Behind the scenes at the Children's Investment Fund Foundation

LONDON — Last month, the Sunday Times Giving List identified Chris Hohn as the United Kingdom’s biggest personal philanthropist, donating more than a third of his £1.2 billion ($1.52 billion) fortune so far. His Children’s Investment Fund Foundation shot into the limelight when it became caught in one of the most expensive divorce cases in English history — and set a new precedent in U.K. charity law — but has otherwise largely stayed out of the public eye. “The new strategy is about really taking advantage of the fact that philanthropy … is the most flexible capital there is and therefore we can have a risk appetite that many others cannot.” --— Kate Hampton, CEO, CIFF Expecting to disburse $300 million in 2019, with an endowment of over $5 billion, CIFF is the U.K.’s second-biggest foundation, after the Wellcome Trust. It is also the biggest child and adolescent-focused foundation in the world, supporting programs across low-income countries in maternal and child health, adolescent sexual health, nutrition, education, deworming, child exploitation, and climate change. Having been through some turbulent years, CIFF has also emerged with a new emphasis on politically and financially risky areas that other funders might find difficult to support, as CEO Kate Hampton explained. The back story Set up in 2002 by Hohn and his then-wife Jamie Cooper, CIFF was envisioned as a new kind of philanthropy, one which had a business-like focus on measuring impact and results, supporting evidence-based interventions, and demanding a more commercial approach from its grantees, such as high impact and financial sustainability. “See your philanthropy not as a gift but as an investment,” Cooper-Hohn, who was CEO at CIFF for its first decade of operation, told a United Nations conference in 2013. Investing also underpins CIFF’s own financial model. Until 2012, it was funded in large part by profits generated from Hohn’s hedge fund, TCI, though it is now sustained by the investment income generated from its endowment. That endowment, which has more than doubled from $2.2 billion since 2004, is invested in a diverse portfolio, which excludes tobacco companies and firms that make more than 10% of their money from fossil fuels. It aims to make a return of 6% per year, according to CIFF’s website. A little over a decade after launching, however, CIFF’s grand vision was far from being realized as the couple clashed over how to manage the foundation. Grant-making levels were low — annual reports show that in 2010, CIFF disbursed only $24 million. One former staffer, who spoke to Devex on the condition of anonymity, said staff turnover was also high due to a challenging work environment. The couple divorced in 2013 but entered a legal battle over who should control CIFF’s resources. Things appeared to have been settled in 2017 when the U.K. High Court of Justice made an unprecedented decision to include some of CIFF’s funds as part of the divorce settlement, ordering Hohn to transfer £282 million from CIFF to Big Win Philanthropy, a new foundation set up by Cooper to support promising African leaders. In 2018, Hohn successfully appealed the ruling, but the case is ongoing. Even if it goes ahead, the transfer of funds will not affect CIFF’s future grant-making, a spokesperson for the foundation said. However, the legal dispute has already cost CIFF £5.6 million in legal fees, according to its 2017 annual report, the latest figures available. The wrangling also precipitated major changes at the foundation. In 2013, Cooper stepped down as CEO. Michael Anderson, who had been special envoy for former Prime Minister David Cameron on the United Nations’ development goals, was brought on as the foundation’s first professional head. CIFF’s grant-making grew from $83 million a year to $220 million during his tenure. However, CIFF underwent another shake-up in 2016 when Anderson and many of CIFF’s big-name trustees — who included former U.N. Development Programme administrator Lord Mark Malloch-Brown and Global Fund to Fight AIDS, Tuberculosis and Malaria head Mark Dybul — stepped down and were replaced by personal friends of Hohn’s. Another trustee, Joy Phumaphi, former health minister of Botswana, had left the previous year. Anderson said this was linked to a change in strategy and governance, with Hohn taking closer personal control of decisions. CIFF did not respond to a question from Devex about the departures, but a press release issued at the time described it as part of a “transition” that would include “a review of CIFF’s mission, approach and focus areas, which will be led by a new Board of Trustees, a new Chairman and a new CEO.” A new start and a new strategy Kate Hampton was appointed as the new CEO that year, having been with the foundation since 2009 as head of climate change. Hampton was tasked with overseeing what she called a “strategic pivot,” as outlined in the foundation’s first multiyear strategy, which describes CIFF as “reinventing itself to be bolder for children.” The programmatic focus did not change, but the foundation’s approach, scale of grant-making, and appetite for risk underwent a shift, Hampton explained. “The new strategy is about really taking advantage of the fact that philanthropy … is the most flexible capital there is and therefore we can have a risk appetite that many others cannot … We really want to think about the opportunity cost of our funding and focus on areas where we can have a catalytic effect,” Hampton said. This means taking on “tough political economy challenges” and “incumbent interests which undermine the ability of, particularly, young people to fulfill their potential,” she added. That naturally led CIFF to climate change and sexual and reproductive health and rights — two major development issues which the current political climate in the United States makes it difficult for American foundations to tackle. U.S. President Donald Trump’s 2017 decision to expand the “global gag rule” — withdrawing all U.S. funding from non-U.S. NGOs involved in any aspect of abortion work — has slashed access to SRHR for millions of the world’s most vulnerable women, especially adolescent girls. CIFF has invested $250 million in SRHR to date and ramped up its efforts, including by providing nearly $1 million in startup costs to SheDecides, the global movement launched in response to the gag rule. The SheDecides support unit was incubated out of CIFF’s London office until last year, when it moved to the International Planned Parenthood Foundation. CIFF has also refocused its SRHR funding on adolescents and is backing a push for “self-care” SRHR, such as the Sayana Press self-injectable contraceptive and HIV self-testing kits, which Hampton said have shown early promise in improving uptake among teenagers. More broadly, she believes self-care offers low-income countries an opportunity to “leapfrog” the need for traditional primary health services and reduce the cost of access. As potentially “disruptive” for health systems, CIFF has been supporting the World Health Organization to develop self-care guidelines, due to be published later in June, and is funding advocacy work to promote self-care as part of SRHR services. Climate change is another key target for CIFF’s flexible and politically unencumbered philanthropy, Hampton said. It aims to spend $100 million a year on the issue over the next five years, mainly on technical assistance and advocacy work to help countries accelerate their transition to clean energy. In particular, the foundation recently intensified its work on air pollution, which Hampton described as a chronically underfunded issue. Last year, CIFF contributed $20 million toward a new Clean Air Fund for tackling outdoor air pollution. Traditionally seen as a “co-benefit” of climate action, CIFF has focused “squarely” on the issue, emphasizing both its negative health and climate impacts, Hampton explained. Beyond these programmatic focus areas, CIFF has paid increasing attention to innovation in the development space — incubating startups, and supporting new tools and approaches by “carrying the costs of experimentation” for NGOs and government, the CEO said. For example, it is supporting work to develop a satellite to measure methane emissions from global oil and gas operations and develop data that can be used by advocacy groups and others. And it has taken steps to “localize” its work. Nearly half of CIFF’s 120 staff now work out of four international offices — in Delhi, Nairobi, Beijing, and Addis Ababa — which is a significant shift from where things were three years ago, Hampton said. Separating the personal from the professional Hampton described CIFF as a “highly professionalized foundation,” which is regulated by U.K. charity law and has a board and investment committee. Still, its founder retains “significant influence” over decision-making and is engaged in its day-to-day work, Hampton said. In fact, CIFF shares a London office with TCI. For Hampton, having such an engaged and investment-savvy funder is one of CIFF’s strengths. Hohn brings a “huge amount of value” to the foundation through his skills and reputation, and means other foundations are confident about co-funding with CIFF, she said. It is also thanks to his ambition and risk tolerance that CIFF is able to do the “really difficult things that many other philanthropists would shy away from,” she added. Former staffers, who spoke to Devex on the condition of anonymity, described lucrative salaries but said the CIFF office culture was often “unhappy” and “competitive,” and that they had found Hohn “challenging” to work with. The founder has been known to drop projects and change his mind about funding unexpectedly, they said. Hohn’s expertise in investing means that CIFF staff are required to produce investment cases for each grant. While exemplary in theory, one former employee said the process often brought “rigidity as well as rigor,” turning projects into “reductive metrics for accountants.” Grantees also often complained of being buried under “insane” reporting requirements, the source added. Michael Anderson, who was head of CIFF while it was being dragged through the courts as part of the divorce settlement, said there were lessons about the personal involvement of donors in their charity work. “CIFF has done some amazing things, with an impressive focus on evidence and results, but like many philanthropies run by a living donor, its scope for impact is set by the changing views of a single individual,” he said. This year, Devex is exploring philanthropy in Europe — from what the Gates Foundation is doing in Brussels to the burgeoning research field of behavioral philanthropy in Geneva. Keep an eye out for more to come.