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Remarks by Dr. Rajiv Shah at the April 2017 Global Philanthropy Forum

As delivered at The Fairmont Hotel, Washington, D.C. on Wednesday, April 19, 2017

Thank you, Jane. That was excessively kind – I wish I could just stay back there and keep listening – but Jane has done such an incredible job, and I’m so excited to be here with you at the Global Philanthropy Forum, which is such an important venue. And Jane’s leadership has been so critical in maintaining the high level and high quality of this venue over many years. I see many friends and colleagues in the audience, and I appreciate your friendship and all that we’ve been able to learn and do together. And I feel like this moment calls for those friendships to be renewed in a very substantial way.

The events of the last year have convinced me that we are in fact living in a deeply fractured world. And like so many others, I’ve been trying to figure out what does this all mean?

At the end of 2015, not long after I was still in government, it was clear that the global efforts to improve the state of humanity had been making very steady and consistent progress. Over 25 years, child mortality rates had fallen by more than half. So had the number of people living in extreme poverty and deprivation. And we had achieved two critical international agreements – the UN Sustainable Development Goals, and the Paris agreement on climate change – that were committed to real, dramatic results, such as ending extreme poverty and achieving a quantifiable reduction in global temperature rise.

Like the 2005 Gleneagles summit on ending poverty, and the ascendance of the G20 as a forum to address the global financial crisis, these milestones really symbolized a post-Cold War international order rooted in progressive globalism. The idea being, with a more interconnected world all but inevitable, the way to usher that in was to embrace liberal democratic values, advance human rights, work towards more and freer trade, and leverage global institutions, public-private partnerships, and new alliances as the way to get things done in the 21st century.

Here in this town, a strong bipartisan consensus that Jane alluded to has enabled the United States to be a, and sometimes the, leading force in this global enterprise, bringing a level of peace and prosperity unprecedented in human history. I’ve found that across the political spectrum – from individuals who are very conservative to those who are very liberal – American political leaders had both a heart and a mind for embracing this vision of global obligation, and frankly the notion of exceptionalism as the value that underpins it. Meaning those who have exceptional wealth and capacity also have an exceptional responsibility to improve the state of humanity.

The agreements we reached in 2015 seemed to signal the continued, widespread, successful acceptance of that approach. And then 2016 happened.

Not three weeks after the Paris agreement was signed last April, the Philippines elected a man who openly called for extrajudicial death squads to kill thousands of his citizens simply for being suspected drug users.

Six weeks later, the results of the Brexit referendum shocked the world, as British voters pushed back against the politics and immigration of European unity, which they felt threatened their sovereignty, their identity, and their way of life. Heralding the potential breakup of Europe, the Dow plummeted 500 points, and the pound suffered its largest single-day drop ever.

Over the coming months, more cracks and crises appeared. Brazil and South Korea impeached their presidents, signaling a loss of faith and confidence in the leadership of two important regional powers. Meanwhile the number of displaced persons reached an all-time high, giving fuel to nationalist, populist movements already surging in France, Germany, Austria, Italy, and elsewhere. And here in the United States, the outcome of the presidential election clearly surprised even the newly-elected president’s team.

While African American, Hispanic, and women voters supported Hillary Clinton at roughly the same rates they had President Obama, Donald Trump’s “America First” message won college-educated white voters by 4 points, and non-college-educated white voters by nearly 40 points – a rate we had not seen in many decades. In the Midwest and Rust Belt, it won him the election. And as someone who was born and raised in Michigan, and no stranger to politics, I can tell you:  no one saw it coming.

So what does all of this mean for the post-Cold War trend towards increased global engagement?  The answer is we don’t completely know yet. But it seems pretty clear that the traditional leaders of a progressive globalism – the western democracies that defined many of the postwar global norms and standards of behavior that we’ve been accustomed to for over 70 years – have retrenched significantly from their historic leadership roles. Today we see nations on both sides of the Atlantic turning inward, and cutting foreign aid budgets at a time when the need couldn’t be higher. Here in Washington, that’s meant a proposed budget that would eviscerate the vital investments in our economic and national security made by both the State Department and the U.S. Agency for International Development. We also see this happening abroad, as countries like the United Kingdom, the Netherlands, Denmark, and Sweden have moved dramatically to cut or redirect their aid funds to pay for domestic priorities. These are more than budget cuts; they’re expressions of values that have dramatic consequences at a time of need. And they represent a departure from how the world tries to solve problems.

Although it’s not easy to hear, or say, many of us who focused on advancing these progressive global agenda goals must now admit that we’ve missed the rising resentment towards institutions, and what many see as an out-of-touch global elite.

Gallup polls show trust in most large institutions – the news media, government, organized labor, big business, and more – to be at either all-time or near-historic lows, especially in the western world. Here in America, most of these institutions have levels of trust below 40 percent. Twenty-six percent of Americans and roughly 30 percent of Europeans say they’re not only disaffected with their governments, but also discouraged about their own future prospects in life – as people who feel left behind in this rapidly changing world are more likely to turn inward and try to protect what they have.

America also seems to be angrier and more divided than ever. 2016 saw over two dozen more hate groups form, and in several areas more hate crimes, than in 2015. Even children at relatively privileged schools in Bethesda and northwest D.C., just a few minutes away from here, have reported swastikas on bathroom walls and words like “Whites Only” written on bilingual posters – showing how quickly our kids can pick up on and accelerate racial divides.

So why is this happening?

In explaining the root causes of the U.S. election results, an economist, Nick Eberstadt, has pointed to a deep economic insecurity brought about by what he calls “America’s Second Gilded Age.” Since the turn of the century, while American wealth holdings have roughly doubled, average productivity per capita has grown less than 1 percent per year. And the percentage of Americans employed has fallen so much, that if we could magically go back to the level where we were at in 2000, over 10 million more people would have paying jobs today. For many, work is also losing its value as a source of pride, identity, and basic human dignity – the absence of which does cause great anxiety and despair.

I grew up in Detroit, where people took great pride in working in the auto industry, and building things you can see, feel, and touch. My dad worked at Ford Motor Company for more than three decades, and I get how hard it is to ask manufacturing workers to retrain themselves for the kinds of jobs that are actually available in some communities – especially when, as one writer at The New York Times put it earlier this year, “nine of the 12 fastest-growing fields [in America] are different ways of saying ‘nurse.’”

When someone loses a job at their factory and we try to tell them that they need to retrain as a service worker in a new field, that may be a way to solve part of their economic insecurity, but it is, in fact, asking them to change their identity.  And for many people, it is very, very difficult to do that.

Having spent a lot of time listening to families around the world who live in extreme poverty and in communities that have been ripped apart by conflict and crisis, it seems to me that many of the same challenges they report – economic injustice, an unfair social contract, the feeling that the system is corrupt and rigged against them – appear quite similar to the gut feelings driving populism right here at home.

But that doesn’t mean these challenges are new. Last week I was in New Orleans and met a young woman who told me that by the time she turned 20 years old, more than 15 of her friends and neighbors – all kids – had been either shot or killed. The lack of hope that leads to kids in her community committing violent acts over sneakers, smartphones, and jackets, is, in fact, similar to the despair that’s led to America’s opioid epidemic.

In December a team led by Stanford economist and 2012 MacArthur fellow Raj Chetty found that for the first time since World War II, American children have only a 50-50 chance of earning more than their parents. That means we’re witnessing what happens when a majority of families believe that for the first time in generations, their kids are going to be worse off than they were.

So right now, in this moment, we at this Global Philanthropy Forum have a lot of work to do. Can civil society, corporate leadership, and community organizations like ours come together to address the root causes of this despair at home and around the world? Can we maintain progress towards our long-term vision of success – ending poverty and its devastating consequences of child death and child hunger, combatting climate change that is happening faster today than even scientists had predicted, and creating a better world for all humanity, including those who feel left behind by an economy that’s moving forward without them? And can we do it in a way that allows every parent to really believe that their kids will have greater opportunities than they do?

Our answer to that has to be yes. Just look at our history.  It hasn’t always been the case that we could count on our government to address these collective challenges.

Modern philanthropy was in fact born out of the first Gilded Age, when government hardly touched social welfare issues at all. When the foundation I now lead was created, the Rockefeller fortune was 2 percent of the U.S. economy, and 25 percent larger than the entire federal budget.  There was no income tax, and hardly any social safety net at all.  When Teddy Roosevelt outlined a vision of progressive government in the 1912 election, which he actually called a “New Nationalism,” he was introducing the novel idea that government should care for the least amongst us. But it took 20 years, and the immense pain of the Great Depression, before Franklin Roosevelt was really able to put many of those ideas into practice. And so the philanthropies of Rockefeller, Carnegie, and others stepped forward at that time, both before and after the New Deal, to show the way forward.

When the horrors of World War I brought new forms of human suffering, organizations like ours gave more money to war relief than the federal government. John D. Rockefeller, Jr. himself personally led the United War Work campaign in New York, raising funds to support soldiers and sailors returning home.

When Frederick Gates and John D. Rockefeller, Sr. exchanged letters in the early 20th century with the goal of bringing science to global philanthropy, their primary focus was agriculture.  Sixty years later that big bet paid off, with the Green Revolution that saved a billion people from hunger and starvation.

More recently – and this is my new favorite one – as the Cold War was ending, and we faced the potential threat of loose nuclear weapons in the former Soviet states, it was research funded by our very own Jane Wales, at the Carnegie Corporation, that led to the Nunn-Lugar Act, which has, of course, brought about the peaceful destruction of many of those weapons.

And when vaccination rates in low-income countries dipped below 50 percent, and over 9 million children under five were dying every year, it was Bill and Melinda Gates who learned about this problem and set out to save those lives.  I’ve seen them sit in the homes of very poor families, to listen and learn.  And because of their leadership and their efforts, including their money, the Global Alliance for Vaccines and Immunization has today helped immunize nearly 580 million kids, and saved 8 million lives.

These are examples of philanthropy at its best – focused on big, global results, not just efforts that look good or feel good.

Achieving this level of success does require doing things differently. With society so skeptical of institutions, it’s hard to see people trusting us to solve these problems – especially if we seem to be removed from the realities of today, or if we fail to be transparent or good partners. If we’re going to make a difference in the lives of those we serve, we need to prove ourselves in this moment. And that won’t be easy. It will require making big bets, managing real and diverse partnerships, and being transparent and open and honest about what works, what we can do, and the limits of our capacities.

For example, we cannot fill the funding gap left by government budget cuts. That would be impossible. If the top 50 U.S. foundations combined every dollar we gave in a year, we’d have $19 billion – still $6 billion short of what the Trump administration wants to cut from State and USAID in this calendar year alone. So instead of trying to replace those funds, we need to explore new ways to seek leverage and impact and results. And that’ll mean taking on more risk and doing things in greater partnership.

Now I’m sure many want to know, amid all of this, what will The Rockefeller Foundation do going forward? Since I just started six weeks ago, for now, I’ll say this:  Our vision for our future will be grounded in the lessons we’ve learned from our own history. And it’ll hopefully reflect the greatest traditions of an institution that I’m very proud and humbled to lead.

In fact, for more than a century, our work been remarkably consistent.  We’ve stood for bringing science and innovation to the fields of health, food, and economic opportunity all around the world. We’ve demonstrated the flexibility to rise up to meet the challenges of our time – from funding the League of Nations when our own government wouldn’t, to bringing refugee scholars to America to protect Jewish scholars in particular during World War II, to building greater resilience in the face of a more turbulent world. And our greatest successes have come when we’ve been animated by big, bold aspirations and been willing to see them through over a very long period of time.

That’s the lens through which our founder saw our mission. That’s the lens through which our program officers, including one that I’m so proud to be affiliated with, Norman Borlaug, won the Nobel Peace Prize. And that’s the lens we’ll apply looking forward.

We’ll try to listen to the people we serve as best we can. And we’ll ask ourselves how, in this fractured world in which we’re living, can we work together with many of you and others in the sectors of philanthropy, civil society, and corporations to create real, meaningful change?

We’re thinking deeply about how to define our role in global health, including how to address pandemic threats and reduce child deaths as we know more than 6 million children a year still die needlessly from simple diseases.

We’ll continue to invest in agriculture and food security. Here we’re trying to understand how we might play a role in reshaping the global protein economy, so we can all feed a population of 9 billion people in a sustainable and different manner.

We see a lack of access to power and energy keeping more than a billion people out of the modern economy, and we’re considering how to expand our own efforts to bring off-grid solar power to villages that are not on-grid, from Haiti to India.

Here at home, we believe real policy innovations, and perhaps real innovations in the structure of our labor market, will be required to renew confidence in the American Dream and restore hope in communities that unfortunately lack enough of it. And while we don’t know yet what our role in that will be, we look forward to working with you to help facilitate that result.

And we’re committed to work with those of you in the room, and new sources of philanthropy around our planet. The reality is the global concentration of wealth has accelerated to the point where eight families have the same net worth as half the world’s population – a statistic made clear by Oxfam. So as more of the world’s wealthiest families and individuals take the Giving Pledge and commit themselves to using that tremendous capacity for good, we hope to hold hands with others and move forward together to protect the basic values of hope, opportunity, freedom, and fairness.

Now, saying that we want to partner more is easy.  Doing it, as you suspect, is much harder.

If we’re being honest in this field, our egos, our desire for control, our confidence in our own intelligence, and our natural desire to go launch programs and then find others to co-fund it instead of actually talking together about what we can do in a more collaborative way, all make it hard to be really great partners. We don’t have all the answers, but as we’re looking around, we are seeing signs of success from which we hope to learn.

We’ve looked at how the IKEA Foundation and the Open Society Foundations are each reimagining ways to address the massive issue of forced displacement, and how the Omidyar Network is advancing impact investing. We’re particularly interested in the Edna McConnell Clark Foundation’s Blue Meridian project of capital aggregation to bring people together and pursue philanthropic pursuits in tandem for the purpose of taking other institutions to scale. And we’ve learned from our colleagues at MacArthur that are quickly creating a global marketplace of big ideas with the $100 million prize concept.

I’ve really only been here six weeks, so I don’t have a lot of new things to tell you. But I do believe that if we can look at these models of collaboration and partnership, and work together to identify new solutions and how we might invest in them to make a real difference, we not only have an opportunity to deliver extraordinary results along the lines some of us have been able to do over time, but we have the opportunity to do it in a way that helps to restore the hopefulness in the future, and maybe create a path for public sector leadership, so we can truly address the dramatic consequences of the current fractured world in which we live.

To get there I think we’ll have to overcome the challenge that sometimes our field can be too insular. More than 70 percent of the largest 100 U.S. foundations are headquartered in coastal states, for example. One lesson we need to take away from November’s election is that we can no longer afford to work alone in closed-off spaces or ivory towers.

Everything I know about our past, and everything I’m learning about the present and thinking about the future, convinces me that we can together live up to our shared potential and make a real difference in this moment of need. We at The Rockefeller Foundation truly believe that, and we’re fiercely committed to working with you, as good partners, to achieve it.

Thank you.

Bio
Dr. Rajiv J. Shah

Dr. Rajiv J. Shah

Dr. Shah brings over twenty years of experience in business,… Read Full Bio