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00:00As the head of the Ford Foundation you're one of the most important people in the world of philanthropy. But tell us how has the water philanthropy changed because of Covid. Well I'm not sure I agree that I'm the most important. I think I am part of a constellation of people who are lucky enough to lead foundations like Ford Rockefeller MacArthur or any of the great legacies. But Covid has absolutely impacted how we do our work both internationally and domestically. Let's start with internationally. The reality of this moment is that we are seeing tremendous inequality in the ways in which vaccines are being distributed. The ways in which they are being manufactured and the issues around cost intellectual property which are profound and are having a tremendous negative impact especially for people in Africa and much of the global south in the United States. We know that Covid has meant that communities that are historically the most vulnerable are doubly impacted because of Covid. And so what that is meant for philanthropy is that we've had to double down in some ways and also recognize it in the United States. The Covid moment has coincided with the George Floyd racial reckoning moment and that has brought into stark relief the challenges for people of color especially in low income communities. Let's talk about the Ford Foundation and something you've done. It's innovative to deal with Covid. So when Kovac came you convinced the Ford Foundation trustees and some others we'll talk about to borrow money. You went out and borrowed a billion dollars. Why did you need to do that. Well we needed to do that because as you recall at the beginning of Covid back in March and April of 2020 the markets were very choppy. And what I was concerned about was on the one hand on the need side we were hearing from many arts organizations organizations working on food security and direct services that they were in huge distress. Remember arts organizations that closed their doors. There was no revenue. The nonprofit fundraisers had been canceled. Donors were beginning to get a little nervous about pledges. So we would see the need to increase our spending while at the same time our our denominator our endowment was going down in value. And I'd seen that happen in the last down market cycle where the need went up and our endowment went down. So in order to really address the needs side while maintaining I think good fiscal responsibility of managing the endowment and of course because of the luck of having Jerome Powell in charge of the Fed and basically announcing in the middle of March that money was free. I mean basically what happened with the yield curve made it really quite possible for us to think about debt as opposed to taking money out of the endowment. And so it was really just a matter of arbitrage. And so it was hard to convince your trustees to do that. Initially they they thought it was out of the box of course because because no foundation had done that before. But once especially the investment committee started to think about the options it became clear that it was the best option.

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Covid Caused Ford Foundation to Borrow One Billion Dollars

Darren Walker, Ford Foundation president, talks about how the Covid-19 pandemic led to the foundation borrowing one billion dollars. This episode of "The David Rubenstein Show: Peer-to-Peer Conversations" was recorded Dec. 13. (Source: Bloomberg)

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