Stephen B. Heintz: A Conversation With the President of the Rockefeller Brothers Fund

November 5, 2000
Stephen B. Heintz: A Conversation With the President of the Rockefeller Brothers Fund

On October 3, the Rockefeller Brothers Fund announced the appointment of Stephen B. Heintz as its new president. Heintz succeeds Colin G. Campbell, who left the RBF in July to become president of the Colonial Williamsburg Foundation. During Campbell's tenure, the New York City-based fund established and expanded significant grantmaking programs around the themes of sustainable resource use, global security, education, arts and culture, and the health of the nonprofit sector.

Heintz brings to the RBF more than 25 years of nonprofit and public service experience. After graduating magna cum laude with a B.A. in American studies from Yale University, he began his career in the mid-1970s with a series of key assignments in Connecticut state government — first as chief of staff to then-state senate majority leader Joseph I. Lieberman (1974-76) and later as commissioner of the state's Department of Income Maintenance (1983-88) and Department of Economic Development (1988-90).

In 1990, Heintz moved to the nonprofit sector, becoming a director of the Prague office of the Institute for EastWest Studies (IEWS), a think tank that seeks to help the Euro-Atlantic community become more secure, democratic, prosperous, and integrated. As director of the Prague office, and then as executive vice president and COO of the Institute, Heintz shaped the Institute's programs for the advancement of sustainable economic development and democratic institutions and coordinated implementation of these programs through the Institute's network of offices in Europe.

Currently, Heintz is the founding president and CEO of Demos, a nonprofit network dedicated to promoting democracy and shared economic prosperity in the United States. He is expected to assume his responsibilities as president of the Fund on February 1, 2001.

Mitch Nauffts, the Foundation Center's Director of Web Services Development, sat down to talk with Heintz on a rainy October morning at the Demos offices in Manhattan's SoHo neighborhood.

Philanthropy News Digest: Good morning, and thank you for taking the time to chat with us.

Stephen Heintz: My pleasure.

PND: You've had a fascinating career, starting with your first job out of college as administrative assistant to Connecticut's then-state senate majority leader, Joe Lieberman. When did you first decide you wanted to work in the public sector?

SH: I guess when I was in high school. I was a kid who grew up in the Sixties, in the tumult of the civil rights movement and then later the anti-Vietnam War movement. I had older brothers in college in those years who were very much engaged in those debates. My parents were also interested in public affairs, although my father was in business. He came at it from the perspective of a lifelong Republican, while my mother was a lifelong New Deal Democrat. So there was always great debate around the kitchen table and a very open atmosphere for differences of opinion about the issues of the day.

PND: What was the young Joe Lieberman like? Was he an inspirational figure?

SH: He was. He was a wonderful mentor, and he was what he appears to be today. He was a person who approaches politics with great integrity and takes great joy in it, because he believes that politics is a noble undertaking and that people in politics should be there because they want to do something for the public good. I mean, one of the great things about this campaign is watching him campaign, because he's just getting so much joy out of it — and putting so much joy into it — and that, in a way, is a contrast to the way politics has been conducted in this country over the last few decades.

PND: That's true. He looks like he's having fun.

SH: Exactly. I think he is.

PND: After stints as campaign manager for Gloria Schaffer's U.S. Senate bid in 1976 and then as director of Connecticut's office of Policy and Management, you were appointed commissioner of the state's Department of Income Maintenance in 1983, a position you held for five years. Those were years of considerable innovation at the state level in the area of welfare reform, with people like Wisconsin governor Tommy Thompson making a name for himself in this area. Were similar things happening in Connecticut?

...Eventually, I began to think the welfare system was designed to prove how poor somebody was, so that they could qualify for a very modest amount of public support....

SH: Absolutely. In fact, when I was asked to become commissioner of the welfare agency, I was 30 years old and completely uneducated in the field. I tried to talk the governor out of nominating me, because I felt unprepared for the enormous responsibility, but he was not to be deterred, so off I went. And it was a profound and extraordinary experience from which I learned an enormous amount. I guess one of the most important things I learned was a deep respect for the poor in American society. They live lives that are so detached from what we think of as the American Dream, and yet they struggle forward every day, doing the best they can to take care of their kids and meet their basic needs against very tough odds. It's extraordinary, in many respects.

But coming into the agency from the outside, one of the advantages I had was that I could look at it with fresh eyes. And I started asking all the questions I could possibly think of to really learn about welfare and about the system, about its history, its effects. The agency in Connecticut was under some pretty intense criticism over its management in those days, and in fact was subject to federal financial penalties. So it was a good time to reexamine the system. Eventually, I began to think that one of the great failures of the welfare system was that it was sort of turned on its head. It was a system that was designed to prove how poor somebody was, so that they could then qualify for a very modest amount of public support in the form of cash assistance, food stamps or medical care, instead of being a system that was designed to try to figure out why families were trapped in poverty and to help them find a path that would lead them to financial independence and greater security.

So we began to experiment in Connecticut, as many other states did, with different ways of taking the system and reforming it, focusing first on the reasons for someone's impoverishment and then on a plan to help them become financially independent. We had a program that we called the Job Connection, which was one of the precursors to welfare reform at the national level.

Eventually, I became active at the national level. I was selected by my peers — the other forty-nine state welfare commissioners — to lead a national welfare reform project in the late 1980s, which culminated in passage of what I consider to be the first really significant welfare reform since the passage of welfare in 1935, legislation called the Family Support Act of 1988.

PND: As the governor of Arkansas, Bill Clinton was very much on the scene in those days. Did you ever meet him?

SH: I did. In fact, I had known Bill Clinton earlier, because he and I were both at Yale at the same time. He was in law school and I was an undergraduate, and we were involved in some political work together — first in a mayoralty campaign in New Haven, and then later for George McGovern when he was running for president in 1972. So I knew him a little bit.

Then I caught up with him when he was governor of Arkansas. Given that welfare had become a rather prominent national issue, I was always accompanying the governor of Connecticut to meetings of the National Governors' Association, and Clinton would always be there. So we would chat and catch up, and we stayed in touch. Then, after I was selected to be the lead commissioner on welfare reform, the governors selected Clinton to be the lead governor on the issue, and we ended up working fairly closely together. He was a big supporter of the legislation we passed in 1988.

PND: So you weren't surprised when, as president, Clinton shepherded welfare reform through Congress in 1996?

SH: No, although I was surprised at what I considered to be the extreme version that the Clinton administration ultimately supported. Although I'm a proponent of the basic thrust of welfare reform, which is a focus on employment and enabling work and supporting people as they move into work and off welfare, I'm not a proponent of what happened in the 1996 legislation, which eliminated the federal guarantee of welfare assistance for qualifying families and turned the entire responsibility over to the states.

I was an advocate of greater state involvement and greater state discretion, but I also believed that there needed to be a federal minimum and a sort of federal standard that states were going to be held to in the administration of welfare services. So now, instead of having one welfare system with fifty variations, we have fifty distinct welfare systems.

PND: After two years as commissioner of Connecticut's Department of Economic Development, you jumped to the nonprofit sector in 1990 when you accepted a position as director of IEWS' (Institute for EastWest Studies) European Studies Center in Prague. How did that come about?

SH: Well, it's one of those wonderful moments of fate that one experiences in life. I was always interested in international affairs on an intellectual level and followed things closely. And, frankly, I discovered that after fifteen years in state government, I was beginning to feel a little burned-out and was worried that I was becoming a bit cynical.

At about the same time, I watched with great admiration what the courageous people of Central and Eastern Europe accomplished in 1989 and 1990. And inspired by that I decided I really needed to make a change — I needed to break through my creeping cynicism, to recharge my batteries and do something useful to help the people of Central and Eastern Europe.

So, basically, I just decided to do it. I started talking to people about how to do it, and one of the first people I talked to was an old friend, Doug Bennet, who is now the president of Wesleyan University. Doug had been the head of AID [Agency for International Development] in the Carter administration, had served in the State Department, and had worked for Chester Bowles when he was ambassador to India. So I went to see him, and Doug said, Well, if you're really serious about this, I'm on the board of a small institute in New York that's getting ready to open a European studies center in Prague and you ought to meet the president. So I set up an appointment with the president, and through a sort of risky move on his part I got the job a couple of weeks later.

PND: Prague must have been an exciting place in those years. The atmosphere of possibility must have been amazing.

SH: It was.

PND: How long did it last?

SH: That's an interesting question. The euphoria during that period was extraordinary. My first trip there was actually in May of 1990, just five or six months after the revolution. And I was there again in June of 1990 as an observer in the first three elections in Czechoslovakia, which still existed as a single state. And as I went from polling station to polling station and watched the citizens of Czechoslovakia line up to go to the polls — many of them carrying bouquets of flowers and some with tears streaming down their cheeks — you couldn't help but feel this euphoria of freedom, of possibility, of opportunity. That was one of the things that really inspired me.

...The euphoria that followed the collapse of the Berlin Wall was quickly replaced by a sober assessment that the transition was going to be as difficult as the process of overthrowing Communism had been....

I arrived in Prague on a permanent basis in October 1990, and the euphoria was still quite strong. I would say it probably lasted, in Czechoslovakia, into 1992. It was different, of course, from country to country. I think what began to dampen the euphoria was the growing and seemingly irreconcilable differences between the Czechs and Slovaks, which in 1992 led to the breakup of Czechoslovakia. That was a blow for Vaclav Havel, who believed very much in the federation and in what it meant as a sort of link between East and West in Europe.

At the same time, as prices were liberated and the cost of living went up dramatically, people began to realize how difficult the economic transformation was going to be. Privatization began, which meant that lots of redundant workers in big state-owned enterprises were laid off, and unemployment, which had been nonexistent, began to be a problem. The health care system began to deteriorate, because the government didn't have the funds to continue to subsidize it. Education system, same thing. Ethnic tensions began to arise around Central and Eastern Europe, most notably, obviously, in the former Yugoslavia.

All these things began to whittle away at the euphoria, and the euphoria was then rather quickly replaced by a sober assessment that the transition was going to be, in some ways, as difficult and as painful as the process of overthrowing Communism had been.

PND: What role did information technologies play in the political transformation in Central Europe?

SH: Well, it's not an exaggeration to say that, without modern information technologies — including television, fax machines, and computers — the revolutions probably would not have occurred as quickly as they did. And without those same technologies, the speed with which democracy has at least fundamentally been consolidated in most of these countries would not have happened either.

So I think they played an enormously important role. There was no way for the regimes to keep the lid on information, which is a key to maintaining control for any totalitarian regime. That, ultimately, is why Milosevic failed.

PND: How important was the role played by U.S. foundations?

SH: I think that foundations — and again, you have to look case by case, foundation by foundation — but I think the role of foundations was quite significant, especially in supporting the growth and the importance of civil society. In helping the Central Europeans achieve their goal of creating a vibrant civil system, I think foundations were essential to the process. They were important in other areas as well. Foundations supported a lot of work on economic reform, they supported a lot of work on conflict resolution, they supported a lot of work on economic development, education reform, journalism reform. But I think the field where they may have made the greatest contribution is in the consolidation and vibrancy of civil society as an essential ingredient to sustainable democracy.

PND: Did you work closely with any U.S.-based foundations while you were at IEWS?

SH: I was totally dependent on the kindness of others [laughs] to carry on the work that we were doing and was very grateful to have secured help from a number of American foundations, including a number of the big ones: Ford, the Rockefeller Brothers Fund, the Mott Foundation, the Carnegie Corporation, the Hewlett Foundation, the Pew Charitable Trusts.

PND: Do you think the transition from Communism to democracy in Central Europe is permanent? Could it be reversed?

SH: I think in most of the countries in the region it has been solidified and is irreversible. Again, one of the things we learned quickly was that the idea that even the Soviet system was a monolith was a fallacy, that even behind the Iron Curtain there was a great deal of differentiation among the countries that were part of the Soviet bloc. That's even more the case since the Iron Curtain was lifted and democracy was established.

Still, I would say that in the frontline states, the Central European countries and the Baltics, that democracy has been irreversibly established. Which is not to say that there aren't weaknesses in the democratic culture, institutions, and processes in those countries. And as you go further east, it's clear that democracy has not been established in countries like Belarus. In Russia, it's probably irreversible. But I would call Russia a proto-democratic state, not a democratic state. The progress they've made is encouraging, but they still have a long way to go. Same in Ukraine. In the Balkans, we're still in the early stage, and in other places the story is far from being clear. So, it's a bit of a mixed bag. But, in general, I think enormous progress has been made.

PND: What do you think of the idea expressed by Lee Kuan Yew, the former prime minister of Singapore, that authoritarianism is a necessary precondition of economic development in developing countries?

SH: Well, I think there's a bit of a paradox there. Certainly, strong central institutions are important to the economic transformation of underdeveloped countries, and — here's where the paradox is most clear — to the transition to democracy. It's ironic that, in order to decentralize — which is part of what democracy is all about — strong central leadership is required. If you don't have strong leadership and strong institutions at the center and a vision of how to go about it, you end up with chaos. And chaos, needless to say, can be destabilizing and dangerous. But I don't think there's a need for dictatorship. With strong leadership and strong and effective institutions — including the press and civil society — you can both improve your economy and your economic performance and create stronger conditions for democracy itself.

PND: Another interesting aspect of the paradox you refer to is the fact that information technologies undermine — or at least seem to undermine — strong authority.

SH: That's right. I think the Singapore model is a very interesting one, although I don't claim to be an expert on it. But my sense is that in other parts of the developing world, the model that has argued for strong central leadership is a model of industrialization. And the New Economy example suggests that industrialization is probably not the winningest strategy. The new model is a model that promotes entrepreneurship; it promotes Information Age economic development, which is a lot more environmentally positive and produces good jobs without the need for large massive industrial development. I think that entrepreneurship argues for a robust environment, which strong leadership can help develop, but it does not call for central planning or even a strongly controlled economy.

PND: Do you subscribe to the idea that, in a world where boundaries of every kind are increasingly porous, the United States cannot afford to turn its back on the world?

...One of the great lessons of the 20th century is that America must be engaged in the world — not as a hegemon but as an open and transparent player in global affairs....

SH: Oh, absolutely. I'm passionate about this issue. I think that, first of all, we cannot even think that we can solve our own problems without understanding how those problems fit into a global context. And second, we simply are too interdependent, in every respect now — economically, in terms of security, in terms of values and culture — to think we can turn our backs on what's going on in the rest of the world.

I think one of the great lessons of the 20th century is that America must be engaged in the world, and engaged not as a hegemon but as a real partner, as an open and transparent player in global affairs. But I think the notion that we are the world's indispensable nation is an exaggeration. I think we're an important nation, but I think we need to see that other nations also are important, and we need to work with them in an open and transparent way.

PND: Do you think there's a domestic constituency for a higher level of U.S. engagement in global affairs?

SH: I do. I also think it's overlooked and largely untapped. In fact, there's a full-page ad in today's New York Times taken out by a group called Earth Action that's very interesting. They're a network of organizations and institutions trying to promote more effective engagement, especially through the United Nations, for both peacekeeping and environmental activities, and they sponsored a series of polls by Yankelovich, a well-respected polling operation, which suggest tremendous levels of support for engagement, especially engagement through the United Nations. So I think there is a constituency for global engagement out there. I also think there's still a sort of neo-isolationist group and philosophy out there. But I think that with the right kind of leadership, leadership that gives voice to the interests and concerns and hopes of the American people, Americans are willing to be engaged.

PND: There might be an absence on the political leadership side of the equation of what former President Bush called "the vision thing."

SH: Yeah. I think there is.

PND: Do you think foundations can play a role in changing the leadership equation?

SH: Well, I think foundations can and should be important leadership institutions on this question. I also think that foundations, through their programming and their advocacy, need to demonstrate the value of international engagement. And I'm proud to say that many American foundations do just that. On the other hand, one has seen in recent years a certain amount of retrenchment by some foundations that are understandably concerned about domestic priorities and needs at a time when government has been shrinking and there are a lot of demands on philanthropic institutions to fill gaps. So, the competing interests are extremely complex. But I do think that foundations need to be part of the leadership equation that helps Americans recognize and internalize the need for international engagement, and that helps them accomplish it in a productive way.

PND: Under the leadership of Colin Campbell, the Rockefeller Brothers Fund was particularly active in building a constituency in this country for global engagement.

SH: Absolutely.

PND: Is that something you hope to continue?

SH: Very much so. I think it's a great legacy of the Rockefeller Brothers Fund over the twelve years that Colin was there that the RBF has been a leader in some very focused areas, but especially in global engagement. It's a legacy I very much want to build on and continue.

PND: In the area of global engagement, do you think the news media in this country contributes to the perception of U.S. fecklessness abroad?

SH: To a degree, I think so. It's a tough job. You know, when I think about the major newspapers — the New York Times, the Washington Post, the Los Angeles Times, et cetera — they invest pretty heavily in hiring and deploying staff around the world who specialize in covering very complicated international stories. But for hundreds of other papers [laughs] that's a hard thing to do, so they end up being dependent on wire services and other forms of news gathering. And it's just much more difficult to get a) the level of depth, and b) the quality one would like to see more routinely in the pages of American newspapers. As a result, I think there is, at times, an oversimplification of the issues, which does help to contribute to this perception of fecklessness.

PND: How would you rate its coverage of the nonprofit sector?

SH: Also weak, I think. This is a lesson that both foundations and the citizens of Central and Eastern Europe really helped to teach me. I have to confess that before I went to Eastern Europe, I did not have as deep an appreciation for the importance of the nonprofit sector as an intermediary between citizens and the state. And it was only through seeing how important it was to the transformation of these countries in Central Europe that I really refreshed my understanding of its crucial role in society.

I mean, I read Tocqueville and I had an implicit understanding of the sector's importance, but my experience in Central Europe really highlighted how important it is. Which suggests to me that, growing up in this country, I hadn't been reading about the sector as much as I should have, either in the press or in other places. And I think this sort of third revolution of democracy around the world has rekindled debate in this country about the value and importance of the nonprofit sector and helped bring a greater recognition of its importance. As a result, it's covered more in the press today than it was, say, ten years ago. But there's still much more that could be done.

PND: Do you think media in general, and the kinds of information technology we've mentioned a couple of times this morning, are solvents of culture or instruments of culture building?

SH: Well, probably a little bit of both. I don't mean to weasel, but I do think it's a little bit of both. In some ways, I think, the media helps crystallize the manifestation of culture at any given moment. And culture, in some ways — there are things about a culture that are more permanent, and there are aspects of a culture that are more transitory and mutable. I think the media tends to have a great deal of impact on the mutable portions of culture.

Clearly, this is what has been happening in Eastern Europe — and even in Western Europe — where there's now a growing backlash against what many people see as too much imported culture from the United States. I think this is an important issue, and I think there needs to be real care and attention paid to the preservation of indigenous and local cultures, as well as great respect paid to the variety of cultures that are, in some ways, under threat because of the globalization of culture through mass media and mass communications.

PND: Based on your experience, do non-governmental organizations have a role to play as mediators between the media and local culture?

...Foundations can do a lot to help encourage respect and appreciation for local cultures and the diversity of cultures and value systems and to support their preservation....

SH: Absolutely. I think that foundations can do a lot to help encourage respect and appreciation for local cultures and the diversity of cultures and value systems and to support their preservation. I also think they can help the media and other institutions in society to recognize how valuable culture is. I think that's a very important role for foundations to play.

PND: It would seem, at this stage of the Information Revolution, that the introduction of information technologies into developing countries — and even here in the United States — leads to a widening gap between economic haves and have-nots. Would you agree? And if you do, what do you think the nonprofit sector can do to address that widening gap?

SH: Well, I certainly do agree. And I think the nonprofit sector can help by drawing attention to this as an issue in our society and in other societies, and by working to support those nonprofit organizations that are trying to address the problem itself. There are educational organizations, there are community-based organizations, there are regional organizations working across the globe to try to create a healthier balance on this set of issues. And I think it's very important for the foundation community to be supporting those efforts when they are shown to have efficacy and impact.

PND: Is Demos — the organization you currently head — active in this area?

SH: Not yet. Demos was founded with a focus on domestic issues, but with the hope that, as we became more established, we would also be able to expand our interests globally. We are very interested in two sets of issues. One is how to help revitalize American democracy. Again, part of my interest in helping to create Demos was to sort of employ my recharged batteries on these issues, to think about the deficits in our own democracy and how we need to re-energize citizenship and engagement in civic affairs in America, to strengthen the institutions and processes of our democracy for the very challenging context of the 21st century; and, at the same time, to help create the means for more Americans to share in our prosperity, to close this tremendous gap in income and wealth that has developed and continues to grow in American society.

Now, clearly, these are issues that have a relationship to global economic and cultural trends, to global political trends. And we have hoped that, as Demos becomes more permanently established, we would begin to work on them in a global context as well.

PND: Have you identified specific areas where Demos might be able to achieve some leverage?

SH: At the global level?

PND: Domestically...

SH: Yes. Our first major effort is focused on the states as an increasingly important level in our federalist democratic system, especially as more and more authority and responsibility on issues like welfare is being devolved from Washington. And in this area, two questions arise. One is, What is the capacity of the states to manage these responsibilities effectively? And the second is, How democratic are the states in their ability to manage these responsibilities?

What we're doing turns out to be the first major study of the health of democracy in the fifty states. It's probably an eighteen-month-long study that we're about six months into, and we're looking at the enormous variation among the fifty states in terms of issues of accountability, transparency, openness, inclusiveness, and effectiveness of democratic institutions and processes. And from that research, we hope to publish a major study by the end of next year which will strengthen reform movements at the state level to help increase the democratic capacity of states to manage very substantial responsibilities in a way that is more democratic and more effective.

PND: There's a great deal of hope in many quarters that information technologies will put citizens in closer touch with government, at the federal as well as at the state level. Have you encountered anything in the last six months that would indicate that government is learning how to use emerging technologies to better serve constituents?

SH: I think there's quite a bit of experimentation under way, and some interesting lessons have been learned. At Demos, we're really focused on these two issues, democracy and the prosperity gap. But we're particularly looking at how three trends that we see as having increasing importance in the 21st century are changing the landscape for both our economy and our democracy. One of them is technology. The second is globalization. And the third is the demographic changes that will occur in our society over the next several decades. So, with regard to issues of technology, we are looking at how technology is changing the landscape for American democracy. And there are some encouraging signs — and also some troubling signs.

On the plus side of the equation, I think one of the things we see in a number of states is an increasingly effective use of new technologies for the dissemination of information. And that's great, because citizens now can get online access to a lot of information that before might have been difficult to get, allowing them to monitor what their government and elected officials are doing. Then, if they're motivated, they can communicate their own views through electronic as well as traditional means. That's very, very positive.

On the other side of the equation, of course, one still has to be concerned about the digital divide and the fact that millions of Americans do not have access to electronic media. And if government shifts more and more toward the use of electronic media for dissemination of information, until we resolve the digital divide a significant segment of the American populace could find it harder to get information than they do now because it will be less available to them. That may be a short-term problem, however.

There's another set of interesting issues. Obviously, the new technologies offer the potential for more direct involvement by citizens in decision-making. We've seen some experimentation along these lines, for example in the Democratic presidential primary in Arizona this year, where registered voters could vote online. You could still vote in a polling place and by absentee ballot and all the traditional means, of course, but tens of thousands of Arizona citizens chose to vote online, from their homes or from libraries or whatever, in what was an interesting experiment in digital democracy. And the result was a significant increase in the number of people who participated in the primary, which is encouraging. But on the other hand, this raises some pretty interesting questions about how far we take this. If you couple the technological capacity with the impulse for greater direct democracy that we're seeing — in particular, in states like California, where more and more public policy issues are being determined by ballot initiative and referenda — one could imagine a future in which citizens would be able to vote on any issue at any time from the privacy of their kitchen table or study. And that raises some fundamental questions about the tradeoff between direct democracy and deliberative democracy.

PND: Single-issue politics is not necessarily the friend of civil society...

SH: Exactly. So I think we're going to have some very interesting issues to sort through as technology continues to change the landscape for American democracy and democracy in general.

PND: These same technologies are being adopted by foundations and nonprofit organizations around the country. What kind of impact do you think they'll have on the landscape of philanthropy?

SH: Well, again, I think a lot of the impact is for the better. I think the new technologies are helping to make philanthropy less mysterious and more transparent to people. It's wonderful that you can go online — either directly to the Web site of a particular foundation or through the site of an organization like the Foundation Center — and find a huge amount of information about the foundation, its programs, its grantmaking, and so on.

And that's all for the good. Philanthropy needs to be continually aware of the need for transparency and accountability, especially as we move into the 21st century, when in my opinion philanthropy and the nonprofit sector are going to become increasingly important. I think the relationship between the public sector, the private sector, and the nonprofit sector is going to be as important to the evolution of American society and probably global society in the 21st century as the relationship of the three branches of government was in the founding of our country, or the relationship between the three levels of government — state, federal, and municipal — has been to our federal system. I really think the interrelationship of the three sectors is crucial to the future of our democracy and our society, and that technology can be a very important part of how that relationship works out and is communicated and made accessible to people.

...Philanthropy needs to be continually aware of the need for transparency and accountability, especially as we move into the 21st century....

So I think those foundations that are at the forefront of using new communications technologies to enhance their transparency, their accountability, and their presence in the communities that they are interested in supporting are really at the cutting edge of what's going to be an important trend in our society.

PND: Managing that kind of rapid change seems to be a critical challenge for any organization. Do you see that as one of your challenges in your new role at the Rockefeller Brothers Fund?

SH: Absolutely. I think one of the key things — I mean, there are so many issues, but I think one of the fundamental ones — and it's amazing how often this comes up — is that once you're online, there's an enormous need to keep current online. And that's a resource- and labor-intensive process, because things change on an almost daily basis.

So it's not enough to get up online and publish your most recent annual report; you've got to devote the resources necessary to keep the information fresh, to keep it accurate, to keep it up-to-date, and to be using the technology in a proactive way to reach out to different parts of your constituency in ways that you haven't in the past. And that means you've got to make the technology not tangential to the work of the foundation, but central to the work of the foundation. That's a cultural shift for foundations to make, and something that I think a lot of foundations are still struggling with. And it's something I hope to devote considerable attention to as I move into my role at the RBF.

PND: Does it also mean that foundations have an obligation to devote more of their resources to capacity building in this area?

SH: I think that's probably right. I think that to function effectively in the 21st century, nonprofit organizations will have to be Information Age organizations, and I think that support for that process will be an important part of redefining the relationship among the three sectors.

PND: Venture philanthropy, which has received a lot of press in the last year or so, seems to place some importance on this notion of increasing capacity building in nonprofit organizations. Do you think venture philanthropy is, as I've heard it described by some, old wine in a new bottle? Or is it really something new?

SH: I think the jury is still out on that, for several reasons. One, I think you can talk to five different venture philanthropists and get five different definitions of what venture philanthropy is. I don't think we have an industry standard yet. [Laughs.] And second, because the notion is still relatively new, there isn't enough of a track record yet to judge its influence and its impact, to know whether it's new wine or old wine. It's certainly a very interesting set of concepts. And I think, in many respects, there are a lot of positive elements to it. But it does raise some concerns for me.

I'm all for an emphasis on impact, for instance, and I'm all for an emphasis on being clear about how you measure impact. What concerns me is that, in some of the articulation of venture philanthropy, there's a real emphasis on market-based terms, market-based measures, and market-based processes, some of which is very good. I think that nonprofit organizations and philanthropic organizations have learned a lot from the private sector about better management, better accountability, better governance. I think all of that is very positive. What worries me as I think about the future relationship of the three sectors is that, while the boundaries between them are blurring, there's still a need to recognize and preserve the essential differences between them. And venture philanthropy has the potential, in my view, to maybe go too far in blurring the boundary between the private sector and the nonprofit sector.

There also are some things where it's very hard to use bottom-line techniques and analysis to really understand the impact of nonprofit activity or philanthropy. So I think it's something we have to think through carefully. I'm open to a lot of it; I think there's a lot of room for improvement in the management of nonprofit organizations and the sector in general, and drawing on the lessons of business in that regard can be valuable. But I do worry that we might go too far in applying the metaphors and techniques of the market to things in the human sphere that are harder to really measure in those terms. And so we'll just have to see.

PND: And on that note, we have to end it. I'd like to thank you again, Stephen Heintz, for taking the time to speak with us this morning, and I wish you the best of luck as you lead the Rockefeller Brothers Fund into the new century.

SH: Thank you very much. It's been a pleasure.

Mitch Nauffts, director of Web services development at the Foundation Center, sat down to talk with Heintz on a rainy October morning at the Demos offices in Manhattan's SoHo neighborhood. For more information on the Newsmakers series, contact Mitch at mfn@foundationcenter.org.