California is a state of superlatives. The most populous state in the Union (home to one of every eight Americans), it boasts an economy that produces $1.4 trillion annually in gross product and ranks as the fifth-largest in the world. Long an agricultural powerhouse, the state also has world-class aerospace, entertainment, technology, and tourism industries; processes (through the ports of Long Beach and Los Angeles) a quarter of all the container cargo shipped to the U.S.; and offers its residents the largest (and one of the best) public university systems in the country.
For all its wealth, however, it's also a state of contrasts. Only the third state (after New Mexico and Hawaii) without a majority ethnic group, it contains within its borders some of the most affluent — and poorest — communities in the country. For every Belvedere, Beverly Hills, or Newport, there's a Tobin, Cutler, or Cantua Creek — communities whose lack of infrastructure, services, and opportunities qualify them as among the most disadvantaged in the U.S. And nowhere is that poverty more stark, or those contrasts more pronounced, than in the state's Central and San Joaquin valleys.
Earlier this year, Philanthropy News Digest spoke with Jim Canales, president and chief executive officer of the James Irvine Foundation, a San Francisco-based foundation dedicated to expanding opportunity for all Californians, about the demographic and economic challenges confronting the state, the foundation's work in the Central Valley and Inland Empire, and the importance of leadership as a driver of change.
Canales was named president of the foundation in 2003, and prior to that served as its vice president and corporate secretary for four years, providing oversight for Irvine's grantmaking programs and communications and evaluation functions. His service at the foundation began in 1993 and has included roles as special assistant to the president, program officer, and chief administrative officer/corporate secretary.
A graduate of Stanford University and a co-founder and past board chair of Grantmakers for Effective Organizations, he is active on the boards of various nonprofit organizations and currently serves on the board of trustees of Stanford, the Monterey Bay Aquarium, and the Education Financing Foundation of California, a newly created private foundation dedicated to helping California students attend college.
Philanthropy News Digest: Tell us how you got into nonprofit work, and how you wound up at the James Irvine Foundation?
Jim Canales: My initial thought when I was an undergrad was to go into education, so I stayed on at Stanford to get a master's in education as well as a single-subject teaching credential in English, which in turn led to a teaching job at San Francisco University High School. I really enjoyed my time there. I taught English, coached cross-country, was a class dean, and eventually became director of admissions and financial aid. Then, in 1993, I was offered a job at Irvine as Dennis Collins's special assistant. Dennis, of course, was the longtime president of the foundation and had been the founding headmaster at University High. In part because the offer allowed me to stay in a nonprofit educational environment, it just seemed like the right job at the right time.
So I took it and have had wonderful opportunities in the twelve years I've been here. I was special assistant to the president for a few years; I then became a program officer and, eventually, the foundation's chief administrative officer. In 1999, I was named a vice president, with responsibility for communications, evaluation, programs, and grantmaking. Finally, in 2003, I was given the terrific opportunity to lead the foundation — which, as you can imagine, has been an enormous privilege.
PND: The James Irvine Foundation was established in 1937 by James Irvine, one of California's agricultural pioneers, and was guided for years by close associates of his. Sixty-eight years after its establishment, is the foundation still a family foundation?
JC: If you define a family foundation in the traditional sense — as one whose founding family is still involved in its operations — then the answer is no. We do not have any family members on the board, and indeed Mr. Irvine, when he created the foundation, did not give the family the controlling vote on the board of directors. There certainly were family members on the board in those early years, but even in the '70s, '80s, and '90s, we had only one family member on the board, and that was Katie Wheeler, Mr. Irvine's granddaughter, who served on the board for forty-seven years, until her retirement in 1997. So, in one sense, the foundation has never been a "traditional" family foundation.
At the same time, many of the values that led Mr. Irvine to create the foundation still inform its work today. For example, one thing Mr. Irvine speaks of in the indenture of trust, which guides the foundation's work, is the concept of the foundation working to provide Californians with an opportunity "to gain a leg up" — he even used that expression in some of the founding documents. And, indeed, that charge has remained a critical component of the way we think about the role of the James Irvine Foundation, except that we express it slightly differently today in our mission statement, which says that the foundation works to expand opportunity for all Californians. In fact, today we are the largest multipurpose private foundation in the state established to benefit Californians only. There are other foundations in California that are larger, but they work, at least in part, nationally and even internationally, or focus on a particular program area, such as health and health care. That puts us in a unique and wonderful position to help the people of this state — something James Irvine would have understood and been proud of.
PND: The historian Kevin Starr, who also happens to be California's librarian emeritus, has written that the state's most salient demographic feature is its diversity, as illustrated by the fact that one out of every four Californians was born outside the United States. To what extent does the state's demographic diversity inform your programs and approach to grantmaking?
The diversity of California is one of the key issues informing the work of the foundation today....
JC: The diversity of the state is one of the key issues informing the work of the foundation today, and we tend to think about that diversity in three ways: ethnic diversity, economic diversity, and the diversity of the state's many different geographic regions.
In terms of ethnic diversity, you're right: One in four Californians today was born outside the United States. As you also probably know, California is one of the few states in the union where a majority of the state's residents are non-white. And those demographic trends are going to result in an even more diverse population over the next twenty to thirty years. So we think a lot about the ways in which we can work, through our grantmaking programs, to make the state a more livable and harmonious place for all its residents, regardless of race or ethnicity.
Socioeconomic diversity is another big issue for us. For all the talk about California having the fifth-largest economy in the world, parts of this state are really poor. It's important to us to change that reality and support opportunities for people from low-income environments.
In terms of geographic diversity, we are very focused on the fact that the state's major population centers, as well as its media and political power, are concentrated in the state's coastal regions. But as we look to the future — and this is already starting to play out — the inland portions of the state are going to become more and more important. The state's population today is roughly thirty-six million, and it's projected that within the next twenty years the population will grow to between forty-five million and forty-six milliom people — an almost 50 percent increase. But here's the interesting thing: The inland portions of the state — the Central Valley and the Inland Empire, which consists of Riverside and San Bernardino counties — are going to grow by more than 50 percent over the next twenty years, while the coastal regions will grow by only 15 percent. Because we're very concerned about whether these inland counties are prepared to deal with that kind of growth, we have identified both the Central Valley and the Inland Empire as regions of priority interest and are working to engage more deeply in these regions to help build their nonprofit and philanthropic infrastructure and the leadership we think they will need in the social and civic arenas to be able to handle that growth.
PND: Both regions are substantially agricultural in nature and have large minority populations, correct?
JC: Certainly that's true of the Central Valley, where agriculture continues to be the dominant economic force. In contrast, the Inland Empire, which had been largely rural for much of the twentieth century, has been changing as land pressure and rising real estate prices force more and more people from the greater Los Angeles-Orange County area to relocate to less expensive communities and regions of the state. As a result, we now have many people who commute significant distances from Riverside and San Bernardino counties, where they can afford to buy homes and provide opportunities and a good quality of life for their families, to their jobs in Los Angeles or Orange County. And that's creating significant pressures — in terms of sprawl, traffic, water, and other infrastructure issues — as well as opportunity for the region.
PND: You mentioned some of the economic pressures on Californians. Increasingly, agriculture is a global business, as is technology, another of the economic pillars of your state. In terms of grantmaking, are you doing anything to mitigate the adverse consequences of globalization on the state's economy?
We're a young state and getting younger and one of our concerns is whether young Californians are prepared and equipped to participate in the global economy of the twenty-first century....
JC: As we look at the population in the state today, we realize that we're a young state — and getting younger — and so one of our great concerns is whether young Californians are prepared and equipped to participate, in a meaningful way, in the global economy of the twenty-first century. Unfortunately, we see some significant disconnects between the reality around us and the opportunity, particularly the disproportionate number of low-income and minority students who are dropping out of high school. As we look to the future, we are focusing on how we can increase the number of low-income Californians who graduate from high school on time and who go on to receive some kind of postsecondary credential by their mid-twenties. In our view, the solution must involve the development of multiple pathways to meaningful adulthood for these youth. It's not just about graduating from high school and going straight to a four-year college or university; it's about ensuring that there is a range of options for low-income and minority students that makes it possible for them to find a path leading to economic success and engagement with the civic life of their communities. That's something we're very much focused on.
PND: If one defines "strategic philanthropy" as using outcomes and measurement to define and shape an effective giving strategy, does the James Irvine Foundation take a strategic approach to its grantmaking?
JC: I certainly want to believe we do. But these are the questions we ask: Are we being clear about what it is we seek to achieve? Are we holding ourselves accountable to our objectives and assessing our progress toward those objectives, and refining our approach as necessary? And are we finding ways to share the lessons we have learned with colleagues in the philanthropic arena?
In addition to those questions, we've spent considerable time thinking about how we should characterize Irvine's approach to its philanthropic work, and have identified four principles that are salient to the way we approach our grantmaking. Let me say that I don't think they make us unique — there are many foundations doing the same kind of thing — but what's important, from our perspective, is that we've articulated these principles and are holding ourselves accountable to them in our day-to-day work.
The first of these principles is a focus on place — understanding that as a regional grantmaker we have an obligation to think about California and about the different regions within California. Many of our approaches are very attuned to the particular environment or region in which we are working and must often be customized to the specific needs of that region or environment. The second principle is about building effective organizations: As we make grants to individual organizations and institutions, we're focused on ensuring that we find ways to build elements into those grants which strengthen our grantees' infrastructure and overall effectiveness. The third is to build leadership through our grantmaking, and to think about ways we can develop the leaders of tomorrow — that's a vital component of our approach. And the fourth involves thinking about ways we can go beyond grants and use our intellectual capital to connect — whether through convening, networking, or brokering relationships — the efforts we support with similar efforts in order to maximize the impact of our grant dollars and enhance the effectiveness of our grantees.
PND: Obviously, you and your colleagues place a great del of importance on leadership. Can you tell us a bit more about what the the James Irvine Foundation is doing to foster effective leadership in California nonprofits?
JC: We're convinced that one of the keys to achieving the mission we've articulated for our foundation is to ensure that we are fostering the new leadership this state will need and, at the same time, nurturing those who are in leadership roles today so that they can continue to be effective. Let me give you an example. We recently made a series of grants as part of a new initiative we call the Fund for Leadership Advancement, which will focus, at least initially, on Irvine grantees. Through a competitive application process, we've identified eight leaders at Irvine grantee organizations to receive grants of up to $75,000. These resources will support customized professional development activities that are designed to enhance the ability of these leaders to direct their organizations and which, at the same time, are linked to what their organizations are trying to achieve. That's important. We don't want this to be seen as a professional-development opportunity that's disconnected from the day-to-day work of the organization; we want it to be integrated with that work and the organization's challenges and opportunities.
PND: Does the program target a certain demographic?
JC: We made a conscious effort to ensure that the first eight recipients were representative of the diversity of our state.
PND: I know the fund is new, but in the short time it's been up and running have you noticed any commonalities in the kinds of challenges faced by nonprofit leaders in California?
JC: It's well documented that one of the great challenges for many talented executive directors of nonprofits today is the fact that so many of them feel, or are on their way to feeling, burned-out. You've probably seen the studies produced by groups like CompassPoint, here in the Bay Area, which point to the fact that many current executive directors would not seek another ED position because of the burnout factor. Many of them feel immense pressures to raise funds and will tell you they spend more time on fundraising activities than on the core work of their organization. And that's one of the objectives of the Fund for Leadership Advancement initiative — to provide talented, capable nonprofit leaders with tools that will help them stretch and expand their skills and, at the same time, provide them with resources that will help them to address some of the institutional challenges they might be facing.
One of the key challenges facing the sector is whether we are doing enough to foster the next generation of nonprofit leaders....
But it goes beyond that. I think one of the key challenges facing the sector is whether we are doing enough to foster the next generation of nonprofit leaders. You often hear people bemoan the fact that there are no John Gardners around today, that the sector lacks powerful and effective spokespeople, and I think that "leadership gap," if you will, is something we all need to think about. How do we equip people to play that role on behalf of the sector, and what kind of conscious strategies are we putting in place to ensure that the sector will be ably led tomorrow? It's a challenge we're very much focused on here, and as we do more work in this area I hope we'll be able to share lots of information and valuable lessons about ways not only to support nonprofit leaders, but ways to surface new leaders.
PND: As much as we've all heard that philanthropy is about relationships — between organizations, between people — one also hears grumbling from time to time about the uneven power dynamic that exists between funders and grantees. Have you and your colleagues done anything to change or mitigate that dynamic?
JC: In my opinion, this is a critical issue for the field, and at Irvine we are working very hard to remain attuned to the dynamic you've described. The most important way we do that is to ensure that the people who represent the foundation are always aware of their privileged position and good fortune. As long as my colleagues, our board, and yours truly approach our work with humility and a desire to meet the great obligation conferred on us by the tax-exempt resources at our disposal, I think we'll be able to keep this power imbalance from undermining our work. As I say, it's something we're very much attuned to and think about, even when we're hiring. We put a premium on hiring people who can bring to their work here a sense of what it's like to be on the other side of the table. In fact, we have a number of people on staff who either have run nonprofit organizations or have been on staff at a nonprofit organization and understand how difficult it can be to come to a foundation office and ask for support.
PND: The private foundation structure is a legacy of the great fortunes created during the Industrial Revolution. Is that structure suited to the unique challenges we face today? In other words, are private foundations flexible enough, and do they take enough risks, to tackle the challenges — global warming, the spread of WMDs, the need to reform public education — we face in the twenty-first century?
JC: I would like to believe it is, but I think in order for private foundations to address those challenges it is critical they remain attuned to the environment in which they are working and remain focused on refining their strategies based on what they learn from that environment. Let me give you an example.
One out of every ten Californians lives in the Inland Empire, and the region's population is projected to grow from approximately 3.8 million people today to just over five million people in the year 2020. This is a region that today has more residents than half the states in the U.S., and yet a significant number of Californians don't know what or where it is. It's also one of the poorest and least-educated regions in the state. Obviously, the region presents huge challenges, and the only way we have any chance of creating opportunity and a better future for the people who live there is by truly understanding the forces and trends that are shaping the region today and how those forces and trends will shape its future.
So, yes, I think that our commitment to the people of California — and to the people of the Inland Empire, in particular — is something that not only informs our strategy but will enable us to make a difference in the region and the state as a whole. And I think the same thing can be said of private foundations in general: If they stick to what they know and feed the lessons they learn back into their work, they can be very effective in addressing some of these big challenges.
PND: As you and your staff consider whether to devote resources to a specific problem, what kind of time frame do you think in terms of? And has that calculation changed as the foundation's assets and the scope of its work have grown?
Grantmakers need to foster a certain amount of creative tension between having a sense of urgency, on the one hand, and being deliberate and thoughtful on the other....
JC: The question of timeframes is an interesting one. Generally speaking, I think grantmakers need to foster a certain amount of creative tension between having a sense of urgency, on the one hand, and being deliberate and thoughtful on the other. Certainly, we need to have a sense of urgency about some of the challenges we've been talking about. But at the same time we have this wonderful luxury — and, indeed, obligation — of being able to take the long view and, with an eye on the future, say, "How can we begin to put in place a set of strategies and interventions that will address, or even forestall, challenges and problems that are likely to surface ten or fifteen years down the road?" Maintaining that sense of balance between the short and long term is one of the great challenges of foundation work. But, frankly, it's also one of the things that makes it exciting.
PND: Given the nature and scope of the challenges we've been talking about, do you think American philanthropy is as generous as it could be?
JC: Philanthropy is fundamentally about personal choice, and what's wonderful about American philanthropy is that it accommodates all sorts of choices. After twelve years in the field, it's clear to me that the richness and diversity of the sector is only enhanced by people who bring different ideas and approaches to the work of making a difference. It's one of the exciting things about being in this field, collaborating with and learning from colleagues. It's what's exciting about the engagement of a new generation of donors with some of these problems. And it's what's exciting about the experiments that do succeed. So, speaking for myself, I hope this will always be a field that permits and encourages a range of approaches to the challenges we face as a society.
PND: You've been president of the the Irvine Foundation for almost three years now. While it's a little early to ask you to talk about your legacy, I wonder if you could share with us some of the metrics you use to measure your own effectiveness?
JC: For much of the time I've been president, I've been focused on building a team here that can achieve the things we hope to achieve. Former Carnegie Corporation president Alan Pifer, who passed away last year, used to say that the human qualities of foundation staff may in the end be the most important determinate for what a foundation can achieve. I think he's absolutely right about that. He also talked about people needing to bring a sense of humility to the work, needing to be conscious of their shortcomings, and needing to have a sense of curiosity, and he was absolutely right about that, too. Having the right people on the team is critically important, and I think we're there now. We have a strong sense of purpose in terms of what we're trying to achieve in each of the program areas, and as long as we remain clear about what it is we're trying to achieve and stay focused, I think we can say, in good conscience, that we fulfilled our obligation.
PND: A decade from now, what do you hope to be able to say about the James Irvine Foundation and the work it has done in California?
JC: I would hope to be able to say that this foundation is viewed as a leadership institution in California — and I don't say that with any sense of ego. Rather, to the extent the foundation can help to frame and draw attention to some of the significant issues confronting this state and help others understand those issues and engage with them, I think we will have made an important difference. I would also hope that we'll be able to say we approached our grantmaking intelligently and thoughtfully. And I hope that along the way we will have made some good choices about who to invest in and which issues to address, so that, at the end of the day, people will view Irvine as an institution that has used its resources and standing to serve those Californians in greatest need.
PND: Well, thanks for taking the time to speak with us today.
JC: Happy to do it. Thank you.
Mitch Nauffts, PND's editorial director, spoke with Jim Canales in January. For more information on the Newsmakers series, contact Mitch at firstname.lastname@example.org.