OSF expected to reveal its new structure in 2024. How will it work?

This year has probably been one of the most significant in Open Society Foundations’ history. The more than 30-year-old foundation, created by billionaire hedge fund manager George Soros to further his goal of creating democratic, open societies around the world, is undergoing a major reorganization that has already resulted in massive staff layoffs and office closures. The effort is being led by George’s son, Alexander Soros, who took over as board chair of the $25 billion, New York-based foundation in December 2022. It will include laying off at least 40% of roughly 800 employees globally, to streamline operations and become a nimbler grantmaker that can respond more quickly to global crises. The transformation of this philanthropy giant is expected to be consequential for the global development sector. OSF has been “a huge player on democratization” with its support for emerging democracies and nonprofit organizations, said Darrell West, who examined George Soros’ political and philanthropic work in his book “Billionaires: Reflections on the Upper Crust.” Generally speaking, extremely wealthy people such as Soros can be hugely influential over global agenda setting, West said. “They have so much money that they can give away, that they can drive change in government as well as nonprofits areas,” he told Devex. “The downside is that a lot of wealthy individuals focus not just on problems but they often have a favored solution,” said West, who is currently a senior fellow in the Center for Technology Innovation within the Brookings Institution’s governance studies program. Brookings has received funding from OSF. However, West said he has not personally received any grant funding from the organization for his work. Sometimes those solutions don’t work and can generate backlash, such as when the Bill & Melinda Gates Foundation advocated for the adoption of Common Core, an overhaul of the U.S. education system that some criticized as being too focused on performance metrics, he noted. OSF’s reorganization might end up being another example of a funder going big and failing to get the intended results, said West. The viability of OSF’s solution is likely to become clearer throughout 2024 once the organization reveals more details about the plan. For now, here is a look at what we already know. Reading the tea leaves Instead of restricting itself to managing programs that would have the same budget year after year — as is typical for most large foundations — OSF wants to have the flexibility to “go big” and make large, multiyear commitments to areas where it believes funding is needed, said Binaifer Nowrojee, OSF’s vice president of programs. “OSF is making a shift to work in a totally new way and to move towards sort of campaigning arcs of different durations, with much larger commitments at the get go,” she told Devex in an interview. A $25 million fund to support women in politics globally that was announced in November is an example of that approach, Nowrojee said. The fund is being set up as a separate entity that will be funded by OSF and run by exiled Nicaraguan activist Suyén Barahona. “The Women’s Political Leadership Fund is a first commitment by OSF to do a very large, one off effort of $25 million to really begin to support and encourage and basically reinforce the recognition that in today’s world, what we’re seeing is the future is young and female, and largely global south,” Nowrojee said. Still, we don’t really know how the fund will operate. Barahona has yet to hire staff or determine her strategy for distributing money from the fund. Those kinds of details are still being worked out, as are the final details of the new structure and priorities OSF plans to adopt, according to Nowrojee. When contacted earlier this month, an OSF spokesperson also said that “the change process is still underway and the answers you seek won’t be available until early 2024.” Alexander Soros has signaled his interest in funding political movements in Latin America and the United States in particular. Other issues and areas where OSF wants to focus under its new grantmaking model include climate finance, debt reform for low- and middle-income countries, and global tax reform, as well as the promotion of progressive drug policies, according to an internal document circulated in October. OSF has also prioritized supporting groups on the ground in Israel and occupied Palestinian territories since the start of the latest Israel-Hamas war in October. The foundation has been a longtime funder of human rights work in the region, spending $14.3 million this year, and in December it pledged an additional $3.3 million in “critical support” for partner organizations and grantees working in Palestinian territories and Israel. But they weren’t explicitly mentioned in the draft funding “opportunities’” document that went out earlier this year, an OSF staffer noted. That could change based on the strong reactions of foundation leaders and employees to the conflict, the staffer told Devex. “Many of our partners have been at the forefront of pushing for a ceasefire in Gaza. Open Society itself has publicly taken this position and continues to advocate for an end to fighting alongside many groups around the world, including members of the United States Congress, the Secretary General of the United Nations, and the Pope,” the organization said in a recent statement. A captain with a very small crew? OSF is making huge cuts in other areas. OSF in August announced plans to reduce funding in the European Union — historically a major priority region for George Soros — starting in 2024. The organization spent more than $154 million in the region it broadly refers to as “Europe and Central Asia” in 2022. And it has launched massive layoffs. Less than half of roughly 160 staff members based in OSF’s Berlin office remained on payroll by the end of December, according to staffers. OSF would not confirm that information or provide figures. Layoffs are also expected in the London office and OSF’s New York headquarters. Communications Workers of America, or CWA, a union representing the U.S.-based OSF employees, said it reached a tentative agreement with OSF management this week to extend the current union contract for one year and add new protections such as standards for severance pay for those who are laid off. They will now be guaranteed at least 4.5 months and up to 18 months of severance pay, CWA spokesperson Moira Bulloch told Devex. There also will be a $10,000 payment for employees who have worked at the organization for 12 years or more, she said. It is “a model for humane layoff practices in a challenging economy,” Bulloch said. OSF closed offices in Baltimore and Barcelona as well as six satellite offices on the continent of Africa, where it spent more than $112 million in 2022. Meanwhile, staff at its Brussels office will be downsized. All that remains This latest phase of OSF’s reorganization was done in consultation with Deloitte and an earlier phase in consultation with The Bridgespan Group, organizations OSF turned to with the aim of identifying how its infamously sprawling international operations — including a network of offices and national foundations — can be trimmed and made more effective. Whether those goals are the outcome of all of this upheaval remains to be seen. But what is clear, at this point, is that when a major funder such as OSF revamps its grantmaking model it has huge ripple effects for the sector. “The OSF is one of the few bodies that hand out unrestricted core funding,” an anonymous grantee told The Guardian. “It’s what keeps the light on for human rights defenders in Europe,” they added. According to West, a hallmark of OSF’s approach has been supporting grassroots organizations, and it is obvious that its leaders view this restructuring as the most effective model of change to achieve greater impact. But he added that the organization would benefit from better explaining the rationale behind these moves to staff, grantees, and the public. “There has to be some transparency in explaining what the new focus is going to be,” West said. “They’re a big player. Everybody is going to be interested in whatever decisions they make, and the onus is really on them to explain that to the outside world.” Update, Dec. 22, 2023: This article has been updated to clarify OSF’s plan to reduce funding in the EU.