The Albert Kunstadter Family Foundation was set up in 1952. It made its first direct overseas grant in 1987. It now makes 16 grants a year, eight in the US and eight abroad. Geraldine Kunstadter, now 82, runs the foundation and visits all their projects each year. But she’s unhappy with the state of philanthropy these days – with the arrogance of foundations that regard themselves as the ‘experts’ on everything, with the way they make life difficult for NGOs rather than helping them do what they do, with the over-emphasis on measurement.
Can I start by asking you how you started international grantmaking?
I went to see a friend in China in 1983 and she took me to the Architectural Society of China where they showed me the library. It was bereft of books − everything had been destroyed and they hadn’t gotten any new ones since the 1950s. So over the next four years, I personally sent over big boxes of books from Columbia University Architecture Library and the MIT Architecture Library. In 1986, I worked out a deal with a book publisher here to send them books that the foundation paid for. Then in 1987 we began to make direct grants to them to buy whatever new books they wanted. And that was the first grant directly abroad. Later, we moved on to Vietnam, Laos and Cambodia. Now we make three grants in Beijing, two in Hanoi and three in Phnom Penh, and we’ll continue to do that as long as I am alive.
What is the average size of your grants?
We used occasionally to make a grant as large as $20,000, but right now it’s between $5,000 and $10,000. Usually, if it’s the larger amount we split it into two parts, so that we don’t draw out too much capital at once. $5,000 is the standard grant we give, and we’re still working extraordinary miracles. Sometimes I’ll apologize to recipients for such a small grant, but they’re so thrilled.
Could you give an example of one of your small miracles?
Last year in Vietnam we helped two schools to put in a water system. We gave them $5,000 and they supplied the materials and did all the work: they dug a well and put a good pump in and now they have lavatories with running water and clean water to wash their hands.
This money also allowed them to build a playground; usually schools just have a marked-off dirt area, and in the rainy season it turns to mud. Now, for the first time, the children are able to go outside in the rainy season and play games and run around. We’ve done a number of playgrounds, and schools are absolutely thrilled.
So how did you find the schools that you gave the grant to?
There’s a marvellous NGO in Hanoi called the National Fund for Vietnamese Children. It was started by Madame Nguyen Thi Binh (pictured right, with Geraldine Kunstadter), who was once Vice President of Vietnam, to distribute vitamin A pills to prevent children from going blind, and then it expanded to other activities. They come to us with proposals and we supply the money for the materials for the projects. We’ve put in a lot of water systems over the years, and we rebuilt a clinic that had been destroyed in a flood.
Do you have similar arrangements in the other countries you work in?
In Cambodia, we work with a local NGO called Mlup Baitong, which is a very inventive environmental organization that trains people in the countryside to maintain their forests and develop ecotourism. $5,000 goes a long way in Cambodia, and it can be used for specific things that need just a few hundred dollars. Often there’s no money to do small things, so this gives them a freedom to address these needs as they come up.
In China, one group we support is called CANGO – China Association for NGO Cooperation. They teach people how to run NGOs in China; it’s quite difficult because the government doesn’t like NGOs, it’s afraid of them. The organization is run by a wonderful man who teaches people how to set up and run an NGO. When this organization first came to the US, the grants they looked for were around $50,000. We’re not able to do anything like that, but our $5,000 grants address specific needs. For example, the proposals they get from the countryside were always written in Chinese, and previously they didn’t have the money to translate them. So for a number of years we gave them the translation money. Now we’re supporting their publications, in English and Chinese. $5,000 goes a long way here as well.
Do you visit all the projects you support during the year?
Yes. I usually make four trips a year and get to see them all once. I could visit several at once, which would mean being away from here too long, so I just take a week to visit one site. I like to see them all once a year because I think you put people in harm’s way if you give them money and you’re not around. They’re wonderful and they have good intentions, but to them $5,000 is a huge amount.
I pay all my own expenses, otherwise the foundation would have gone out of business a long time ago!
Are the rest of your family involved with the foundation as well?
Yes, my three children who live in the US are on the board − they’ve all travelled with me to our sites; they love what we do and they will eventually take over. When this happens, they will make grants in their own areas. My father-in-law, who actually ran the foundation for his father and was one of the original donors as well, felt that every generation should address the needs as they see them. Two of my three children work full-time but my older daughter, who serves on a lot of boards and is a deacon in her church, is a whiz on the computer so she helps; she puts everything on spreadsheets for me to give to the tax people.
Do you have anyone else helping you run the foundation?
I have a secretary who comes in on Saturdays and pays my bills and checks the bank statements, but other than that I do it. It’s a lot of work − especially around tax time.
You said that you don’t any longer go to the Council on Foundations or other big philanthropy meetings because you’re unhappy with the state of philanthropy now. How has it changed?
Well I’m unhappy with the meetings because they address the same subjects all the time. They would say they had an international track, but it was always United States-Mexico − Mexico is important, but there’s a whole big world out there. They gave a lot of advice about how to make grants abroad, but they did it with a sort of fear and so made people slightly afraid to make grants abroad because they might get into trouble.
In fact it’s very easy to do. You have to do your homework, but we’ve proved equivalency using a simple form that Ford and Hewlett used to use, to prove that these organizations are equivalent to a US 501(c)(3). The very first time we made a grant we filled out all the forms and took them to our lawyer. He charged $3,000 to read the forms – this was in 1987. The grant was going to be $2,000! So we decided from then on to do it ourselves. I can read, I know what the answers are supposed to be; if the answers are what they’re supposed to be, I don’t have to take the forms to the lawyer. And since that first time, we never have.
The conferences apart, why are you unhappy with philanthropy itself?
I find with philanthropy there’s an arrogance that I hate. I sit on six non-profit boards, and a number of the boards have tried to get funds from some of our major foundations but they guard their money – in fact, my feeling is that they try quite hard not to give it away – and that’s a terrible attitude. In fact, one of my boards was given a wonderful introduction to somebody at a major foundation and our president went to see her, and she said the project looked very interesting. After six months he called her and she said she wouldn’t be able to fund the project because they didn’t have an expert in what we were doing.
Excuse me, but the expert is doing it; as a grantmaker, you’re just supposed to be able to see if people are doing what they say they’re doing. But often foundations think that they are the experts in everything. They will sometimes tell NGOs, ‘We’ll fund your project but you have to do it from this point of view.’ That’s not what you do, you’re supposed to be responsive. If you trust people enough to give them money, you have to trust that they know best how to spend it.
Do you have any sense of what’s behind the increase in this sort of attitude on the part of foundations?
Part of it is that with big foundations the directors are usually businessmen or women, people in very high positions, and they don’t understand small NGOs. If someone comes to us for a specific project, we will give them the money, but we always say ‘or for general support’, so that if they get the money for the project from someone else they can use our money to pay the electricity bill. For many years, directors of major foundations didn’t like the idea of general support because you don’t know how NGOs are going to use it. There was only one other foundation that I knew of (the Freeman Foundation) that was regularly giving, as we were, all its grants for general support.
I always said that if a person is going to be a board member of a major foundation they should be made to serve on the board of a small NGO for at least a year so they learn how important some things are, like general support. People will often give a grant for a wonderful project, but there’s no money in there for core support. I once organized a session for the Council on Foundations called ‘We don’t give core support, you have to get that elsewhere – but where is elsewhere?’ Now the big foundations are more likely to build it in − 10 or 20 per cent usually − but sometimes they don’t seem to understand that it’s people who carry out these projects, and they need salaries and electricity and telephones and you have to pay for that.
Family foundations are closer to the money, and I think they’re different. I think they are kindlier, still careful but willing to take risks where big foundations sometimes aren’t. We’ve taken a lot of risks, we’ve given a lot of first grants for organizations just starting up, where other people will say come back to us when you have a track record. But how do you get a track record? Foundations often don’t train their people properly, they don’t tell them it’s all right to have heart, they just become a big business.
What do you feel about the big emphasis there is now on measuring impact?
Oh please! What a waste of time! When NGOs have to spend time measuring impact when they’re supposed to be out helping people, I think it’s outrageous. Of course we want to be sure that we’re doing something right, but you can see that the result is what you wanted or not quite what you wanted without so much time being spent writing reports. NGOs have a lot of paperwork that they have to do, and it takes a lot of their time.
You visit your projects so you can see what they do, but what would happen if you weren’t able to visit?
Well, we could give them maybe a one-page form to answer any questions that we have. But I don’t think you should send money abroad if there isn’t somebody you know living in that country. I wouldn’t send any money abroad when no one was going to visit.
Presumably you’d feel the same here in the US, but it’s easier to visit if it’s in your own country?
Yes, and we know the organizations that we fund and we’re in touch with them all the time. But we only fund organizations in the Northeast Corridor between Boston and Washington so they are easy for us to visit. We have one grant we make in California, but that was because it was close to something else we were doing; I do visit them, and I’ve been on their board for a long time.
But I hate all this paperwork that NGOs are made to do by some foundations. If they’re going to give large amounts of money, then they should have people who travel around and see the results. (Pictured right is a group of children that Geraldine Kunstadter met at a nursery school on one of her trips to Vietnam. The school, in the Vinh Phuc province, which received a grant for a clean, piped water supply and lavatory system.)
Also, when foundations get very big, they often only want to make large grants. But there are so many smaller organizations out there that need $50,000 or $30,000 or even $10,000. It is a lot of paperwork for a large foundation, but they should set a certain amount aside to make small grants; not all organizations can take $10 million at a time, or would want to!
One final thing, because you mentioned how you check your own equivalency affidavits: has it changed a lot since 9/11? Are you finding it harder?
Not for us, because I know the people that we fund. I don’t think we’ve taken on any new grants abroad since 2001. We’re very careful to know the people and the organization and what they do, and where we work it’s pretty simple. I think if we were working in other countries, it might be a lot harder for us to be sure that we weren’t funding something that we shouldn’t be funding.
When we make a grant abroad, they all send me the letter saying that these funds will not be used to support terrorists or terrorist organizations, but of course they could still do it. But I’ve been in this business a long time, I know the good guys and the bad guys. There’s a lot of paperwork that would have to be done if we were funding in areas that were a little iffy, but we don’t have to do that with the organizations that we’ve been funding for ten years.
Is there anything else you’d like to add?
Well, the important thing is that foundations should take more risks; they don’t take risks like they used to. Sitting on these non-profit boards and seeing how hard it is to get grants, it seems that if they haven’t funded you before they’re a little hesitant to start.
The other thing is that most foundations make it so hard to apply for grants, with pages and pages of forms to fill in; we’ve always said if you’re going to send us a proposal it can’t be more than two pages plus a budget, and people love it! The less one causes a problem for grantees the better it is; we’re not there to cause problems, we’re there to help them do what they do.