Open Society Foundations readies for next phase of reorganization

The massive reorganization that Open Society Foundations undertook two years ago has resulted in hundreds of staff cuts and the closure of several offices around the world. It’s part of a “fundamental transformation” that OSF chief Mark Malloch-Brown has said will allow it “to bring more focus, integration, and scale to our work.” And more changes are yet to come under a new phase of the restructuring. OSF leaders will soon consider where else the enormous charitable foundation might close offices and reduce staff, Malloch-Brown told Devex in an interview in Washington, D.C., last week. Next steps in the process will be discussed when its board of directors meet in June. “We’ve got a board meeting in late June where we’ll report back on plans for the next round of change and then move to do that post-June,” said Malloch-Brown, who was in Washington for the World Bank-International Monetary Fund Spring Meetings. OSF has grown enormously since it was founded by billionaire investor and philanthropist George Soros more than 30 years ago. By 2021, it had more than 40 offices and was working in over 100 countries. But under the cuts, staff size has been reduced by 20%. OSF, which is headquartered in New York, also has shuttered several offices, including its only United States field office in Baltimore. The overhaul surprised grantees and even some of OSF’s own staff members when it was revealed. Nonprofits that had had long-standing relationships with OSF suddenly found themselves being cut off. With its roughly $22 billion endowment, OSF trails only the Bill & Melinda Gates Foundation and the United Kingdom-based Wellcome on the list of the biggest global philanthropic funds. In 2021, OSF said its sprawling structure complicated efforts to nimbly respond to “the changing reality of the world,” which includes global crises such as climate change and the rise of authoritarianism. At the time, OSF said it would consolidate a dozen separate thematic programs into a single global program that would “integrate the full range of the Open Society Foundations’ tools,” including grantmaking, advocacy, impact investing, and strategic litigation to counter human rights abuses through its Justice Initiative. Many of those changes have already been completed. Before the transformation, OSF had 22 regional and national foundations and 44 offices with 1,684 staff, spokesperson Erin Greenberg said. “Now we have twelve OSF offices and eleven national foundations, which has resulted in a leaner organizational structure with more targeted, goals-driven programmatic focus built around six regional programs,” she wrote in an email. Its current staff size is 1,170. The six regions where OSF operates are Africa, Asia Pacific, Europe and Central Asia, Middle East and North Africa, Latin America and the Caribbean, and the U.S. This restructuring is of huge significance for nonprofits that have relied on OSF funding. The announcement “stunned” and “surprised” nonprofits that had previously received OSF grants, The New York Times reported in 2021. Some received “tie-off grants” with final funding to “ease the blow of getting cut off,” according to the article. But OSF has maintained that streamlining and narrowing its purview has been key to making it a more agile organization that can tackle some of the world’s most pressing issues. And the board will consider how it can further that transition in June, according to Malloch-Brown. He sits on the seven-member board, which is chaired by George Soros’ son Alexander Soros. Among the changes the board will consider is how to reduce and consolidate grantmaking in places like Africa and Latin America, where OSF wants to increase its impact by focusing more closely on specific causes and regions, Malloch-Brown said. The board will also consider how to provide nonprofits with more multi-year grants and increase the size of grants, Malloch-Brown said. Still, he added, OSF continues to recognize the importance of giving smaller grants to nonprofits “earlier in their growth and development.” OSF spent $1.5 billion globally in 2021. And it wants to be more “strategic” in how it spends its money in the future, Malloch-Brown said. One way to do that is to use the foundation’s funding “at the policy level” to “catalyze” and “leverage” global development spending by institutions like the World Bank, he said. As a private foundation, “our comparative advantage is to be able to push aggressively and in high-risk ways,” he said. Malloch-Brown noted that the foundation has been advocating for the World Bank and the International Monetary Fund to devise “more enlightened debt restructuring” plans so that there is less damage to the livelihoods of people living in heavily indebted countries that borrow from the bank. He recently told Devex that he is alarmed by how the debt crisis is affecting lower-income countries such as Zambia. OSF also has been concentrating more on providing support to civil society groups advocating for debt restructuring within some of these countries, he said. Additionally, the foundation wants to ensure that its grantmaking is strategic and results in measurable impacts, Malloch-Brown said. OSF will be “more focused, limited in what we’re doing so that we spend more on a bit less in terms of number of countries, number of projects, sectors, et cetera,” he said. OSF also has increased its attention on issues such as equity and climate change. It has made several hires over the past two years, including its first director of climate justice, first global director of equity, and first global director of advocacy. OSF also brought on a director of pro-democracy alliance and structural reform for Open Society-U.S. in March as well as a new chief executive of the Soros Economic Development Fund late last year. And the foundation has made new appointments to lead its regional and thematic work, Greenberg said. Still, not everyone has been happy with the changes. Staff members were rocked when the changes were announced in 2021, with many taking buyouts as part of the restructuring. Some foundation employees criticized the plan and complained that they were left out of discussions about the changes, according to the New York Times article. However, Malloch-Brown said that the reorganization was recognition of the limitations of OSF’s previous approach. It offers the opportunity to scale up OSF’s work by sharpening its focus on fewer countries and more specific areas, he said. “If you try and distribute across too many countries, you just lose impact,” Malloch-Brown said. Update, April 20 and 21, 2023: This article has been updated to clarify the size of OSF’s endowment and its country operations. It's also been updated to carify how OSF is changing its strategy in Africa and Latin America.