Part Two: Organizing the Foundation: Basic Decisions

The Nathan Cummings Foundation

 

Part Two: Organizing the Foundation: Basic Decisions

"The ball's ours; let's run with it."

Choosing the type of foundation

Even as Marting began work with the family, some basic decisions had already been made during the year following Nathan's death. The family wasn't going to give all the money away at once, an option which had appealed to some in the older generation because it meant a short-term commitment, not a long-term encumbrance. In the aftermath of Nathan's death, and Alan's death soon after, quick disbursement appeared to be in a practical sense less stressful, fatiguing and time-consuming to people confronted with the huge task of settling the estate and providing oversight for an influx of grant requests. Yet, this was not the course chosen. Nor would there be a division of assets. There would be one foundation, not three (one for each branch of the family), because, argued the grandchildren, more good could be done that way than by splitting it up.

The actual organizational format was selected from a range of possibilities presented by the facilitator, each requiring a different degree of commitment. As one option, the family could have rejected the level of responsibility necessitated by the governance of an independent foundation, and given their money, instead, to a community foundation, where staff could then manage and disperse the funds. With a modicum of time, a family could maintain some control through a "donor-advised" fund held by the community foundation. Or, as an alternative, the Cummings family could have chosen to set up an independent foundation, governed by the family or outsiders, but with a "sunset clause," which, in effect, would have limited the foundation's existence to a set time period, say 10 or 20 years. By spending down the endowment in large grants, such a foundation might make possible a major development in science or medicine or another field.

After examining all the options, the Cummings family decided it was willing and able to commit to a major obligation over time. Its foundation would give grants to tax-exempt organizations for their programs instead of becoming an operating foundation that developed and ran programs itself. "There was an assumption that we would assist other charities rather than try to run it ourselves," recalled Stephen Durchslag, Buddy's son-in-law, "because this option felt more natural to everybody." The Nathan Cummings Foundation would begin its work as a family foundation in perpetuity. It would retain in its by-laws, however, the flexibility to change over time. As Herb put it, "Its current model is not cast in stone."

Family values

Over the course of the next year, Leeda Marting led a series of discussions centered on philosophical and procedural issues. One involved understanding the role of stewardship. Did the money belong to the family or was it a public trust? Members of both generations had little trouble putting the public good before family interests, a perception that was perfectly condensed in a statement by James Cummings:

It's not my money. I didn't make the money, and it doesn't belong to me. It doesn't belong to the family. It really belongs to the grantees, and it has since the point of my grandfather's death...I'm very privileged to be able to participate in any manner.

During Nathan Cummings' life, the family knew about his large public gifts. But on a much more profound level, they had absorbed his philosophy, as Herb's son Richard (Rick) pointed out:

"There was always a sense that we had been extremely fortunate and that we had an obligation to give something back to society. This attitude came from my grandfather and from my parents."

'Giving back to the community' was a deeply held value in the family's collective psyche, reiterated by each generation.

Working together

Like many other families, both generations of Cummings discovered that it was one thing to socialize together, and another to make decisions together. To compound the issue the family as a whole had done little of either in the years before Nathan's death. "That was one of the hardest parts to work through," remembered Herb's wife Diane, "to think of ourselves again as a family after so much separation." Working together in the planning process, with the facilitator, helped Herb and Buddy and the grandchildren rediscover their bonds.

Leeda Marting established an environment in which people could talk openly; she reinforced a sense of inclusion for everyone by helping the group make their decisions by consensus, rather than by voting. She organized the agendas of planning meetings and helped maintain their focus. Rick Cummings attributed to Marting's skillful and insightful work the enhanced credibility of the third generation with their parents. James attributed to his father Herbert and his Aunt Buddy the wonderful qualities of "being willing to listen to the third generation, when there was nothing which said they had to; and with being able to bow gracefully to the collective decision around the table when they didn't always agree with it."

In contrast, the youngest grandchildren, barely past their teens, felt out of their element because they didn't have the experience or the knowledge to participate fully in these ardent discussions.

"I tried to fit into the role. It was very difficult--it was over my head," recollected Adam Cummings, who was 17 when he first went to planning meetings. His brother Marc, a few years older, "foresaw a giant being created," even though he felt at the time as though he "had been dropped into a pool, and it was sink or swim." Nevertheless, they attended meetings when they could, not wanting to be left out of this unique enterprise.

Mission and programs

Taking stock almost two years after Nathan's death, the family found that it had both chosen the kind of an organization best suited to its goals and, with the help of an adept advisor, learned the basics of working together. The family was now ready to define a mission for the foundation and select its program areas. For this next stage, Marting separately interviewed all the family members and analyzed their answers to a questionnaire she had prepared. What was Nate's legacy, his vision, their vision, their experience? Would there be enough common threads among the responses to enable the family to make decisions about mission and program areas? She prepared a report that summarized her findings, and this was used as the basis for a crucial family meeting.

The family came together in Dallas in April 1987 for several days of intense deliberation, punctuated by tears and laughter, a sense of loss and gain, and, in the end, clarity. They began by remembering who Nate was--someone who was strong-willed, totally focused, and committed to his religion. "He seemed to have an amazing grasp of exactly what he wanted to do and how he wanted to do it," recalled Rob Mayer. He always demanded excellence, saying to his grandchildren, "I don't care what you do, as long as you're the best." Yet in spite of his demanding ways he was able to have fun and enjoy himself in all aspects of life. The family remembered the man as well as the legend: a grandfather who may not have been a "sit-on-your-lap" kind of grandpa, but rather one who had taken his grandchildren, as a group, on wonderful trips to Israel and Japan; a businessman whose motto was "Nothing will ever be accomplished if all obstacles must be first overcome." A philanthropist who enjoyed having his grandchildren cut the ribbons at dedication ceremonies for the buildings he had paid for. The qualities the family wanted in the foundation reflected the boldness, creativity, and risk-taking that had characterized Nathan Cummings' life and business. Buddy summarized the conclusions reached after lengthy discussions:

"We were going to be pro-active, take reasonable risks, and be willing to fail at times. This was how Dad had approached life. I felt this foundation should reflect those values, that stance of inquiry, those standards of conduct--that's what spelled progress. We didn't want to be just another Jewish foundation; we didn't want to be just in the business of handing out money."

At the same planning meeting, the family compiled a list of 40 possible program areas. Realistically, only four or five could be designated. For Ruth Mayer Durchslag, Buddy's daughter, "It was fun, it was terrific, sitting around and saying, 'What do we want this to be?' It was intellectually exciting and stimulating." Following many hours of "healthy dialogue," there was agreement. Three of the four areas were those which had engaged Nathan Cummings: health care, Jewish life, and the arts. In one way or another, many family members shared these interests, which were broad enough to encompass varied approaches; and which, by their selection, honored the memory of the donor.

The fourth program area, the environment, was suggested by several members of the third generation. Brothers James and Rick Cummings, and their cousin Michael, Alan Cumming's son, brought their passion to the table. In James' vivid words:

"I got up and spoke from my heart. No matter what else we did, if we didn't address what was happening to our environment, somewhere down the line--maybe not this generation but perhaps by the time of our great grand-children--there wouldn't be any breathable air left; our planet would be in crisis."

While largely unfamiliar with specifics, the older generation accepted the environment as the fourth area. They recognized its potential importance and respected the validity of the third generation's concern. As Herb concluded, "The grandchildren are going to carry out the programs. They're going to be more involved with the foundation if we allow the program opportunities to grow in areas where they are already interested."

Subsequently, the family decided that the four program areas would co-exist with a special funding area to be known as "community grants." This idea emerged from the family's initial research into foundations, and from the pressures they were experiencing from local groups seeking help. The money for these community grants was to be drawn from a fixed proportion of the yearly budget. These funds would be distributed equally to the three family branches, whose members would then recommend to the foundation board specific grants for organizations in their own communities. For both community grants and the core areas, the family decided that foundation funds would support programs, not building construction, a departure from Nathan Cummings' own approach.

As Diane noted, "He gave to buildings with his name on them. That's the way he felt he was doing his share." The same sentiment was confirmed by Stephen Durchslag, "Public recognition was very important to him as a self-made man." His children and grand- children, however, chose a different mode for effecting change, one that was consonant with their experience and beliefs.

By the end of the planning meeting in Dallas, the family had prepared a mission statement that embodied the convergence of core program areas with the family's values:

"The Nathan Cummings Foundation is a national, grantmaking organization dedicated to the well-being of all people. The Foundation seeks to meet the fundamental human need for sound health and a safe environment. It also seeks to foster understanding and respect between Jews and non-Jews. And it believes that the human spirit often achieves its finest expression through the arts."

Within this broad mandate, there were several themes that the family later elaborated upon to inform the foundation's approach to grantmaking: concern for the poor, disadvantaged, and underserved; respect for diversity; promotion of understanding across cultures; and empowerment of communities in need.

Location

With the foundation's mission in hand and its funding priorities in place, the family now turned their attention to the next item on the agenda--location. Where should the foundation's headquarters be located? With family members scattered around the country, only two places made sense: Chicago and New York. On the one hand, Nathan Cummings had built his corporate empire while living in Chicago and had given generously to many institutions there. One branch of the family still lived in the city. The question arose: if the foundation were located there, would the Chicago branch dominate the foundation and possibly undermine the delicate balance among the branches? On the other hand, Nathan Cummings had lived in New York for almost 20 years before his death, presiding over business and financial matters--including foundation affairs--from his apartment in the Waldorf-Astoria hotel and his offices in the Seagram building. New York hospitals and museums had received substantial gifts from him, too.

It became apparent that New York had one overriding advantage: it was home to many of the country's major foundations--Ford, Rockefeller, Carnegie, Revson--as well as the Foundation Center itself. If the Cummings Foundation wanted to be at the center of foundation activity, and if it wanted ready access to other foundations to collaborate on programs, then New York was the place to be, in spite of the extra expense of doing business in the city. Moreover, it was close to Washington, DC, where legislative matters concerning foundations and the non-profit sector as a whole were vigorously debated and decided. All agreed that it was important to be part of such discussions. The family decided to locate the foundation offices in New York.

By the middle of 1988, the fundamental decisions about the foundation had been made. For almost four years, the grandchildren had contributed substantially to the discussion and proved their interest by their work and their dedication. In response, the five trustees--Herb, Buddy, Ruth Sorensen (who succeeded her father Alan after his death), the lawyer and the accountant--expanded their ranks to eleven, bringing on board several grandchildren and allowing for non-family trustees in the future. Shortly thereafter, equal board representation for each branch would be written into the foun-dation's by-laws. Less formally, it was agreed that board leadership would rotate among the branches, first within the second generation, then moving to the oldest grandchild in each family. These principles helped inspire trust among family members, who brought to their work dissimilar life experiences and temperaments.

One other basic decision concerned compensation. Following the policy of many American foundations and most non-profits, the family decided that no member of the board, or officer of the board, would be compensated. Trustees would be reimbursed for the expenses of attending a meeting, but would not receive salaries for their work. Even the modest honoraria offered for board service by some foundations was not acceptable. For the Cummings family, payment was incompatible with managing a public trust.

The family had invested a great deal of time in planning. They did not just jump into a flurry of grantmaking activities but proceeded slowly, first getting a firm grasp of what they needed to do. "We prepared ourselves," recalled Ruth Sorensen. "Instead of rushing ahead haphazardly, we were wise to spend the money and take the time to figure out our program areas in a methodical way." This cautious and considered approach proved worthwhile. Having decided that a single foundation making grants nationally would best serve the public good, the family realized that the amount of work and responsibility would far exceed what board members alone could possibly undertake. Just the experience of making grants during the interim planning period--to meet the requirements of federal law to spend annually five percent of the value of the endowment--demonstrated to the family how much effort was involved, even though at this time many of the grants were awarded to organizations which Nathan Cummings and other family members had supported in the past. The family's honest appraisal of the time required to match the new program areas with public needs and to establish a grant-making mechanism convinced them that a professional staff was essential. The family's careful planning provided a blueprint to guide its search for staff.