May 19, 2005

Moore’s Law of Philanthropy

By Matt Isaacs
Special to the Neighborhood Newswire

Former San Francisco Mayor Frank Jordan likes to say he’s proof of life after politics, and you can see the change in his demeanor from the days when he ran the city. When he greeted a visitor in the lobby of his office, he was relaxed, his shirt open at the collar. A scheduling mix-up pushed the meeting back an hour, but no worries. “The important thing is you’re here,” he said with a smile.

Jordan has good reason to be serene. Four years ago he landed what he describes as a dream job as senior advisor at the Gordon and Betty Moore Foundation, a grant-making organization worth $5 billion devoted to environmental conservation, science, and worthy local projects. Who wouldn’t want to cap a career working at a do-gooder organization with resplendent Presidio digs and nearly twice the state budget of Vermont? “You name it, Gray Davis, John Burton, would kill for something like this,” Jordan said quietly.

After making billions in Silicon Valley as the co-founder of the Intel Corporation, the 75 year-old Gordon Moore has himself pulled off a second act of magnificent proportions, an enterprise sure to hold him not only through retirement, but beyond the next millennium. “Gordon likes the idea that he’ll still be contributing to humanity five thousand years from now,” Jordan said.

The foundation, in fact, has been set up to operate for the next ten thousand years, a lofty but typical aspiration for Moore, who’s always thought both big and small. Last month marked the 40th anniversary of Moore’s Law, a prediction the executive made in 1965 that semiconductor manufacturers would henceforth double the number of transistors on a silicone wafer every year. The industry, led by Intel, has been racing to keep up ever since.

As an encore, his foundation is tackling some of the world’s largest problems: destruction of the Andean-Amazonian rainforests and wild salmon depletion in the North Pacific Ocean. Million of dollars have been set aside to explore the universe’s outer reaches, including the possibility of extra-terrestrial life, but Moore has an equal interest in surveying the tiniest, undiscovered life forms in jungle foliage, as well as the microscopic organisms of the oceans.

Office as Art
Frank Jordan takes his time showing a visitor around the building, pointing out the little particulars that add up to a wondrous intermingling of art and science. The sunlight streaming in the windows, the polished wood, and the subtle earth tones create an almost palpable calm. “The first time I had a look at the place I was blown away,” said Ron Sonenshine, a spokesperson for the Presidio Trust. “I was like, ‘Am I really seeing this?’ I was literally almost speechless.”

The Moores, who spent $8.6 million on a “green” restoration of the retired Army barracks, tell their own story in the details. Window shades made of Romanian hemp line the windows of the Los Gatos Room, named after the city where Betty Moore was born and raised. The rounded base walls of the Pescadero Room, a tribute to the town where Gordon lived until he was ten, are made of reclaimed bricks. A massive table, fashioned from a fallen California Bay Laurel, dominates the conference room. Carpets made of undyed, pesticide-free wool cover the floors. The kitchen cabinets are crafted from pressed sunflower seed composite boards punctuated with handles fashioned from smooth black river stones.

Each of the three floors is open, intersected occasionally by glass, no cubicles in sight. Transparency, Jordan explained. As he said this, he pointed out Ed Penhoet, the organization’s president and the co-founder of Chiron Corporation, eating a homemade lunch at his desk just a little ways away. Penhoet glanced up, bushy eyebrows raised, but Jordan didn’t disturb him. Staff members draw straws every ten months to determine where they’ll sit next, all part of Moore’s desire to keep things fresh, even off-balanced, blending disciplines and experience.

A private, enclosed room is available on every level for meetings or solitude. The Japan Room on the first floor is steeped in deep reds, the South America Room blooms in orange, rose, and avocado, the African Hut on the third floor is comprised of reclaimed wood and glass, the throw pillows stitched with African textiles. In Intel’s early days, Moore reportedly began morning meetings by calling for “the idea of the day.” If the inspiration was good enough, it would take priority over all other matters. It’s easy to imagine the bright young staffers at the foundation gathering in these little incubating rooms, cultivating dreams of the future.

Giving as a Business
Lounging in a voluminous armchair, Jordan makes clear that the foundation isn’t comprised solely of starry-eyed idealists. If anything, it employs a more corporate structure than its philanthropic peers. “”We’re run like a business,” he said. “We expect something in return for our investment.”

When Gordon Moore started the foundation, he hired as president Lewis Coleman, a former chief financial officer of Bank of America, chiefly for his experience in real estate, stock portfolios, and conservation. Moore’s recruitment of John Seidl, a former Maxxam/Pacific Lumber president, as chief program officer for the environment, caused a minor stir among environmentalists, given the foundation’s proclaimed commitment to conservation. Both men have left the organization, but among the roughly 36 staff members setting policy, the number of MBAs rivals PhDs. Another staff of seven financial specialists focus exclusively on the foundation’s asset portfolio.

The Moore Foundation does the bulk of its planning and thinking in-house, distinguishing it from other foundations. Rather than simply giving away money to worthy causes, the program team decides where the organization should devote its resources, then finds the right players to carry its vision. The foundation doesn’t accept unsolicited grant applications. It’s picky. It has nothing set aside to support the arts, sports, religion, or politics. And unlike other foundations, it closely monitors the projects it takes on.

The Richard and Rhoda Goldman Fund, in contrast, prides itself on giving money and getting out of the way. “We strive to enable organizations to succeed in their work, not to micromanage their operations,” said Richard Goldman, the Fund’s president. “Trust, respect, and arm’s-length independence are at the core of our relationship with grantees. This healthier, more productive and professional alliance has resulted in more successful, self-sufficient organizations.”

The Goldman Fund also differs in terms of the ratio of its assets it gives annually. Goldman, whose foundation will close 10 years after his death, has been outspoken in his belief that federally-protected grant-makers should spend a minimum of 10 percent a year, excluding administrative costs, as his own organization has done. The federal government currently requires foundations to spend at least five percent annually. The Moore Foundation, established to survive just short of perpetuity, aims to spend no more than the minimum, including overhead. In 2003, for example, it spent $97 million, which included $17.9 million in administrative costs.

Both foundations, however, expect results. In the case of the Moore Foundation, the results should be scientifically measurable. Thus, protecting the Amazonian Rainforests made sense because aerial photographs can empirically measure changes in forest canopy density over the course of the grant. The foundation can likewise gauge the success of a salmon program with a simple head count. On the other hand, the foundation declined to take on global warming because it couldn’t foresee making a large enough impact to produce the same concrete outcomes. “For us, it would be a waste of time,” Jordan said. “There’s no political will for the cause internationally. And until that political will emerges, we won’t deal with the coral reefs either, because the two go hand in hand.”

The foundation has committed hundreds of millions of dollars to Bay Area projects, including the reclamation of the Cargill Salt Ponds and other large land acquisitions, which by the foundation’s standards, must be “unique and irreplaceable.” It has allocated $15 million to the Exploratorium, $5 million to the Academy of Science, and $3 million to the Chabot Space and Science Center in the East Bay, all in keeping with Moore’s passion for science. The foundation has also set aside $110 million for one of Betty Moore’s pet projects, the Bay Area Nursing Initiative, intended to expand and improve nursing skills in the region.

But one of the more telling grants completed in the last few years might have been one of the smallest, a $350,000 contribution to KQED in 2001 for its production of “The Nobel Centennial: 100 years of Awarding Genius,” honoring the anniversary of the international prize. The foundation made the donation with one provision: the producers had to include the ethnicity and gender of the winners profiled, and say whether the inventions were used for positive or negative outcomes. Literally altering the language and content of a script is unusual even in the world of philanthropy, where outsized egos often run the show. But in this case Gordon Moore wanted it done his way, not for vanity, but because he believed the project could be improved with his ideas. Chances are, the show’s producers agreed with him.