Heinz Endowments refocuses its grantmaking strategy

The 86 leaders gathered there rely on a piece of the more than $70 million in grants that the city’s second-largest foundation doles out each year.

The endowments told the crowd it’s planning to change things with a new strategic focus that includes making the Pittsburgh area more sustainable with initiatives including clean air and water, green and energy-efficient buildings, healthy food and plenty of services for veterans and military families.

But the foundation stopped short of telling those gathered how that would happen.

“The days of Richard King Mellon and Davey Lawrence deciding they would clean up Pittsburgh’s air and water are done,” said Grant Oliphant, the endowments’ president, referring to the banker and the Pittsburgh mayor who helped spearhead Pittsburgh’s first renaissance in the 1940s and 1950s.

“That doesn’t happen anymore, even for organizations like ours that presumably wield power because we give away money,” he said.

Instead of top-down decisions about who will receive money, Mr. Oliphant envisions a “new power” emerging in Pittsburgh that includes foundations, nonprofits and government officials collaborating on critical issues. The recent forum at the Energy Innovation Center was the first of three planned in coming months as the endowments blends its five historic grant-making areas into three: sustainability, creativity and learning.

A pivotal point

It’s nothing new for the endowments to take a leadership role in a conversation about revitalizing Pittsburgh. Since the Heinz family began amassing a fortune from the pickles and condiments company founded in Sharpsburg in 1869, it has poured billions of dollars into boosting culture, education and economic development in the region.

Its philanthropic legacy ranges from theaters and concert halls in the city’s Cultural District to revitalized riverfronts and innovative programs for children and veterans.

With assets totaling $1.6 billion, it ranks as the 54th largest grant-making foundation in the U.S. according to the New York-based Foundation Center. The largest Pittsburgh-based philanthropy, the Richard King Mellon Foundation, was ranked 32nd with assets of $2.3 billion.

The shift in how the endowments make grants is happening now because Mr. Oliphant and the board believe Pittsburgh is at a pivotal point where it has largely transitioned from a predominantly industrial past, but faces challenges about how to become a sustainable and creative center for innovative industries and the workers those businesses attract.

“We have a five- to 10-year window to make a serious impact or we will have missed a generational opportunity to change the face of Pittsburgh,” said Mr. Oliphant.

“We’ve gone from trying to figure out how to start the engine, crank it and get it going to steering a vehicle that feels like it’s moving pretty quickly down the track.”

‘Power is changing’

The timing is ideal to engage civic, cultural and business officials, Mr. Oliphant said, because of a strong working partnership between Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald, and relatively new leaders at the city’s largest universities: Patrick Gallagher, chancellor of the University of Pittsburgh; and Subra Suresh, president of Carnegie Mellon University.

For the first time, he noted, there’s also a convergence of women in top roles at key regional institutions including JoEllen Parker at the Carnegie Museums; Karen Hacker at the Allegheny County Health Department; Christina Cassotis at the Allegheny County Airport Authority; and Melia Tourangeau at the Pittsburgh Symphony.

“Power is changing. The region’s beginning to move dynamically,” said Mr. Oliphant. “There’s new leadership and it’s the ultimate carpe diem for the community.”

In the endowments boardroom, there’s also a shift happening with the emergence of the next generation of the Heinz family.

Teresa Heinz chairs the board that includes her three sons, H. John Heinz IV, Andre Heinz and Christopher Heinz. Two of the brothers have increased their visibility in the city in the last year — Andre Heinz was a leader of the P4 (planet, people, place, performance) Conference; and Christopher Heinz disclosed plans to move his young family to the East End from New York City.

The younger Heinz board members “are really anxious for us to do things that matter … and act in a vigorous, aggressive manner,” said Mr. Oliphant. “They have a keen sense of the opportunity passing … if we’re not paying attention.”

Fewer, but larger, grants

What the new strategy means for nonprofits is that there may be fewer grants disbursed while the average grant size could grow, Mr. Oliphant said. In 2014, the endowments gave out $74 million, according to its federal tax filing.

Thomas Baxter, executive director of Friends of the Riverfront, a South Side nonprofit that restores and maintains 24 miles of the Three Rivers Heritage Trail and 18 river access points, said though the endowments could make fewer grants, he expects them to be “high impact.”

The nonprofit doesn’t seek money from the endowments every year but has received support for special projects, he said.

“My general sense is that they’re not looking to reinvent themselves but provide the high level of community interaction we need,” said Mr. Baxter. “A lot of nonprofits are waiting for the final plan. But we feel it will make a tremendous impact for the region.”

Measuring the impact

What nonprofits can be guaranteed is more input in the early stages of the funding process.

The Heinz Endowments is refurbishing space on the 31st floor of EQT Tower, Downtown, where it plans to convene conversations with nonprofits and other key stakeholders. Both the endowments and nonprofits will produce “data and metrics” to hold themselves accountable for measuring the impact of their grants.

For decades, the foundation focused on five specific areas: arts and culture; education; environment; children, youth and families; and community-economic development.

Running throughout its three new priorities, said Mr. Oliphant, will be an intense focus on initiatives that advance technology, leadership, and racial and gender equity.

For example, a recent $1.5 million grant to Homewood-Brushton YMCA will fund the first phase of construction for a $6.5 million Creative Youth Center that will house the Lighthouse Project — an array of after-school activities for teens in that low-income community. The center will offer experiences in the arts, digital media, and science and technology labs.

It’s the kind of investment, said Mr. Oliphant, that helps transform a struggling neighborhood by “turning kids that people may not believe in into artists … and help them grow through education.”

Jeffrey Moore, interim co-chief executive for Independent Sector, a Washington, D.C.-based network of foundations and nonprofits, said the endowments’ move exemplifies “broad recognition among the charitable sector — both donors and those seeking funds — that the state of their relationship is perhaps not as effective as it could be and in many cases, could use some work.”

Other large grant-makers including The Ford Foundation and the James Irvine Foundation in California also are seeking new strategies to engage their grant-seekers up front, he said.

Planning for the grant-making shift began before Mr. Oliphant stepped into his job in June 2014.

“They were thirsty for a sense of what the direction of the foundation ought to be,” he said of the board. ”And I came in with a sense of urgency.”

By Joyce Gannon / Pittsburgh Post-Gazette

Joyce Gannon: jgannon@post-gazette.com or 412-263-1580.