led to huge amounts of wealth for the Rockefeller family. But it also led to this extraordinary insight that you could use science, innovation, and some of the tools from industry – a focus on results, making big bets, having tremendously broad ambitions – to try to lift up as much of humanity as possible.
And so they have been doing that for 100 plus years. I am daunted every day by the legacy that this institution has left the world, which has included: the creation of the modern field of public health; the creation of international health efforts that have saved tens of millions of lives; the launching and sustaining of a green revolution that moved hundreds of millions of people off the brink of hunger and starvation in the ‘60s, ‘70s, and ‘80s; and more recently, a focus on helping cities become more resilient in the face of climate changes.
The Rockefeller Foundation’s greatest asset is probably its standing in the world – our ability to convene people, to reach the smartest, most capable leaders around the world, to have the trust of local health officials and teachers at home and around our planet, really. That’s our greatest asset.
Denver: They’ve always had the long view. Just to ground listeners, what are the assets of the foundation? What are your annual grants?
Dr. Rajiv Shah: Well, The Rockefeller Foundation’s greatest asset is probably its standing in the world – our ability to convene people, to reach the smartest, most capable leaders around the world, to have the trust of local health officials and teachers at home and around our planet, really. That’s our greatest asset.
Financially, our endowment is about $5 billion. Our giving is about $250 million on an annual basis, and we deploy that using an “all tools in the toolbox” mindset. So we’ll make investments that can help transform the face of poverty in India. We’ll make grants that can help the poorest amongst us rise. We’ll use convening and collaboration as tools to motivate other people to give in a more effective manner. And, ultimately, we are returning to our roots and staying true to our culture of being inspired by and optimistic because of the power of science, technology, and innovation to really help humanity rise.
…we thought if we focus and concentrate our resources, our efforts, our capacity to be a bridge between the public and private sector, our capacity to be connectors between scientists and inventors and NGOs and operating partners on the ground, at home and around the world, we could have the greatest impact.
Denver: I want to discuss the work you do in these program areas in a minute. But first, I thought it would be useful if you told us about the restructuring and reorganization you undertook soon after you became president a couple of years ago, which reduced these focus areas from 30-something down to just seven or eight. Tell us about that.
Dr. Rajiv Shah: Well, I started in this role as president at The Rockefeller Foundation just after the election of 2016, and it did seem like a moment in time when we should reassess our priorities and ask ourselves: What are the greatest challenges that are facing the world? And where could we make the biggest contributions to address those challenges?
So we conducted a review. We did, in fact, shut down, as you pointed out, a large number of programs and lines of work in order to focus and concentrate and get bigger results out of a few big bets – some of which I’m eager to talk about, as you know. And like any other rigorous business enterprise, we thought if we focus and concentrate our resources, our efforts, our capacity to be a bridge between the public and private sector, our capacity to be connectors between scientists and inventors and NGOs and operating partners on the ground at home and around the world, we could have the greatest impact.
So, we went through a pretty significant transformation of the institution, which included a fair amount of staff turnover, recruiting of some exceptional people, keeping and retaining some folks who’ve been there for decades and who have insights that are invaluable. And today, we have a culture that I hope is defined by optimism, a commitment to help those who are most vulnerable, and a real sense of accountability, not just to our board, but really to the people we serve at home and around the world.
Denver: I always thought it was a bit fortuitous to be recruiting people after the last election, who many were committed to want to do something a little bit more, and you are able to get some of those people.
You also embedded a data mindset into each of these program areas to get a better measure, a better handle of outcomes. That can be a pretty dramatic cultural change for an organization. Was it? How did you manage it… and maybe some of the lessons you learned while doing it?
Dr. Rajiv Shah: Well, I’d say The Rockefeller Foundation, historically, has always been very data-driven in the way it does its work, so the basic idea that we should be focused on measurable results for the people we serve– vulnerable families at home and around the world– was one that I think was broadly embraced and accepted.
Of course, the devil’s in the details about how you define those results, and we now define them in fairly straightforward terms: the numbers of people we can move out of poverty; the numbers of lives we can save through health and food and nutrition interventions; the number of working Americans that can meet their basic needs and be optimistic about the future. And I, for one, just believe that you’ve got to have those measurable results and milestones and targets in order to run an enterprise of this scale with the ambitions that we have.
…we think it’s possible in the next 10 years to end energy poverty for more than a billion people.
Denver: Let’s discuss some of the work Rockefeller is doing in these focus areas, and we’ll start with energy. There are about 850 million people or so in the world who do not have access to electricity. It’s a form of energy poverty, and you have a new initiative to fast-track power solutions for these people. What are you going to do?
Dr. Rajiv Shah: Well, I would start by pointing out that it is an extraordinary characteristic of our planet that probably 2 billion people don’t have enough access to electricity to be more productive on a day-to-day basis. What that effectively means is, if you’re in that population of 2 billion people around the world, you wake up, you may not have lighting and heat in your home. Cooking requires using firewood or charcoal or sometimes dried cow dung inside your small shack of a home in order to cook food. It means jobs are not really available because to have a job, to run a business, you’ve got to have reliable 24/7 access to electricity that, frankly, is offered at a reasonable price. Most of the businesses that employ people in these environments do so with some backup diesel generation. It goes on and off. It’s dirty, it’s expensive, it’s loud, and it doesn’t enable these economies to create jobs for people who desperately need them.
So, we believe – and we’re willing to make a huge bet – we think it’s possible in the next 10 years to end energy poverty for more than a billion people. We think we can do that by developing a solar mini-grid technology that, at a very low price point, can provide renewable energy access to people that live in rural areas and even urban slums throughout the developing world. We think that that’ll have some value in communities in the United States, as well, like Puerto Rico and critical care facilities in that setting.
We just launched a $1 billion partnership with Tata and Sons, one of the largest companies in India, to put this plan into action, to roll out 10,000 of these rural mini-grids to reach 25 million people and to help 5 million families move out of poverty. We’re going to get that done together with private partners, commercial investors, technologists, energy storage specialists. It’s an awesome project to be a part of because I actually believe it will change the face of rural poverty in many parts of our world.
Our food system is literally killing us. Eight of the top 10 future causes of burden of disease globally are related to diet. In the United States alone, diabetes, which is almost entirely a diet-caused disease, will cost our country more than $300 billion this year and lead to more amputation in the United States than the entire set of wars in Iraq over the last decade.
Denver: Sounds fantastic.
Rockefeller…you’ve had a 70 year-plus commitment to agricultural productivity. You mentioned the green revolution before. That may be the most notable achievement – at least the one that I’m aware of – of Rockefeller, but still, there are 800 million people or so who are going to go to bed hungry tonight, and the food system is broken. We’re all getting sick from it. What are you doing to address those challenges?
Dr. Rajiv Shah: We have reinvested in our efforts around food, hunger, and human nutrition. We do that by supporting small-scale farmers, in Africa in particular, to get better technologies to improve their agricultural production through our partnership with the Alliance for Green Revolution for Africa (AGRA.) We reach 15 million farm households a year, helping them get better seeds, better fertilizers, better irrigation equipment, and importantly, helping them also grow a variety of crops so that they’re growing what we now call Protective Foods – healthy vegetables, leafy greens – so that as their incomes rise, their diets also actually improve from a nutritional perspective.
Here in the United States – you’re absolutely right. Our food system is literally killing us. Eight of the top 10 future causes of burden of disease globally are related to diet. In the United States alone, diabetes, which is almost entirely a diet-caused disease, will cost our country more than $300 billion this year and lead to more amputations in the United States than the entire set of wars in Iraq over the last decade.
So, we’re working to try to change the American food system to prioritize protective foods and nutrition; working with school lunch partners all around the world to transform the quality of what children eat; working with governments to transform the incentives around leafy greens and vegetables and legumes and nuts and other protective foods, and supply chains related to those protective foods; and increasingly working with insurance companies to test the idea that if you help people have a healthy diet, especially food insecure populations, you can statistically see the amount of pre-diabetes in low-income populations go down, and that will save insurance companies money and more importantly, it will allow lower-income American households to lead better and healthier lives.
Denver: I’m glad to see that they’re beginning to prescribe vegetables and food as medicine instead of another pill. And I guess the other thing that I saw is that one out of four young adults in this country between 18 and 34 have pre-diabetes. So as bad as it is right now, the future looks pretty glum unless we do something about it.
Dr. Rajiv Shah: The future is worse. I’m glad you mentioned the prescription food strategy because that’s a strategy we have helped to innovate and get behind. We’ve seen excellent experiments we’ve been a part of – with Geisinger Health in Pennsylvania, DC Greens in Washington D.C., with Blue Cross/ Blue Shield in North Carolina – where actually prescribing food for pre-diabetic populations lowers hemoglobin A1C levels in a statistically significant manner and represents kind of solving diabetes before it occurs.
That’s really where we want to be. We want to be addressing the root causes of problems. We want to be experimenting with new solutions, and then we want to partner with insurance companies, governments, local NGOs, people that have real muscle that can take these things to scale so that, especially for lower-income Americans who are food insecure, they get the support they need to lead healthier lives.
Denver: I’ve always wished that the Department of Agriculture spoke a little bit more frequently to HHS because sometimes they’re just down there, and they never get together.
But that is a nice segue into health, and the only way to make health for all a reality for everyone is by focusing on community health and making it more integrated and digitally enabled. Another new effort of yours is Precision Public Health Initiative. Tell us about that and your goals for the program.
Dr. Rajiv Shah: We actually believe that if you can look on your iPhone or Android phone and see what the weather’s going to be like in your neighborhood that afternoon and maybe the next week, and if you get on your phone and you’re getting ads that are targeting exactly what you think you want to buy with a precision that should be a little scary to everybody, we think those same tools of data science and predictive analytics can help us identify a high-risk pregnant woman before she’s pregnant in rural India, in urban environments in Detroit, in parts of Africa.
And if we can do that, we know we can support high-risk pregnant women through their pregnancies, make sure they get the antenatal care they need, help them take care of their children in the first month of life when so many children perish from disease or sepsis or low birth weight or other challenges around childbirth. We think it’s possible to save 6 million women and children’s lives, effectively ending preventable maternal and child death at home and around the world.
That is a tremendous ambition. We’re making a big bet together with important organizations like the World Health Organization, UNICEF, the governments of India and Uganda and many local municipalities in the United States to literally try to end preventable maternal and child death as we know it.
Dr. Rajiv Shah and Denver Frederick inside the studio
… at times when things are going backwards in our politics, that can be when philanthropy and civil society step up and have the most to add. So, our efforts to keep this Paris Coalition together, productive, developing new solutions, and inspiring the idea that it is possible to win the fight against climate change is, I think, more important now than it ever has been.
Denver: Let’s talk climate and resilience, and The Rockefeller Foundation is committed to tackling these immense issues’ barrage. How can a foundation really have an impact on something so large, so complex, and so political?
Dr. Rajiv Shah: Climate is one of the defining challenges of our time, as we know. And I was a small-but-I-learned-a-lot part of the Paris negotiations and the Sustainable Development Goals that were created in 2015. At the end of the day, we know we just have to get solutions to the climate challenge that are at the scale necessary in the United States and around the world to protect our planet and secure our future.
So we do a lot to enable that. I’d say the most advanced thing we do in that space is around climate finance. We have partnerships with the government in Norway, with major banks here in New York, with global financing institutions to invest in renewable energy, to invest in sustainable agriculture so that agricultural transformation can be a real carbon sink for the planet to prevent deforestation and to usher in the creation of voluntary carbon markets that will unlock more climate finance, and do it at the scale of billions or trillions of dollars.
We’ve had a network of cities. We worked with 100 Resilient Cities, which today we’ve transformed into the Global Resilient City Network, where mayors are trying to come together and come up with solutions so they can prepare their cities and their populations for pending climate changes, particularly related to heat, which is something cities are experiencing. We’re creating new insurance products with the city of Athens and a dozen others to protect those cities from heat stress, which kills a lot of people actually and destroys communities and infrastructure; from flood risk, which half the world’s population is vulnerable to serious flood risk, and that is only going to increase with an erratic and unpredictable climate.
So those are the types of things we try to do together with others. Ultimately, I believe solving that problem requires a renewed global deal, with the United States leading the way, and China participating actively, and we’ve seen both of those things go backwards. But you know, at times when things are going backwards in our politics, that can be when philanthropy and civil society step up and have the most to add. So, our efforts to keep this Paris Coalition together, productive, developing new solutions, and inspiring the idea that it is possible to win the fight against climate change is, I think, more important now than it ever has been.
Denver: I think you’re right. I think when we pulled out, too, some of the complacency that we may have had – every city, every company, they started to step up and say, “We can’t let this happen.” And it really did activate, I think, a lot of people.
Let me go back to the 100 Resilient Cities initiative. When you transitioned, it was sort of looked upon as you dropped that program, and you took a lot of heat for it. I’d be curious – What’s it like when a foundation moves on and drops, if I can use that word, a program? It’s not an easy thing to do.
Dr. Rajiv Shah: It’s not easy to do. These are tough decisions. You got to look at the portfolio and say, “If we are committed to, as we started our discussion, highlighting, narrowing the number of areas we focus on, insisting on measurable results and getting the most bang for the buck, how do we do that?” As part of that process, we did restructure 100 Resilient Cities. We continue to support city networks – and by the way, that was always the plan. The plan was to create this effort that brought mayors in particular together to share learnings around tough problems as it related to climate resilience, and then let them take it forward on their own.
And so, we have largely followed that plan, and it has meant shifting the way we’ve supported that resilience network. We still support it. We still believe that cities, in particular, have a tremendous role in tackling some of society’s biggest challenges, and becoming more resilient to the climate challenges the world faces is high on that list. So, we’re there with them, but in a different way, where they’re really in the lead, and we stand behind them as supporters.
Denver: Then there’s the issue of economic inclusion or jobs. And I’d be curious, Raj, what are the opportunities today for a young person to do economically better than their parents, as compared to, let’s say, a generation or two ago?
Dr. Rajiv Shah: Let me rewind for a second. In my own family – my parents are first-generation immigrants, and I’m a second-generation here. They came from India in the late ‘60s and early ‘70s because they just had an abiding belief that if you are in the United States, your children had a better shot than you did. And if you worked hard – and it was taught to my sister and I every single day – that if you study hard, if you play by the rules, if you have a great work ethic, and you live a life of values in America, you will succeed. And they literally defined success as: “You’ll have more opportunity than I did.” I heard that every day of my life growing up.
And so, after the 2016 election, when I took this role, we really looked deeply at this structure and nature of opportunity in the US economy, and it turns out it has changed dramatically. It turns out when my parents came here, in that window of time between the ‘60s and the ‘80s, more than 90% of people born in that window would have done better and will have done better than their parents. In fact, unless your last name was Rockefeller, you were virtually guaranteed you are going to do better, and that’s only because it’s a high bar. You know, you’re still okay.
That’s not the case anymore. That started to shift in the early ‘80s and since then, it has come down consistently. Today, it’s less than 50%. Less than 50% of Americans born today will have a chance of doing better than their parents if the current trends continue.
Denver: That sort of holds for people who are born into poverty, moving into the middle class. There’ll be similar statistics, I assume.
Dr. Rajiv Shah: Absolutely. It used to be that if you were born into poverty, there was a 50% chance you’d end up in the middle class. Today, it’s less than 25%. And by the way, if you take three or four major metropolitan statistical areas – New York, DC, San Francisco, LA – out of the math, it’s even worse and it’s more stark.
So, the reality is you’re looking at a nation that has so much to offer the world, but has taken a very large percentage of its own population and really suffocated their sense of hope and optimism around their economic and community prospects going forward. I think in our analysis, we also find there is kind of two main insights that have led to that. One is large scale tax and fiscal and regulatory policy that has changed consistently over 40 years and brought down the nature of opportunity.
Denver: Sort of favoring capital and not labor?
Dr. Rajiv Shah: Absolutely. Favoring capital over labor consistently, and throughout our economy.
And the other is a lack of understanding and investment in the importance of place, in the sense that if you’re born in a community that is defined by strong institutions, good schools, a certain social fabric, you have a much, much, much better chance than if you don’t. And some great analysis by Raj Chetty and colleagues have brought that to life in something called an Opportunity Atlas, which we’ve helped support.
But the bottom line is we need to take this challenge on with real intention because the very character of our country is at stake. And it is hard to lead around the world; it is hard to be that shining city on the Hill when 60%, 70% of households in the United States feel like they’re falling behind every month; feel like they’re working hard and they don’t have a shot; feel like their kids are not going to do better than them, and too many of them are right to have that feeling. So, we know we have a lot of work to do here in the United States, so The Rockefeller Foundation has repositioned our work to focus more on economic opportunity and equity here at home, and we’re committed to being part of the solution.
Opportunity zones are census tracks that are designated by governors as areas that are lower-income and lower growth and lower opportunity, and there are now tax preferences – strong ones – to incentivize investment in those areas.
Denver: Let’s talk a little bit more about place and that Opportunity Atlas. I know you’ve been very passionate about opportunity zones. Describe what they are, the promise they hold, and maybe some aspects about them that we need to keep an eye on.
Dr. Rajiv Shah: The opportunity zones come out of the last tax bill. I am passionate about both the tax bill and opportunity zones. My passion about the tax bill is primarily concern because it was $2.3 trillion by CBO estimates. Almost all of those benefits go to the top 1% of income earners in the United States. And it, to me, is a perpetuating of tax, regulatory, and governance policy that has led to a huge amount of inequity in this country and is threatening, as I said, the very nature and fabric of our society.
I’d go back and say within that, there was one bi-partisan amendment that created opportunity zones. Opportunity zones are census tracks that are designated by governors as areas that are lower-income and lower growth and lower opportunity, and there are now tax preferences – strong ones – to incentivize investment in those areas.
We’ve seen two things happen. The Rockefeller Foundation has worked with six cities, in particular, to help them bring together the local community, talk to community leaders, identify investments that are necessary to build strong communities, and we’re seeing those investments now come to life because of this tax change. That’s going to lead to jobs. It’s going to lead to better educational opportunities. It’s going to lead to a transformation of some of those communities. I’m exceptionally proud of the work The Rockefeller Foundation has done to help that part of the puzzle take shape.
At the same time, we’re seeing a lot of real estate projects in particular, that are happening in Brooklyn or Baltimore or San Francisco that would have happened anyway – simply get a tax cut to increase the economic returns to real estate developers that are behind those projects. That’s deeply concerning to me.
And so, our advocacy as a foundation is, we’ve gotten a group of other foundations and interested parties together. We’ve been advocating for some rules of the road and some regulatory and transparency reforms related to opportunity zones. And most of all, we’ve been helping cities engage local communities so they can identify the investments they believe they need to create stronger local communities in places that are otherwise left out of the strong economy we’ve had in the last decade.
Philanthropy is society’s risk capital. And so, if we use it that way, we should be working with the most innovative public sector leaders to say, “Let’s identify new solutions to old problems, and then let’s advocate for those solutions at scale.”
Denver: The motive of those investments make a big, big difference in terms of how they’re going to be executed.
Let me pick up on that thread. What do you believe the role of philanthropy is to affect public policy?
Dr. Rajiv Shah
Dr. Rajiv Shah: I think it’s tremendous. Philanthropy is society’s risk capital. And so, if we use it that way, we should be working with the most innovative public sector leaders to say, “Let’s identify new solutions to old problems, and then let’s advocate for those solutions at scale.” So whether it’s getting opportunity zones right, and then working with the government to reshape that law to allow opportunity zones to genuinely create upward mobility in those 8,600 communities that have been designated as opportunity zones; or advocating for changes to the way we do tax and social policy.
Another big effort we’ve supported is around the earned income tax credit and the refundable child tax credit. We’ve seen the Canadian version of those two policies help reduce poverty in Canada by 20% in just the last few years. We know that these are the most effective, proven, data-driven federal policies we’ve had in the last three decades to address poverty for working Americans here at home. So, true to our word, we’re doing the analysis and advocating for things where the data science and the need for innovation are crisp and clear. We believe that some modest reforms to our tax policy in this country could help move 20% to 30% of the people who are living as the working poor out of poverty.
Denver: My impression of The Rockefeller Foundation – now, maybe this is right and maybe it’s not – but it’s always been an organization that tended to do things on its own. But you have been a real champion of partnerships. Share with us your thinking on that and how you go about forging a really good partnership.
Dr. Rajiv Shah: I don’t believe you can tackle society’s toughest, most challenging problems alone. I think you need to have the public sector working with the private sector. I think you need investors working with scientists. I think you need civil society organizations and philanthropies working with corporate leaders and local entrepreneurs. And so, to foster those kinds of collaborations and partnerships, we really have a pretty simple formula that I think has been proven to work globally and at home.
First, you set a clear and compelling goal. We want to end energy poverty around the world for billions of people. And to that end, we are building partnerships with large companies, with local entrepreneurs, with scientists and technologists. We want to expand economic opportunity for 90 million American families who are working families but effectively working and stuck in a poverty trap. We can partner with investors, policymakers, local real estate developers and others, and transform the lives of some percentage of that community. So, setting the goal is really important.
And then I’d say being an honest listener and learner. I’ve had the chance to see and work with Bill and Melinda Gates and their philanthropy work, and I have always been amazed by their willingness to just go into the toughest parts of the United States or around the world and listen and learn. I tried to do that when I was in the Obama administration. It is amazing how much knowledge a teacher in Detroit will have about how to improve her schools and her students’ experience, how much information a farmer in Northern Nigeria will have about what he really needs or she really needs to transform their production of food. So, continuing to listen to those we serve and building that culture across these partnerships remains very important.
And then, the final one is just accountability. Like anything, we are society’s risk capital. A lot of things are not going to work, and we just have to be honest about if we’re not seeing the results being delivered, we take the resourcing down, and we try other things. And that’s critical so that you have a feedback loop that you can optimize around. That’s how we’ve run this smart power India project. And if you’re not willing to do those kinds of things, you’re then not able to make the billion-dollar bets on moving 25 million people out of poverty in India through that effort either. So, the two go hand in hand.
Co-Impact is an extraordinary collaboration between The Rockefeller Foundation and a group of philanthropists who’ve come together and said, “We should do more in a collaborative manner to invest in proven, cost-effective strategies to reduce poverty on a global basis.”
Denver: And as you said a moment ago, it’s always been true that those people who are closer to the problem are also closest to the solution, and we really stand to benefit to listen to them. You know, I think partnerships are really important on a global stage and one of them that you’re involved with is Co-Impact. Tell us about that.
Dr. Rajiv Shah: Co-Impact is an extraordinary collaboration between The Rockefeller Foundation and a group of philanthropists who’ve come together and said, “We should do more in a collaborative manner to invest in proven, cost-effective strategies to reduce poverty on a global basis.” We all just saw the Nobel Prize in Economics being awarded to a few economists associated with the Poverty Action Lab at MIT. They have pioneered work that allows us to know when a project or program or strategy works to reduce poverty.
I was just in the rural community in Bihar, India, and saw one of our Co-Impact projects at work. By our math, for about $80, we can actually reach out and help a woman who is living in extraordinary deprivation, where her children are probably not even getting basic dairy in their diet; where their home is almost indescribable in terms of living conditions; where there’s open sanitation all around where the children are playing. In that kind of an environment, we actually know how to take $80 and turn it into moving that woman out of that situation and creating upward economic mobility for her and her family.
And so, the presumption for Co-Impact is very simple. We’re going to take the most cost-effective ways to reduce poverty and improve health and education for the world’s poorest populations. We’re going to invest in known strategies, and we’re going to do it in collaboration with other philanthropists so we can learn together and make sure the resourcing is significant enough that we can reach millions instead of 10-, 20-,30 people at a time.
Denver: That is effective altruism. No question about it. Another one of these partnerships is the Catalytic Capital Consortium.
Dr. Rajiv Shah: One of the things we’ve done at The Rockefeller Foundation – I think this is a genuine innovation – is we’ve created a structure we call a RFIIM or The Rockefeller Foundation’s Impact Investment Management Group. What that has allowed us to do in partnership with the MacArthur Foundation is create a pool of capital that we use in a catalytic manner. We’re willing to actually take a very low return on high-risk projects that have the chance to be transformational for very large numbers of poor households.
So, in the United States, that’s allowed us to invest in new innovative structures that allow thousands of low-income minority kids to go to college and graduate school because they can get lending now, and they couldn’t before. It’s allowing us to reach tens of millions of low-income people around the world with basic financial services – savings, checking, transfers, and lending – and we know that that correlates with helping them lead better lives and move themselves out of poverty. And frankly, it’s allowing us to make our biggest bet of all, which is $1 billion investment in a business we call TP Microgrid in India to roll out the first, I think, viable solution to end energy poverty in that country and around the planet.
I think criticism of philanthropy and critical evaluation of philanthropy are necessary. Every sector of society should be looked at critically, and we should have real data that says: What’s working? What doesn’t work? How do you really solve the problems you claim to solve?
Denver: As you know, Raj, there has been no shortage of criticism of big philanthropy in general, and foundations in particular – questioning how these fortunes were made in the first place; on whose backs; a system that benefits those at the top and just perpetuates that system; the exclusion of smaller and lesser-known organizations, in favor of the tried and true. What do you make of this, and what can an organization like Rockefeller do to address some of these concerns?
Dr. Rajiv Shah: I think criticism of philanthropy and critical evaluation of philanthropy are necessary. Every sector of society should be looked at critically, and we should have real data that says: What’s working? What doesn’t work? How do you really solve the problems you claim to solve?
If you’re working on, as The Rockefeller Foundation is, economic opportunity and equity in the US economy, advocates should be asking: Is that an institution willing to talk about tax policy? Is that an institution willing to invest its resources in low-income communities around the country? Is that an institution willing to stand up for diversity, equity, and inclusion? And is it willing to do that in a way that’s powerful enough to actually solve the problem?
So, if we were the kind of institution that was saying things and not doing them, then we would have earned that criticism. And someone, more than just one, there should be a whole cottage industry of folks evaluating institutions to make sure they’re living up to their values.
I’m proud to say that I think The Rockefeller Foundation for more than a hundred years has been an exemplar of living up to those values. We have helped create the basic economic infrastructure of this country in the sense that our early investments helped define the national accounting systems that are how we still today measure economic performance. We helped pull together the Social Security Commission that resulted over many, many, many years, decades even, but resulted in social security being enacted in this country. We have reshaped urban policy and planning over the last several decades.
And today, we’re bringing that same willingness to engage on policy, to tax policy in America, to economic opportunity policy in America, and to how we make sure we protect… especially the lower-income minority populations that have relatively high risk of everything from maternal mortality to food insecurity.
Those are our values and actions. And so, we can stand proudly and claim that we do that because we do, but not every philanthropy is doing that. And so, criticism is good.
Denver: That’s right. Sometimes foundations don’t have that much accountability. They don’t get thrown out of office, or they don’t go bankrupt or whatever in terms of a company; so having those outside forces looking at it is probably a healthy thing.
When you get together with your counterparts at other foundations – Kresge and Ford and MacArthur – what are the major areas of concern that fill those conversations?
Dr. Rajiv Shah: I think we look at each other and try to learn from each other. We have some common challenges. Sometimes they are related to governance issues, but mostly, they’re related to whether or not our philanthropic efforts feel like they are impactful enough to tackle the scale of the challenge we’re facing in society.
You see, the scale of the challenge we are facing in America is that our economy has changed so dramatically over 40 years. It has continued to produce some amazing outcomes – a tremendous amount of growth, a tremendous amount of wealth, a tremendous amount of innovation that’s reshaping the planet – but at the same time, it’s left out 60% of all American households, and that can no longer be something that we sustain. So, we try to come together and say, “Are we taking actions that can legitimately change the nature of that problem?” And I think that’s a healthy process.
Denver: You have had a very interesting journey on your way to becoming the president of The Rockefeller Foundation. We’ve talked a little bit about it, but share with us some more about that journey and some of the major influences and influencers along the way.
Dr. Rajiv Shah: Well, I have had the experience of being in business with a private equity firm. I’ve had the experience of being in government with the Obama administration and running the US agency for International Development, and experience watching and supporting and partnering with Bill and Melinda Gates as they created the Gates Foundation as it evolved over the first decade of its institutional life.
I can say, across the board, I have learned from so many. I’ve learned so much from Bill Gates. We worked on immunization policy together and said, “How do you look at the world and ensure that every single child on this planet gets the vaccines they need? Not 50%, not 70% but every single one. And if that requires reshaping the way we finance vaccines, let’s do that. If that requires reshaping the way we contract and buy vaccines, let’s do that. And if that requires making billions of dollars of investments and frankly raising tens of billions of dollars more to ensure that countries have the resources to immunize every child, let’s do that, and do that with determination.” So, looking large-scale at a problem and being hard-nosed, data-driven and insistent on coming up with solutions that can solve the scale of that problem is something I learned from him.
I learned from President Obama the value of just taking the long-term view, being patient and confident in your judgments, being data-driven and specific about what you’re trying to achieve, and ultimately, about living the values that are this country and demonstrating those values in the farthest corners of the globe – whether it was in Haiti during the Haiti earthquake; or Afghanistan in the context of our ongoing conflict in that setting; or Somalia when it came out of conflict and was in an environment where terrorist groups were creating the conditions that led to a famine. In all of those hotspots around the world, the value of being true to American values and doing that in a collegial, collaborative way was something I learned in that context.
And I learned in private business that just being focused on results and deeply quantitative and understanding the incentives that different people, especially investors have as projects come together is extraordinarily important and a rigorous exercise. So, these things together, I think, allow us to be the institution we seek to be today.
Denver: It’s always a healthy blend, isn’t it?
Dr. Rajiv Shah: That’s right.
Denver: Let me close with this, Raj. With all these challenges, you are very optimistic about the long-term future. What do you see that provides you with that optimism? What needs to happen for the American people to regain their sense of optimism?
Dr. Rajiv Shah: Well, I get to see solutions all the time to problems that otherwise are characterized as intractable problems. Global poverty or anything you read about global poverty usually is going to have a negative framing. It’s going to say there are so many poor people. It’s going to say that countries are deeply corrupt, and therefore people are stuck in these poverty traps. And some of that is definitely true.
But I’ve also seen that over the last 20 years, more people have moved out of subsistence poverty and into an upwardly mobile, modern economy than ever before in human history. I’ve seen how some new technologies, new partnerships and new solutions can extend that progress to people who’ve been left out. And so, I have a lot of confidence that 15 years from now, there probably won’t be any really poor countries. And even within countries, the number of people living in subsistence will have gone down to a very, very small number. That’ll be a tremendous achievement for humanity in the course of hundreds of years.
Denver: I hope somebody covers it.
Dr. Rajiv Shah: I hope so, too, because it runs the risk of going kind of unnoticed. And so, getting to see those kinds of solutions in action gives me tremendous hope. I believe that that’s kind of what we need to bring to the American body politic. I think people need to see and feel like they can be more hopeful about their own futures. And to me, that’s going to require real changes in policy in this country, so that we’re reinvesting in local communities, so that public-private partnerships are seen and felt in local contexts and, frankly, so that our tax policy and economic regulatory policies are more fair… so people feel and can be true in their feeling that if they work hard and play by the rules, their children will have a chance to do better than them.
Denver: Well, Dr. Rajiv Shah, President of The Rockefeller Foundation, I want to thank you so much for being here this evening. Share with us what you have on your website if listeners should be interested in learning more about the foundation and its work.
Dr. Rajiv Shah: We’re at a www.rockfound.org. You’ll see information about our biggest bet efforts to change the world for the better using science, technology, innovation, and partnership to help humanity rise.
Denver: Well, thanks, Raj, for a great conversation. Really enjoyed having you on the show.
Dr. Rajiv Shah: Thank you, Denver.
Denver: I’ll be back with more of The Business of Giving right after this.
Dr. Rajiv Shah and Denver Frederick
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