Under election-year spotlight, Clinton Foundation prepares for a new era

By Catherine Cheney 27 September 2015

On April 29, 2013, President Clinton and Chelsea Clinton hosted “A Night Out with the Millennium Network” in Washington, D.C. Photo by: B. Moritz / Clinton Foundation

As the Clinton Global Initiative annual meeting opens this morning, one thousand of the world’s most influential people are descending on a Sheraton Hotel in Manhattan. This is CGI’s 11th annual meeting — the theme this year is “The Future of Impact” — and this time something is different: one of the three namesakes of the foundation that runs this annual event is the leading Democratic candidate for president of the United States. Another would be the first man in history to have lived in the White House as president and later as first gentleman. Delegates milling in the hallways at this moment could be excused for wondering about the future of the Clinton Foundation itself, an operating foundation that has grown to be one of the largest and most influential global development players in the world.

To get the foundation’s perspective on that question, Devex spoke to nearly a dozen professionals there — from the new president to leaders of some of its 11 key programs. CGI, though perhaps most prominent, is but one of these.

With the 2016 election around the corner, it is the best of times and the worst of times for the Clinton Foundation, with the same prominence and influence that secured its success also subjecting it to a new level of scrutiny. Since Hillary Clinton left to pursue the presidency, the foundation has been thrust into the spotlight not for the impact of its programs, but for questions surrounding foreign donations, conflicts of interest, and internal politics. What has received less attention are the foundation’s programs, and the professionals who lead them insist they are hard at work and won’t be slowed down by an election in which the foundation itself has become an issue.

Gearing up for a new era

Donna Shalala, who became president of the Clinton Foundation in March 2015, told Devex one of her top priorities is to bring on a chief operating officer. She indicated the new chief operating officer will work to ensure the foundation is taking full advantage of its unique position to form partnerships for a purpose, and figure out how to do that even as Bill Clinton becomes less involved in daily operations.

What’s not on Shalala’s agenda is putting the foundation “on ice” during the presidential campaign, something the USA Today editorial board has called for. Walker Morris, who manages foundation projects in Malawi, Rwanda and Tanzania, told Devex that if people would only “ignore the names for an hour and look purely at the work being done,” they would come away understanding the effectiveness of the work the Clinton Foundation does to help people “truly live that ‘best life story’ that we talk about.”

He described that work as creating opportunity, removing obstacles where they exist, and leaving decisions up to people in their own communities. One example is the Anchor Farm Project, a commercial farm operated by the Clinton Development Initiative that provides smallholder farmers with improved seeds, training in advanced techniques, and direct access to buyers.

Bill Clinton tours the Clinton Development Initiative’s Ngongwa Anchor Farm. Photo by: Max W. Orenstein / Clinton Foundation

“I am green with envy that they have access to anyone in the world,” Pierre Ferrari, CEO of Heifer International, based in Little Rock, Arkansas, told Devex. He said he would suggest a COO who can work with Shalala and initiative heads to leverage the former president’s connections in preparation for the possibility that he may have to be less involved down the road.

“Their competitive advantage is that they have access to people who can take good ideas to scale,” Ferrari said. “I don’t think they need somebody who’s an entrepreneur or an experimenter or an innovator but they need someone who can say, ‘Okay, how can we mobilize hundreds of millions of dollars behind an idea?’”

Focusing on the work

It’s hard to imagine a foundation so tied to a political family not being distracted by the presidential election. But Shalala insists she tells her friends working on the campaign that she will see them after the election, and she expects the same focus on mission from other foundation staff.

“The people that run the programs are professionals in these areas,” she said. “They’ve been doing either domestic or global development work their whole careers and so keeping them focused is not as difficult as it appears on the outside.”

That focus can be a challenge when the foundation’s work is so widely scrutinized in the media. One of the many often repeated misconceptions that rankles foundation staff has to do with just what kind of organization it is.

“You would see the dollar signs in their eyes and we would have to say, ‘We’re not here to give you money. We’re here to work with you,’” said Mark Gunton, CEO of the Clinton Giustra Enterprise Partnership, adding that those meetings have frustrated him most. “I’m not even sure the word foundation is the right word for the Clinton Foundation.”

Critics have pointed to only a small portion of spending going toward charitable grants. But the Clinton Foundation, a public charity, is a direct service provider, rather than a foundation in the traditional sense. The foundation has said 12 percent of its $223 million in expenditures from 2013 went to overhead costs for management and fundraising, with the rest of that money funding its programmatic work around the world. As an operating foundation, the vast majority of the funds it raises are spent on programs rather than grants. The exception to the rule is its work in Haiti, where the foundation uses targeted grants to build capacity in a country of special importance to the Clinton family.

Even the size of the organization has become part of the media narrative. A Google News search for the keywords “$2 billion Clinton Foundation” reveals dozens of articles, including features from the Washington Post, Politico and the Daily Beast that suggest in their headlines that the organization is a “$2 billion foundation.” That amount annually would make it among the largest operating charities in the world, but $2 billion is actually the total sum raised since Bill Clinton left office in 1997. The foundation’s annual budget is more modest, under $250 million, placing it in the league of substantial global nonprofits like Pact and Mercy Corps and far smaller than the billion dollar Save the Children movement.

Gunton said he remains so focused on pioneering “impact entrepreneurship” that he is not phased even as donations from the billionaire his initiative is named after come under particularly heavy scrutiny.

“We keep our heads down and focus on impact,” he said. “The rest is just background noise.”

Frustrated by criticisms of the foundation, Hugh Locke, president of the Smallholder Farmers Alliance and a member of the Haiti Action Network, was compelled to write his supporters in June 2015 to defend the foundation’s work.

“The main benefit of membership is that we help each other out and collaborate in addressing common development challenges,” he wrote. “The Haiti Action Network is our community, Bill Clinton is our mayor and Digicel owner Denis O’Brien chairs our regular town meetings.” He went on to share two success stories, one on organic certification systems and one on soil testing facilities, emphasizing that the power was not in dollars leveraged but in ideas shared.

“It’s always a tough sell to get people to pay attention to good news about what’s going right in the world, but we’re incredibly proud of what we do and the impact that our programs have,” said Erika Gudmundson, a recently appointed spokesperson for Chelsea Clinton who was part of a foundation trip to Haiti this summer that Devex attended. “When you get a chance to talk to the people who are actually being helped by our work, it puts into perspective how baseless the political attacks on the foundation really are.”

A growing role for Chelsea

Shortly after Hillary Clinton left the State Department and became a private citizen again, the Clinton Foundation was renamed to include her and her daughter. Now that Chelsea Clinton’s name is on the door, and as her role in the operations of the foundation continues to grow, the foundation’s succession plan is coming into sharper focus.

Chelsea brings her management consulting background from McKinsey and Company as well as a history degree from Stanford University, a master of public health from Columbia University and two degrees from Oxford University. Like her mother, she has a strong interest in empowering girls and women, and like her father, she has a strong belief in the importance of evaluation. She served as the driving force behind an evaluation of CGI commitments last year. And Clinton Foundation staff revealed to Devex that they will announce plans at the annual meeting to do a deeper dive into strategies to ensure the success of all CGI commitments.

When Chelsea Clinton led her first solo trip to Haiti with Clinton Foundation delegates this summer, many remarked how specific her questions were. Yve-Car Momperousse, CEO of the beauty supply company Kreyól Essence, led Clinton through a castor oil production facility in Mirebalais, Haiti. They stood over a large bin of seeds from the castor plant as delegates gathered and photographers snapped shots. “And it helps the soil,” Clinton said as she ran her fingers over the seeds, talking about the benefits of the nitrogen the seeds produce. “You know all about it!” Momperousse laughed. “Hardly,” Chelsea said, smiling.

Chelsea Clinton examines castor beans with Kreyòl Essence founder Yve Car Momperousse. Photo by: Clinton Foundation

Her eye for detail extends to the operations of the foundation. “She has a shrewd eye for very efficient management and probably gave me the best briefing on the foundation that I received,” Shalala said.

Terri McCullough, director of No Ceilings: The Full Participation Project, added, “It is truly awesome, and not in the slang version of the word but in the true meaning of the word, to see how immersed she is in data and how focused she is on translating that data to impact.”

When Chelsea Clinton and Bill Clinton take the stage this weekend, many in the audience will be thinking about what they share and how they differ.

“She and her father are great complements to one another,” said acting CEO of the foundation Maura Pally. “They approach problem solving in different but complementary ways.”

What happens if she wins

The Clinton Foundation has already made a number of adjustments with the election in mind, like restricting foreign donations to six Western nations, announcing that it will disclose donors quarterly rather than annually, and raising an endowment of $250 million. That Shalala, the former U.S. secretary of health and human services in Bill Clinton’s administration, took leadership of the foundation suggests a desire to ensure continued leadership during the campaign and beyond.

“The foundation will continue to do significant work to lift people out of poverty,” Shalala said, taking an intentional pause midway through her next point as she added, “And we certainly will have a dynamic foundation — when Mrs. Clinton is elected.”

Hillary Clinton backstage at Girls: A No Ceilings Conversation in New York. Photo by: Julie Zuckerbrod / Clinton Foundation

Staff are intent on building a foundation that won’t live and die by the Clinton family’s political victories and defeats. They’ve taken conscious steps to set themselves up for long term success. “Building the endowment was a critical step in that, and we prioritized that, so now we have an endowment and a staff that’s truly committed to the work and our programs,” Pally told Devex.

Ed Hughes, deputy director of CGI, described this as a “pivot year for the next 10 years.” If Hillary Clinton returns to the White House, the first gentleman may have to step down to avoid perceptions of mixing U.S. policy with donor interests and that CGI in particular has to prepare for that possibility.

“That’s our job in October,” Hughes said. His team at CGI has been focused on the annual meeting, which will have the full involvement and investment of the former president. The next step will be to figure out what the future will look like without the man behind the mission at the center of it all.

“While he was critical to the establishment of it and the attraction of our most important members, over the last 10 years CGI has been able to broaden and deepen its engagement with our members, its services to help facilitate commitments, and in the process, I think folks have recognized that there’s a lot of value that occurs here beyond the value to just see or be seen with President Clinton,” he said.

In fact, 2015 represents a pivotal year for the foundation as a whole. Shalala likes to say that success for the foundation is working itself out of a job. But at the same time, she and the future COO will be working on strategy to sustain these initiatives for the long term. The Clinton Economic Opportunity Initiative is the only major initiative to have been phased out, and now the foundation is considering whether all 11 initiatives can continue to make the impact they aim for moving forward.

Gunton, who leads the Clinton Giustra Enterprise Partnership, said that given the more diverse model of his initiative as compared to other Clinton Foundation initiatives, he is less concerned about a ripple effect from a Hillary Clinton victory. One path other initiatives could follow is spinning off into their own organizations, as the Clinton Health Access Initiative did. It was an initiative of the foundation from 2002 to 2010 before evolving into a separate nonprofit organization. Many know the organization by its acronym, CHAI, so while the Clinton name is still technically attached, the work speaks for itself regardless of the name. CGI also spun off from the foundation in the years Hillary Clinton led the State Department.

The prospect of another U.S. President from the Clinton family would certainly create challenges for their family foundation. Raising money without creating even the appearance of conflicts of interest could lead to reduced budgets for the foundation’s programs. On the other hand, when it comes to impact, one could argue that a President Hillary Clinton would be able to do more from the Oval Office than the Clinton Foundation building on Avenue of the Americas in New York.

Despite the challenges the foundation would have to navigate, a White House win would be a net gain for everyone, Gunton said.

“Part of the speed we can move at is due to the attractiveness and the allure to the Clinton Foundation,” he said. “And so the more the profile of the foundation as a whole is raised, then we can bask in that reflective glory.”

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About the author

Catherine cheney devex
Catherine Cheneycatherinecheney

Catherine Cheney covers the West Coast global development community for Devex. Since graduating from Yale University, where she earned bachelor's and master's degrees in political science, Catherine has worked as a reporter and editor for a range of publications including World Politics Review, POLITICO, and NationSwell, a media company and membership network she helped to build. She is also an ambassador for the Solutions Journalism Network and the Franklin Project at the Aspen Institute.


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