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MEMORANDUM TO BRUCE LINDSEY

FROM:

KUMIKI GIBSON

DATE:

NOVEMBER 10, 2008

RE:

LEGAL AND HUMAN RESOURCES REVIEW & ASSESSMENT:

REPORT OF INITIAL FINDINGS AND RECOMMENDATIONS
_________________________________________________________________
This report sets forth the findings of my review of the Legal and Human
Resources Departments of the William J. Clinton Foundation (Foundation)
and those pertaining to other areas of the Foundation revealed during this
review, and my recommendations to the Foundation based on this review.
I.

SUMMARY

While the Foundation has grown impressively over the past several years, it
has a number of fundamental organizational challenges and deficiencies that
undermine its effectiveness, expose it to significant risk, and, ultimately,
threaten its long-term survival. The Foundation (as opposed to its initiatives,
which I have not reviewed) operates more like a political operation focused
on immediate situations, tasks, and events, as opposed to a professional,
strategic, and sustainable corporation committed to advancing its overall
mission. While that may not be a problem while the President is personally
involved in the Foundation -- and can garner support based on that
involvement -- it will be a problem when he is no longer involved, and the
Foundation has to rise and/or fall on its own name and work only.
If the leadership (that is, the Board and the CEO) intends and wants the
organization to survive beyond the Presidents personal involvement, then it
must take measures to move the organization onto a path of sustainability,
starting with revamping both the Legal and Human Resources (HR)
Departments; reviewing its corporate structure and governance documents;
and, perhaps most importantly, having a frank discussion with the President
about the current state of the organization, the future of the organization,

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and his appetite and willingness to allow the Board and CEO to make the
changes necessary for it to become sustainable, even great.
The time for making these changes, if they are desired, could not be better:
The presidential campaign, which distracted some key employees and
caused uncertainty among others about the future of the organization, is
now over; virtually all of the employees interviewed are anxious for more
structure, professionalism, and mission-focus; and funders are expecting the
same.
II.

BACKGROUND

As you know, the Foundation operates in a highly-regulated environment,

which impacts its operations in significant ways. Specifically, as a not-forprofit organization, which enjoys tax exempt status under Section 501(c)(3)
of the Internal Revenue Code and which solicits funds from third parties, the
Foundation is subject to a number of Federal and State laws governing such
organizations. As an employer, the Foundation is subject to the various laws
governing workplaces and workforces of the Federal government and of the
countries and states in which the Foundation has offices and/or employees.
And, as a corporate entity with a board of directors, the Foundation is
governed by certain laws applicable to boards of directors and by standards
and practices that have developed in the area of not-for-profit governance.
The larger philanthropic landscape makes these legal, compliance, and
governance issues even more important. Despite the record levels of
philanthropic activity in recent years, donors have become more and more
focused on the strategic use of their donations, on realizing a real return on
their investments (that is, demonstrable impact), and on the actual
operations of the organizations to which they donate. Specifically, they are
demanding that not-for-profits function with the same level of discipline,
professionalism, and transparency as for-profit companies. These
expectations are likely to become even more important to funders in light of
the current financial crisis.
In light of these important issues, we agreed that I would
1. Review the Legal and HR Departments to determine whether they
function as effectively and efficiently as possible and as necessary to
service this rapidly-growing organization;
2. Identify any other areas in need of improvement, as revealed or
unearthed during the review of the Legal and/or HR Departments; and

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3. Make recommendations for improvements in all areas reviewed and/or

identified.
The specific work I have conducted to date is outlined in Tab A.
III.

FINDINGS AND ASSESSMENTS

In order to ensure that the review, the assessments, and subsequent actions
address all aspects associated with organizing and operating an effective
organization, I structured this review around the McKinsey & Co. 7-S
Framework. As you may know, this Framework is recognized as capturing
the fundamental elements of an effective and holistic organization: (1)
shared values, (2) strategy, (3) structure, (4) systems, (5) staff, (6) style, and
(7) skills.
This report looks at each factor separately, discussing the findings and the
implications of those findings. (A detailed list of all of the major findings is
set forth at Tab B.)
1. Shared Values: This factor focuses on the central and shared beliefs
and attitudes underlying and driving an organization.
There seem to be two principal beliefs that permeate the Foundation:
(1) that its entrepreneurial culture, which sets it apart from most notfor-profits, makes it more effective than like organizations, and (2) that
structure, rules, and processes result in a bureaucracy that slows down
an organization. The former is true to some extent, but not entirely:
While the Foundation appears to be nimble and quick in response to
opportunities and to problems, it is not very good at planning. This
causes the Foundation to be less strategic and less efficient than it
could be and increases the risks of mistakes or worse, which could
affect it in significant ways legally and/or reputationally.
The belief that controls (through structure, rules, and processes) slow
down an organization is also a bit misguided. Structure, rules, and
processes ensure that the Foundation operates lawfully, consistently,
and efficiently, which ultimately enhance its effectiveness and
reputation. It is unclear whether certain managers shun such controls
because they have never worked in an environment that was both
entrepreneurial and disciplined; because they do not know how to
create and/or manage an office/initiative that is entrepreneurial, but
disciplined and structured; because they prefer working, as they do,

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with little oversight or accountability; and/or all, or some combination

of all, of the above. No matter what the cause, this disdain has
resulted in a culture that under-values structure, controls, and
compliance.
Because the lack of planning and controls can adversely affect the
Foundations effectiveness, efficiencies, and reputation, and because a
being entrepreneurial and being strategic and compliance-oriented are
not mutually exclusive, the Foundation should work to turn around
what appears to be current values in a way that leaves intact the
entrepreneurial culture of the Foundation and its employees.
2. Strategy: As you know, mission focuses on the why, and strategy
focuses on the how. Strategy provides a game plan for an
organization to achieve its mission, by setting priorities, directing staff
and resources toward those priorities, and enhancing the decisionmaking process and actual decisions, by focusing both on priorities, in
the face of what are oftentimes conflicting requests, demands, and
pressures, made daily. Finally, a strategy ensures accountability, both
by the organization as a whole and by individual employees.
The lack of a strategy tied to an articulated vision is one of the major
deficiencies of this organization. Employees, even at the senior level,
could not articulate the organizations game plan for achieving its
mission, confessed that there are no goals or measures tied to any
strategy, and complained that the work across the organization is not
linked to each other or, even worse, does not always advance the
Foundations mission or best interests.
The lack of strategy has resulted in, among other things, a lot of
confusion across the organization about organizational priorities (which
many claim appear to shift constantly); missed opportunities (as a
result of shifting priorities and lack of a game plan); very little, if any,
accountability (as no ones work is measured against established goals
and measures); a bottom-up budget tied to the priorities and desires of
individual department heads, not to the organizations mission; and
wasted time and resources.
Absent greater strategic clarity, the Foundation may be able to achieve
some immediate tactical goals, but is unlikely to ever fulfill its mission,
to maximize the Presidents impact, or to endure beyond the
Presidents personal commitment or lifetime. Moreover, without such

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clarity, improvements in other fundamental areas (e.g., skills) will be

limited or misguided.
3. Structure: This factor relates to the way an organization is structured
-- that is, how work is divided, how work is integrated, and who reports
to whom. While there is not one type of structure that fits all
organizations, the structure of any organization should be developed
around the organizations needs (including, specifically, ensuring
proper controls, maximizing resources, and reducing waste), and must
be clear to those who operate within it.
The current structure of the Foundation accomplishes neither.
Specifically, the organization appears to have been built around
individuals, not the needs and interests of the Foundation, and it has
not been reviewed or mapped against needs or interests (much less a
real strategy) since the days of its inception. Moreover and
significantly, the work of the Foundation and the President are
intertwined in a way that creates confusion at, and undermines the
work of, the Foundation at virtually every level. As a result, there is no
central command, functionalities are divided across offices,
Foundation offices and initiatives are dangerously independent,
resources are not maximized, and a couple of key managers appear to
have interests that do not always align with those of the Foundation.
This organization, loosely linked around the President, comprised of
many free agents, and serving, to some degree, the interests of the
President may have been appropriate when the Foundation was in its
start-up phase, with few offices, few employees, and few major
decisions. It is not, however, appropriate for an organization that
operates across the globe with over 500 employees and a budget of
$90 million, that is regulated at every level of government, and that
depends on outside funders for sustenance.
Absent a clearer structure and greater clarity about that structure, the
Foundation will continue to be faced with reputational and legal
challenges, and with confusion, inefficiencies, and waste.
4. Systems: As noted above, having the proper systems, procedures,
and processes in place ensures appropriate controls and consistency,
and reduces risks and waste. In short, it enables an organization to
operate lawfully, efficiently, fairly, and effectively, and ensures that it
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The Foundation has very few procedures, processes, and systems in

place, and even fewer that are consistent across the organization. For
example, it is missing several policies/procedures that are required by
law (e.g., record retention policy). Moreover, although it has an
employee manual, that manual is not comprehensive and is not
distributed or followed consistently across the organization. Finally,
the Foundation has no system in place to ensure equity or consistency
in compensation or to allow for professional development or training,
issues that a number of employees noted and/or complained about.
What makes this (systems) deficiency particularly problematic is that
(1) the organization is legally liable for the acts of its offices and
initiatives and those who run them; (2) managers in key positions have
no to little experience in not-for-profit management and thus do not
even possess the right instincts when faced with a problem for which
there is no policy or procedure; and (3) there is no established
mechanism for catching problems and mistakes.
In short, the systems deficiency subjects the Foundation to significant
legal and reputational risks, results in inconsistencies and
inefficiencies, and undermines its work and viability.
5. Staff: As you know, having the right people in the right positions is
critical to the success of any organization. Employees effectuate the
work necessary to achieve mission, serve as the ambassadors of the
organization to the outside world, and, when talented and properly
utilized, enhance the organization and its impact. Thus, organizations
must be committed fully to finding, recruiting, retaining, and
developing the best and the brightest.
The Foundation is not appropriately organized or sufficiently staffed to
meet these objectives. Specifically, there is no central personnel
office, there are few position descriptions or requirements and
standards for recruiting and hiring staff, and the heads of offices and
initiatives have great discretion in creating and filling positions. This
can lead to and has led to inconsistent and sometimes negative
results.
As an initial matter, there are individuals serving in managerial
positions that have no to little managerial experience or skills. This not
only impacts the effectiveness of such managers, vis--vis their own
work, but it impacts the effectiveness, working conditions, and morale
of those working with them. For example, at least two senior

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managers tend to micro-manage, which not only takes away from their
own responsibilities, but undermines their subordinates. Ultimately,
the entire department suffers, which affects the entire organization.
In addition, several key managers appear to prefer qualities in
candidates that are unrelated or indirectly related to the position at
hand or that will add little value to the organization as a whole. For
example, the head of the Harlem office has admitted that she likes
hiring and/or promoting interns, despite the fact that many of these
individuals have no to little experience outside the Foundation and the
fact that this office is located in a city with vast talent pool. Such an
approach does not allow the Foundation to identify or ferret out the
best talent, it promotes inconsistencies in hiring, and it could have a
discriminatory impact on certain groups in hiring and promotion.
Moreover, because very little attention is paid to these staff issues,
employees are often confused about their roles and the expectations of
them in their roles, which confusion is exacerbated by the fact that
they are not evaluated on a regular basis.
Finally, morale is low among the current staff. Moreover, according to
several members of the staff, the Foundation has lost some employees
because of some of the issues identified in this report, including,
specifically, the lack of clear priorities and of good managers.
This lack of attention to staffing standing alone could lead to the
Foundations demise: Without the right talent, the Foundation will be
unable to accomplish its important work and will be unable to attract
new talent to do that work. It will also lose good people, which will
affect its work and its reputation.
6. Style: This factor refers to the way key managers behave to achieve
organizational goals, with respect to, among other things, their
priorities and their use of time.
As noted above, a couple of key positions are filled with individuals
who do not have a lot of managerial experience or strong managerial
skills and who operate without a strategy or much oversight. As a
result, these individuals do not have a clear sense of priorities or how
to prioritize, or of their roles or the roles of those who report to them.
Moreover, because there are so few systems, policies, and procedures,
they tend to make decisions on an ad hoc basis, which are not always
appropriate, in terms of the law or organizational interests. And,

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because the lines of authority are murky, managers tend to underconsult or over-consult with others in the organization. Finally, the
anti-compliance attitude of a couple of key managers has affected not
only the culture or certain decisions, but has affected the view of lower
level employees who either witness less than fully compliant behavior
or, even worse, are asked to participate in or condone it. (Indeed,
several staff members virtually begged fro a stronger whistleblower
policy and process.)
If the Foundation becomes more strategic, professional, and
compliance-focused, its managers will likely change their style to
conform.
7. Skills: Skills refer to the capabilities within and of the organization.
As noted above, there are some extremely committed employees who
are able to react swiftly and competently to opportunities and
problems. Unfortunately, that reactive approach dominates the entire
organization. As one employee stated, managers and staff seem more
interested in getting it done than getting it right. Most troublesome,
perhaps, is the fact that neither the individuals nor the organization
seem committed to planning or getting it right from a strategic or
efficiency point of view. Without this commitment, the organization
and its employees will never realize their full potential.
IV.

RECOMMENDATIONS

The assessment of the organization through the 7-S Framework makes clear
that the organization is not operating as effectively or efficiently as it should
or could. Indeed, it has major deficiencies in each of the fundamental areas.
Each of these deficiencies, standing alone, threatens the effectiveness of the
Foundation in the short and long term. When combined, as currently the
case, they threaten its very existence (absent the Presidents involvement).
Because it is unclear whether the President wants the Foundation to exist
beyond his personal involvement, the Foundations leadership (that is, the
Board and CEO) should address this question head-on with the President.
That will require a frank discussion with the President about his desire,
willingness, and appetite to move the Foundation to the next level of
development. If the President concludes that he does, in fact, want the
Foundation to survive and thrive beyond his involvement, then he should
authorize and empower the CEO and Board to make the changes necessary
for this survival.

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While you and/or the leadership puzzle through this question, the Foundation
should begin improving immediately the Legal and HR Departments, which
have responsibility for a number of the 7-S elements (i.e., systems, staff,
skills, and, to some extent style).
A.

LEGAL AND HR DEPARTMENTS

No matter what the leadership decides about the larger, over-arching

question, it must act immediately to bring the Foundation into compliance
with the law and standards that govern not-for-profits, and must create
strong legal and HR offices so to prevent any lapses in the future. To this
end, I recommend the following:

Hire professional legal and HR managers dedicated solely to

overseeing each of these departments;
Empower each of these department heads to oversee and manage that
area of operation for the entire organization, including structuring
his/her department and hiring staff as s/he deems necessary and
appropriate;
Have staff currently functioning in each of these areas report directly to
the new department head, as the department head deems necessary
and appropriate;
Have the new department head establish policies and procedures in
his/her area of responsibility (by a date certain), oversee the
implementation of these policies and procedures, and monitor
compliance for that department;1
Establish at least two new positions in HR, one for employee benefits
and development and one to handle complaints, in accordance with
the Sexual Harassment Policy I have proposed;
Authorize and empower the Legal Department to oversee compliance
for the entire organization, create an internal controls position within
that department to oversee that area of responsibility, and hire an
attorney to serve in that capacity;

As I have recommended, I urge the Foundation to adopt and implement

a handful of policies and procedures immediately (even before the
appointment of these recommended department heads), and I will continue
to forward these to you as I draft them. Currently pending before you is a
proposed Sexual Harassment Policy, and I will soon be submitting to you a
draft Records Retention Policy.
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Engage a consultant to conduct a compensation review of all positions

in the entire organization;
Review and adopt the proposed Sexual Harassment Policy, for
immediate implementation; and
Review the Records Retention Policy after it is drafted.2
I urge you to adopt the recommendations set forth above and authorize me
to execute against/implement it, which work will include, among other
things, developing an organizational chart for the two departments, drafting
position descriptions for the General Counsel and HR Director positions and
for the internal controls position, and retaining a consulting firm (such as prm
Consulting) to conduct a compensation review across the entire organization.
B.

BOARD-RELATED WORK

My review also disclosed that the Foundations Board may not be functioning
as effectively as it could or should and that the Foundations governance
documents may be dated and/or inappropriate given the current state of the
law and of the organization. To that end, I recommend that you expand my
assignment to include reviewing specifically the Boards structure and
governing documents so to ensure that they meet current standards, and
that I do so in time to enable you/us to present any changes to the Board at
its December meeting.
C.

BROADER IMPROVEMENTS

As noted above, the Foundation has challenges and/or deficiencies in all of

the 7-S areas, which have significant implications as to the viability and
sustainability of the organization. You/the Board should discuss with the
President these findings and their implications. 3
If the Foundation is meant to survive only for the time that the President is
personally involved, then it may want to only focus on bringing itself into
When the proposed policy is drafted, I will not ask you to approve it for
adoption; rather, I will want your permission to circulate it to department
heads for their review and comment. Because it will change the way the
Foundation does business (specifically, retains records), I want to make sure
that the proposed approach is workable.
2

This report expresses no view on whether the Foundation should

survive beyond the President or should be structured to survive beyond the
President. These considerations are being proffered in the event that
President and the Board want to address this bigger issue or conclude that it
should.
3

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compliance and on maintaining that compliance, through the revamping

suggested above for Legal and HR. If, however, the Foundation is committed
to surviving and being effective beyond the Presidents personal involvement
-- that is, until the problems it is attacking are resolved, which likely means
into perpetuity -- then it should consider undertaking an in-depth review of
its structure and operations, which should include, among others, the
following considerations:

Consider separating the Foundation completely from the Presidents

operations, functionally, staff-wise, and physically, re-assigning staff as
necessary to meet the needs of the Foundation;
Consider creating a position, below the CEO, to oversee and coordinate
all of the offices and initiatives, with each of the heads of these offices
and initiatives reporting to that position;
Consider developing a strategy to guide the Foundations work and to
serve as the benchmarks for the performance of the organization and
its employees; and
Consider creating a central administrative office that services all
offices and initiatives, either directly or through off-shots that report
back to it, in the areas of budget and finance, legal, human resources
and personnel, and IT.

If the President is interested in such a review, he must communicate this

directly to the management team, so to make clear his personal commitment
to improvement and the fact that he will not entertain individual pleas for
exemption from review or complaints about the review. This expression of
his interest in and commitment to taking the Foundation to the next level -which, again, will likely involve, among other things, changes in value,
structure, and systems --- will be critical to a successful and smooth review
and to the implementation of necessary changes.
V.

CONCLUSION

The challenges and deficiencies plaguing the Foundation cannot be overstated: They are real and undermine the organizations effectiveness,
immediately and more long term. To address the issues that present
immediate threats, the Foundation should revamp its Legal and HR
operations, should review its governance structure and documents; and
should have an open and honest discussion with the President about the
future of the Foundation.

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TAB A: OUTLINE OF WORK TO DATE
I commenced this work in mid-September, and, to date, my review and
assessment have included the following:

Interviews with all department heads, with the exception of Terry

Krinvic and Matt McKenna, who have not yet responded to my

requests;
Interviews with select members of the non-managerial staff;
Interviews with the personnel/HR/recruiting staff in Boston;
Review of policies and procedures, with the exception of unidentified
documents maintained by Laura Graham (including salary information),
which I have not yet received;
Review of all corporate documents and interview with the firm retained
to assist with state filings;
Research into current legal requirements governing not-for-profits and
the best practices employed by similar not-for-profits; and
Research (very preliminary) into the structures and compensations of
similar not-for-profits.

Note: This report does not include any back-up documents, and I will retain
those documents in my files unless requested otherwise by you to submit
them or release them. Please be advised, however, that the notes of my
interviews have not been transcribed or typed and that a number of staff
members requested that the contents of their interview be treated as
confidential and not shared with anyone other than you, for fear of
retribution. I promised these staff members that I would not share them with
anyone but you, but could not commit you to confidentiality.

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TAB B: SIGNIFICANT FINDINGS
Set forth below are the significant findings to date, which serve as the basis
for the assessments and recommendations in the report.
RELATIONSHIP BETWEEN THE FOUNDATION AND THE PRESIDENT

There are members of the staff who are paid by the President/his office
and the Foundation, which may cause apparent or real conflicts of
interest.
o For example, a senior staff member being paid by the President,
the government, and the Foundation allowed the Foundation to
host what may have been (or may have been viewed as) a
political event, apparently, without official pre-approval from the
Foundations legal department and without regard, before the
fact, to the impact of that decision on the Foundations tax
exempt status.
o It has been reported to me that a senior staff member has
attempted to have (and perhaps succeeded in having) her travel
paid for by the Foundation when traveling with the President on
mixed trips, even though her presence may not have been
needed for the Foundation.
o It is not apparent how staff members paid through various
sources (which means, presumably, having more than one fulltime job) are able to fulfill their responsibilities and duties to the
Foundation given the amount of work associated with those
responsibilities and duties.

Many staff members believe that staff members with closer ties to the
former President receive better benefits or more favorable treatment
from the Foundation as a result of those ties.
o Many staff members believe that certain people are
untouchable because of their relationship to the President.
o A few commented on Lauras extended absence and her late
arrival time, believing that both violate Foundation policy and/or
standards.

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Many staff members are confused as to the decision-making process at

the Foundation, not knowing where the ultimate authority lies for most
major decisions.
Virtually everyone I interviewed expressed some level of concern about
the Foundations sustainability and/or viability when the former
President is no longer involved, and their interest in it becoming a
sustainable organization that survives the former President.

It is not clear that the Board is sufficiently independent from the

President and/or is structured appropriately given the current size of
the organization and the breadth of its work.

Virtually all Harlem staff interviewed expressed relief that the

campaign is over, advising me that many staff members turned their
focus on that during the campaign and others advised that they were
concerned about the Presidents commitment to the Foundation during
the primary and after the election if the Senator had prevailed.

STRUCTURE OF THE FOUNDATION

The initiatives and offices operate independently and do not share

resources.

The Foundations largest initiative operates extremely independently,

oftentimes to the detriment of the Foundation.
o I believe that the current lawsuit that the Foundation is facing
involving CHAI could have been avoided altogether if the Boston
office had contacted the CEO as soon as it learned of the
problem, instead of trying to resolve the problem itself.
o This office also seems to make employment-related decisions
based on factors other than the Foundations policies,
procedures, or interests.

The functions typically associated with human resources are divided

between at least two offices, with no one person providing oversight
and/or uniformity; the legal office is now located in the office with the
least number of staff members, and its role is not clear to staff; and the
CFO does not appear to have sufficient management authority over the
finance operations in the satellite offices.

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No one is charged with overseeing compliance for the Foundation.

LACK OF STRATEGY

The Foundation has no articulated strategy tied to its mission or a

vision, with benchmarks, goals, and/or measurements.

There appears to be very little planning at the departmental level, with

the exception of the finance operation, which appears to have a real
budget process (which, in my view, may be a bit inefficient in the
Harlem office).

Staff complained about confusion around priorities and/or the constant

shifting of priorities.

Staff complained about the proactive and last-minute culture of the

organization, many believing that it operates more like a campaign
than a professional corporation.

NO OR INADEQUATE POLICIES AND PROCEDURES

The Foundation lacks important policies and procedures and a real

process to ensure compliance, resulting in increased risks, confusion,
conflicting (and perhaps arbitrary) decisions, and inefficiencies.
o The Foundation does not have a record retention policy, and the
procedures currently utilized in Harlem may violate the law.
o The Foundation does not have a discernable risk management
policy or a business continuity plan, although I understand that
Donovan submitted to Laura a draft policy for IT protection.
o The Foundations current Sexual Harassment and Whistleblower
Policies should be stronger, and it may want to strengthen its
Conflict of Interest Policy.
o The Finance Department in Little Rock has minimal, if any,
control over the policies and procedures used by the various
initiatives and offices regarding financial and budget matters.

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For example, virtually all expenditures made by staff in Harlem

have to be approved by Laura Graham, despite the fact that they
had been pre-approved as part of the budget process and are
approved, on an expenditure-by-expenditure basis, by each of
the department heads before submission for payment. This
triple-approval process is not only inefficient, but it also is
unnecessary in terms of financial controls and undermines the
annual budget process and the authority of your department
heads.
o Employment decisions are ad hoc and are not always guided by
what is in the best interest of the Foundation -- especially in the
Boston office.

There is no policy or procedure regarding compliance, and the

Foundation is out of compliance in several important respects. Several
staff complained about the ant-compliance sentiment that permeates
the Harlem and Boston offices.

Important responsibilities regarding corporate filings are delegated to

the CFO, who appears to delegate them to an outside organization,
with very little oversight by the legal department. As a result, the
Foundation is not in compliance with the filings rules, including in New
York, which requires the Foundation to be certified to do business in the
State.

No established policy or procedure for contract reviews, and some

department heads do not submit contracts or MoUs for review.
Associate General Counsel suggests that each unit have a contract
administrator that reports to Legal.

HR has paid very little attention to the organizations employees,

failing to institute job/position descriptions, a real evaluation process,
any professional development, or any process for complaints.

It is unclear whether lower level employees actually meet the definition

of exempt under the Fair Labor Standards Act.

The Foundation needs to review its policies and procedures regarding

interns and volunteers, including how individuals are classified and are
trained with respect to overseas travel and work.

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Processes and employment decisions are made on an ad hoc basis.

There is no real evaluation process, and employees are not held

accountable for their performance (or lack thereof).
o A perfect example is Harlem offices recent decision about
evaluations. During my interviews, a lot of staff members
complained about the evaluation process -- specifically, not
being evaluated in two years and having Laura Graham involved
in the majority of evaluations. I asked Laura about the process
generally during a conversation she and I had regarding a
particular staff member who is being a bit difficult. In response,
Laura decided that the organization must do evaluations as soon
as possible, and announced that decision to the Harlem staff -without any discussion about the process (which I think needs to
change), without much notice to staff (some of whom are in the
midst of budget preparation), and without consideration of
training managers first on how to conduct and write-up a proper
evaluation (which I think is absolutely necessary). Improper,
inadequate, and inaccurate evaluations do little to educate
employees about their performance and create an inaccurate
paper trail, which is harmful to the Foundation on a number of
levels.

Staff complained about the lack of comprehensive and/or written

policies and procedures.

Staff complained about the lack of a real complaint and/or

whistleblower policy.

LACK OF MANAGEMENT EXPERIENCE/SKILLS ACROSS THE

ORGANIZATION

Many key Foundation staff came from the Presidents political world or
through the internship program, and, thus, lack real management
and/or not-for-profit experience. A number of staff members
complained about the lack of real managerial experience among the
people filling key roles (virtually all citing Laura Graham as an
example, and a few citing Julie Becker).

Many key managers micro-manage their operations, which is inefficient

and undermines the authority and/or roles of mid- and lower-managers.

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There is no clear decision-making hierarchy, and staff forum shop or

bypass the hierarchy to secure a favorable decision.

Virtually everyone I interviewed in the Harlem office expressed some

level of dissatisfaction with the operations of that office and/or Laura
Grahams management style. Indeed, a couple complained about her
attempts to manage by fear, which they claim includes yelling.

The Foundation has paid very little attention to its workers or their
professional development and has not insisted on or paid for
management training for its staff.
SALARIES IN THE NEW YORK CITY OFFICE APPEAR TO BE BELOW
MARKET

Although only a handful of staff commented on their own level of pay,

a few expressed concerns about how salaries are set generally and
others expressed concern about the Foundations ability to compete for
talent in New York City because of its compensation levels.

My own preliminary review shows that the compensation for the

Foundations CEO position is lower than other not-for-profits, of similar
size (that is, total annual expenses), in New York City, and suggests
that it may be lower for other management positions as well. For
example, LISC ($102M in expenses) pays its CEO approximately
$410,000; the Open Society Institute (expenses exceed $100M) pays
its CEO over $312,000, pays its Director of U.S. Programs over
$197,000, and pays its General Counsel over $187,000, plus it
contributes into each of these employees benefits plan (with
contributions ranging from $30,000 to $53,000); the Robin Hood
Foundation ($94M in expenses) pays its CEO over $435,000; and the
Childrens Aid Society ($89M in expenses) pays its CEO over $339,000.
Even smaller organizations in New York seem to pay better than the
Foundation: The ACLU (total expenses only $40M) pays its CEO over
$309,000, pays its legal affairs director over $206,000, and pays its
communications director $185,000; and the National Urban League
($36M in expenses) pays its CEO $425,000.

STAFF MORALE IS LOW AND STAFF IS HUNGRY FOR MORE

STRUCTURE

Virtually everyone I interviewed stated that morale was low in the

entire organization or in certain departments and that upper
management either did not know this or care about it.
6

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Virtually everyone I interviewed expressed their desire for a more

professional and structured environment.

Many staff expressed concern about the Foundations ability to attract

and retain talented employees, particularly in New York, where there
are a number of impressive not-for-profits, and a few cited employees
who the Foundation may have lost due to the Foundations structure
and/or culture.

A couple of staff members identified as a good source of the staffs

discontent the interviews and comments provided during the
GSDM/Ogilvey review. I am not sure if you were ever able to track this
down, but it may be worth pursuing.